THE LIBRARY

THE UNIVERSITY

OF CALIFORNIA
LOS ANGELES

a JULUKGHr'-'

THE

EESOURCES OF MODERN COUNTRIES

VOL. II.

LONDON : PKINTKD BY

8P0TTISW00DB AND CO., KEW-STUEET FliLAKK

AXD PARI.IAMKXT 8TUr;KT

THE

IIESOUIICES OF MODERN COUNTllIES

ESSAYS TOWARDS AN ESTIMATE OF THE ECONOMIC

POSITION OF NATIONS AND BRITISH

TRADE PROSPECTS

ALEXANDER JOHNSTONE WILSON

REPRINTED, with EMENDATIONS and ADDITIONS, from ERASER'S MAGAZINE

IN TWO VOLUMES

VOL. IL

LONDON
LONGMANS, GEE EN, AND CO.

1878

All riahts reserved

CONTENTS V. 1

THE SECOND V L U M K.

CHAPTKR PAGIJ

IX. Italy 1

X. Spain, Portugal, and the Netherlands . . 40

XI. Canada and South Africa . . . . .95

XII. Australia and New Zealand .... 152

XIII. Mexico and Brazil 212

XIV. The River Plate, Chili, and Peru . . . 243

XV. The West Indies and other minor British Pos-
sessions 21>2

Conclusion 309

APPENDICES.

I. Comparative Statement of the Total Value of

Imports and Exports of Merchandise, etc. . 357

II. General Domestic Exports of the United States

IN Twenty-six Years 358

III. Abstract Statement of the Debt of Russia . . 360

IV. The Financial Position of Egypt . . . 364

8381(IG

THE

RESOURCES OF MODERN COUNTRIES.

CHAPTER IX.

ITALY.

The rapidity with wliicli the new Itahan kingdom has
grown out of a congeries of petty States and subject
provinces is a good augury for its future. Unless we
must yet look forward to a time of social revolutions —
to struggles between priestcraft and popular liberties —
of which there are at present few seriously disturbing
signs, there is little to hinder modern Italy from ad-
vancing to the position of one of the most thriving
nations of the old world.

There is indeed something very attractive in the
progress which Italy is making. It is a progress
dashed with errors, and not witliout dangers of course ;
but it has for all that been great and admirable. Wc
have but to glance for a moment at the picture which
the dismembered kingdom presented before she began
to stir for her freedom in 1818. The first stirrinijs

VOL. IL B

2 ITALY.

^vere indeed earlier than that ; for Italy, bound hand
and foot at the feet of Austria as she was by the Con-
gress of Vienna, which restored and solaced exiled and
effete dynasties in all Western and Central Europe —
Italy never quite forgot the liberal ideas which the re-
])ublican armies of the young citizen Buonaparte had
carried with them out of France. The dull brutal rule
of Austria in Venetia and Lombardy, and the more
than Asiatic ruthlessness of the Bourbons of Naples,
gave the Italians small chance to forget their dreams
of a bright deliverance. Accordingly, there had been
risings before 1848 ; and besides the risings many an
effort to persuade tlie people to stand up like men for
their rights, tliat had seemingly led to nothing. But
it was not till 1848 that Italy could be said seriously to
l^end herself to the task of wrenching her shackles off.
That year sent a quiver of dread through the heart of
every king and kinglet in Europe. Again the impulse
came from France, that country so full of striking ideals
in its modern political liistory — ideals which have been
made the ])retext of tremendous crimes; but dis-
membered Italy could have made no headway at all
against either Bourbon or Hapsburg, except for the
resolution of Charles Albert, the King of Sardinia, to
become the champion of national unity and indepen-
dence. The new generation of to-day forgets these
things: l>u1 iiiiddlc-ac^ed men remember the excite-
ment, the hopes, at fii-sl <,'V(;n slinuilatcd by the

ITALY. 3

sovereign PontifT, destined to so cruel a disappoint-
ment. Italy was beaten back apparently into slavery
in this her first grand dash for freedom, and the dreams
of Mazzini and Cavour seemed to be gone as dreams
all go. The weak-kneed Pope had turned traitor to
the nation, in his greed of temporal ascendency, and had
given it his curse. Powers too strong for them were
arrayed against the people, the Sardinian armies were
defeated, and Italy seemed by 1850 to have lost every-
thing. It was not, however, so to be. The defeat gave
a keenness to the national feeling all over the land
such as it had not attained to before. Neapolitan and
Lombard began to recognise themselves as men of the
same nationality. The repression of the foreigners had
thus to do its final work in welding the nation, and
the conquerors endeavoured to do it effectually, to their
own ultimate overthrow.

Louis Napoleon also did something, no doubt, for
the liberation of Italy, in a grandiose, histrionic,
morally contemptible way, urged as he was by the
necessity of justifying his rather despicable existence in
the eyes of France ; but whether he had interfered or
not, the power of Austria was destined to fall before
the rising forces of Prussia, and with it that of the
Bourbons of Sicily, Naples, and Tuscany, most corrupt
of all the corrupt creatures whom England had propped
up again for a brief space, to play the part of tyrants and
oppressors in nnmdniie affairs. It is not my purpose

4 ITALY.

to follow the history of tlie Italian struggle for inde-
])endeiice, througli its Napoleonic and other phases ;
suffice it that we call to mind some of the cardinal
facts. Before 1848 Italy, all except Piedmont, seemed
hopelessly crushed. Austria, the Pope, and the Bour-
bons held her in their grasp. Even the comparatively
native sovereign of Tuscany had turned oppressor, and
all Italy groaned like a man in the grasp of the
torturer. Commerce languished, divergent fiscal laws
and arbitrary raids on private wealth choked up the
channels of intercourse between one ]:)art of the king-
dom and another ; without shipping, without manu-
factures or foreign trade of a solid kind, possessed of
no political security, Italy was, thirty years ago, more
insignificant in the eyes of neighbouring nations than
Greece or Spain is now. But, once free, her consolida-
tion was almost as ra})id as that of the still newer
German Empire ; and to-day Italy is a power to be
reckoned with in the councils of nations, and possesses
a trade that begins to be a distinct element in
European prosperity, a trade that we in England
cannot too carefully give heed to. The bitter bondage
which the countrj^ has long lain under has ended in
making its mixed population, in a hopeful degree, a
nation ; and, prudently ruled, new Italy may yet have
a remarkable career before it.

Naturally ouougli, all this progress has not been
made without i^reat cost, and it is our dutv to look at

ITALY. O

both sides of the picture ; noi- should tlie pohtical and
commercial success blind us to the fact that the young
kingdom is not free from serious economic and social
dangers on more sides than one. The very transition
from a collection of petty States to a single power en-
tailed enormous waste of resources and almost irremedi-
able administrative confusion. Jealousies Avere also en-
gendered between province and province, which it will
take some time to heal : so that this transition stage
cannot by any means be considered at an end in Italy.
Nor need we wonder when we remember that it is
barely seven years ago since the crowning act of Italian
unity was performed, and Victor Emmanuel entered
Eome as King of all Italy, to the disgust of Pio Xono
and the corrupt creatures around him.

I must leave the historical part of the subject,
however, and trace some of the financial characteristics
of this period of transition, before examining the
trading capacity and mercantile development which
Italy exhibits. These financial characteristics are
again so intimately bound up with the administrative
machinery of the State, that in noticing the one we
must notice the other. Indeed, the first things that
strike the observer are the concurrent facts that the
Government of Italy has, throughout, been impecunious,
and, throughout, comparatively feeble and irresolute,
while yet the nation has grown and consolidated. No
statesman has succeeded to the seat of Count Cavour ;

6 ITALY.

and, eitlier because the men were feebler, or because
tlie constitutional powers, donned suddenly like a
garment, fitted but ill, the remedial measures which
society and the State required on all hands have been
but tentatively and tardily applied, amid not a little
buuLding^. The new kino^dom succeeded to all tlie
debts of the petty States it absorbed, and it also suc-
ceeded to their corrupt administrations. The debts
made a most serious burden to begin with ; and when
added to the cost of the wars of independence, so
handicapped Italy that few people would have been
surprised if she had pulled up short and proclaimed
lierself bankrupt. In a most valuable report on the
financial system of the kingdom, recently made to
our Foreign Office by Mr. Herries, Legation Secre-
tary at Eome,^ we are enabled to trace very clearly
the stages of this financial malady ; and many of the
statements I sliall make here will be drawn from this
source. Quoting Mr. Pasini, for instance, he gives the
total de])t of the petty States of Italy just before the
consolidation of the kingdom in 1871 at 90,000,000/.,
or 2,241,270,000 lira.^ The debt was growing rapidly
then, as the expenditure in all cases exceeded the in-

' Enihassij and Li-f/afion Reports, part iv. 1876.

* Martin, in his Statesman's Year-hook, states the debt of Italy in
1800, the year before the emancipation, at 97,500,000/., but does not
give his authority. It is possible he may be rij^lit, liowever, because the
debts being reckoned in dift'erent currencies, some of which were of fluctu-
ating values, the best statemeut which could be given was partly only an
estimate.

ITALY. 7

come; but, aflur the new kiugduin was fairly started,
the deficits grew worse and worse. In tlie words of
Mr. Pasmi it is stated that dnring this disastrous period
the receipts were diminished by 1,280,000/., while the
expenditm-e was increased by 2,280,000/., and the
public debt by 30,360,000/. Only in ihe old pro-
vinces forming the kingdom of Sardinia was there any
elasticity of revenue ; in all other ])rovinces the oust-
ing of the old government and the setting up of the
new involved almost hopeless fiscal confusion and loss.
Income fell off and expenditure increased until the
budget deficits, which had nominally been but 520,000/.
in 1859 for the various States composing Italy, rose to
over 4,000,000/., the greater part of which was due to
the Neapolitan provinces and Sicily. Taxes of an odious
character imposed by the old tyrannical governments
had to be taken off and reduced before any regular
system of substitutes could be framed to take their
place ; so that, as pointed out in the report of a finance
committee, also quoted by Mr. Herries, and which
gives, it would seem, a different estimate from that of
Pasini, the income of the States forming United Italy
fell from over 20,000,000/. at the time of the breaking
out of the war to 18,500,000/. the following year, and
the expenditure exceeded that diminished income by
7,200,000/. This defect, however, as others similar,
refers mostly, if not exclusively, to the ordinary income
and expenditure, and does nul include the special outlay

8 ITALY.

incident to the war, which is partially at least repre-
sented by the increase of the public debt. In 1860
and 1861 no less than some 370,000,000/. nominal
appears to have been raised by loans, issues of incon-
vertible paper, or sales of stocks, only part of which
has since been redeemed.^ There were six separate
budgets for the various parts of Italy in 1860, and it
was not till 1862 that the Government was able to
present a single budget for the united nation ; but that

^ I tind great divergencies in the estimates given in various works of
the present debt of Italy. For example, Kolb, whom I am disposed to
place first as a compiler of statistics of this kind, gives the debt, funded
and floating, at the end of 1872 as 10,060,000,000 lira, the interest of
. Avhich is 4G0,445,G14 lira. In other words, the capital of the debt was
400,000,000/. odd, and the interest-charge just under 18,500,000/. Martin,
on the other hand, in the new issue of his Statesman's Year-hook, places
the capital of the debt at about .380,000,000/. at the end of 1873, including
of course the paper money, and the interest-charge at just over 16,500,000/.
Again, the Livestoi^s Mnnthhj Manual, a publication usually accurate, and
with figures to a more recent date than either Martin or Kolb, places the
capital of the debt at only .357,000,000/., and the interest and other
charges thereon at 15,300,000/. This last estimate appears to me to be an
ob\nous error, because for one thing the deficits on the annual budget
have not yet ceased, and these alone for the past four years have amounted
to an aggregate of 28,000,000/., which has necessarily added to the
debt in some form. If we take Kolb to be correct, therefore, the debt at
the end of last year cannot liave been less than 430,000,000/. all told.
This is, it need hardly be said, a very serious burden for so young a
nation to carry, and it has been further heavily augmented since by the
Italian Government taking over the Italian portion of the old Lombardo-
Venf^tian Railways, as it contracted Avith the Rotlischilds last year to do.
This bargain will involve an addition to the debt of at least 30,000,000/.,
including the extra payments, and should the yearly deficits go on, and
the railways not pay — both likelj' contingencies — the taxation of Italy
will have to b*; seriou.sly increased. By 1880 we maj' expect to see the
funded and floating debt raised to the amount of 470,000,000/. to
o00,000,00C)/., and the chances of a redemption of the paper currency
alrao.st as remote as ever.

ITALY. ^^

was only the initial stage of tlie task which Itahau
llnanciers had before them. A cumbersome method of
account-keeping had to l)e swept away, which under
tlie old system entailed the mischief of several distinct
statements of accounts running alongside each other.
The budget passed through no less than seven different
stages before it could be considered a finished account,
and it was not till 1869 that this was swept away.
Now the financial account rims even with each year,
and comprises within it only the actual receipts and
payments of the year. Further reforms as to the
administration of the various departments of the State
had still to be carried out, and it was only the other year
that Italy could be said to have her finances completely
under Parliamentary control. A far more formidable
difficulty remains to be noticed — the reformation of the
taxes — and that cannot yet be said to be anything like
completed, for Italy is still too poor to have a consis-
tent fiscal system. There was a too radical cutting
down of obnoxious imposts in the first moment of
liberty and unity, when men's hearts overflowed, and
ever since the Government has had to struggle pain-
fully to make ends meet. One of the best sources of
national income, the property and land tax, has also
been most difficult of administration, through the absence
of anything like a sound basis of assessment, and it now
only yields something like 9,300,000/. including provin-
cial and communal surtaxes. In 1874 this was levied

10 ITALY.

upon 5,130,140 proprietors, and tlie average impost per
proprietor for imperial purposes only was almost
exactly 1/. The amount of tliis tax which actually
goes to the State is thus only about 5,000,000/., the
rest being devoted to local purposes under the law
which permits provinces and communes to levy certain
imposts for themselves. The figures as regards the
number of people assessed cannot however be de-
pended upon, any more than the cadastral basis of the
tax ; and there is no reform more urgently needed than
the one which shall distribute tlie burden fairly over the
landowners and metayers. At present the tax falls too
lightly on some parts of the country and on the tenant
(lasses, and far too heavily on others, and altogether
does not yield probably within millions of what it ought
to do. Another considerable source of revenue is the
income tax, which is not however to be taken as similar
in character to the English tax of that name, being a
complex and irritating impost which includes licenses
of various kinds, and which presses very heavily on
small incomes.^ It seems to vary in character too in

' Mr. Hemes makes the following comparison between the burden of
this tax on the Italians and of tlio Enfrlisli income tax. ITis figures were
compiled before the date of Sir Stafford Northcote's budget last year,
which relieved small incomes up to 300^., while imposing an additional
penny on all beyond that ; but they are sufiiciently close to the i'acts, and
illustrate the peculiar initation of the Italian tax:— 'An Englishman
having an income of exactly 100/. pays uotliing. An Italian pays on its
equivalent, if in Category A, 13/. 4«. ; if in Category B, iW. 18s.; if in
Categoiy C, 8/. Gs. A so-called ' professional man ' in London, with an
income of just 300/., pays on thnt amount, minus 80/., a tax of 1/. 1G.9. 8d.

ITALY. 11

difTereiit parts of tlie kingdom. The grist tax should
also be mentioned as an old and most oppressive im-
post on the grinding of corn, which was withdrawn at
the revolution, and re-imposed afterwards under pres-
sure of the necessities of the State. In its new form
it is vexatious, and that it should be required at all is
a proof both of the poverty which Italy still labours
under, and of the imperfect manner in which the fiscal
reforms have yet been carried out. It gives a gross
return of about 3,500,000/.

We might pursue this subject further, and find it
very interesting ; but my object is only to indicate the
broad fact that Italy is reforming ; is, though slowly,
growing solidly together; that she has to all ap-
pearance heartily adopted constitutional forms, and is
shaping her destiny to good purpose, in spite of the
many drawbacks to which she is subject. By means
of the changes which have been introduced, the peace
and security that have prevailed, and the consequent
increase in wealth, the gross income of the kingdom has
slowly recovered itself, until in 1875 it amounted to
55,480,000/. In 187(3 it was rather less, being only
54,800,000/., owing to the insuflicient harvest, ratlier
than to any weakness in the country. In 1877 the
fiscal estimate of ordinary ijicome was about

If he establishes himself at Rome, he will soon fiiul his means of snbsist-
ence diminished by a charge of 24/. los. ; the sum which in l^igland
would be due from a commercial house maldng a clear profit of 2,0701. a

year.'

12 ITALY.

51,000,000/., but tlie total receipts, oidiuaiy and extra-
ordinary, were placed at about 50,000,000/. There are
still deficits, of course, but they are growing on the
whole less alarming ; that for 1875 having been only
1,124,000/., that for last year 1,160,000/., and the esti-
mates for the present year showing a surplus, which will,
however, in all probability prove delusive. There is
]>erhaps some reason to hope that deficits may really
disappear before long, unless unforeseen events check
the gradual development of the community, or unless
the imprudent commitments of the Government to
railway purchases and administration lead to unex-
pected loss. 1 should not be surprised, however, were
this to prove the case ; and, if so, the small deficits of
the last year or two may again increase for a time, but
only for a time. Italy has but to push forward her
social reformation, to steadily reorganise her finances
and her provincial administrations, and there can be
no fear that the wealth of the country will not be
found in time sufficient to furnish all the Government
requires. The only serious elements of financial danger
are the funded and floating debt, and the wasteful ex-
penditure of the municipal and district Governments,
some of the Itahan cities, such as Florence, Naples, and
Genoa, being, for example, almost as spendthrift as
New York. These therefore constitute grave dangers,
which Italian statesmen cannot too deeply recognise.
Not only should every effort be made to keep down

ITALY. 13

tlie national and local expenditure, so tliat there sliould
be no further increase in its amount, but every effort
should be made to reduce the debt also. This is es-
pecially necessary with regard to the paper currency,
which now forms sucli an intolerable drag upon the
commerce of the people. In amount it seems light be-
side tliat of France, being only some 40,000,000/. ;
but then the population of Italy, and the trade of Italy,
are both much less. The imports and exports together
are under 100,000,000/., or less tlian a third of those
of France. Moreover, Italy has little or no metallic
reserve, so that her paper currency is of necessity
bound to fluctuate with every adverse movement of the
exchanges. As the imports of the country have been
stimulated for many years by the issue of such paper
and by other loans, so that they uniformly exceed the
exports, it follows, of course, that exchanges are often
adversely affected. Add to this the fact that a good
deal of Italian rente is held abroad, in France, Holland,
and England, and we liave abundant materials for a
very troublesome state of mercantile credit. The
premium on gold is rarely less than 10 per cent., and
it rises sometimes to 12 and 15, or even to 20. During
one year the fiuctuatiou is not unfrequently as much as
from 5 to 7 per cent., so that the difficulty of adjusting
prices so as to avoid ruinous losses becomes most serious.
A premium on gold becomes, as I have said before, a
universal tax, because no comnioditvsold or bonulit can

1 4 ITALY.

be made exempt from its influences. Of late, however,
there lias been less tendency to violent movement in
this gold premium, and the average is lower now than
it was in the years immediately succeeding the national
independence. Should the funded debt be kept well
within bounds, therefore, it might be worth the con-
sideration of Italian statesmen whether the Government
should not make an approach towards a resumption of
specie payments by means of an issue of bonds for the
purpose of redeeming the currency debt. A measure
of the kind, were it accompanied by the exemption of
the foreign creditors of the State from an income tax,
which is not fairly justifiable when imposed on loans
w^hich were raised abroad, would do a great deal to
elevate the commerce of Italy out of its fifth-rate
position, and to make it solidly prosperous.

There are, as we see, drawbacks in the situation of
the country ; but for all that I shall miss my aim
grievously if, in this rapid sketch, giving the outlines
of both sides of the subject, I do not show that Italy
has made, and is making, steady progress. She is not
standing still, nor going back in either her political
organisation or her fmances. The nation has vitality
as a nation, and through all the drawbacks and diffi-
culties, one can discern the possibility of a new future
for the peninsula which once ruled the world.
Splendidly situated for doing at all events a Con-
tinental trade with Asia and the far East, it is possible

ITALY. 1 5

tliat the tide of commerce will partially roll backwards
to lier long-deserted shores. We must try, then, to
find out what Italy is doing in the way of developing
her trade — what her capacities are, and what hindrances
there may be in her way other than the merely financial
or administrative.

- In the first place, it may be at once admitted that
Italy is not a manufacturing country now, nor very
likely speedily to become one. The races which in-
habit Southern Italy are ill adapted for the hard inces-
sant labour to which ' factory hands ' and ' foundry
iiands ' have to submit in any country, but most of all
in a country striving to establish a business for itself at
the expense of rivals. In Northern Italy there is mucli
more raw capacity for industry ; and the hardy Lom-
bards or Piedmontese — even the Venetians and Tus-
cans — might, if it depended upon mere labour alone,
rise with some rapidity into the position of competitors
Avith other nations for certain kinds of manufactured
staples. But, granting everything to be favourable
in the character of the people, Italy does not possess
the raw materials necessary to a great manufacturing
nation in sufficient quantities, or in a form so readily
accessible as to make it possible for her to become great
in this way. The only industry in which she can be
said to possess some advantage over her neighbours is
silk-weaving, and in this, I believe, some progress was
made ut) to llio liinc wlicii ;i ('h:niL!'e of fasliion and

16 ITALY.

failure in the Italian silk crop gave the entire industry
a severe blow : but as a producer of textile fabrics
generally Italy does not promise to take a strong
position. Her exports of silk, raw and manufac-
tured, averaged in value about 15,000,000/. in the
years 1870 to 1874, according to tables given by
Mr. Herries. This was balanced to some extent
by imports of the average value of 5,500,000/.
Besides silk, Italy grows a certain amount of cotton,
but not nearly enough to supply her own wants; and
although she has an export trade to Austria in cotton
tissues, it is more of a transit trade, I believe, than the
result of the competition of Italian spinners and
weavers. Her industries are, indeed, all — except that
of silk — small and of quite local importance. Italy
is in nothing more provincial, in ftict, than in the
isolated condition of her cotton, linen, and woollen
manufactures. But, although insignificant, they still
increase in a measure, and may well grow very
much logger without interfering in the least with
the purchasing power of Italy in other countries, or
competing very seriously in foreign markets. With
her immediate neighbours, Switzerland, Austria, and
France, it is in the nature of things that her trade
shoidd grow larger, and that where competition is
])OSsible Italian products should in some directions beat
ours ; but there is as yet certainly nothing alarming in
tlie situation, and we have no cause to l)e envious of

ITALY. 17

her prosperity. At present the total export and im-
port trade of Italy is, as I have said, well under
100,000,000/., and the bulk of the exports— silk, oil,
wine, marble, and glass — are of a kind which do not
come much within our competing range. As far as the
direct trade with Great Britain is concerned, it is on
the whole steady and profitable, and amounts to about
an eighth part of her entire commerce ; Italy buying
from us nuich more largely than we do from her, al-
though the discrepancy is less now than it has been,
owing, in part, I fear it nuist be said, to the more
effectual competition of French manufiicturers. The
consum}>tion of Indian and Egyptian raw cotton is also
steadily increasing in Italian mills, although these are
in great part still of a primitive kind. Some progress
has been made in the establishment of small iron-
works, and one work at Venice, beloneiufv to an Eno--
lishman named Nevill, has attained to some local cele-
brity. Italy possesses few iron mines, however, and,
as far as we know, has no rich contiguous stores of
iron and coal such as are essential to a coimtry des-
tined to lead in almost any branch of skilled produc-
tion.^ We must, therefore, after making all allowance

^ In Kolb's Veryhichendc Statistik it is stated that the average
annual value of tlio production of iron in Italy in the years 18G7-70 was
just over cSOO,000/., the product of 11,100 workpeople; tliat of copper,
53,000/., won by the labour of 2,500 workmen. Coal and petroleum
together represented the insigniticant value of I2G,000/., and gave em-
ployment to .3,450 workmen. Lead was considerably more valuable than
copper, but only gave an average of about 330,000/., a quantity clearly

VOL. n. C

18 ITALY.

for the signs of local activity which are to be met
Avith ill the country, come to the conclusion that Italy
is not in a position to become a great manufacturing
centre. Her people are by preference pastoral ; and
as in France, although tlie tenure of the land is not
the same, large tracts of the soil are parcelled out
amongst small holders, whose position is nearly as se-
cure, if not so independent, as that of the French peasant
proprietor, and the attractions of the workshops are
not sufficient to draw a comparatively comfortable and
by no means crowded population from their fields.^

not sufficient for home consumption. Italy is, in fact, a steady customer
to England for the metals of manufacture and for coal.

^ According to the return published in 18G1, the latest which seems to
be available, about 8,000,000 of the population of 22,000,000 then com-
pri.'^ing Italy were employed in agricultural pursuits, and a nearly equal
number were returned as ' without calling.' The number engaged in
mineral production was less than G0,000, and there were devoted to
manufactures about 3,100,000. In this latter would of course be included
all the local tradesmen, the shoemakers, smiths, carpenters, masons, and
clockmakers, which go to make up the population of the villages, so that
the numbers engaged actually in Avhat we should in this country call
manufactures would probably not reach half that figure. These figures
are not of much value now, however, for Italy has been changed and
opened up greatly since then, and in some of the northern provinces
manufactures and agriculture overlap each other, so that the same people
ought to be classed in both ; not only so, but the addition to the popula-
tion, both by natural increment and through the incorporation of fresh
provinces, has materially added to the proportions of certain classes.
Instead of 22,000,000, Italy has now a popiilation of 27,500,000, of which,
according to Behm and Wagner's last Annual on the population of the
earth, issued in Peterinann's Mt/fhcilunf/m, 0,000,000, or 2-5-7 per cent.,
form the scattered population, tlie remainder being gathered in the cities,
towns, and agricultural villages of the land. I am unable to say, how-
ever, what proportion of the entire population may now be actually
employed in, or directly dependent upon, the labour of the agnculturist.
From an official report lately issued on the state of the Italian agriculture
in the years 1870-74, of which copious analyses have been appearing

ITALY. 19

But, though not a great manufacturing nation, Italy is,
as we have seen, advancing in several respects as a
])roducer of articles meant for home use, and her
tariff is, like that of other coinitries we have men-
tioned, acting as a strong bulwark to protect the home
producer against competition. One woidd imagine,
for example, that in the matter of silk the Italian
manufacturer would require little or nothing in the
shape of protection, seeing that he coidd set up his

both in the Econoynista iV Italia and in the Economiste Fnm^ais, I learn
that 11,000,000 acres of land are devoted to wheat, and yield about
142,420,000 bushels, or, ron<rhly, a little more than twelve bushels to the
acre — a very small yield for so rich a country — and tlie best commentary
we could have upon the exceeding backwardness of agriculture. Of maize,
rice, barley, and oats, the yield was rather better, as the following table
will sliow : —

Total yield m

Yield per

Acres

Bushels

Acre

Maize .

4,242,000

85,959,000

20-3

Rice .

.582,000

27,000,000

46-4

Barley and rye

. 1,162,000

18,417,000

15-8

Oats .

798,000

20,471,000

25-6

Allowing for the difference of grains, this table still shows great variable-
ness in the yield. At the worst, however, Italy compares very favourably
with such a country as Russia, where the yield per acre of wheat is esti-
mated in the latest returns at only five-and-a-lialf bushels per acre. The
total yield of wheat in Italy is indeed witliin 15,000,000 bushels of that
of Russia, and leaves a considerable margin for export. Besides these
grains and root crops, olives, cotton, and flax, a large acreage is devoted
to the vine, no less, according to the table from whicli I quote, than
4,700,000 acres, the yield upon which was 597,000,000 gallons of wine.
Altogether, the agricultural land in Italy included in the official returns
extends to 08,000,000 acres. The tendency would seem to be to extend
the pasture lands, a good trade offering to Italy in cattle with Austria,
Switzerland, and Frauoe, which the vegetarian habits of the agricultural
population enables it to turn to better account than the mere enmuemtion
Of the flocks would lead one to suppose. In horses particularly Italy is
poor, and she stands immerically in all Icinds of animals behind Austria
and Hungary, but for all that she can export to them.

c 2

20 ITALY.

mill- in the heart of a silk-growing country, and yet
Italy levies a duty on all kinds of silk tissues imported,
which, though small, is, like the Indian duty on cotton
Sfoods, sufficient to debar foreign imports to a consider-
able extent, and to raise prices at home. Woollen,
cotton, and linen fabrics are more heavily taxed still,
as will be seen in the note which I append ; ^ and,

' The import duty charged at Italian ports on silk tissues is 5 per cent.
od valorem, or Is. Id. per lb. ; ribbons pay from Is. lOd. to 2s. lid. per lb.
if of silk alone, and 10 per cent, ad vtdorem if mixed. Only silk twist is
admitted free. Cotton yarn, on the other hand, pays according to fine-
ness, and to whether it is bleached and dyed or unbleached, a duty varying
from 6s. Id. to 14s. Id. per cwt., the twists and double yarns and bleached
and dyed ditto paying respectively lis. Or/, and 14s. Id. On cotton
tissues the duty is very heavy, varying from 2C)S. 5d. on unbleached
cotton to 47s. on cotton prints per cwt., while cotton embroidery pays
4/. 14s. Zd. per cwt. Woollen yarn comes off worse still, undyed paying
J8«. Qd. and dyed 28«. M. per cwt., while woollen cloths pay substan-
tially about the same nominal duties per cwt, as cotton. Blankets and
carpets, for example, are charged 23s. 6(/, to 32s. Qd., according to quality,
per cwt. ; tapes and lace of pure wool or mixed 4/. 13s. Qd. Ordinary
woollen tissues or cloths pay, however, either a 10 per cent, ad valorem
duty or 3Z. 5s. per cwt. What the incidence of much of this taxation is
according to the values of the articles taxed it is of course impossible for
any but exporters to teU ; but it must vary considerably, and in some
instances, when the cloth is of a cheap kind, represent something like
20 to 30 per cent, of its value or more. The same may be said of linen,
hempen and jute fabrics, all of which pay heavy duties, which, if nomi-
nally less in amount than those levied by France or Russia, are by their
rough and ready mode of adjustment probably practically as prohibitory.
Measured by the wealth of Italy, compared with France, they must be
more so. As to iron and steel, the tariff of Italy is, if anything, more
foolish than that of any other country we have had under review, because
in thi.«i instance there is nothing to be protected worth speaking of There
are no blown-up hectic home industries in iron to pamper and to fine the
people for the maintenance of, as in the United States ; and therefore these
duties have here not even the irrational excuse which the States, France,
Austri.i, and Germany may plausibly advance. Italy charges, for all
that, a duty of some sort on every kind of iron except pig-iron and broken
scraps. In some cases, as, for example, rails, the duty is relatively low,

ITALY. 21

speaking generally of the Italian tariff, we may say
that, instead of being now light and Jil)eral, as Count
Cavoiir wished it to be, when compared with that of
other European countries, it is essentially the tariff of
a country devoted to protectionist ideas. Driven by
stress of poverty, Italian statesmen not possessed of
the political sagacity of Count Cavour, have re-im])osed
some very obnoxious customs duties, and increased tlieir
burden, without, however, adding materially to the yield,
while certainly hindering the development of the trade
of the nation. Compared with the fragmentary tariffs
in force in 1858, the duties are, however, still very
low, and Italy should get credit here (dso for at all
events not slipping back into the slough from which
she emerged. Still, the })resent tariff is higher in
a good many instances than that in force in 1863
and 1864,^ which alarmed the short-si o'hted economists
of the country by the smalhiess of its yield ; and it is

only .some 5if/. per cwt. ovOs. 2d. per ton; but in others it is very liiirli —
steel wire paying 9s. 6d. ; rolled and bar steel, os. 7d. ; tin plates, 6s. Id. ;
fine iron wire, 3s. 3^d. ; tools for mechanics or agriculturists, 3s. 9<7. ;
knives of ordinary kinds, 20s. M. ; and with fine handles, 40s. 8d. per cwt.
Steam-engine boilers and machinery of all sorts also pay duties rangin£»'
from Is. 7ir/. to 4s. lOhd. per cwt., agricultural machines being admitted
at the lowest scale. All this indicates an extremely short-sighted policy,
because it is hampering the progress of the community, without doing
any class in it even a temporary benefit, or bringing the Government
much profit. And these are by no means all. Italy taxes tlie import of
food grains, of meats, of sugar (which pays from 8s. 5d. to lis. Ud. per
cwt., according to fineness), and chemicals (such as the alkalis so valuable
in agriculture), and yet with it all the gross income from the customs
ku-ely readies 4.000,000/. a year.

* See tables in Mr. Ilerries s Report, pp. 597-599.

22 ITALY.

apparently furtlier beset by vexations provisions and
excess charges which aggravate importers and cumber
business, without yielding any adequate return. We
may hope then that, when the time comes for a fresh
revision of the general and special customs tariffs of the
kingdom — as come it speedily must — a step forward
will be taken, and that England will be admitted with-
in the inner circle, if Italy cannot find it in her heart
to open her gates to all alike. But at present it
must be candidlv admitted that the sio:ns are the other
way. From year to year Italy has been going to re-
vise her general tariff, but hitherto the revision has
been postponed. A fragmentary tariff between Italy
and France was, however, signed in the middle of
July last, and it indicates rather an increase of fiscal
obstructiveness than the reverse. Sundry duties on
articles specially affecting the two countries, such as
wine and silk, have been rearranged mostly for the
worse, and Italy has distinguished herself in particular
by large additions to her list of export duties. Alto-
gether tliis treaty augurs ill for free trade, and ill for
the reciprocal business of Italy and France, which has
lat(;ly been flourishing apace. We may rest patiently
therefore under the present burdens imposed on our
trade, lest a worse evil befall us. A few years' further
experience of the mischiefs in the present system may
lead to change in the dirccti(jii of freedom, which Italy
is clearly unprepared for now.

Yet it would be decidedly the interest of Italy to

ITALY. 23

revise her tarifT in a free-trade sense, were it for no
other reason tlian that her wealth is neither mineral nor
industrial in the English sense of the terms, but agri-
cultural. How decidedly Italy is a pastoral country is
seen best by her actual foreign trade ; the staple
exports of Italy, beyond her silk and her small amount
of silk manufactures, being oil and wine, fruits and
seeds, cereals and hides, timber, animals, hemp and
flax, some sorts of provisions, and a little wool. She is
inevitably, in spite of the development of her local in-
dustries and manufoctures, much dependent on foreign
supply for many necessary articles of clothing, for much
of her machinery used in mills, on farms, on railways,
and in steamboats. Italy is, in consequence, and in spite
of herself, therefore, a customer of growing importance,
either to Great Britain or to industrial countries such
as France or Germany, and she ought to recognise
the fact so as to make the benefits as much as possible
mutual. For example, she took from us alone, in 1875,
about 2,600,000/. worth of cotton yarn and piece goods,
besides what may have reached her indirectly, and a
considerable amount of iron and iron manufactures, as
well as woollen goods and coal. The character of her
trade with us is very decidedly fixed by the tariff,
however ; and we discover here, as in the case of France,
a tendency to take from us raw or half-manufactured
articles in increasing quantities rather than the finished
goods. It is not satisfactory, for instance, from our
point of view, to And that the value of the cotton yarn

ITALY.

entered for Italy was in 1875 almost as large as the
value of the cotton cloths. It shows us that, however
unfitted Italy may be by nature and circumstances to
become a great manufacturing country, she can at least
secure the temporary advantage of being in a con-
siderable measure her own provider. Still less satisfac-
tory is it to find that for some years France has been
gaining steadily where we have been losing, and that
althougli our general trade with Italy gives few signs of
weakness, but rather the reverse, our cotton manufac-
turers are being decidedly elbowed out of her market.
The following tables given by Mr. Malet in his
report to the Foreign Office on the trade of Italy for
1875 will show the position most clearly :

Tabic showing the Value of Imports from England and Fra^wc to Italy oj
Tissues of Hemp or Flax of less than nine Threads of Warp in the Space of
five MUlimitri's, whether Raw or Bleached, during the Jive Years ending
DecemJber 31, 1875.

En;;land .
Franco .

1871

1872

1873

1874

1875

Fr.

1,473,000
798,000

Fr.

1 287,000
717,000

Fr.
1,035,000
1,031,000

Fr.
978,000
674,000

Fr.

1,145,000
1,338,000

Tahle showing the Valtte of Imports from England and France to Italy of
Cotton Tissues, also mixed with Thread and Wool, Coloured, Bycd, or Vrinted,
during the five Years ending December 31, 1875.

England —

Cotton or dyed
Printed

France —
1 Cotton or dyed .
[ Printed

1871

1872

1873

1874

1875

Fr.

6,732,000

17,778,000

Fr.

6,458,000
14,020,000

Fr. Fr.

6,339,000 4,267,000

14,475,000 10,633,000

Fr.

5,529.000

12,696,000

24,510,000

22,478,000

22,814,000 14,900,000

18,225,000

2,620.000
5,311,000

3.727,000
6,326,000

4.497,000 5,566,000
7,748,000 7,166,000

6,649.000
8,472,000

7,931,000

10,053,000

12,245,000,12,732,000

15,123,000

ITALY.

I'able showing the Vahie of Imports from England and France into Italy of
Tissues oj Wool or Hair, also mixed with Cotton or Thread, during the five
Years ending Decemher 31, 1875.

England —

Paying ael valorem

duties
Piiyingbywoight .

Franco —

Paying ad valorem

duties
Paying by weight .

1871

Fr.

1872

1873

1874

Fr.

16,542,000,15,73-1,000 12,48r),000

Fr.

1875

Fr.

9,521,000,10,873,000.

3,170,000! 3,103,000, 3,533,000: 3,204,000 2,074,000

19,712,000 18,837,000 16.018,000'l2,72o,000 12,947,000

7,231,000
4,918,000

9,225,000,10,500,000
6,653,000 6,926,000

12,149,000 15,878,000|17,462,000

11,015,000114,471,000
7,812,000 6,831,000

18,827,000,21,302,000

Umbasstj and Legation Reports, Part II., 1877, p. 137.

These figures are of a sufficiently startling kind,
and would seem to make good the contention of Mr.
Malet, that Frencli manufacturers have now the ad-
vantage of us. There is no reason to be alarmed at
that fact even supposing it true, and least of all as
regards Italy, which is France's next-door neighbour ;
but I am disposed to think that the importance of this
growth of the French trade in tissues might be easily
exaggerated, and tliat were trade to be made free we
should regain a considerable part of the ground we have
lost. At present both tariff and freight are against us,
and tlie freight probably turns the scale as compared
with France more than aiiythiniz else. And these
figures at least tend to confirm the statement that Italy
is dependent on foreign supply in most im})ortant
branches of manufacture. Her tariff may give a certain

26 ITALY.

forced prosperity to some of her endeavours to become
a rival of England and France, but she has no other
advantage than her tariff gives, for hvlng is not much
cheaper for tlie working chisses in Italy than here,
and, as a rule, they are less capable, more ignorant,
and more disposed to ' scamp ' work than our own, so
that, with wages nominally on a lower scale, the real
cost of production in Italy is probably higher than here.
I have not, indeed, attempted to discuss in any adequate
way the 'labour element 'or the ' wages element ' in
dealing with the competing capacities of other countries
in contrast with our own, because, in my judgment,
they are of comparatively secondary importance to the
piimary forces of reserves of capital, of habit, and above
all of geographical and physical adaptabiUties. Against
the enormous advantage which England still possesses
over almost all other countries in most respects, were
she free of the markets of the world as the world is
free to hers, the labour and wages elements have, in my
oi)iiiion, little force. It is not labour itself so much as
the facilities for applying labour in all departments of
manufacture in the most economic manner possible
which determines the battle, and in these facilities no
country in the world can hope for some time to rival
us. So far, therefore, as the policy of Italy tends to
fight against this superiority, I hold it to be mistaken ;
but it is a policy which we cannot inmiediately hoi)e to
see departed from there or elsewhere ; and we cannot

ITALY. 27

therefore expect that the present reaction, partly tlie
result of over-.s])eculation, partly artificial, will soon
end even in increased demand from Italy for our woven
fabrics, although in regard to our general trade with
that country we have good reason to be hopeful.

Left unforced, the course which Italy might pursue
with most advanta2;e to herself and to the world, as a
commercial nation, is very clearly marked out by her
poverty, her physical peculiarities, and her geographical
situation. To the first we shall refer again presently.
As to the second, we need only say that the highly
favoured climate and rich soil of Italy render her ad-
mirably adapted for the production of wine, oil, sugar,
maize, and choice fruits, for which she would find, and
does find, a ready market, not in Europe only, but also
in the East, and in America, North and South. Al-
ready a considerable trade is established with the United
States, for instance, and the large flow of Italian emigra-
tion to that region, as to Brazil and the River Plate,
tends to extend this kind of commerce. But for the
backward character of Italian agriculture, which, except
in Piedmont and perhaps part of Lombardy, is hardly
worthy tlie name of tillage at all, Italy might to-day
be much more })rominent as a rival of France in llie
su})ply of luxurious nations with dainties, and of [)]iy-
sically ill-conditioned countries with cheap food. With
Italy, as with France, it is the fruits of the earth which
must form the solid basis of all licr trade. To much of

28 ITALY.

the rest of the world these fruits are, or might become,
delicacies of the most precious kind ; and, therefore,
whatever Italy does to develop agriculture, is better
tlian the establishment of a dozen unliealthy factories
In some measure the Italian Government may be said
to see this, inasmuch as they devote a considerable
amount of attention to agricultural education, establish
depots of agricultural implements in various districts
for the purpose of educating the people, and so forth ;
but that is only toying with the great reforms needed,
which must include a wide remodelling of the fiscal
burdens, a new cadastral survey, followed by a revised
land tax, and the protection of the tillers of the soil
alike from the extortions of their do-nothing landlords
and the robberies of the brigand. Eecent letters from
Italy have shown the Italians to be morbidly sensitive
to this last subject ; and the curious vanity whicli they
have displayed about their rights and liberties is not
l)leasant. For certaiidy tliis brigand question is more
\it;il to tlic (rue settlement and })ros[)erity of Southern
Italy than almost any other. Until the nefarious robbers
are extirpated, and the so-called upper classes of the
towns — the remnant of a debased and corru])t nobility
— prevented fioni aiding and abetting them in their
depredations, Italy caimot advance as an agricultural
ntition. Her ])easantry, unable to cultivate the vine,
tlie olive, and the citron in peace, must remain, over
almost hah" the land, degraded, stu})id, and wasteful.

ITALY. 29

Instead of strutting about, talking of national dignity,
therefore, Italian statesmen would do avcU quietly to
set about the task of making each man's life and pro-
perty secure through the leiigtli and breaihh of the
laud. Unless they do so, their work may one day be
partially undone, and the country, ill-taxed and over-
taxed, poor and vexed by thieves and priests, may see
itself outstripped on every hand. In vine-growing now
it cannot for a moment compete with France or Spain,
hardly with Greece ; indeed, but for the dishonest
trade with France in bad wines, used for adulteration,
the export wine trade of the mainland would be of
hardly any value at all, and no It;dian wine is known
widely in England except the Sicilian Marsala. If she
does not take care her silk trade will be in like danger
from the competition of our Australian Colonies, as well
as from that of China and Japan. Italy has done much ;
but what she has done only brings into most startling
relief all that she has to do. And, latterly, not the
tariff only, but several acts of internal administration,
show signs of retrogression rather than progress, which
the best friends of Italy uuist lament over. Her
apathetic deputies are far too disposed to shirk their
duties, and would do better to dis})lay the fire and hot-
headedness of the French Assembly than the selfish
absenteeism now so common, which makes the Sardi-
nian again begin to think that he has nothing to do
with the afliiirs of Lombardy ; the Lombard indifTerent

30 ITALY.

to what interests Venice ; and all the North together
agree in looking with something like cold dislike on

DO O

the troubles of Sicily and the South. Ministers, aided
by such a Parliament, are hardly to be blamed if they
sometimes go backwards in their attempt to keep the
State solvent, and not tlie least unsatisfactory feature
is the httle help they get from the King, who, but
for his family, might ere now have ruined all the fair
prospect.

Eeverting to the position of Italy as pre-eminently
an agricultural country, I may enumerate a few of the
clogs wdiich prevent her progress in this direction. The
re-establishment of the grist tax was, for example, a
distinctly retrograde movement. It costs the nation,
directly or indirectly, perhaps five times as much as it
yields. The mere irritation to which the millers who
grind the corn and those who own it are alike subject
nuist be very dis])iriting, and check agricultural pro-
gress. Again, Italy copies French foshions a good deal
in tlie manner of her taxation : and we find all the
array of succession duties, mortmain dues, stamps, taxes
on locomotion, licences, and such like, in full sway.
Some of them are wise and fair enougli, and might
bear increasing, were their incidence fliirly distributed ;
but many of them are obstructive and injurious to the
prosperous growth of the national wealth. Italy also
has her tobacco monopoly, on the security of which slie
raised a loan for 9,500,000/. in 18G8, andwho shall say

ITALY. 31

tiiat it is not hurtful to her true interests ? But of
wider scope for evil, almost unproductive as they are,
we must characterise the export duties now levied on
many articles of vital importance to Italy. These duties
have, like those on imports, been increased in recent
years under the plea of necessity, and now act as a
serious barrier on free export. A low customs duty on
exports may do more harm than a higher one on im-
ports, because it cripples the nation in competition
directly, and, as it were, at the sources of its life ; and
no country is so exclusively possessed of advantages in
the production of any particular article as to be safe
under such hindrances. The liberal Sardinian customs
law of 1854 was much inveighed against at the time it
came into force, ^ and when its benefits were spread
pnrtially over the rest of the kingdom of Italy the
manufacturing classes looked as usual for ruin. Of
course no such ruin took place. On the contrary, Sar-
dinia prospered then, and Italy has prospered always in
proportion to the liberality of her commercial policy,
and if many branches of her agricultural industry stag-
nate now, it is because, apart from general causes
affecting all trade, she has gone backwards in her fiscal
laws. Her small manufactures have ever been bene-
fited by the lowering of her tariff. After the passing
of the liberal import tariff, the import of raw cotton
rose from an average of nbout 6,500,000 lbs. to over

^ Mr. Herries's Report, p. 589, et seq.

32 ITALY.

17,000,000 lbs., and in other respects home industries
such as these were benefited. What lias thus, as
always, proved true in the case of imports holds good
with still greater force in regard to exports, because a
tax on production is of all taxes the most wasteful.
Make bread dear and you make life hard ; and in like
manner put a barrier between the tiller of the soil and
a free market in any raw produce, and you strike at
the root of the entire national prosperity. This is un-
fortunately wdiat Italy has in no small measure done by
her grain taxes, her grist tax, and her vexatious, barren
export duties, to which she has in her special treaty
with France lately made large additions. Let her take
a lesson from the policy of her greatest statesman and
repeal these, and she will have done more to stimulate
agriculture than all her schools and exhibitions ever
can do. On the whole, agriculture maybe pronounced
now more burdened than manufactures since the recent
tinkering at the general tariff has, in various ways, in-
creased the pressure on this, the all-important source
of her prosperity. I give below Mr. Herries's figures,
comparing the present export duties charged on a few
of the principal articles with those in force in 1863 and
18G4, which was the period when the tariff was lowest.^

' Italian ExroRT Duties.

On August 1, 18C3
Lira (,'ents

At present
Lira Cents

Lime, per licctolitre

.... free

1 10

„ „ >X)ttle .

„

Olive oil

. per lOOkilog. 33

1 10

ITALY.

Hard necessity may be pleaded for tliis backward
movement as for that in the import duties ; but no
such plea can be admitted for a moment, inasmuch as
taxation of this kind tends to keep agriculture — and
all that depends on it — primitive and un})roductive.
Therefore this policy does also, and necessarily, lessen
the tax-paying power of the community, and the co-
herence of the young State. The whole fiscal system of
Italy thus requires to be remodelled, special favouritism
in tariffs done away with, and the duties which cannot
be dispensed with levied with as little irksomeness as
possible on the articles that can bear a tax with the least
injury to the country. Till this is done the trade of Italy
will not grow as it ought to do now in the directions
which nature has marked out for it, and I wiU even say
that the consolidation of the races which inhabit the

Italian Export Bvties— continued.

On August 1, 1863 At present

Lira

Cents

Lira

Cents

Volatile oil .

per

100 kilog.

free

Lemon juice

free

17
10

Extract of aloes .

Oranges and lemons

}}

Meat, fiesh or salted

Cheese

»>

Bulls and oxen .

•

per bead

Hides and skins .

. per

100 kilog.

Wool .

Silk, raw

' 11

))

„ -waste .

})

Unspecified dried fruit

3 »

)}

))

Almonds

))

f 1

' 1

Go
30

Report, p.

599.

VOL. II.

►

34 ITALY.

peninsula cannot be held assured, while their free
development is in this manner forbidden.

We may, then, I think, put aside all fear both that
Italy "will become a rival to England in any of her im-
portant branches of manufocture, and that, once un-
fettered, she will cease to be a progressive customer.
The character of the trade between the two countries
may vary in some measiu'e, and the competition of
other countries may grow, in certain directions, more
effective, but I do not think that these will cause our
Italian trade to grow less in bulk or value, and a
liberal, well-organised and classified tariff in Italy
would, I am sure, make it year by year greater, to the
benefit of both countries.

But there is another direction in which I think
Italy may not only rival us, but become in a great
degree, and within well-defined limits, a monopolist, if
she goes on as she has done these last dozen years.
Her geographical situation peculiarly fits her to be-
come again the distril^uting and carrying maritime
nation for Central Europe and the Levant. I do not
dream of a revived Venice. Venice may indeed flou-
rish again in a modest way, but not as a great port
and mart for the civilised world. I mean, rather, that
the sea-borne trade of Italy and of the neighbours of
Italy along the Greek archipelago, in Egypt and Syria,
and possibly even in the Black Sea and the Danube,
seems likely to be carried on more and more ii\ Italian

ITALY. 35

ships, and that her merchant marine may in time come
to be no mean rival of that of England in those
regions of tlie South and East. The progress of Itahan
shipping since the estabhshment of the kingdom is
evidence that in this direction she lias already taken
considerable strides. Italian vessels not only nearly
monopohse the coasting trade of the Adriatic and
Mediterranean ports near her borders, but the Eu-
battino hue of ocean steamers, sailing from Genoa and
other ports, compete successfully with the Austrian
Lloyd's and the French Messagcrie Maritime lines in
the Eastern seas, while two other important lines, the
Florio and the Pierano, are fast sweeping into Italian
hands the heaviest share of the trade of the Mediterra-
nean and the Levant. Moreover, the fact that our own
mail company, the once unrivalled Peninsular and Ori-
ental, is compelled to make a depot at Brindisi, is
itself a sign of change in the position of the Eastern
trade. As yet, this depot may be said to exist only for
the convenience of overland passengers and fast mails,
but goods will be sure to follow in time this overland
route to some extent, and a certain portion of the car-
rying trade of England become diverted to Italy. The
Suez Canal has hitherto been almost an EnoHsh water-
Avay, and will, no doubt, long continue to be used in
a predominating degree by English ships ; but it ob-
viously makes competition by a country situated as

D 2

6 ITALY.

Italy is much easier than it was before, and that com-
petition is being even now felt, fostered as it is by the
postal subsidies which the Italian Government, in
imitation of our own, gives to the Rubattino Company.
Looking at the map, we see that the harbours of Italy
are, as it were, placed directly in the way of ships
coming westward through the Canal, and the Asiatic
trade which the discovery of the Cape passage threw
into the hands of the Dutch, the Portuguese, and the
English, to the ruin of Venice and Genoa, may not
unlikely tend now to revert in some measure to its
old channels. Steam, no doubt, neutralises the altered
circumstances somewhat, but not altogether. Once let
Central Europe get consohdated into peaceful commu-
nities, Turkey become pacified or obliterated as a sepa-
rate State, to be replaced by, at worst, less devastating
governing agencies, and we may expect the trade of
Italy as a common carrier on the seas to be greatly
extended in that quarter. The cotton mills which she
possesses, or that may exist in Austria, Hungary, and
Bavaria, are likely to draw their supplies of Indian
cotton direct from the ports of shipment, or by Italian
ships, almost direct, instead, as heretofore, through
England. Marts for the raw produce of India and
China are thus not unlikely to spring up in Genoa and
Leghorn, if not in Venice and Naples, just as a wool
mart is now rising into importance at Antwerp ; and
London will then no longer occupy the exclusive posi-

ITALY. 37

tiou whicli the wars and follies of lier neighbours have
maintained her in for so long.

Nor need Italy halt with the Eastern trade. Her
connections with the Brazils and South America, as
well as with the United States and the islands in the
Spanish Main, are extending, though comparatively in-
significant now, and, unless emigration from her shores
ceases, are likely to extend, for a large Italian popida-
tion is now scattered over the fakest regions of South
America.

Therefore, altliough I do not think that, as manu-
facturers, we have much cause to look on Italy with
any dread, as a competitor for a portion of the European
cai-rying trade which has been so long in our hands, in
all its most valuable departments, I think we have good
reason to have misgivings. Italy is, in my opinion,
destined to make a more marked impression on our
monopoly in her own immediate neighbourhood than
almost any other European nation, and may yet become
a far-reaching rival. Even at present Italy stands for-
ward amongst the nations of the world as a great ship-
owning nation. The only European country that is
ahead of her besides ourselves is Norway, which has
always been prominent with its seafaring population,
who have much of the carrying trade of Germany,
Eussia, and Denmark in their hands. Year by year,
until the last two years, when depressed trade has pro-
duced some slackening, the tonnage of foreign vessels

38 ITALY.

entering our ports has been on the increase, and of
this increase Italy bears its full sliare.

We must accept Italian competition on the sea as a
factor of growing importance therefore, and, instead of
being jealous of it, seek to utilise it where it can serve
our ends, just as we allow other countries to use our
shipping for theirs. There must be free trade in ship
freights as in everything else, and in the meantime we
need have no fear that Italy will, for a long time to
come, drive us from the markets for our manufactures,
if she ever does it. While her budgets show an annual
deficit, while her paper currency is always at a dis-
count which seldom sinks much below 10 per cent., while
her population remains pastoral, and while her internal
administration is but half organised and her taxation
oppressive, she cannot run far in the race with us, or
with any manufacturing country; and for ourselves, free
trade is, after all, our great stronghold. When we
recognise how far behind us in this respect all other
nations yet are, ^VQ may be easy in our minds, provided
always, of course, we continue to work as heretofore.
Free trade will do nothing for a nation of sloths. At
present I see no signs anywhere that other countries are
in the least likely to be more diligent than we are.
Italy, at all events, gives no such indication, and
against her competition we can not only pit superior
and freer industry, but a higher order of agriculture, a
system of internal taxation on the whole less oppressive,

ITALY. 30

and natural and acquired advantages such as it takes
generations to bring into play. For the rest, if on the
high seas her ships should threaten to rival oin* own,
we can only hope that llie trade of the world will
become large enough to afTord them plenty to do with-
out lessening the employment of ours.

CHAPTER X.

SPAIN, PORTUGAL, AND THE NETHERLANDS.

The three countries with which I now propose to deal
have one characteristic in common. They all possess
colonies which are more or less wealthy and important.
At one period in their history, to 3, they have each
taken the lead amongst the maritime nations of the old
world. Spain in particular stands forth as the country
which has made more extended geographical discoveries,
and at one time ruled over a more extended territorial
empire, than any other nation which tlie world has
ever seen. In the higli days of Spanish glory her
sovereigns were dominant not merely in Europe, but
over all llic discovered portions of the New World.
They governed almost a continent and a half in tlie two
Americas, and appeared to grow, year by year, in power
and dominion, till tlieir might was broken by the slow
atti-ition of stubborn Dutch resistance, and the defeat
of the Armada. Since then Spain may be said to have
settled down gradually like a vessel which has sprung
a leak, until she now lies a wreck at the mercy of every
movement of the waters.

SPAIN, rOETUGAL, AND THE NETHERLANDS. 4l

Less in might, but in its day of a towering ambition,
and no mean dominion, ranks the little kingdom of
Portugal, which, stimulated by the precept and example
of ' Prince Henry the Navigator,' crept southwards
along the then unknown coast of Africa ; westwards to
the Brazils ; and gradually eastwards through the
Indian seas, until at one time during the end of the
sixteenth and early part of the seventeenth century its
prospects of possessing Hindostan were far greater than
our own. Less in its greatness, its decrepitude is also
less than that of Spain. The little kingdom is, indeed,
now busy Avith efforts at self-improvement, with schemes
of colonisation hi Mozambique and elsewhere, and may
be said to thrive in a modest sort of way in its old age.

Last comes the Netherlands, a country full of the
memory of brave conflicts and long-suffering per-
sistence, out of which it emerged to be the main in-
heritor of the commerce of its ancient oppressor. Tlie
poi'ts of Holland were for long the busiest and most
enterprising little corners of Europe, and its naval
power dominated that of England at the time Dutch
WiUiam came to the Enii-Ush throne. But the misjht
of the Netherlands has also sunk out of sight, and since
the devastating energy of Buonaparte swept it into his
mad Continental system, caut>ing England to destroy its
fleet, Holland has ceased to be a recognised Power in
Europe. There is still a busy, prosperous population
in the country, and still a considerable trade, but

42 SPAIN, PORTUGAL, AND

politically Holland is almost completely effacecl, and
when the new German Empire again troubles Europe
with its ambitions, may possibly sink into one of its
provinces.

In thus referring to famihar facts, I have no desire
to do more tlian recall the history of these countries.
My object is to impress on the reader this dominating
idea — that there can be no question of competition
with England stirred by the present state of any of
these countries. They have had their day, and they
have either lost the best opportunities it gave them or
have abused them ; and there is, I believe, no hope or
chance of a return of dominion for them. Spain will
not again rule in America ; no fleet of hers will alone,
at least, ever again terrify the people of England. Por-
tugal is no rival to us in the East, or appreciably in
Africa, and the carrying trade of Western Europe shows
no signs of passing back again into the hands of the
Dutch. There is, consequently, no use in treating these
countries from the point of view of possible rivals in
any l^ranch of trade. They can only be galvanised
into an attitude of rivalry by a foreign motive force
such as annexation, and so far, at all events, as Spain
and Portugal are concerned, can compete only by the
lielp of an influx of English and French capital. But
because we cannot treat any one of them in this light,
it docs not follow that a study of the commercial pro-
gress and capacities of these countries is of little interest

THE NETHERLANDS. 43

to US. We are, or ought to be, as anxious to find out
customers as rivals ; and in the position of customers,
or as aids to custom elsewhere, each of these countries
possesses a peculiar interest. They are all interesting
also in another way, although I cannot travel far into
that branch of the subject. Their fallen greatness,
their colonisations, their mercantile policies, are full of
most important lessons for us, and by drawing out to
view some of the causes of the failure which has followed
the attempts of each of these Powers to build up a
great empire, we might be able to form some idea of
what the chances are that the Empire of England will
not soon be wi^ecked and fall to pieces like that of Spain
or the Netherlands.

Confining, however, the attention chiefly to the
capacity of these countries to be our customers, I will
first of all deal with Spain. And I may as well say at
once that I do not know of any general statistics re-
garding Spain and Spanish trade that are of the least
value. Spain is a land where Chaos has held rule for
many generations, and one has to grope along in dark-
ness and confusion towards any conclusion one wishes
to reach. What figures there are only help, Jis a rule,
to mislead, and it is therefore as well, perhaps, that
they are few. Take Spanish budgets as an example.
No more imaginative creations exist. The Spanish
Finance Minister fully equals the Turk or the Egyptian
in framing an illusory national balance-sheet, and one

44 SPAIN, PORTUGAL, AND

recent minister boldly justified the subterfuge. But,
quite apart from habit and disposition, the truth is
really almost beyond the reach of a minister. Seiior
Salavei'ria is considered an upright man, and his budget
for 1876 was to all appearance moderately framed,
and with a more honest purpose than most of those
which had gone before. Yet it has turned out just as
false as its predecessors. Instead of a surplus, or
merely a small deficit, there was an empty Treasury,
and in order to meet the much curtailed interest on the
debt, borrowing, more or less secret, had once more to
be resorted to. This result has been reached, too, in spite
of an increase in the revenue of about 3,700,000/., due
mostly to increased receipts from import duties, frouj.
the tobacco monopoly, and from direct taxation ; but
this increase is only an inadequate set-off to Spanish ex-
travagance, and under the new fiscal laws it may be par-
tially lost. Spain had last financial year a revenue of only
28,700,000/. all told; and to meet all her engagements,
to carry on her foohsh Cuban war, and re-establish her
credit, would have needed something like 45,000,000/.
Such a sum there is not the least hope of her getting
under the present regime^ and lier ministers have there-
fore wisely determined to cut down to the lowest possible
limits the amount claimable by tlie creditors of the State
— the creditors, that is, who hold her funded debt. Those
who lend to the Treasury for short periods fare better.
Senor Salaverria last year made strenuous efforts to

THE NETHERLANDS. 45

arrange the huge debt of his country, and seemed to
succeed, so carefully limited were the obligations which
the State undertook. The arrangement was not just,
nor what a country penetrated with any sense of com-
mon honesty would care to propose ; but it was tolerable
in that it left the Government with not the shadow of
an excuse for further defaults. The debt charges were
pared down so as to be well within the apparent means
of the country, taken at their soberest estimate. Yet
what do we find ? No sooner is the arrangement carried
than the old curse starts up again. Not only has Spain
to borrow in order to pay 1 per cent, on her debt, but
in order to carry on her insane war with Cuba, and to
support the crowds of faineants produced by succes-
sive revolutions she raises special loans on Cuban
securities to preposterous amounts and drains at the
same time her home resources. These needs, in short,
added to the peculation and dishonesty of all kinds
haunting every branch of the public service, threw the
Government back into the hands of Jew money-lenders
of Paris and Madrid, before a month of the reformed
era had expired.^ The progress of Spain is treadmill

' There is nothing more difficult to determine than the amount of the
Spanish deht. All sorts of estimates have floated about rejrarding it,
most of them inaccurate. Some attempt was made, however, to get the
real truth out at the time when arrangements for the payment in paper
of the coupons overdue were being discussed ; and a statement appeared
in the Times of March 21, 1876, based upon official figm-es, which is
probably as nearly accvu'ate as can be got at. According to this the total
debt of Spain was just over 700,000,000/., of which nearly 300,000,000/.
had been incurred since 18C8. This estimate is in one sense misleading,

4G SPAIN, PORTUGAL, AND

progress. Instead of a surplus she will this year agaiu
show the usual deficit ; her creditors on bonds will get
nothing but paper and promises or borrowed money,
and only the usurers of the capital will grow fat on
the spoils of the land. The budgets of Spain are
therefore false on all grounds, and not the least false
when their framers are passing honest. The corrup-
tions, pride in thieving, and general political and social
debility which thus permeate the Government, ne-
cessarily affect every department of the social fabric.
The trade of Spain is therefore also cumbered by the
impossibility of conducting it with fair honesty. The
onerous customs duties are evaded on all hands, taxes
are left unpaid, and the spectacle stands out before
Europe of a popidation comparatively well-to-do con-
however, inasmucli as it represents merely the nominal amovmt at which
the debt would stand did it all or nearly all figure as 3 per cents. As a
matter of fact, a portion of this total is arrived at by taking the 3 per
cent, bonds issued as security to lenders for money advances at 17 per
cent, of their nominal value. And since the date of this retiuni the new
debt caused by the payment of the overdue coupons in 2 per cent, bonds
has been issued, bringing the nominal total of the debt up to nearly
800,000,000/. In point of fact, however, the money assigned in the
budget for the sum of the debt is about 7,000,000/., while at its nominal
value in 3 per cents, the debt would require for its sum about 22,000,000/.,
more than the entire revenue of the country in recent years. Judging
the funded debt by its assumed burden, therefore, it only stands for
.some .300,000,000/. at the outside. From all this it will be seen that any
idea of the ca.--h actually borrowed by Spain is quite beyond reach,
especially as there have been borrowings and borrowings, as well as com-
poundings and compoundings, till Spain must have -wiped out her in-
debtedness by a simple nonpayment several times over. The debt of
Spain is as old as the days of Ferdinand and Isabella, and were the history
of it to be written it would form the most marvellous record of usury,
theft, and credulity which the world ever saw.

THE NETIIEELANDS. 47

spiring, as it were, to keep its Government impotent, to
cause impecuniousness, and thereby to subject itself
to periodic deluges of anarchy and partial spoliation.
The ordinary Spaniard would seem to glory in the
national bankruptcy.

The more one studies the Spain of to-day, in fact,
the more profoundly is it borne home to one's mind
that we English did that nation an everlasting wrong
in delivering it from the grasp of the French at the
time of the Kevolutionary wars. Had there been true
stuff in the fibre of the people, a period of subjection
to that arrogant race would have brought it out. The
impracticable, dishonest, and utterly iucapable creatures
Avho held the controlling power in Spain then, and who
gave us lessons in number sufficient to convince the
most stupid that we did no good, and were not wanted,
would have been swept away perhaps to make room in
time for better men. But we propped them in their
place, and, like patient oxen, bore with their crimes,
their buffets, and insults, as if they had been the dis-
pensation of Heaven. The world saw the spectacle of
a military hero, with a foreign army at his back, de-
livering a reluctant nation from an oppressor whom
many in it welcomed as a dehverer from the anarchists
and effete tyrants at home. The Peninsular campaigns
of Wellington have thus proved almost a pure curse to
the people of the Spanish Peninsula. What true life is
in them has never yet got its opportunity. Without

48 SPAIN, PORTUGAL, AND

, J. v/j.ta.wv^^^,

statesmen, without patriotic zeal or cohesive force of
any kind, buried in a corrupt officiahsm, Spain Innlles
on her way to what goal I dare hardly venture to think.
Held in the steel grip of France for a generation or
two, she might to-day have emerged as Italy is emerg-
ing, and with even a grander prospect of future growth
than Italy. I confess I see small prospect of that re-
surrection to-day. The short gleam of hope which
followed the advent of Castelar has vanished, and
Spain has entered anew on a career of miserable
anarchy, which the tinsel of a restored monarchy hides
only for a little while. The day has long gone by
when any offshoot of Bourbonism can purify a people
from its administrative and other corruptions. The
only result of the restoration of Alphonso has hitherto
been reaction and the deepening of the shadows
which liang over Spain. Old ideas are clung to ;
wealth and precious lives are lavished to retain Cuba ;
priests come back like crows to settle on the doomed
land ; and liberties are narrowed or altogether pro-
scribed. There is a nobler Spain, it is true, than what
we tlius see, but it is feeble, scattered, and helpless
against the hideous official and hereditary corruption
wliif'h we Englisli, as it were, picl^ed up out of the
ditcli whither the French hud thrown it, and with
measureless expenditure of l)lood and money, toil and
endurance of sufTerings, set again on the necks of the
people. There is at tlie present day no more melan-

THE NETHERLANDS. 49

clioly spectacle for Englishmen on the earth tlian
Spain, when we contrast what she is witli what she has
been, and when we add to the contrast the thought
that our hands have, beyond all others, destroyed, per-
haps for ever, her chance of self-deliverance.

But I must leave this tempting subject to speak of
her trade, wliich, like her wealth, is considerable, and,
like her Government, ill regulated. Spain has a mag-
nificent sea-board, and, next to ourselves, possesses
what ought to be the most vahiable aid to foreign trade
in the shape of her colonies, and of the countries
founded on what were her colonies in America and the
Eastern seas. Her trade with these dependencies and
offshoots is, of course, very small compared to our own,
but it is an important element in her wealth, and, with
a more enlightened Government, might raise Spain
once again into the position of a second-class Power at
no very distant date. I do not look for this resurrec-
tion any more than I look for any of the South Ame-
rican Eepublics to rise into the position of a respect-
able State while dominated by people of Spanish blood.
I only note what might be in other circumstances,
while the actual focts compel me to say that there
seems every probability tliat Spain will in the near
future lose at least a portion of such trade as she now
has. Her recently promulgated tariff Avill, imless
modified, have, at all events, the eflect of seriously
lessening Spanish trade with England and Erance.

VOL. II. E

50 SPAIN, POETUGAL, AND

This has been hitherto no small part of her total trade
if we may judge by the figures published in our own or
in French official documents, which are indeed the only
rehable guides in the matter. The total of our own
trade with Spain is about equal to tliat with Italy.
Tlie two sides of the account are, however, significantly
reversed. Italy buys from us much more than she sells
to us, but Spain is comparatively a very poor buyer. In
her revolutionary years, following the expulsion of
Queen Isabella, her piu-chases from us fell in value
below 3,000,000/. a year— about a fourth of the imports
of Belgium. At present Spain buys of us between
4,000,000/. and 5,000,000/. per annum, or, at all events,
goods to that value are sent from here to her ports ; but
even this is little more than a million in excess of the
imports of her little neighbour Portugal, and will now
most probably be again diminished. On the other side
of the account we find that our purchases from Spain
have been as high as 11,000,000/. (in 1873), and that
they average from 8,000,000/. to 8,500,000/. We buy
from her, in other words, nearly double what we sell
to her, and may soon do much more unless Spanish
folly closes her markets against us by the operation of
the new tariff. This is not a large trade, althougli
much larger than that between Spain and France, and
on the whole, perhaps more healthy, as it indicates a
stronger hold upon Spanish products by English capi-
talists than the French trade does. It is not 9,000,000/.

THE NETHERLANDS. 51

nltogetlier, and tlio imports of France are larger tlian
tlie exports. Still our trade with Spain is small and
far from satisfactory, considering the positions of the
two countries, and tlieir mutually liel[)ful ca])acities.
This smallness is by no means to be taken as im})ly-
ing that Spain is poor ; only that its wealth is ill regu-
lated or mismanaged ; and the fact that we import so
much more from Spain than Ave export thither is not,
on the other hand, to be taken as implying that we
have helped to make Spain rich.

For this divergence of the account ap])arently so
much in Spain's favour the causes are various, but cliief
among them is the amount of English private capital
invested in Spain in wine-culture and mines. The iron
region of Bilbao, of which Defoe speaks in his ' Captain
Carleton,' has long attracted the attention of the Eng-
lish, and was the seat of a prosperous English mining-
company before the outbreak of the last Carlist war,
and there are several important copper and sulphur
mines also in English hands. The wine cultivation
in the south, again, has long been stimulated, and
in a good degree sustained, by English money aiKl
English-governed labour, which has also, althougli to a
small extent as yet, been put into several of the other
industries of Spain, the quicksilver loan being, for ex-
ample, another cause ol" a ilow of Spanish products to
this country in a small way. Natural causes Avould,
however, and independently of these mortgages, tend to

E a

52 SPAIN, PORTUGAL, AND

draw towards England a still larger portion of Spanish
raw produce, were the country well opened up and in
anything like decent order. The mineral wealth of
Spain is enormous. It has been nibbled at and
scratched, as it were, for at least two thousand years,
and is practically inexhaustible still. I am told that
the veins of ore possessed by the Tharsis and Eio
Tinto Mining Companies are capable of yielding for
many years enough sulphur, and almost enough copper,
to supply the wants of the whole world ; yet these
mines had been worked by the Eomans ; and the latter
company, at this very time, extracts a considerable
amount of metal from the refuse that these old miners
left in heaps on the ground. Coal, iron, lead, copper,
zinc, silver, all are found in abundance in Spain. ^ Being
tlius provided, and having no powerful manufiicturing
capacity either in population or in organised productive
machinery, Spain is thus, as our near neighbour, most
admirably adapted to be a storehouse from which we

' A return of the production of the mines of Spain, and of the motive
power and manual labour employed in mininjr operations, in 1870, is given
hv ^fr. Consul Wilkinson in his report for 1872, from which we learn
that the total quantity raised was as follows : — Iron, 43G,.586 tons ; lead
(soft and argentiferous), .3.52,193 tons; copper, 39.5,69.5 tons; zinc,
1 13,.583 tons ; and manganese, 10,87-3 tons. The total numbers of work-
people employed were 33,277 men, J, .508 women, and 0,225 boys. There
were also 148 engines of 3,711 horse-power in use. I am disposed to re-
gard this return as very imperfect, however, as, for one thing, no account
is apparently taken of the large export of pyrites of sulphur and copper,
and the quantity of manganese mined seems to be obviously understated.
We can only take these figures, therefore, as a sort of dim indication of
the facts.

THE NETHERLANDS. 53

can draw many raw materials at little cost, and to the
great saving of our own niore limited and sometimes
overstrained resources. I liave not the least doubt
that, were Spain in the position that Italy even now
occupies, we should find this tributary supply of ores
and raw produce nuicli greater than it yet has been ;
and, in a)iy event, it is likely to make rapid progress
when the world's business takes a new start, unless
Spain, under the guidance of her purblind and reaction-
ary royalists, deliberately locks her doors. Tlie con-
ditions of crude labour are such in Spain that we can
probably, for a long time to come, procure her mine-
rals cheaper than the United States can do out of tlieir
own mines ; and we have thus a reserve of competing
power which we sliould seek to preserve with infinite
solicitude and pains while we can. The more we can
husband our home resources the stronger we shall con
tinue to be. It is not at all probable that Spain will
become a large buyer from us for many a day. The
tenacity of the fixed ideas biu'ned into the minds of the
race by the fanatic semi-insane kings that followed the
Emperor Charles V. — himself power-mad — is still il-
lustrated by tlie policy of such statesmen as Spain can
boast of; her whole fiscal system is framed on the
basis of the old notion that it is good to sell, but
bad to buy, and that gold and silver are the only real
wealth ; and the pernicious character of these ideas has
been well exemplified in the new tariif wliich was pro-

54 SPAIN, PORTUGAL, AND

luulgated in July last. The tariff makes some modifi-
cations of a favourable character in certain imports,
but does not permit these modifications to benefit Eng-
land or the United States. The result of this exclu-
sion is that the exports of these countries to Spain are
likely to be curtailed by perhaps one -half So impor-
tant has the question of the Spanish tariff suddenly be-
come, that I am constrained to turn aside and deal with
it at more lena;th than the old blindly obstructive state
of things would warrant, and I give in a note the
main features of the tariff charges extracted from
a summary lately printed in the ' Times.' ^ Here I

' The followin<? is extracted from the Times of Aiigust 21, 1877. I
include only the more important articles or thoae showing the greatest
divergence in duties : —

* British trade with Spain in 1876 showed imports from that country
amounting in value to 8,703,146/. and exports valued at 4,706,408/. The
general history of tlie last ten years disclosed a gradual increase of trade.
The imports had increased by 50 per cent, and the exports had doubled.
An exceptional movement in 1873 made the imports greater than in any
other year. This gradual development will now be rudely interrupted
by the step, talien with unwonted promptitude, of the Spanish Govern-
ment in raising the customs tariff. A reduction of duties has been fixed
in favour of countries which have commercial treaties with Spain.
iMigland, wliich admits to the benefits of free trade merchandise arriving
under any flag, is excluded from fiscal advantages. France and the
United States suffer the same exclusion. The favoured nations are
Austro-IIuiigai-y, Belgium, Germany, Italy, ]\Iorocco, the Netherlands,
Portugal, Russia, Norway and Sweden, Switzerland, and Turkey. The
Budget was passed on July 11. On .July 17 the tarifl" received the
appnjbation of the King. On the 21st the King fixed the date on which
it should come into force. It was published in the Madrid Gazette, on
July 22, and came into operation on the first of the present month. Three
cla-sses are established by the n(;w regulations. One sot of duties {a)
applies to the nations which have no 'most-favoured nation clause,' the
second {h) to nations which have treaties, the third (c) is for articles
specially provided for. The extraordinary charge (<-) is a mysterious

THE NETHERLANDS. 55

need scarcely observe tlirit on some of tlie most im-
portant manufacturing staples, such as machinery or

extra duty, which is cumulatively imposed for the ' protection ' of Spanish
industrie.'^ upon tlie favoured and the unfavoured nations alike. The
dillerfntiul duties run throughout a great part of the tariff, and apply to
a vast list of the most heterogeneous articles. Uiir largest exports to
Spain are in textile fabrics and in iron ; and it will be observed that con-
siderable dillerential imposts are levied in these respects. Rectified
petroleum, mineral oils, and benzine are charged 5 pesetas 50 centesimos
per 100 kilogrammes when they come from natii)ns in class a, as from
Great Britain, for example. From nations in class h they pay at the rate
of 5 pesetas. The special or extraordinary charge is 12p. 50c. The
peseta is worth ^0(L Iron in pigs and scraps («) 2-50, {h) 2p. .31c., (c)
37c. per 100 kilos. Iron, tine manufacture, polished or with porcelain
coating, or ornamented by other metals, {a) 17"o0, (b) I3"76, (c) 2"20.
Iron and steel in bars, {a) 8p., (i) 7"5yc. (c) Ip. Iron in plates above
C) millimetres in thickness and rivets or returns, {a) Op., (i) 8-lOc., (c)
1-OS; ditto in bars, plates up to millimetres, axles, tires, plates, and
springs for carriages and hoops, («) 13p., (h) 10"50c., (f ) l'40c. ; ditto in
tine work or polished, with porcelain coating or ornamented with other
metals, and steel manufactures not otherwise mentioned, (o) 27'50c.,
(h) 25-50c., (f) 3-40. Wrought tin (a) G2-oOc., {h) G2-2oc., (c) 8-30c.
Copper in pig and old, («) 12-50, (6) 12, (c) 4-80 per 100 kilos. Copper
and brass in bars and ingots and old brass, («) 22'50c., (i) 19p., {o) 7'OOc.
Copper and brass in sheet, nails, and copper wire, (n) 50, {li) 44-20, (c)
10-40. Copper and brass in pipes and in pieces partly wrought, {a) 70,
ih) 52, (c) 10-40. Brass wire, {a) 30p., (6) 20, {c) l6-40c. Bronze, un-
wrouglit, {(t) lOp., (ft) 9-50, {c) r.30. For the above metals WTought,
and all alloys of common metals in which copper may form a portion of
the hardware, {(i) 12.")p., {h) 100, (<■) lOp. For the same, gill-plated,
nickeUed, and varnished, (« and li) 250p., (c) 40p. For all other metals
and alloys wrought, («) ;{7p. 50c., {h) 16p. 50c., (c) 4p. 40c. It has not
always been thought worth while to quote small additions in class (c) ,
Raw cotton is charged to («), Ip- 50c., (i) Ip. 20c., per 100 kilos. All
other cottons are charged per kilogramme. Cotton spun, twisted in cue
or two threads, unbleached, bleached, cr dyed, up to No. 35 inclusive,
(rt) Ip. 25c., (J)) Ip. 5c., (c) 12c. ; ditto above No. Zb, {a) Ip. 75c., (i)
Ip. 35c., (c) 18c. Cotton — twisted in three or more threads, bleached,
unbleached, or dyed, (o) 2p. 50c., (6) 2p. 25c., (e) 30c. Textile goods
are charged by the kilogramme. Cloths, pressed, plain, unbleached,
bleached, or dyed, in piece or handkerchiefs, up to 25 threads inclusive
(in warp and woof in the square of G millimetres), («) 3p., {h) 2p. 10c. ;
ditto, above 20 threads, (a) 2p. 70c., {h) 2p. 25c. ; ditto, printed and

56 SPAIN, PORTUGAL, AND

textile fabrics, we shall now be called on to pay from
50 to 100 per cent, more than the favoured nations,
who, most of them, have little or no competing power
at all.

As regards the cause of this singularly hostile move-
ment against England, Spain is said to be prompted
l)y two motives — disgust at our conduct in Gibraltar
— wliicli is notoriously a smugglers' nest — and dislike

worked up in the loom to 25 threads, iDcliisive, in warp and woof, (a) 4p.,

(b) op. loc.,; ditto, printed, &c., and containing' more than 25 threads,
(a) 3p. 70c., (b) Sp. 15c. Quiltinga and pinked goods, (a) 4p. 50c., (ft)
2p. 70c. Cloths for socks, gloves, stockings, and other like purposes,
(a) 5p. 25c., (b) .3p. 50c. Corduroys, velveteens, and other double stuffs,
(a) 3p. 50c., (b) 3p. 30c. per kilogramme, are the only goods in which dif-
I'erential duties are charged in this class. In hemp fibre, rope, &c., the
differences are but few and slight, plain woven fibre up to ten threads
being charged («) Ip. 25c. per kilo., as against Ip. to class (6), and of 25
threads 4p. 25c., against 4p. 20c. In woollens, in the class of unwashed
wool, the class (i) benefits by 4p. in common unwashed wool for 100 kilos.,
and by 5p. in the higher wool and that fit for yarn, the latter being {a)
I2p. 50c., (6) 7p. 50c., (c) 2p. 50c. Worsted, spun rough or with oil,
per kilogi'amme, {rr) Ip. 85c., (6) Ip. 20c., (c) 32c.; ditto clean or washed,
(«) 2p. 60c., (b) Ip. 80c , (c) 48c. ; the same dyed, (o) 3p., (i) 2p. lOc,

(c) 50c. Carpets are charged to (a) 175p., (b) 125p. per 100 kilos. Felts,
75p. to (rt), G5p. to (ft) per kilo. Blankets (including rugs) per kilo., (a)
2p. 25c., (ft) 2p. Clotlis, and all kinds of woven goods of wool only or of
wool mixed with cotton, (a) 8p., (ft) 5p. Horsehair cloths, (a) 2p. 50c.,
(ft; 2p. per kilo. Silk is charged per kilogramme, raw or spun, but not
twisted, (a) Ip. 50c., (ft) 75c.; twisted, (a) 6p. 25c,, (ft) 4p., (c) 80c.;
Bpun untwisted floss silk, («) 50c., (ft) 30c. ; ditto, twisted, («) 4p. 50c.,
(ft) 2p., (c) 50c.; plain or worked silks woven, {a) 17p. 50c., (ft) 15p.
Velvets and plusli, (a) 20p. 25c., (ft) 22]). 50c. Tulles, laces, and point3
of silk or floss, (a) 22p. 50c., (ft) 21 p. The only diii'ereuces in paper
worthy of notice seem to be in wall papers, printed with gold, silver,
wool, or crystal, and charged to class (a) 200p., (ft) ]50p., (c) 24p. for
100 kilo.s., and a general impost on papers Jiot enumerated of 40p. against
(a), 35p. (ft), and (c) 14p. Class («) is charged for eocli piano a duty of 250p.,
(ft) 160.' Vide also Sir J, Walsham's interesting report on the new tariff
presented to Parliament last session (Parly. Papers, C. 1836).

THE NETHERLANDS. 57

to our wine duties. Tlie revenge which is sought to
be taken lias not, it seems to me, any justification in
our misdeeds, if these are all the faults which can be
urged against us ; but I nevertheless think that we
ought to remove even these pretexts for such treatment.
It ought to be a matter of no difficulty for us to stop
smuggling at Gibraltar, especially as the Spaniards find
abundant opportunities for defrauding the revenue
elsewhere, and if we must retain that rock, by all
means let us abate the nuisance. Probably nothing
that we can do short of giving up the place will satisfy
the proud-stomached S[)aniards, but we can, at any rate,
do our best.

The wine-duty question is to my mind perhaps the
more simple of the two. The present scale of duty,
which levies Is. per gallon on all wines below 2G per
cent, of proof spirit per gallon, and 26'. Gd. on all over
26 per cent., is a cause of gross injustice to the strong
natural wines of Spain, practically shutting the cheaper
among them out of the nun'ket : it ouglit therefore to
be altered. What intellis'ible i^rounds there were for
the imposition of so absurd a scale I never could make
out. It affords no protection whatever to the distillers in
this country, and is no adequate equivalent lor the lO**.
duty levied on home-made s[)irits. To approach fair-
ness the scale should have been much more fine drawn.
Nor is it any help to the consumer, who, we are told,
always is in some mysterious way siu'e to be endan-

58 SPAIN, PORTUGAL, AND

gcred by the importation of vile ' fortified ' compounds
if tlie duty is lowered. It is distinctly my opinion,
therefore, that this is a real grievance to S[)ain, and
if we can procure admission into the position of the
' B ' class of nations by I'emoving it we shall have
done our excise no harm and our trade a possible
good.

I say i^ossible, for I confess that I do not hope
much for trade with Spain while this invidious and ca-
priciously variable tariff continues in any shape to exist.
Other nations will not gain much by being ' favoured,'
nor shall we perhaps lose a great deal beyond what we
otherwise might, should we continue to be excluded.
France has had special grace in the matter of import
duties from Spain since 1865, yet Spain ranks as a
buyer of French goods below Switzerland, Belgium,
Italy, and Algc^'ia, and as an exporter to France below
even Turkey in the trade account of France for 1875.
Although now favoured as a<'ainst us more than ever
ill nearly all staple manufactured tissues, by the new
arrangement which at once gives advantage to nearly
all Europe except ourselves, I am nevertheless disposed
t(j think tliat French exports to Spain will fare little
better tlian they have done. The truth is, the lowest
tai'ifl" which Spain ikjw exacts on importcxl manufactured
goods is sufficient to [)revent the entry of such goods
in any quantity. The Spaniards are as violent protec-
tionists as if they had sometliing to protect. One might

THE NETHERLANDS. 59

suppose Spain to be toiling along a mistaken path with
the energy of the United States, and fiercely combative
for what her manufacturers say are her interests. No-
thing of the kind. Hence, taken in connection with her
capacity of consumption or her manufacturing power,
the Spanish tariff is sim})ly monstrous. As a result, it
will minister, as it has always ministered, more to the
gains of the smuggler than to the national revenue, and
will continue to prove a fruitful source of the national
curse of dishonesty in trade and politics. This disho-
nesty and smuggling go on everywhere, and the latter
is, as I have said, a constant soiu'ce of annoyance to us
at Gibraltar, as the traders who run the gauntlet of
Spanish Guarda Costa boats and posts find the Eock a
most valuable means of entering Spanish territoiy; and,
had the nation been stronger, we might have been
drawn into a war with it on this score long ago. On
the French side across the mountains, and all along the
coast from Barcelona southwards, the same illicit trade
goes on, to the great profit of the individuals who en-
gage in it and the serious loss of the revenue.

It is this smuggling which, more, perhaps, than
official chaos and incompetence, makes all general
figures relating to Spanish trade quite delusive. Such
as they are, they give evidence that the disturbances
incident to the irruption of Carlos caused a sharp
diminution in Spanish production in everything except
wine. In the official figures quoted by Mr. rhi[)ps, in

60 SPAIN, PORTUGAL, AND

his report for 1874 on the trade of Spain/ the total
outward and inward trade of that year was stated as
only 31,500,000/., which was less by 13,700,000/. than
that of the previous year. The decrease was entirely
on the export side, the imports sho^ving an increase,
owing to the bad harvest in the eastern provinces
necessitating an import of corn. At the highest of
fiscal reckoning the foreign trade of Spain is not much
more than half that of Italy ; and, did we suppose the
figures published represented the facts, we should say
that Spain is miserably poor As we have said, they
do not represent the facts ; l)ut her recent attempts at
improving her fiscal legislation will certainly not tend to
increase her wealth or to draw to her shores much of
that foreign enterprise and capital for which she has,
wnth all her pride, no little necessity.

Undoubtedly tlie trade of Spain is rudimentary and
her resoin^ces ill developed ; else she is wealthy enough
to be a much larger buyer than she is now. She might
alio be a large exporter of other things besides wine,
fruits, oils, merino wool, and ores, and a large importer
of manufactured goods, were she politically ahve.''^

' Leyation IlepmU, Part III., l87o.

"^ According to Kolb, the weaving industries of Spain gave employ-
ment in 1801 to about 100,000 penple, of which about half were cotton-
.spinners and weavers. .Since tliat time there do not appear to have been
any reliable statistics published. It seems probable, however, from the
decrease in the totals of Spanish trade during the Oarlist war, that the
prosperity of the nation in this respect has not recently increased. At
the beginning of the sixteentli century the same authority tells us that in
Seville alone there were 10,000 silk looms, giving employment to 130,000

THE NETHERLANDS. 61

There are, indeed, few countries in the world more
adapted than Spain for the judicious outlay of capital
in improving the land as well as opening mines; but
we can hardly hope to see the capital forthcoming
while the existing superstitious dislike of everything not
S})anish holds sway with the purblind and corrupt
rulers attached to a court whose existence in Spain is
itself a hollow sham and a mockery of the pco})le.
Spain needs but capital and honest government, and is
likely to get neither : with both, what might she not do
in agriculture alone !

The cultivated area of Spain was estimated some
years ago at 00,355,000 acres, and the waste land at
50,000,000 acres. Making allownnce for the moun-

people, but by the end of tbe seveuteenth century tlie looms bad dwindled
to 300, and now Frencb and Italian competition has driven it partially
if not entirely out of existence. The trade system of Spain from tbe
first made solid manufacturinp- prosperity impossible. Consul Pratt,
in bis report on tbe trade of Barcelona for 1874 {Coiisular Reports,
Part ly., 1875), gives a list of tbe cotton, silk, and woollen factories in
and around that city, where the manufacturing- industries of Spain now
chiefly centre. Accordinfr to this, tlie total number of bands employed
was over 16,000, and the value of tbe animal production of tbe spindles,
looms, and printin<r presses used in the cotton and mixed cotton and silk
industry was more than 700,000/. Tlie value of the outturn of tbe
woollen mills wa?i over 400,000/. At a moderate com])utation we mav
say that tbe production of these industries altogether represents an annual
Aalue of about 1,200,000/., which lor a country like Spain, and with tbe
foreign relations and dependencies which Spain has, is a remarkably poor
result. This is substantially about all that protection has done to develop
tbe country, for the manulactories to be found elsewhere are of no great
importance. There are a number of small woollen manufactories at
Alcoy, in Alicante, where also the famous cigarette paper is produced to
the extent of 000,000 reams a year, and elsewhere throughout Spain,
more or less, local nuinulactories are to be found. But there ii^ no national
manufacturing industry.

62 SPAIN, PORTUGAL, AND

tainous regions and the stripped arid plains of Estre-
niadura and other portions of Central Spain which are
capable of reclamation, this shows a very large margin
of ground unoccupied that might be well worth culti-
vating, and would, no doubt, be cultivated, did Spain
give the land into the hands of the peasantry. At
present a large amount of the property taken from the
Church is waste or in the hands of land speculators.
It would form an admirable investment for agricultu-
rists, and might be made to produce a great surplus of
food, that could be exported every year, instead of fit-
fully abundant harvests which never get Spain a steady
hold on the grain markets of Europe. But there is
little chance of either the men or the money being
forthcoming for such development. At all events,
England will not lend freely, although there is still a
lingering idea amongst holders of Spanish bonds that
one day the country will ])ecome orderly and solvent.
The French have been, perhaps, wiser than the English
in the matter of lending money to Spain. They hold
many of her national bonds, no doubt, but chiefly in
pledge for advances at high usury, which have long
a«"o paid themselves. The finances of the nation are
always in the usurer's grasp, and he perpetrates all
sorts of impositions on the Treasury because of the fools
and rogues that keep it ; he lends at 20 per cent., defeats
all schemes of reform, and, in one way or another, keej3s
the country' always deep in his debt — always in need

THE NETHERLANDS. Go

of new loans. It is so now. It has been so since
Spain attained the position of a CathoUc monarfliy,
and became a fair quarry for the mucii-kickcd but able,
unscrupulous, and politic Jews. In fairness to these
Jews, and also to the French i)ul)lie, it must, however,
be said that thev have done somethino' more for the
country than help it to drown itself in anarchy and
debt. But for French Jews' assistance Spain would
never have had half her present railway system, wdiich,
in spite of all drawbacks, is doing a great deal for the
country in opening the natural wealth of the interior
to foreign trade. This has been good work, not un-
wisely done.^ But the manner in which capital will
now be infused into Spain is rather through undertaking
to work mines than b}- loans for large public Avorks,
and even these channels have been temporarily nearly
dried up by the events of the last half-dozen years.
I do not wish to write despairingly of the future of
any country for which hope is discernible, but it would
be easy to accumulate evidence tending to prove that
Spain may now be where she is for a generation yet for

* Spain possesses about 4,000 miles of railway in active operation,
most of them doing very well, especially those in the south and in Cata-
lonia, where the linos helnnp- exclusively to Spanisli capitalists, cliiefly
Spanish Jews. Other parts of the system have been constructed for the
most part with French money, but some, I believe, with English. There
are about -2,000 more to construct, and Avhen they are all in working order
they will hardly provo too raucli for the necessities of the nation. In
nothing has the foresight and prudence of the financiers wlio organised
the companies and made the railways been more conspicuous than in the
manner in which they for the most part have avoided foolish competition.

64 SPAIN, PORTUGAL, AND

all that foreign capital will do for her, so much has it
been scared away, I shall content myself, however,
with saying that I see no evidence that the trade of this
country with Spain is destined to any large or rapid
expansion. The broken character of the nation, its
internal race antipathies and zones of sloth and
industry, its feeble Government and bad fiscal laws,
combine to make a prospect gloomy enough. Spanish
statesmen do nothing but obstruct the nation, and when
a storm sweeps one swarm of corrupt officials away
another settles in its place. There is no honour, no
plain dealing, no truth ; only chicane elevated to a
science, and superstition glorified into a foith, till con-
tact with Spanish officialism in any form is itself a cor-
rupting thing. In one direction, where we might ex-
pect progress from mere force of circumstances, we find
next to none. Spain has no great hold on her own
carrying trade. English ships bring cargoes of goods
to her ports from all parts of the world, and from South
America particularly. I am told that her mercantile
navy is declining.' The late civil war had a pernicious

' Almost the only Spanish port which can he said to show signs of
advancing prosperity in a marked degree is that of Iluelva, which lies on
the west coast north of Cadiz. Its prosperity is entirely due to the
mining enterprise of Scotch, French, and Anglo-German companies, which
have opened up such mines as Tharsis, I{io Tinto, and Oalanas. They
have also built railways to the port, and the line Lelonging to the Rio
Tinto Company is to be extended to Seville. Huelva is therefore a very
busy port, wlience coftper, copper ore, pyrites, manganese, are sent in
oreat quantities to Great Britain, Germany, and France. There are also
large quantities of very good wine made in the neighbourhood, most of

TILE NETHERLANDS. G5

influence upon it, and tlie long-continued disturbances
in Cuba have also driven a good deal of the valuable
trade of that island into the hands of the English and
other foreign carriers.

The mention of Cuba brings before us a very-
striking example of the manner in which Spain has
flung away her great opportunities. For some nine
years now that island has been a scene of miserable
civil strife; waste and devastation have gone on, tens
of thousands of Spanish soldiers have been sacrificed —
all for what? Just merely that the Spaniards of the
military and official classes might retain a rich plundering
groimd against all native Cuban interests. There is of
course the usual element of Spanish vanity and childish
pride helping to maintain her endeavours to recover
the island ; but beneath these lies the hard, matter-of-
fact inducement of vulgar rapacity which uses the
sentimental reasons as a cloak for its base designs.

■which has hitherto passed through the hands of the monopolists at Xeres,
to be shipped there or at Cadiz and Port St. Mary, but which will Ihid a
channel of its own by the new railways. The port of Malaga is also
fairly prosperous, having, besides its gTeat fruit trade, a large export busi-
ness in minerals. Since 1 873, however, the latter has been depressed, and,
dependent as it is on foreign capital and enterprise much more than native,
it cannot at best be taken as a sign of Spanish revival. At these ports,
as well as those of Barcelona, Valencia, Oavthagena, and Cadiz, however,
it is foreign shipping which obtains the bulk of the increased trade Spain
has a few steamers and a considerable fleet of sailing vessels, but they
are not able to compete for a moment with those of England, or even with
those of Italy and France. Heavy port dues, official exactions of the
black mail order, and the difficulty of obtaining cargoes out as well as in,
prevent the development of an English or of any foreign shipping trade,
yet the native craft are getting beaten.

VOL, II. P

66 SPAIN, PORTUGAL, AND

Cuba is rich ; her annual foreign export trade is valued
at from twenty to twenty-four millions sterling a year ;
and so fertile is the land, so abject the condition of the
colonial population, slave and free, that on this trade
the Spaniards are able to levy all sorts of oppressive
fines. Cuba is a mine of wealth to the emigrant
Spanish official and planter ; and because it is so he
will not let it go. The treatment which the ' Pearl of
the Antilles ' now receives is just what Spain has meted
out to all her great possessions, and with this result that,
when she has been compelled to loose her grasp from
them one by one, she has left them a prey for the most
part to political rowdies or petty tjrants ; all manhood
being beaten out of them, all truth forgotten in the
hollow baseness of a country which was one huge lie.
Not one of the colonies of Spain which have asserted
their independence has done any good as a State in the
world as yet — is other than a sort of curse to the earth.
Cuba, liberated, will most hkely fall into the same
slough. Tyranny breeds civil incapacity everywhere,
and the Creoles of the island are too well schooled by
tyranny to belie the rule.

Of course the imports of Cuba from England, as
from all foreign countries, are heavily taxed ; and al-
though with this island, as with its neighbour Porto
Eico, our trade is considerable, it is nothing like what
it might be did the owners know fair dealing. We buy
probably nearly a fourth of the produce of these islands.

TILE NETHERLANDS. G7

and tlie United States alone takes perhaps a half of the
remainder — 70 to 75 per cent, of the Cuban sugar
crops going there • — but everything that purblind sel-
fishness can do to obstruct the return flow of com-
merce is done. The marvel is not that Cuba cannot
buy in return, but that she can continue to sell, and no
doubt the fruit of all this obstructiveness will, by-and-
by, appear in successful competition and a ruined
colony. Had Jamaica recovered sooner from her in-
ternal troubles, and had Haiti been in the hands of a
competent population and government, there is little
doubt but that Cuba and Porto Eico would have
been distanced and partially beaten ere now. Their
situation would have been as that of Mexico and the
United States of Colombia. The fact, however, is that
these islands have profited by the confusion and impo-
tence which has prevailed around them and on the main-
land to an extent that could never have been possible
had good government and settled institutions existed
elsewhere. Their possession of slaves had also a power-
ful influence in their favour. With slaves and an in-
exhaustible soil a cultivator may do almost anything, be
the exactions to which he has to submit what they may.
The state of affairs in the Philippine Islands, also
and unfortunately a possession of Spain, is only a few
degrees better than in the West Indies, because there
is no insurrection in them, and no troublesome slave

^ Consul-Geueral Dunlop's Report vn the Trade of Cuba for 1872.

F 2

68 SPAIN, PORTUGAL, AND

question. The State is the sole entity that has any life
there beyond that of a machine, and the common
population is only of use to keep the Government in life.
The history of Spanish foreign dominion is, however,
summed up in that one description. A more heart-
saddening story than that of Spanish conquest and
Spanish rule in many of the fairest portions of the
world is not to be found in the records of any nation
that has ever risen to empire since articulate history
held the deeds of nations up to judgment. No wonder,
therefore, that the trade of Spain is weak, that her
mercantile navy languishes, that corruption and venality
sit like cormorants on the heads of the people. Spain
and her colonies are almost incapable of themselves
rising into a better phase of national existence ; and
although sections of the populations that inhabit them
are growing rich, the riches do not conduce to civilisa-
tion and progress, nor are they in many instances al-
together the product of Spanish foresight and industry.
The ordinary Spaniard prospers best now, as he has
always done, where rapacity, falsehood, and selfishness
yield the highest returns at the lowest risk.

Much might be said al30ut the little kingdom of
Portugal, to which I must now direct attention ; but
the importance of actual British trade, or trade pros-
pects, with that country would not warrant a wide dis-
cussion here. For some five years past the total trade

THE NETHERLANDS. 69

accounts of Great Britain with Portugal have averaged
about 7,500,000/., and, as might be expected from the
liigh Portuguese tariff, the heavier portion of this was
imports from that country. There has been an in-
crease in the total busines;^ of nearly 3,000,000/. a
year since 1860, and there is, therefore, a certain
amount of prosperity visible in the recent history of
the trade between the two kingdoms. But it is partly
of a forced character. Like other countries, Portugal
has gone into great public works, labouring thereby to
increase the productiveness of the country without at
the same time acting liberally towards trade. Until
last year Great Britain, although the best customer and
best friend in all ways that Portugal has, was treated
worse than France in the matter of commercial facili-
ties and freedom. France has enjoyed since 1866 a
special tariff, whicli has imposed duties on the average
only about half what England has to pay ; and the
wonder is, that our manufacturers, so heavily over-
weighted as they have been, were able to make head-
way at all. The tariff is still very high on many ar-
ticles, but so much lower by comparison with the past
that English exports to Portugal will no doubt receive
considerable impetus, unless the state of the country
prevents it. This is just the ]wint of doubt. Portu-
gal has unquestionably made progress in recent years ;
railways liave been built, roads made, banks estab-
lished, and much done to open the inland ^•alleys to

70 SPAIN, PORTUGAL, AND

trade. The result lias been a large increase in the ex-
porting capacity of the country, which has told, es-
pecially in the north, in an increase of the wealth and
resoiu'ces of the people. But against this has to be
set two very serious elements of danger — the steady
growth of the State debt and the extravagant height to
which speculation has pushed institutions of credit. It
will scarcely be credited that whereas a quarter of a
century ago banking was almost unknown in Portugal,
there should now be thirty-six or thirty-seven banks in
a coimtry possessed of only two large towns, and the
total population of which is only some 4,000,000,
mostly agricultural people ; but such is the fact.
There is, of course, no legitimate business for most of
these banks, which are often started by returned emi-
grants, who have made their fortunes in Brazil or in
Africa, and who, finding no ready outlet for investing
their means, amuse themselves by starting high-sound-
ing lending institutions in the small towns, and even
villages, of the country. Having no legitimate busi-
ness for these, they either, as a matter of course, en-
gage chiefly in the business of bolstering each other up,
or in tempting a needy, left-handed, and rather stupid
Government to borrow for this, that, or the other loud-
sounding ' public work.' ^ There would have been a

' The capital of these Portuguese banks appears to aggregate about
11,000,000/., and the deposits do not amount to much more than

.3,6

00,()00l. This includes the paid-up capital and the deposits of the
London and Brazilian Bank at its branches in Lisbon and Oporto. Such

THE NETHERLANDS. 71

crash among these banks last year that would have
swept half ot" them out of existence, crippling the
country for years, but for the interference of their
chief debtor, the State, which decreed a suspension of
the power of creditors to enforce payments, and bor-
rowed money of the Jews and others in London with
which to back up their credit. Of course this money
could only be repaid by raising a new funded loan
here and in Paris, and accordingly the funded debt of.
the kingdom was increased this year by four millions
sterling. Originally the loan was to have been for
6,500,000/. nominal at 3 per cent., and to be issued at
50 per cent., but it took so badly, although issued
here by the house of Baring, and iu Paris by a highly
respectable finance and banking company, that the
Government withdrew, or said it withdrew, 2,500,000/.
Of the remainder the greater part hes in the hands of

a swollen amount of capital as this, compared "with the smallness of the
resources lent by the public to the banks, indicates better than anything
else the mushroom character of this banking speculation. In fact, as I
have said in the text, the banks lend each other their available means in
order to enable the whole to float, and they are thus, with three or four
conspicuous exceptions, in whose hands the mercantile business of the
country centres, a sort of mutual pawning clubs. Fortunately, their issues
of notes are rather limited, most of them having none at all, so that their
collapse is not likely to have that universally paralysing effect on the trade
of the nation which followed the destruction of the English muslu'oom
banks in 182o. None the less are they a source of much present mischief
and future danger, because they inflate credit most outrageously, and also
because they have drawn in the Government to sustain the inflation.
They are also centres of wild gambling in many instances, so much so that
tlie crisis of last year was brought about, not by the state of trade, but
by a severe fall in Spanish o per cents., wliich these so-called banks had
been speculating in heavily for the rise.

72 SPAIN, PORTUGAL, AND

the contractors, and the temporary advances which
the loan was to meet have not been all paid off.
It is stated that the monetary public here and in
France has not taken 250,000/. nominal of the loan,
and akeady the agents of the Government are endea-
vouring to negotiate further advances. Be that true or
not, it is certain that the Government must soon again
borrow, were it for no other reason than that half the
banks in Portugal will want propping, and must soon
be propped by the Government or not at all. This
method of keeping enterprise afoot is highly danger-
ous at best, and one can easily see that amid such a
muddled confusion of public and jjrivate interests, it
has become a serious question whether the ever-grow-
ing burdens of the Government, or the increased jaeld
of the land, will win the day. I am inclined to fear
the former. That the resom-ces of Portugal have ex-
panded greatly since the ' progress ' fever took hold of
her is proved by the reduction in the deficits, which
used to be often a million or more a year on a
revenue of little more than 3,000,000/., and are now
dwindling, till, according to the budget estimate for the
present year, there is an anticipated shortcoming of
only some 400,000/. Last year the deficit was about
000,000/. These results, too, are inclusive of the
charges for the Public Works outlay. With the large
increase in revenue, however, Portugal ought not to
have any such deficit at all. By keeping her works

THE NETHERLANDS. 73

well within the increased means, and avoiding paternal
support to every little speculation which crops up in
the country, there sliould be no necessity to recur every
few years to a fresh loan, and no such partial collapse in
raishig a loan as has lately occurred. The income of
the country is now about 5,500,000/., an increase of
more than 2,000,000/. since 1870-71, due principally,
it is said, to increased trade, and this should have suf-
ficed to keep Portugal out of the market as a borrower
and something more.

The new Ministry, which is said to be more
economical than the last, ought accordingly to {)rove its
superiority by putting an end to deficits, and finding a
surplus for the reduction of debt. The country is at
peace, and, by comparison with Spain, is securely
governed. Were her agricultural resources in the south
developed more by the subdivision of land amongst small
cultivators, as in the north, and the railways finished,
Portugal might possibly pull through by retrenching.
It would be a heavy task, but it is possible, and I do
not wish to be too pessimist in the view I take of the
situation. Her new administrators will, however, have
to remember that a portion of the prosperity of the past
half-dozen years has come from exceptional causes,
among which are to be reckoned these very pubhc works
themselves, which have entailed large imports, upon
which duties have been levied ; also that a good deal
of the prosperity of Brazil, from which Portugal still

14: SPAIN, PORTUGAL, AND

derives uo small benefit in one shape or another, has
been due to the same exceptional causes. Were either
Portugal or Brazil to be pulled up short in their credits
or their trading facilities abroad, therefore, a collapse
would be almost certain to follow in both, which would,
at least, do great temporary injury, and which might
upset the rather rickety credit of Portugal altogether.
For it must not be forgotten that many of the public
works created are a source of direct loss to the Govern-
ment every year, and likely to continue so for some
time to come, so that the burdens of the State are in-
creased in two ways — by the debt charge, and by the
cost of maintaming works which the debt has paid for.
Hence, whatever the ultimate outcome of the present
not unpraise worthy efforts of Portugal at home and in her
African colonies to run abreast of the new habits and
ideas of the day, I think a balancing of these conside-
rations will prevent any sanguine hopes for the imme-
diate future. The best we can say is, that on the
whole the country seeks to move forward, and that her
pace is not an alarming one, although it may none the
less be rather beyond her strength, as certainly her finan-
cial methods are radically bad, and her mercantile
credit deeply undermined.

It must not be forgotten either that the debt of
Portugal is enormously heavy, reaching now well upon
80,000,000/. ; that it has been defaulted on more than
once ; and that, except Brazil, her connections and de-

THE NETHERLANDS. 75

pendencies abroad arc of very little value to her, com-
mercially or otherwise. The colonies of Portugal are
not indeed overshadowed by the gross tyrannies that
have torn the life out of those of Spain, but they are
feebly administered, far scattered, and poor. The island
of Madeu-a is perhaps the richest possession which
Portugal has. Her territories along the north-west
coast of Africa, and in the south-east of Africa, at
Mozambique, and Delagoa Bay are not very profitable.
There are efforts made at extending their productiveness,
no doubt, especially in Mozambique and at Delagoa
Bay, which has only just fallen to Portugal, but if they
are not more profitable than those which have gone
before, they will do little good. The truth is that the
Portuguese Government, under a seeming solidity, is
considerably worm-eaten with a venerable traditionary
sort of corruption unfavourable to healthy colonial
development. Eobbery prevails nearly everywhere,
and the management of a colony is merely more or less
a big job. Hence the manner in which Portuguese
ride in Africa still shelters the slave trailic, although
the complete abolition of slavery has long been decreed
to cease in 1878. It is quite notorious that along the
coast- of Mozambique haunts of slavers are to be found,
and that these often trade under Portucjuese colours,
and find shelter and tacit encouragement in Portuguese
harbours, although doubtless the Government at Lisbon
may be horrified at the fact. That Government can do

76 SPAIN, PORTUGAL, AND

little against officials who have purchased posts from it
in order to make for themselves fortmies, and who
therefore farm the colonies to their own profit ratlier
than the general good. Absurd customs regulations
also prevail in most of these colonies, seriously imped-
ing their prosperity, and the Portuguese, though a
better colonist than the Spaniard, has not succeeded
in planting anywhere, except in Brazil, settlements
which may grow into new nations, and of Brazil itself
my hopes are not high.

Once more, on the brighter side of the picture it is
to be noted that a certain progress in agriculture seems
to have been made in Madeira, in Portuguese Guiana,
and elsewhere. Cotton has been grown to some small
extent in Angola, and it is said to be of good quality.
And there can be no question that Portugal still pos-
sesses territories capable of becoming valuable posses-
sions were they administered for the public weal. No
more desirable district is to be found in Africa than
some of those on the south-eastern side which Portugal
now holds. Her possessions in India are insignificant
territorially, but might be of some importance as centres
of trade ; and the same may be said of Macao, Portugal's
solitar}^ foothold on the coast of China. As matters
stand, all of them are good only for wliat Brazil is still
good to Portugal — they are places where the few make
fortunes, perhaps, l^ut wliich the parent country, as a
whole, keeps up at a loss, and they are not, even in the

THE NETHERLANDS. 77

fortuno-making light, taken in a lump, at all comparable
in value to Brazil. In some of them, such as the Azores
and Madeira, the development is due to British enter-
prise and capital much more than to Portuguese, and
it is to British ships that Portugal is indebted for her
best mercantile facilities with nearly all her possessions.
Two lines of fine steamers run from the English colonies
in South Africa to London, carrying no inconsiderable
portion of the Portuguese African trade, and English,
French, and German vessels do almost all the business
with the Brazils.

To sum the matter up, then, Portugal is a country
where English capital has done much, where oiu* trade
is increasing, and would increase faster did it get fair
play ; but the p(3licy of the Portuguese Government,
alike at home and in its possessions, is backward and
impr6vident at the same time. There has been some
abnormal stimulus of business here, as elsewhere, and
the backward swing to which all trade is subject cannot
be prevented here more than anywhere else. Portugal
has little to depend on, after all, but her colonial trade,
her wines, and her other agricultural produce, and the
last has not been increased much in amount by her
efforts at improvement The increase in the wealth of
the country and its dependencies is as yet unimportant
against the inllation of credit with which it has been
accompanied, and that inllation may yet sweep the
Government into the chaos of bankruptcy. That,

7S SPAIN, POrvTUGAL, AND

however, is not necessarily a condition which wonld
destroy our trade with tlie nation. On the contrary,
if the nation have the elements of order and stability
within it, a collapse of the State might actually un-
shackle trade and increase it.

It is time now to turn to the Netherlands, which is,
after all, for us the most important of the three countries
I have included in this chapter, alike in its trade and in
its foreign dominions. I have not left space to treat it
according to its importance ; but fortunately the points
of doubt and difficulty regarding it are very few.
Holland, like the other two, has had her day of conflict
and of triumph, and it is past. She is now settled
down into the position of a peaceful nonentity amongst
the big Powers, still vexed by their greatness. Her
possessions some may covet, but her might now makes
none envious. Holland is free to pursue her industries
and commerce without much fear of molestation, and
nothing could well be more in contrast than her con-
dition compared with that of Spain, whose sovereigns
once spent the energies of nations and the wealth of a
continent in efforts to brins^ the stubborn Dutchmen
under their heel. Few countries are perhaps more
substantially comfortable than Holland, and, except
France, no country that I know of has a population
more industrious and thrifty. Although the population
is only some 4,000,000, including the Grand Duchy
of Luxembourg, or about 300,000 less than that of

THE NETHERLANDS. 79

Portugal, the Netherlands nrc not only able to expoit
large quantities of agricultural produce, but to maintain
a considerable manufacturing industrj' in connection
with their East Indian possessions. The trade of this
little kingdom with England alone is more than five
times that of Portugal, exclusive of direct colonial trade.
To be sure, a good deal of this is transit trade, the
ports of Holland having gained steadily in importance
of late years, as entrepots for the ingress and egress of
the trade of Western Germany. Eotterdam is in this
respect no mean rival of Antwerp, and now that the
new North Sea Canal has opened the port of Amsterdam
to ships of large tonnage, that city also promises to be-
come more a centre of solid transit business than it is
now. But, allowing for this through trade, the fact
remains that Holland itself does a very large business
with England. We import thence cattle and vegetables,
and all kinds of agricultural produce, in increasing
quantities every year. One of our railway companies
has a regular line of steamers plying between Harwich
and Eotterdam three times a week for the purpose of
carrying on this trade, and there is also a Dutch line,
which runs between Dutch ports and London.^

1 Some thirty-seven steamers ply between the port of Rotterdam and
various ports of the United Kinrrdom, nearly the whole of them under
the Enp:lish flajr, during the busy parts of the year. One English line —
that of tlie Great lOastern liiiihvay Company — is rapidly openinjr up an
admirable new tourist route to the Contuient, the steamers beinp: botli
well appointed and well manafred. Two steamers trade between
Rotterdam and Dublin and Belfast, and there are five run between that

80 SPAIN, POETUGAL, AND

Busy and prosperous as Holland is, however, she
has never recovered, in any substantial degree, her
former position as one of the leading seafaring nations
of the Old World. Dutch shipping is on the whole
being pressed hard and run down by Enghsh and
Grerman ; and w^ere it not for the manner in which her
East Indian commerce is fenced in for the benefit of the
Netherlands Trading Company, and the Netherlands
India Steam Shipping Company the carrying trade of
Holland would probably now be much smaller than it
is. The number of foreign vessels which enter the
ports of Amsterdam, Eotterdam, and Flushing is on the
increase, that of Dutch vessels rather on the decline ;
and there is little difficulty in accounting for this.
Amongst minor causes is the disadvantage which Hol-
land is placed in through possessing none of the materials
necessary to construct the modern iron steam-vessels
at home. She buys most of them from Clyde builders.
Her attempts to keep abreast of the requirements of
modern trade are therefore met by difficulties at the
outset, and she has so far less chance of success. In
point of fact, I believe only the Netherlands Trading
Company — a huge monopolist concern headed by the

port and Leitli, Grangemoatli and Dundee, besides occasional sailings
from other places. This is, of course, independent of the trade of Am-
sterdam, which, till the opening of the new canal, was a declining though
important one. A Dutch company has lately begun to run a line of
steamers between Flushing and Sheerness in connection with the
Chatham and Dover Railway, but hitherto its success has not been
encouraging.

THE NETHERLANDS. 81

King — lias made any serious attempt at competing with
Englisli sljip-builclers, and tlie attempt lias not been
successful. Other things being equal, the country that
lias to buy its ships from foreign builders will be very
likely to find the trade pass into the hands of its
neighbours who make the ships. In other words, the
nation that builds ships cheapest and best for itself
must, as a rule, be the nation that can run them with
most success and profit. The K'etherlands have had
no success, for example, in competing with England
for American trade, and only make their East Indian
lines pay through incorporating them as, in a manner,
a part of the colonial system.

Another cause of perhaps even greater force acting
to produce the decay of the foreign carrying trade of
Holland is the rise of Germany, and the pushing en-
deavoiu's of the Germans to get a good grasp upon
an extended foreign trade. This resuscitation of the
German Empire is threatening to Holland in several
ways, and, should nothing come to upset the ambitious
edifice, may lead by-and-by to the extinction of this
little kingdom as a separate Power. Holland and
Denmark would form but two morsels to the giant. In
the meantime Germany overshadows Holland in matters
of trade in some important channels. The ports of
Bremen and Hamburg struggle for the mastery over
Amsterdam and Eotterdam, and show abundant siauis
of prevailing so far as general over-sea business is con-
VOL. II. ^'

82 SP.\IN, PORTUGAL, A>T>

cerned. However much use the Germans may make
of Dutch railways and Dutch ports for the local export
and import trade of theu- Westphalian provinces, it is
to theii" own ports that they seek more aud more to
draw the staple over-sea traffic of the Empire. And
thus it is bound to be, till Dutch ports become German.
While, therefore, the Xorth German Lloyd's hne of
ocean mail-steamers prospers fairly in the American
trade, the Dutch American has been unable to reap a
profitable return.^ It is, consequently, fak to assume
that Holland, though much richer, and a much more
extensive trader than the other decaved nations which
we have noticed, is certainly in no position to interfere,
if left to her own resources, with, the predominating
position of England as an over-sea goods carrier for all
nations.

This conclusion is, I think, quite consistent with the
belief that the prosperity of Holland may in other ways
continue. Lidustrious populations cannot become,
imder any ordinaiy cu'cimastances, reduced to abject
poverty ; and while England continues to be a great
manufactiu-ing. seafaring nation, Holland is bound to
have a large trade with her. In spite of herself she
must buy of us manufactured goods of all kinds, but
particularly machinery and agricultural implements ;
and, in spite of ourselves, we must be in some measure
dependent on her agiicultural produce for food. Her

1 Consul Turing's Report on the Trade of Rotterdam for 1875.

THE NETHERLANDS. 83

meat and fruit and vegetables are most invaluable to us.
On the wliole, this interchange of products is at present
nearly as unfettered as we could expect with the trade
ideas still current nearly everywhere. The Dutch
tariff for our manufactured tissues is, as a rule, only
5 per cent, ad valorem^ which is fairly liberal, and per-
mits of a considerable consumption of English manu-
factures within the country. It is true that we have
the sugar grievance in a mitigated type against Holland
as against Belgium ; but were it not that France has
hitherto used the pretext Avhich these countries give
her as a justification for the maintenance of her own
more onerous system, we shoidd have little cause to
grumble. Holland will, of course, endeavour to keep
a strong hold of her Java production of sugar, whatever
happens ; bu.t beyond that her trade has not hitherto
extended much, nor does it seem likely to extend. The
quantity of raw sugar wdiich we import direct from
Holland is quite insignificant as a rule, and the import
of refined, though very much larger, is to some extent
counterbalanced by the increasing hold which we are
obtaining over the raw produce shipped direct from
Java. It is probable, moreover, that the revision of
the treaty between France and this country, and the
new convention entered into by the three Powers —
France, Belgium, and Holland — with our Government
over this miserable sugar dispute, will soon practically
remove the grievance altogetlier, although one cannot pre-

84 SPAIN, rORTUGAL, AND

diet this with certainty, and the draft proposals of France,
lately made public, are not all that one could wish.

Holland herself cannot, unfortunately, be a very
large consumer of English goods in any case, so that
the liberality of her tariff does not count for a great
deal while she so jealously preserves for herself the
trade of Dutch East India. Her management of Java
and the adjacent islands is indeed a curious subject for
the study of the political economist. From a humani-
tarian point of view the Dutch policy stands almost at
the antipodes of that professed, but not always practised,
by England. Idealism in government, and the tutelage
of subject races in the art of self-government, form no
part of the Netherland programme in Java and Sumatra.
All Dutch colonies are held for the purposes of gain,
and to these puq)Oses native population and the Govern-
ment are alike boimd to be subservient. From such a
prosaic method of viewing their foreign possessions, it
is natural that the Dutch should come to treat their
colonies as huge farms or private estates. Commercially
this system has its advantages for the owners, who are
not only able to draw all possible profit from the sale
of the produce of their possessions, but to command al-
most the entire supply of the wants of the subject popula-
tion. The profits of this closely guarded trade must
amount, at the very least, to several millions sterling a
year, on an average of years, independently of surplus
State revenues, and this is unquestionably of more

THE NETHERLANDS. 85

pecuniary importance to Holland than posing before
the world as a philanthropic power. In her Indian
provinces she rules over a population of more than
20,000,000, that of Java and Madura alone being about
18,000,000 ; but no attempt is made to ' develop' the
natives, nor are they admitted to any share in the
government, however hiniible. Their duty is to pro-
duce either for the privileged Dutch trading corjjora-
tions, or for private persons of the dominant race intent
on fortune-making, and consequently Holland is not
bothered with the dynastic and other troubles which
disturb our rule in India. She miii'ht not be able to
hold her possessions if she were. It is not my purpose
to discuss otherwise what is to be thought of this policy ;
I merely note the fiict. The dependencies of Holland
are not governed as those of England are, but hitherto
they have been more obviously profitable to her than
ours. For many years after Holland obtained the com-
})lete mastery of Java, the annual surplus of revenue
drav\^n from it by her came to between 2,000,000/. and
3,000,000/. a year, and sometimes exceeded the latter
sum. Eeceutly, however, a rather more enlightened
system of taxation has prevailed, monopolies have been
partially abolished, and the direct results of Government
estate overseeing have fallen ofT, but the indirect gains of
the trading company and private merchants have pro-
bably increased. There have indeed b^en rather sevei-e
losses suffered in Java sugar lately, owing principally to

86 SPAIN, PORTUGAL, AND

the effects of tlie Frencli bounty system, already noticed ;
but Java tea has been growing in favour, and the pro-
duction of rice has been growing in quantity. On the
whole, the profitableness of the island to its owners has
not seriously lessened. Java cannot fail to be a most
profitable investment while governed as it now is, for it
is an island whose fertility is not yet half developed ;
and did the Dutch abstain from Avars in Sumatra, which
they do not seem very well able to conduct, and give
themselves earnestly to arts of peace, they might year
by year increase its productiveness. Cotton, tobacco,
tea, coffee, cereals of various kinds, wool, fruits, almost
every product of value to mankind, can be produced
by the island with an abundance that should, under a
more lil^eral trade policy than yet obtains, enable its
owners to command a much wider market than they do.
The Straits tin, for example, marketed by the Nether-
lands Trading Company, regulates the European tin
markets now, and under the present system of sales,
wdiich resembles that of our Indian Government in the
case of opium, it forms a favourite medium for gambling
amongst metal brokers.

The com])etition of such a possession as Java with
our Indian Empire is a danger which it might be easy
to find a plausible colour for ; but I do not think it
affects us at present to any appreciable extent, excejit,
perhaps, in spices and indigo. There is none of the
eager, feverish desire for advancement in modern arts

THE NETHERLANDS. 87

and sciences to disturb or impel the Dutch into hot
competition. Tliey go quietly on in their old-fashioned
ways, adopting improvements and opening up their
possessions with slow, cautious circumspection, intent
chielly on keeping the profit to themselves with the
least possible risk. Although near neighbours, the
trade between Java and British India is indeed very
restricted, compared to what it might well be were the
former in the hands of a pushing people. Probably
certain consignments of goods find their way to the
Netherlands India through the English free port at
Singapore ; but, granting that to be so, the total inter-
course between the two coiuitries is not worth counting
on, and since the war broke out between the Dutch and
the Atchinc.se there has ])een a decrease on both sides
of the account.^ We have, therefore, about as little to
hope for as to fear from the Dutch in that quarter of
the world, which is in several senses a pity.

It is much the same with regard to the direct trade
of England witli these possessions. For the last year
or two it has shown some increase through the com-
petition which English steamers carry on against the
Netherlands lines, and the eagerness with which specu-
lative merchants have striven to push goods against the
Dutch ever since the import duties were somewhat
reduced.' But, at its largest, the direct trade between

^ Vide Mr. J. E. O'Connor's iutroductiou to last year's issue of
the Statement of the Trade of British India.

* Consul Eraser, iu his report ou the trade of Java for the year 187i

88 SPAIN, PORTUGAL, AND

this country and the Dutch possessions has not exceeded
3,300,000/. in any one year, and usually it has been
about from 800,000/. to 1,500,000/., taking exports
and imports together. Of course, as I have already
said, a considerable indirect trade is done through
Holland, whose traders buy of us to send to the Indies
on their own account in their own ships ; but this
indirect trade has not been very satisfactory lately, I
suspect, to any of the parties concerned, any more
than the recent push of English merchants for direct
business, which has resulted in a glutted market and
ruinous prices. Besides, the indirect trade is, so far as
English exports are concerned, to a large extent limited
to half-manufactured articles, sucli as yarns, which the
Dutch make up themselves for their Eastern market,
and sell there at higher prices than English merchants
ask for their fabrics. Their control of the market

(^Consular Reports, Part IV., 1876), makes tlie following observation ou
the alteration in the Dutch colonial import duties. It lets a flood of
light into the failures of Dutch government in these regions : — 'At the
opening of the year, wlien the modified scale of duties came into force,
considerable difficulties were caused to importers by the irregular and
inconsistent taxations imposed ]jy the customs authorities for the 6 per
cent, ad valorem duty. The taxations are revised every three months ;
but in some early instances valuations far exceeding market currencies
were imposed, and the liberal spirit which induced the Home Govern-
ment to abolish differential duties thus neutralised. The attention of the
customs authorities Avas called to the matter by tlie Cliamber of Oom-
merco, and, backed by a protest from the Batavia Exchange, through the
medium of their price current, resulted in a material improvement,
although complaints are occasionally heard regarding exaggerated values
being placed on goods.' An ad valorem scale of duties, revised arbitraril,T
overy tliree months, must be the height of torture to a trader.

THE NETHERLANDS. 89

probably enables them to exact these higher prices
with a certain impunity.

Except as a source of gain, the Dutch East Indies
are of little value to the mother-country, to whom they
give hardly any })olitical imjiortance, and might pass
out of her grasp almost with as little noise as Ceylon,
once so bright a jewel in the crown of the Stadtholder.
The same assertion holds good of all other Dutch pos-
sessions. They may be more profitable to her than
those of Portugal and Spain are to those countries ; but
they do not make their owner a great State. Nor has
Holland, any more than these others, ever made a mark
as a coloniser, pure and simple ; her most successful
effort in that line beino- the settlements in South Africa
■ — almost the last direct memorial of which has again
fallen into the hands of the conqueror of all the rest, a
conqueror by whom, a quarter of a century ago, it had
been abandoned because the Dutch people refused to
become English. How the Transvaal will fare now
under the rather anomalous philanthropic despotism
which Lord Carnarvon has inaugurated is a question
Avhich I shall not now try to settle. The Dutch boers,
at all events, have not })rospered alone, except at cattle-
herdiuii, and seem unable to knit themselves into
strong self-u'overninGj commiuiities with success.

It would take me too iar out of the range of my
subject to discuss this question ;it length ; but, I think,
one remarkable feature can be distinguished in the

90 SPAIN, PORTUGAL, AND

failures of all eflbrts on the part of these three nations
to found great colonies, which, apart from the distinctive
race characteristics, marks them off from our later
colonisations. They all governed their dependencies
over-much to beo;in with, and sought to make them
merely a source of material aggrandisement to those
left at home. And tlie worst of it was that they suc-
ceeded for a time in this endeavour, through various
causes, until all verve and independent life was in a
manner squeezed out of the offshoots. We tried that
plan ourselves in America, but, fortunately, too late to
do any harm except to ourselves. We had lazily
suffered the existing states, planted there by inde-
pendent adventurers, to go too far alone before asserting
forcibly the current kingly ownership doctrine about
colonies, and they accordingly beat us, as we deserved,
when we tried coercion. Since then England has let
well alone. Her colonists have had almost complete
liberty to order their ways from tlie first, England only
lending them an ornamental head, with maternal advice
good or other on occasion. A vigour has thus been com-
municated to most of them which promises to carry
them far, and such as all other colonies appear to want.
But tliough a failure, like Spain and Portugal, at
the art of colonising, Holland has not been so to the
same degree, and she still preserves a dominating power
over many spots on the face of the earth which would
start anew into importance, did the little kingdom fulfil

THE NETHERLANDS. 91

Its 'manifest destiny,' and become a portion of the German
Empire. That consnmmation may not come perhaps,
or before it does tlie dependencies of Holland may not
exist in their present condition and shape, and, whether
or not, tlie English race and English power have spread
too widely over the world, let us hope, to be easily
driven back or overtaken by the greatest inheritor of
the old Empire of the Netherlands.

As a general conclusion we may say that with
Spain and Portugal our trade is not very promising,
much hampered, and, without a great change in the
mercantile policy of these countries, likely to advance
very slowly, and to suffer heavily in depressed seasons.
The same may be said about the dependencies of
Holland ; they do good well-nigh exclusively to
Holland. But with that little kingdom itself, and
through it with its great continental neighbour, w^e do
a good solid trade which is reasonably free, and which
we may therefore hope to see increase.

I ought not, perhaps, to close this essay without a
word about Denmark, which is another kingdom, once
famous, now rapidly sinking into oblivion. Its general
trade is too insic!;iiificant, however, to call for much
notice, and it is too surely enclosed by German in-
fluences to possess great interest for us. Its business is,
however, still considerable with this country, and we
derive a supply of raw sugar from the small West

92 SrAIN, PORTUGAL, AND

Indian islands still in Danish keeping. But there are
no features in this trade worth commenting upon. It
is steady, and so far as regards imports to this country
from Denmark has increased considerably, but the
exports thither are nearly stationary and hardly likely
to expand much. Since Prussia reft away Schleswig-
Ilolstein, Denmark has been steadily sinking into a
Prussian province and may sooii become extinct as a
separate State. Whether it does or not, it is of less ac-
count by far in all that relates to statecraft or to trade
than the Swiss Cantons.

The trade of Scandinavia might also be consi-
dered worthy of some analysis, but there is little in
its present aspect that is unfamiliar or that calls for
remark. Sweden and Norway have not partaken
much in the economic revolutions which have
changed the face of so many regions of the earth
except in so far as their commerce has been thereby
increased. There has been augmented demand for
Norwegian timber, and for certain food products of the
peninsula such as fish, oats, and oils, and the shipping
trade has been enormously benefited by the great
increase in the carrying trade of other nations and
especially of England. The total tonnage of Swedish
and Norwegian ship])ing is the highest of any in the
world except our own and that of the United States,
and much more than half tliis tonnage may be con-
sidered as auxiliary to that of England. Norwegian

THE NETHERLANDS. 93

ships carry a great deal of the timber and corn whicli
comes to us from North America, especially from Canada,
and the trade between the two countries, as also be-
tween the Baltic and Enfjland, is to a o;reat extent
carried in Scandinavian bottoms. The profits of tliis
trade are visible in the continued power which Norway
and Sweden liave to import more than they export, and
between their steady qiuet commerce and their inter-
national carrying trade these countries are ftdrly pros-
perous. There has been less wild speculation, more
of quiet ])rudent money-getting, in them than in any
other country in Europe except perhaps Holland. At the
present time these countries have together nearly 3,000
miles of railway in operation, which have for the most
part been cheaply constructed, and of which about 1,000
miles belono- to the State. Yet even this moderate mile-
age has proved more than the country could use by a
good deal, and there has been a considerable sum of
money lost in some of the lines by English people ; but
they do not seriously burden the country, and to a cer-
tain extent offer indirect compensation by the fticihties
whicli they give for commerce. Should the two king-
doms continue their quiet course importing manufactures
and exporting such raw produce as they possess, they
will continue sound and healthy commercially, and
as auxiliaries to the trade resources of England must
always have a high value to us.

At the present time considerably over 40 per cent.

94 SPAIN, PORTUGAL, AND THE NETHERLANDS.

of the entire direct trade of Sweden and Norway is with
Great Britain. We send, in addition to textile fabrics,
coal, hardware and machinery materials, and get back
their raw produce, including a considerable quantity of
Swedish iron, which is of very fine quality. Altogether
the aggregate trade between England and Scandinavia
last year came to nearly 17,000,000/., and there is
nothing that I can see which tends materially to lessen
its volume except the probability that we shall want
to buy less. The competition of Germany has not yet
told sensibly upon our hold in the peninsula, and there
is no reason why it should do so to any injurious extent.
And no other country except Germany has any appre-
ciable chance of diverting a stream which has flowed
between England and Scandinavia now for many
generations.

CHAPTER XI.

CANADA AND SOUTH AFRICA.

Two things strike one at the very outset regarding the
English Colonial Empire — its newness and its rapid ex-
pansion. Three hundred years ago England did not
possess one of her present numerous colonies. Her
greatest offshoot of all — now the United States — was
not in any part peopled by Englishmen before the be-
ginning of the seventeenth century, and, exce[)t the
small colony of Newfoundland, no territory held under
the British Crown to-day was ours so early as tlie old
State of Virginia. We did not begin to lay our grasp
on the French possessions in Canada till 1623, and it was
not long anterior to that date that adventurers from
Virginia first wrenched the peninsula of Nova Scotia
from the same colonisers. And we may say that all the
colonies which are now inhabited by Enghsh-speaking
people began their career as self-governed States only,
as it were, yesterday. The Dominion of Canada was
organised only in 1869, and cannot be said to be yet
a completely homogeneous State. Compared with the
extended sway of the Romans over Gaul, Spain, and

96 CANADA AND SOUTH AFIIICA.

Britain, of the Phoenicians in Carthage, or of the
Spaniards themselves, under one guise or another, in
South America, the colonial empire of England is, in-
deed, a tiling of yesterday, and this should not be
forgotten in speaking of the success of our efforts at
colonisation. In many respects that success has yet to
be proved.

The success, as far as rapidity of growth in the
population is concerned, has, however, been very great.
Before 18-45 it may be said that none of the colonies
were of great promise. Canada languished beside her
prosperous independent neighbour. New South Wales
— then including Victoria and Queensland — -was a
feeble settlement, still troubled by the residuum of
those importations of criminals from the mother-
country, from which she had been but just relieved ;
and the Cape of Good Hope was almost Dutch in its
European population and its absence of enterprise. The
total English population of the whole of our foreign
possessions, including the Crown colonies so-called,
such as Jamaica and the other West Indian possessions,
did not, in 1850, exceed 2,000,000. Only Canada and
the United States, previous to 1845, attracted anything
like a steady stream of emigrants, and it was small
compared to the rusli which broke out after the Irish
Famine in 1847. That, and the gold discoveries in
Australia and California, led, however, to an exodus,
which was at ils highest in 1852, when nearly 309,000

CANADA AND SOUTH AFKICA. 97

peojjle left our shores, and the flow has never but once
or twice fallen below 100,000 a year since — the aver-
age being from 150,000 to 200,000. Of this great
emigration British Xorth America has received latterly
a much less portion than it did when there was no at-
traction in the iSoutliern hemisphere ; but the numbers
going to Australia and New Zealand have, with the ex-
ception of the six years 1867 to 1872, been uniformly
very considerable. Altogether, since 1845, at least
6,000,000 British-born people have left the mother-
country for the colonies and the United States ; and,
besides these, there have been large emigrations of
Dutch, Germans, Norsemen, Italians, and French, many
of whom have settled permanently in the British
colonies, and are becoming absorbed in the Anglo-
Saxon race. From all these causes, and in spite of
occasional retinii waves of immigration, due to tempo-
rary pauses in the headlong pace at whicli the colonies
have developed themselves into communities and
states with a great trade of their own, the English
population of British North America has risen to nearly
3,000,000, that of Australia and New Zealand to about
2,100,000, and the Enghsh and Dutch population of
South Africa to more than 250,000. We may say
that the population of these colonies has at least quad-
rupled in thirty years, and in some cases it is now ten-
fold what it was in 1845. This is a most remarkable
fact, and, in estimating what our colonies are or may

VOL. II. H

98 CANADA AND SOUTH A I RIGA.

become, must be constantly borne in mind. They are,
indeed, creatm^es of a generation.

There is another general observation which I
should like to make here, and it is this. Nearly all
the colonies which are of any importance, and on
which Englishmen can live and multiply more or less
as in their native land, have been formerly in the pos-
session of another European Power.^ As a mere in-
stance of the backwardness of the English as geogra-
phical discoverers, or ocean marauders, in the Middle
Ages, tliis would be a remarkable fact, but that view
of the subject does not concern us. Of more interest
is the effect which this previous occupation is likely to
have on the future of those colonies which, like Canada
and the Cape, still contain a large population descended
from the original conquerors of the territories. In a lesser
degree the same question would, of course, be interesting
as regards the Crown colonies of Jamaica, Mauritius, Cey-
lon, and the settlements on the north-east coast of Central
America, taken from the Spaniards, French, and Dutch,

^ It may be useful to call to mind the history of oui- acquisition of
these possessions hy a brief enumeration of them. The chief sufferer by
our habits of appropriation has been France, from whom we have taken
Canada, Nova Scotia, Newfoundland, Louisiana, Maiu-itius, and the
small settlements of Dominica, Grenada, St. Lucia, Tobago, and St.
Vincent. Besides portions of the United States which became English-
governed, either before or since their independence, we have taken from
Spain : Jamaica, Trinidad, Honduras, and Gibraltar. Holland has given
us the Cape of Good Hope, Ceylon, and Guiana. Portugal alone amongst
the seafaring countries of the seventeenth and eighteenth centuries who
were large owners of territories in various parts of the world has escaped
without paying tribute, except in India.

CANADA AND SOUTH AFRICA. 99

but I do not intend to deal with these at any length.
They are not colonies in any true sense of the word,
but merely territories held for gain in regions where,
as a rule, the English race could not permanently settle
and propagate itself. Their trade is, therefore, entirely
what we make it, and their condition also. But in our
great colonies it is altogether different. They live and
grow, and found institutions, which must exercise a
most important influence on the future of the world, as
well as of our mere trade prosperity, and we must
consequently examine this race element amongst others
which come before us in dealing with them.

The most important questions which w^e have to
determine, however, affect the material progress and
well-beins of the colonies. We have to see how their
populations live, how their trade is developed, and in
what it consists : and also to endeavour to value the
character of their institutions, the wisdom of their
commercial policy, and their wealth. For example,
at the very threshold of the subject, we find that one
characteristic common to all the colonies is debt.
Their growth in population has in some cases hardly
kept pace with the accumulation of their public bur-
dens, and obviously this debt element must have pro-
duced the same results in tlieir case that we have found
it doing in the case of foreign nations. The questions
which meet us on the threshold of our inquiry into
colonial progress and prosperity are therefore many

H 2

lUO aiNADA AND SOUTH AFRICA.

and complicated, and must make one very cautions in
the use of the language of unlimited enthusiasm and
panegyric which is so common. Beginning now with
Canada, I will endeavour to indicate the salient features
of the situation of our leading colonies on the lines
thus laid down, with impartiality, and as comprehen-
sively as the narrow limits of my space will permit.

The modern Dominion of Canada embraces, as
everyone knows, a number of provinces which were
formerly separate colonies.^ In some respects portions
of the united country are highly favoured, and in time
may rise to be important portions of a great nation ;
but there can be no question that the situation of the
Dominion as a whole is, in the meantime, not satisfac-
tory. Numerous drawbacks are to be met with, of
which not the least is the manner in ^\'hich the
blundering heedlessness of the English Government has
caused its inhabitants to be cooped up almost entirely
in the bleak north in such a fashion that the best pro-
vince of all — that of Ontario — is, from a trade point

' The present Dominion of Canada was formed in 1867 out of the old
Provinces of Upper and Lower Canada, Nova Scotia, Prince Edward's
Island, and New Brunswick, and the new district of British Columbia.
On the cession of the Hudson's Bay territory to the Dominion in 1870
part of the northern territory was erected into the province of Manitoba
and incorporated with the Dominion. Newfoundland is still under an
entirely separate organisation. Although united under one central Par-
liament, consisting of several Houses of Representatives, each province
has still a separate legislature and separate internal administration. The
franchise is on a different footing as to property qualifications in different
provinces, and only New Brunswick appears to have the ballot,

CANADA AND SOUTH AFRICA. 101

of view, at the mercy of the United States for a con-
siderable portion of the year. If the reader will take
a map of North America he will see this at once. By
reason of the manner in which the boundary line, run-
ning from the sea to its interior, is carried northward
from the St. Croix Kiver to the St. Jolm's Eiver, an
immense tract of territory is taken away from East-
ern Canada, and the whole of the western part of the
Dominion is thereby shut up in winter by ice and
snow. This boundary was not settled till 1842, and
by its settlement on the present Hues Canada has un-
doubtedly been most seriously injured.^ Owing to the
manner in which Canada is squeezed up on the east
side, for example, the Intercolonial Eailway has been
driven northwards through a comparatively useless
and waste territory, causing not merely an enormous
increase in the mileage, but an almost complete stop-
page of business during live months of the year.
Had the boundary originally intended been settled on,
this line might have run straight across a fertile coun-
try, open all the year round from Quebec or Montreal
to St. John's, or even to Portland, and the trade of
Western Canada might thus have been kept as inde-
pendent as the country itself wishes to be considered.
Now, however, as I have said, the west is cut ofT from
the east, and the traffic of Ontario benelits the United

' For a clear account of this boundary bung:le see The Histortj of the
Intercolonial Railway, by Saudforcl Fleming, publislied in 187G,

102 CANADA AND SOUTH AFRICA.

States more than the eastern provinces of the Dominion.
The coal of Nova Scotia is placed 200 miles farther
from Montreal by railway than it need have been, and
that province is also by this means thrown, as it were,
into the arms of the American Union, which promises
to be its best market. Great ports and large trading
centres on the coast of New Brunswick or Nova Scotia
are thus, to my thinking, rendered impossible ; while
the magnificent waterway of the St. Lawrence is in the
open season of much less use to the Dominion and the
cities on its banks than it would have been had no
United States railways tapped the traffic of Western
Canada at Buffalo and Detroit, and, by offering a cheap
comparatively short direct route to the sea, drawn the
trade away to the south-east. No railway system
which Canada could now construct would ever be able
to remedy the mischief that has been done, and the
trade battle which she tries to wage in her existing
condition is beyond question utterly hopeless.

I dwell on this point at the outset, because it ap-
pears to me to concern vitally the whole future of
the Dominion. The hearts of the people will in time
go the way of their interests, and tlie union so recently
formed between the various provinces may be broken
one of these days by the secession of Ontario to the
United States. For, unhappily, the chill which inter-
course between the parts has received is further ag-
gravated by miscellaneous causes, all tending to sepa-

CANADA AND SOUTH AFRICA. 103

rate the east from the west. First of these we may
place the fact that the large province of Quebec (for-
merly Lower Canada), which interposes between On-
tario and the maritime provinces of New Brunswick
and Nova Scotia, is inhabited mostly by a poverty-
stricken and unenterprising French population. We
have in that territory more than a milhon of people,
chiefly French Canadians, wdio live still for the most
part in the primitive superstitions of three centuries
ago — a people who have not been moved by the tide
of civilisation and material progress surging around
them, who, with a railway running past their doors, as
it were, refuse to use it, and creep along in the ways of
their fathers. These, therefore, form a race barrier
between the east and the west which makes free inter-
course between the purely Englisli parts of the Con-
federation very difficult, which prevents community of
interests from being realised, and generally tends to
complete the mischief that the boundary muddle be-
gan. Add to this that the soil and wealth -producing
capabilities of Quebec province are about the poorest
in all the Union, and that it is overladen with debt at
the instance of reckless speculators who apjjear to
have bribed its legislature, and we have reasons
enough for doubting whether the dilferent parts of
the Dominion are likely long to cohere. What was
necessary to give the country a chance of becoming
homogeneous was, in short, the northern portion of

104 CANADA AND SOUTH AFRICA.

Maine, handed over to the States in 1842, where a race
of Anglo-Saxon and German settlers might have grown
up to unite the east and centre.

Passing to tlie west coast, we find still more seri-
ous difficulties in the way of the development of a great
State, and there also the mischief has in part been
done by the stupidity of English officials, who surren-
dered without necessity or warrant vast regions of mag-
nificent country to the United States. The superficial
area of British North America has never been accu-
rately ascertained, but on the map it looks to be about
the same as that of the United States, and probably is
somewhat larger. The physical condition of the two
countries is, however, altogether different ; and while
almost the whole of the United States is habitable, and
capable in time of sustaining a population as large as
that of China, the greater part of the Dominion is a
forbidding land of frost and snow, whose brief sum-
mer is barely sufficient to permit a scattered Indian
population and a few Hudson's Bay trappers to find
the means of subsistence. There is indeed a possi-
bihty that settlers from Europe may reclaim portions
of the central and western territories of Canada, and
some of the valleys of Manitoba are capable of culti-
vation, in a certain fiishion. Possibly also the intro-
duction of a vigorous race and the reclamation of the
land might have a favourable influence on climate,
driving the zone of frost farther north. But at present

CANADA AND SOUTH ATOICA. 105

the prospect of any such change is reiiK^te indeed.
Canada is shut up, separated into isolated rommuni-
ties all winter, and the free intercommunion which
would enable all the parts to grow into a great whole
is utterly destroyed. To have conquered the icy north
she ought to have had more of the south and west, parts
of Ohio, Indiana, Michigan and Illinois, and the whole of
Oregon. All the magnificent territory which we Hung
away to the Union, from lirst to last, should have been
hers, and then, westward as well as eastward, there
would have been a basis upon which a mighty empire
might have been reared. Biitish Columbia would not
then have been a miserable settlement cooped up be-
tween a lonely sea and forbidding mountains, vainly
hoping that a railway across the trackless continent
will unite it with the east, and set it free from all its
troubles. With the western regions now called Ore-
gon and Washington uniting it with more favoured
lands southward and eastward between the south-
western shore of Lake Superior and Cahfornia there
might have been scope for its growth, since there could
have been ready intercourse through magnificent lands,
capable of being quickly peopled. Instead of God-for-
saken groups of struggling settlers dotted here and there
over the vast area of the Dominion, numbering altogether
not a tenth of the population of the United States, there
might hiixe been a ]ioweri"ul conlederation capable of
taking its place amongst the leading nations of the world.

106 CANADA ATsD SOUTH AFRICA.

It is useless to regret these ' might-have-beens ' now. I
onlyalhideto them in order to ilhistrate the more forcibly
what I consider the initial, and, I fear, insurmountable,
difficulties which stand in the way of Canadian pro-
gress. The Dominion is to me a hopeless congeries
of provinces which have little community of interest,
and the best parts of it can only have their full
development when united to the greater Union of the
South, or to the northern half of it. We have tried to
make a united whole of what we by our own folly
everlastingly divided, but there could be no task more
hopeless than that wliich seeks to produce a single
State from provinces like Nova Scotia and Quebec,
Ontario, British Columbia, and Manitoba.

The worst of all this blundering is that it con-
tinues to be so expensive. We have spent milUons
upon millions of money on Canada, chiefly in a vain
endeavour to accomplish the impossible, and Canada
appears to have been deluded by these spendiiigs into
a belief that we should succeed. She has got her
Parliament, her Vice-King, her Ministers of State, and
her huge debt, and complacently calls herself a new
empire — the brightest jewel in tlie English crown.
' Loyalty ' is, in fact, the one article in which Canada
repays the Englisli })eople for tlieir lavish endeavours
to overcome the follies of the past, and when one
talks of the probable dismemberment of the Dominion,
this loyalty is always fkuig in one's teeth. ' Look how

CANADA AND SOUTH AFRICA. 107

enthusiastic Canada is for the Queen and the old
country ; she will never revolt.' This is the purest
nonsense, to my mind, for Canadian loyalty is, and has
always been, a very mercenary affair. Let the country
once get into the depths whither it has been hastening
imder our leadership, and let the various provinces begin
to feel their individual burdens — as they only can do
when British money ceases to flow in — and we shall then
see what this loyalty means. Will it hold Ontr.rio when
Ontario is in dread of having to pay the debts of
Quebec or any one province when the burden of im-
perial taxation becomes over heavy ? I doubt it ; nay,
I more than doubt — I utterly disbelieve it.

We must take this geographical question, then,
as a cardinal factor of the problem in dealing with
Canadian progress. At the very outset it reveals to
us how very mistaken that ' progress ' has, in many
cases, been in its aims. The legislators of the Dominion
have sought to accomplish the impossible. Take, for
example, the Canadian Pacific Railway scheme, and
judge it by the dry facts of the situation. Conceive
what a railway means — what it needs to maintain it
in order — and imagine a line built across vast plains,
through almost impassable mountains, along the greater
part of \vhose track there would not be 10,000 inhabi-
tants ; wliich would be subject in winter to enormous
falls of snow and intense and destructive frosts, that
would not only sto[) all traffic probably, but necessitate

108 CANADA AND SOUTH AFRICA.

constant repairs ; and having realised in this fashion
how very mad the scheme is, ask yourself why it was
conceived ; why England came forward with a guarantee
for part of its cost, buoying up British Columbians with
visions of the good the line was to do them, till, not
getting the promised boon, they threaten to secede from
the federation. Wlio can avoid the conclusion that the
whole scheme is a wild attempt to retrieve the past —
to try and bind together with a band of iron lands
irrevocably separated, we having lost for ever the op-
portunity of uniting them by filling first a fertile
southern continent with a numerous and thriving popu-
lation of Englishmen ! The provinces thus separated
may thrive after a fashion, but there can be no united
nation built up by such means. For all that, this railway
is being pushed on, and last year the Government of
the Dominion spent ^2,390,000 on its construction
and survey. As many as 681 miles of the line are now
definitely located, and 227 of these are contracted for.
It appears that the intention is to penetrate into Britisli
Columbia by the Yellow Head Pass and the gorges of
the Eraser Eivei', where ])ortions of the line are also
surveyed. Here the engineering difficulties are
enormous, and will involve quite incalculable expense,
so that the chance of the road ever becoming other
than a l)urdcn on the Dominion would be remote even
were conditions as to trade more favourable than they
are ever likely to be. As things are, the line will be in

CANADA AND SOUTH AFRICA. 109

ruins probably within five years of the date of its com-
pletion, and it may yet be the instrument which will
rend the Dominion asunder. Trade it cannot produce,
for the line will be 2,U00 miles long, reckoning from
the head of Lake Superior only ; and what can British
Columbia produce that will bear a land carriage of
4,000 miles if carried by rail to the east coast, or of
nearly 3,000 if transhipped at Quebec ?

The railways which have already been carried out
in the Dominion are almost all financial failures, and
ought to be a constant source of wisdom to those who
now seek to hurry the country into still more grievous
disasters. The Grand Trunk Eailway, for example, is
in a state of utter bankruptcy, and has very little pros-
pect of ever being anything else. It may pay ultimately
on one or two more millions of capital than it does now,
though that is rather doubtful ; but it does not seem
to me to have any chance of ever becoming a great
' through ' road. Along its eastern half it has little or
no local traffic ; and, although it leases a road down to
Portland, in Maine, it must always be beaten by the
railways of the States, which are much shorter, in any
competition for the traffic of the west. Almost equally
disastrous is the history of the Intercolonial Eailway
likely to be. It has been built by the Government
with money partly guaranteed by England. It is
another part of the iron bond of union, and is a failure
for its primary object, whatever it may come to do for

110 CANADA AND SOUTH AFRICA.

New Brunswick alone. What with Government busi-
ness paid for out of loans, and tlie mails, it has a share
of traffic now which the condition of the country and
its route prove to be of a quite misleading kind.

But perhaps the most signal example of the loss and
ruin which has been the result of all Canadian efforts
at material development is afforded by the history of
the Great Western Eailway of Canada. Formerly this
line earned large dividends and was very prosperous.
Not content with this, Canadian speculators — of whom
there are many — backed, it is said, from New York,
built an opposition road, which was almost at once
seized upon by Vanderbilt, of the New York Central,
and forthwith the Great Western was ruined. Its
prosperity had been based, not upon Canadian traffic
pure and simple, but upon the traffic connection with
the Great New York line ; and when that was taken
away the collapse was almost instantaneous. Thus
almost the only prosperous railway undertaking which
Canada had was prosperous through foreign help ; and
the Canadians themselves made haste to destroy this
prosperity. Such is their patriotism. Whether a union
of this bankrupt line with the bankrupt Grand Trunk
would mend matters now is doubtful ; but that is, at all
events, the only remedy left for English investors to
dream about.

The truth of the matter is, that Canada has neither
population nor trade of a kind capable of sustaining

CANADA AND SOUTH AFRICA. Ill

great railways. The trade consists mostly of lumber,
corn, and Horn-, none of which can bear heavy overland
freights. Nova Scotia possesses minerals, and exports
a good deal ; but it is so favourably situated for water
carriage that it has little need of railways. The inland
provinces of Canada have also good water carriage all
summer ; and it is so much better fitted for the kind of
raw produce which they have to move that the railways
would get beaten for a portion of the year, even were
there no short overland carriage through the States to
the sea. Then the population of Canada is not only
thin — the Dominion altogether containing little more
than 4,000,000 souls— scattered in unequal groups over
territory larger than all Ein^ope, thickest and poorest
in Quebec provinces; more scattered, but richer, in
Ontario, Nova Scotia, and the other eastern provinces ;
— not only is this population thin, but it does not travel
extensively. And even were it to be rushing about con-
tinually, it would not be able to keep the present railway
system in a flourishing state. ^

^ Canada possesses altogether nearly 0,000 miles of railway ; but
some of tlie lines are not in operation yet, or have been closed, so that
actually there are not more than about 5,000 miles which can be
described as earning anything. The Grand Trunk Company ovms,
leases, and works about 1,390 miles, the Great AVestern Company about
797, and the Intercolonial system represents 844. Not one of these
corporations yields a net ^revenue of 1 per cent, on its capital, and many
of the branch lines do not earn their working expenses. The total
capital involved is, in round figures, about ;{f300,000,000, or say
60,000,000/., of wliioh nearly i?.50,000,00(), or say 10,000,000/., has been
contributed by the Dominion Provincial and Municipal Governments.
Of course, much of this capital has been issued at a serious discount, so
that the actual cash spent has not been so much as this represents. This

112 CANADA AND SOUTH AFRICA.

In respect, tlierefore, of the heavy outlay which
Canada has incurred on railways, I think there lias been
a huge blunder. The credit of the colony has been
strained to breaking for a very inadequate gain. A
certain amount of progress has no doubt been made,
population has increased, and trade has extended ; but
in no instance has the progress at all justified the pace
at which the colony has gone ahead with its railways —
a pace ^v]hch has been the ruin of thousands. The
Dominion debt, for pubhc works of all kinds, has, I fear,
been incurred with almost equal recklessness. In the
matter of debt, indeed, Canada is not peculiarly or pre-
eminently a sinner, for all our colonies have plunged
more or less recklessly into it ; but her powers of ex-
pansion are, in my opinion, so small tliat she stands in
more danger from her burden than any other colony,
except perhaps New Zealand. Exclusive of the pro-
vincial and municipal requirements, the Dominion
Government alone requires a payment of from 61. to 6/.
per family every year in the shape of taxes,^ and has
now to face deficits. These taxes represent well nigh a
month's labour to the working man — a most serious

is of little consequence, however, in judging^ of the results of investment
in these railways. AVe find then that in lb75 the actual net earnings
on this capital were just ,^.3,700,000, or little more than 1 per cent.
Last year the yield was less, and it could not well be otherwise with
declining traffic and keen competition. The whole system carried in the
twelve months about a fifth of the number of passengers carried by the
English Midland Company.

* Budget speech of the Hon. R. T. Oartwright in the Canadian
House of Commons, February 187G.

CANADA AND SOUTH AFRICA. 113

drawback on prosperity. Thus, nlthougli the total may
seem a small one, compared with the burdens wJiich
we shall find that some of the Australian colonies Jiave
taken u[)on themselves, it is for Canada a very heavy
item, because at l(!ast a fourth of the population of
Canada is excessively })Oor. And this is not all ; every
province has its own budget, and in some of them it is
very heavy. Quebec, for instance, is crushingly over-
laden, and has a budget of its own which from tlie
growing deficits it displays ought to alarm all prudent
citizens ; yet it rushes into fresh loans for railways, pro-
jected by speculators for their own profit merely, with
a levity which strikes one with positive amazement.
What the actual individual burden of imperial and local
taxation, taken together, in Canada may be per head,
I have not been able to ascertain with exactness, because
the accounts of the various provinces are not regularly
obtainable ; but, as near as I can estimate, I should
say that, speaking moderately, it is not less than 3/. per
head. The country has, in sliort, been forced and
overdriven to a degree in all directions, and will now
suffer from it severely. A false step Avas taken when
the Dominion assumed the debts of all the |)rovinces
that joined it without restricting them from borrowing
again on their own account, and we now find burdens
increasing on all hands, municipalities being steeped in
debt with the rest. In the aggregate I estimate the
liabilities of this sort which Canada bears at about

VOL. II. I

11-1 CANADA AND SOUTH AFRICA.

30,000,000/. to 35,000,000/. besides the debt of the
railway corporations. Tlie present debts of the Pro-
vincial Governments of Canada incurred in England
amount to nearly 3,000,000/., and tlie four cities —
Montreal, Ottawa, Toronto, and Quebec — have bor-
rowed here about 2,500,000/. Their united popula-
tion is not more than 250,000. These figures may
seem tedious, but they suffice to give a better idea
of the position of Canada than a very long argument.
Everywhere we find debt. The whole fabric of the
State hangs upon it, and the pettiest municipality in the
country thinks itself hardly constituted unless it can
boast of an issue of bonds. The result of all this of
course is, that the countr}^ lies under burdens which we
at home liere, patient as we are, would almost rebel
against, and which must, I fear, prove before long a
great deal too much for Canada.

For a time, of course, trade has been inflated by
the inflow of money, and there is no doubt that
some of this inflation may prove to be permanent gain ;
l)ut the danger of all such movements is, that they put
trade upon a false basis, which sooner or later gives
way and causes widespread ruin. It becomes a thing
resting on credit and bolstered by credit, instead of a
solid fabric well grounded on national wants, and ex-
pansive by reason <>f the growth of these wants. The
primitive character of the industries which such a
country as Canada possesses, and its almost complete

CANADA AND SOUTH AFRICA. 115

dependence on good liarvcsts, make an ample margin
of solid resouices absoluLelv necessary when reverses
come ; but she has practically left herself with none.
Moreover, as I have often insisted, feverish progress
always tends to defeat itself. Fresh taxes have to be
imposed, and these hin<ler trade. Protectionist theories
(ind currency in order to give plausible justification Ini-
these taxes, and so matters go on till irreparable mischief
is done to the real advancement of the community. At
present the import taxes of Canada are light, com-
pared with those of the United States, but they are
distinctly protectionist, nevertheless.^ We in con-
sequence hear a good deal of the necessity of develop-
ing native manufactures, of the excellence of Canadian
cloth, its cheapness compared with English, and so forth,
as if it ^vere a real ixain for such a country, needing,
as it does, every energy to battle with climatic difficulties
and win bread and clothing from the soil, to turn itself
into a woollen factory. The result so far of the effort
of Canada to force Inisiness, and of the blown out credit

' The Canadian taiifl' is not in itself a heavy one, many articles of
manufacture paj-ing no more than 5 per cent, ad valorem, and never'more
than 2.5 per cent., while tlie free list is pretty extensive. The duty on
cotton, woollen, and silk ^'oods is 17 per cent. «f/ r«/o/T//<, and ou iron
6 per cent. There is, indeed, .strong complaint on the part of some
classes of Canadians that the duties are so low, and only very recently
a strenuous eiVurt was nuide in the Canadian Parliament to get them
raised further tlum the (tovernment de.sired. Exigencies of the exche-
quer have compelled the Finance Minister to augment several dutie^i, hut
the languii'hing manufacturing interests are not yet enough protected in
the eyes of those who are engaged in them and amhitious of rivalling
other countries in tlie production of clothes and machinery.

116 CANADA AND SOUTH AFEICA.

on which licr trade is based, is pretty clearly set forth
in the following extracts from Messrs. Dun, Barlow, and
Co.'s excellent summary of the Canadian trade outlook
for the year 1877 : —

While the failures in the year just closed are over two
hundred less in number than in 1875, with a decrease of
three millions of dollars in liabilities, both number and
amount continue to be exceptionally large, especially as com-
pared with the preceding years. In 1873 the number of
those who failed in Canada in proportion to the number
engaged in business was one in every 47. In 1875 there was
a failure to every 28 names reported in business ; while in
1876 there is one failure to every 32. In the United States
iu 1873 the number was one in every 108 ; in 1875 one in
every 83 ; and in 1876 the number is one in every 69. The
average liabilities in Canada for 1875 were ^14,656 ; and in
1876 the amount varied only very slightly, being ^14,767.
The results of the year's business do not encourage the belief
that the conditions of trade in the Dominion have much
improved. The number of traders who have added to their
capital is comparatively few ; those who have held their own
are to be congratulated ; while those who have diminished
their surplus are not inconsiderable. The disease from which
the commercial body politic has been suffering for the past
three years has, it is hoped, well nigh spent itself. But the
signs of improvement, which it was thought the past year
would bring, have not been fultilled. Had we been favoured
with good crops of agricultural produce in the year just past,
a great stride would have been taken towards the return of
prosperity. But in this, the fine promise of the first half of
the year was unfulfilled, and notwithstanding lessened imports,
restricted sales, and reduced indebtedness, the improvement
which all these would help to create is without effect,
because the amount of wealth produced in the last year is

CANADA AND SOlTir AFR[('A. Ih

far l)c4ow that of the average of years. Seldom in the hi:--
tory of the country was a good crop of cereals more needed :
rarely has the failure in the crop been more general. The
manufactures of tlie Dominion, which in late years have as-
sumed a growing importance, are struggling against a variety
of adverse conditions, the chief of which is the competition
from the United States. The decline in values in greater
proportion to that of gold in tliat country, in the early part
of the year, and the lessened home demand in the face of
enormous productive power, have caused competition from
this quarter to he unusually severe, against which Canadian
manufacturers liave deemed themselves insufficiently pro-
tected. But all these unfavourable symptoms of disturbed
trade— whether the result of poor crops, limited lumber de-
mand, or depressed manufactures — all indicate no organic
trouble, but are temporary in their character, and time alone
is essential to a recovery. Farmers, though the crops of
187G were a failure, were never so wealthy as a class. \Vliile
many of them may not have the ready money at hand to
promptly pay the yearly account for supplies furnished by
their country merchant, they nevertheless are in a much im-
proved condition as compared with former years. A much
larger area of land is in a higher state of cultivation, and
they are in possession of facilities^ in the sliape of imple-
ments with which to economically and rapidly perform wiirk
that years ago was not near as well accomplished with much
greater expenditvue of time and labour. The developnu'ut
of large areas of country, under the influences of local rail-
ways, has been most remarkal)le, and throughout the Western
Province tlic increased pinchasing ami debt-paying power
amongst the vast majority <»t consumers is undoulttt'd. It is
sale to say that no country in the world possesses a popula-
tion more industrious, economical, thrifty, and prosperous
than tlie farmers of (';\nada. Thi-n, with regard to the lum-
ber interest, tlie pri'St-nt depression can at worst only be
temporary, while it has even compensating advantages that

118 CA^JADA AND SOUTH AFRICA.

the future will disclose. This particular asset in the nation's
wealth is gaining in value with a rapidity hardly dreamed of,
and the realisation of which is only a question of time. So
scarce has accessihle and marketable lumber become, that it
is alleged that plots of land, now cleared farms, with all
appliances, are really less valuable than if the trees stood in
imdisturbed majesty thereon. Even certain towns in former
lumbering districts would bring less than if the land they
occupy were covered with pine forests. Over-production has
cheapened this great staple, and the waste of years may well
be atoned for by a few years of cessation and depression.
Nothing will eventually be lost by this delay in realisation ;
indeed, the yearly gain in value of this valuable product will
more than compensate for what appears to be loss and disaster
at tlie moment. . . . The failures in Canada in the last two
years number nearly four thousand, which, occurring among
fifty thousand traders, is a proportion indicative of something
radically wrong in the trade of a rich country. At this rate,
in ten years, every second business man in Canada may suc-
cumb ! The gross liabilities of failed estates during the two
years are over fifty millions of dollars, a sum barely equalled
by the entire exports of grain in that period ! Of this fifty
millions, at least thirty millions have been irrevocably lost,
and when this amount is divided among the limited number
of first hands which comprise the merchants, manufacturers,
and bankers, the marvel is that they have stood these calami-
ties with so few signs of distress. It is time to adopt some
policy that will lessen these disasters. A lessened number of
traders, and a higher standard of credit, are the first essen-
tials. Active and available capital, instead of real estate,
should be the basis of credit, in addition to capacity already
developed and character already tested. Credit based mainly
on real estate is a delusion and a snare, for it is not capital
available but locked up.

These extracts give a curiously cliequered picture.

CANADA AMJ SOUTH AFRICA. 119

the 'lights' of wliicli I am disposed only partially to
approve. No doubt the i'anners hi Canada, just as in
the Western States of the neiiihbouring Union, have
been prosperous, and are comparatively rich, but they
are not so all over tlie country. It is only in Ontario
where farming is at present, and in bad times even, a
good occupation. Elsewhere the wealth is not nearly so
apparent, and even in Ontario tlie farming is carried on
to an enormous extent on money borrowed from land
mortgage companies. This is not in itself a bad thing,
but coupled with the manifest bankruptcy of the general
trading community and the toppling loads of Govern-
ment and local debt, it offers a serious warning against
congratulation. As to the general trade of the country,
nothing could, it is indeed obvious, exceed the reckless
speculativeness of its character. Almost every man has
gone into business on the ueck-or-nothing basis, and the
result is failures, losses, and almost every conceivable
mischief. The bigness of ])urpose whicli characterises
colonial traders is, however, a marked feature in the
history of all our colonies, and one great cause of their
frequent recklessness in getting into debt seems to me
to be unquestionably the inflated ideas which the pos-
session of enormous tracts of country has engendered.
The mind expands before infinite possibilities ; the man
feels tliat he has room, and he straightway launches forth
into the most imprudent courses possible.

As with tlie hidividual so with the State. It has

120 CANADA AND SOUTH AFRICA.

been intoxicated by its wealth in real estate, and much
of the wild efforts at development and progress which
have marked the history of our colonies in the last
generation are due to the free manner in which they
felt at liberty to trade on this })resumed wealth, to
mortgage it, to sell it outright, or to give it away in
slices large enou";h sometimes for the wants of a mode-
rately large nation. The land of all the colonies theo-
retically belongs to the Crown, and has been by it
handed over to the communities as they took to them-
selves parliaments, and became self-governing, and this
land these communities have all dealt with in the most
reckless fashion possible. I shall have to notice this in
connection with every colony, but a brief detail of the
habits of unthrift common to them all, though subject
to minor variations, may, if given here, save a good
deal of repetition. The rational and simplest way of
dealing with vast territories owned by a State would be
to lease them for, to begin with, a nominal rent to
tenants for purposes of reclamation, the State retaining
the fee simple and power to revise rents at stated
periods of, say, thii'ty years. By such a course every
one of our great colonies would, in course of time, have
become possessed of a splendid revenue, which might
have taken the place of ah other forms of taxation, and
the incidence of" which wonld never have been seriously
felt, for the iiK^^ease of rent W(»uld piobably have fallen
far short of the real increment in the value of the land.

CANADA AND SOUTH AFRICA. 121

Tills .siiiij)lc plan did nut, iniliaj)})ily, suit the colonists.
Their ideas were framed on the familiar lines of English
feudalism, and it was impossible to dissociate their
minds, therefore, from the notion that the state or com-
munity was a big landlord who had almost limitless
stretches of spare ground to sell ; so, instead of leasing
the land, all haste was made to dis])ose of it outright,
at any price it would fetch. Nay, the State would
almost give it away, rather than that it should not be
got rid of, and in many cases good land has actually
cost the colony something considerable to put tenants
upon it, rather than realised any substantial sum to the
community. In most colonies a good deal of land is al-
ways selling, however, at one price or other, and as a rule
according to the briskness of immigration is the nominal
amount which the State annually pockets under this head.
In Canada, the provincial governments draw the
major ])ortion of their revenues — other than the im-
perial subsidy — Irom the land sales, wliich are con-
ducted, to some extent, on the principle of an English
building society — failure to pay instalments involving
lureclusurL'. There is al>o a certain amoui.t of land
leased, of course, and there are loyalties exacted from
n»ines, but, on the whole, take away the proceeds of
sales pure antl simple, and every province in Canada
would have been in distress ten years ago. Antl very
soon ti'ouble l"rom want of means is certain to come
upon them all, tor the land will not la^t fur ever, and

122 CANADA AXD SOUTH AFRICA.

suiiposiiig it did, cmipratif^n is not at present working
at all satisfactorily. People go to Canada, indeed, but
they do not stay there as a rule, and the demand for
land is, in consequence, insignificant. Moreover, with
the recklessness of spendthrifts who thought of nothing
but the pleasures of the hour, large tracts have been
passed over to land mortgage companies and to other
land speculators, wlio reap the benefit of such demand
as there is, and not the Government; such has been the
haste in Canada and elsewhere to fling away for ever
the most valuable source of i)ermanent revenues.

It is the uniform custom of the colonies to treat
the money obtained from land sales as revenue, in the
ordinary sense of the term. Our colonies, in fact, do
with the proceeds of the land sales precisely what an
Englishman at home would be guiltj^ of if he sold off
his estate acre by acre, and si)ent the proceeds as in-
come. But the vastness of the territories to be sold,
and the apparent endlessness of the income which their
sale would produce, have blinded people to the true
nature of this proceeding, and in the meantime colonial
legislatures have been tempted to go lieavily into debt
because their resources looked so fabulous. There
could be no moi'e dangerous mistake, at all events in
the case of Canada, who has decidedly outrun her
tether, and in doing so is compelled to levj^ taxes
which seriously detract from the value of the land un-
sold, and retard its sale, which hamper her foreign

CANADA AND SOU'l'II AlIJICA, 12o

trade, and lediice her to uiithiirty ways oC making
ends meet. Canada may pull tlirougli it all, and, in
one way or other, become prosperous, but it will be at
a very fearful cost. At the very moment when I
write, her mercantile convulsion is staring her iu the
face. The Hon. Mr. Cartwright, in his budget speech
delivered last February, dwelt with great force on the
evident spread of wealth which had taken place in
Canada during tlie last few years, and adduced, in
evidence, the increased deposits in the banks. It would
seem that these have swollen enormously, notwith-
standing the mercantile depression and the general
state of debt into which Covernment and people have
fallen. A curious commentary on tliis pleasant picture
is, however, afforded by the rapid fall which has lately
taken place in all Canadian bank shares — a fall induced
by the feeling that many of their assets were not solid,
that much of the ci-edit given — which has helped, of
course, to swell the total of the ' deposits ' at times —
has been a source of loss, and that there is danger of
a sudden collapse of the whole fabric. Canada may
pull through, but till her windy inilations of false credit
are all swept away, she must live in a daily dread of a
tempest of ruin.

In the meantime her foreign trade is not flourishing
in proportion to the demands of the country, or in
accordance with this wonderful How of wealth ; on the
contrary, for the last three years at least it ha? de-

124 CANADA AND SOUTH AFRICA.

creased in aniount ^^ith nlmost every other country
witli ^vliicli the Dominion does business. Such as it is,
England derives, and has always derived, great benefit
from it. Cnnada supplies us with quantities of timber
to the value of from five to six millions sterling a year,
witli nearly a million and a half's worth of the various
kinds of grains and lloui-, besides considerable quantities
of bacon, butter, lard, and other animal products. Her
fisheries, especiidly those of the unabsorbed province
of Newfoundland, are also of considerable service to
us, and might be more, botli to us and to Canada,
but for the inroads of United States fishing-boats on
Canadian waters. Canada, like all our colonies, in
short, supplies us with a certain amount of food at a
comparatively cheap rate, and a good deal of raw pro-
duce, whicli are just the things we want. In turn
she gets from us all kinds of manufactures which it
is for our benefit to selL The total annual yield of
her fisheries alone is, I beheve, about 3,000,000/.,
most (if \\hich goes to the United States ; but the
trade of the Dominion is witli England in a preponde-
rating degree, botli as reg;irds lier im])orts and exports.
( h\ llic whole, too, lier ti'ade witli this country has not
sufliered quite so severely as witli the States, for the simple
reason that we are better able to buy tlian tliej'. The
imports of Canada are not, however, drawn from EngUsh
sources, so mucli as our large purchases from her
might lead one to expect, and it is rather in Iniying

CANADA AND SOUTH AFRICA, 125

cheap from Canada than in selling dear to lior that
England prospers. She does not allow ns even the
privilege of being her sole ocean carrier, for her own
shipping is considerable, and, iiltliough i'oi- the most
part engaged in hike, river, and canal traflic, it also
carries on the bulk of the bnsiness done with the
United States, outside which and ourselves Canada has
but httle trade.

Canadian trade figures, taken generally, have for
long given unmistakable signs that her business on the
whole was not following its natural course. Canada
has l^een importing beyond her means year after year,
or at all events much beyond her exporting capacity,
and no doubt she has been able to do so by reason of
the money which we have so freely lent her. A new,
raw, unopened country can have no margin to trade
upon in this fashion except by borrowing, and it fol-
lows therefore that, so far as our business with
Canada has been based on money lent beyond the true
capacity of the country to pay the loans, it has been
unsound, and must be reduced. Since lS7o a ])rocess
of reduction has been going on, which is, therefore, so
far healthy; but the limit is, I am persuaded, not yet
reached, especially as the exporting capacity of the
Dominion has, at the same time, been on the decline.^
What the healthy basis may be, it would be hard, in

' The Ibllowirifr olHcial table gives at a glance the export and import
trade of the Doiuiniou for the past nine years. It will be seen that the

126

CANADA AND SOUTH AFRICA.

view of the facts I have inuiratcd, to ]M-c(lict ; but it is
quite clear, when we consider tlie large sum which the
country has yearly to find for interest on Government
loans and on dividends on companies working with
foreign capital, there can be no safety till the export
figures are in excess of tlie import. So many things
are against Canada, her debt, her disjointedness and
isolation, her raw undeveloped condition, the difficulty
of keeping pojnilation in tlie wintry north — Manitoba
has but 12,000 to 14,000 inhabitants, most of them
either tra|)pers or Indians — and her foolish though
feeble efforts at protection, that we can never count on
her ability to go on working on extended credits, till
gradually the country develops up to a capacity great
enougli to cope with its swollen liabilities.^ All these

imports uniformly much exceed the exports, a most dangerous and un-
healthy occurrence for a new country wliich is every year increasing its
forei"-n deht. The figures do not include the returns of Britisli Columbia,
which are quite insignificant, as in the case of such an out-of-the-world
temtory is to be expected : —

Fiscal Years ending June 30

Total Exports

Total Imports

1868 ....

/57.567,888

$ 73,459,644

1869 ....

60,474,781

70,415,165

1870 ....

73.o73,490

74,814,339

1871 ....

74,173,618

96,098,981

1872 ....

82,()89,663

111,430,527

1873 ....

80,789,922

128,011,282

1874 ....

89,3.')1,928

128,213,582

1875 ....

77,886.283

123,070,283

1876 ....

80,299,834

95,056,532

' The inhabitants of the new province of Manitoba are mcstly half-
bred Indians, the descendants of French and Scotcli fathers and Indian
mothers, and form a race of varying qualities, amongst which industry
does not prominently figure. The extremes of heat and cold to which

CANADA AND SOUTH AFRICA. 127

obstacles stand in licr way, and not a few besides
these. The customs barrier set u]) a^^^ainst her by
the United States lias also, no doubt, prevented any
healthy expansionof her trade in that direction, and the
accumulated disasters of a forced and uiiprofitaljle
business have yet to fall upon her before we can say
that we know wliat the country can stand. ' Canada
is on the gravel ' is a cant saying of her admirers,
meaning that she has reached the very foundation of
her trade, and cannot sink further ; but no dream could
be more delusive. Canadian trade has to sink a long
way yet before the ' gravel ' is reached, and, in com-
mon with the rest of the North American Continent, it
must pass through a fire which it is but ill able to en-
dure. ' The farmers are wealthy ' is another favourite
saying, which affords much comfort to many who do
not stop to ask how they have become so. These
persons forget that bolstered credit, inflated prices,
borrowed money, nnd hectic industries, all tend to raise
the cost of living, and by this farmers profit while true

the climate of Central British America is subject, the pest of flies which
infest it duriuij^ its brief summer, anil the exceeding difficidty experienced
in establishing communications between it and the outer world, must all
tend to make it difficult to people with emigrants from Europe. At
present it is an almost inaccessible region from Canada, and can only be
got at through the States, by which it naturally tends therefore to be
absorbed. Indeed, tlie priest-incited rebellion amongst the French
Canadians and half-breeds in the district, which led to the Red River
Expedition of 1870, sought a colourable excuse in a professed desire of
the malcontents to join the American l^nion. No railway can for many
a day to come open up this region through Canadian territory. It is
madness to think of it.

128 CANADA AND SOUTH AFRICA.

prosperity is being sapped to the core. Wait till the
tide has well turned, and then Ave shall see what the
wealth of the farmer means. He stands to be ruined
by a big crop in Europe and America. What Canada
has most of — beef, pork, corn, wood, and wool — the
United States has a great deal more of herself, and
what the United States seeks to supply in the shape of
manufactures Canada wants to make at home. There
is hence no good scope for a large development of reci-
procal trade between these two coiuitries at present, least
of all a good outlook for the farmer in the event of a
succession of splendid harvests. The truth is also, that
both the States and Canada have gone on the foolish
plan of practically limiting the farming class during
the time of seeming manufacturing prosperity. Railroad
finances and company speculation, anything but hcmest
tillage of the soil, has become the occupation of a large
part of the population, which has thus been drawn into
fields of labour which yield no i)ermanent subsist-
ence. By-and-by, when the country becomes crowded
with numbers of these people in need of bread, the
])resent farmers may have to face the double danger
of low prices and over-competition. And should this
same reaction take place, as is probaljle, in other lands,
we shall have the spectacle presented to the world of
an agricultural population in many countries tempo-
rarily greatly in excess of human necessities, fighting
with each other for a market.

CANADA AND SOUTH AFRICA. 129

At present, tli-eretbie, the ti'ade of Caiuidii appears
to ine destined inevitably to decline further, and con-
sidei'ably, even supposing that the Government and
the banks are together able to stave off the day of
reckoning. So many other countries are competing
with her for the supply of corn, that she is being dis-
tanced in the race ; and the heavy demands for her
pine, which of late years have done something to ba-
lance the account, is not likely to continue. Excep-
tional influences have been at work, at all events in
England, entailing an enormous consumption of timber,
but these are passing away. Building has been over-
done amongst us, and for our permanent demands in
respect of railway tinibiTs we have other countries be-
sides Canada to depend on. Anstralia is capable of
taking her place to no small extent in this as in other
things, and the forests of South America are gradually
opening to our traders. Besides, the adm.inistration of
the Canadian forests has been of a piece with her other
wastefulness. There has bt^en little or no fresh plant-
ing, little careful luu'sing, and it iherefore becomes
year by year more difficult to get the timber to mar-
ket in some districts. There has been a belief current
that the cleared land would be at once wanted for corn,
and it has been left barren. For this mistake, also,
Canada will now pay. Tlw' wants of the world have
not nearly come up to the level of her ambition, and
she will ha\e to sink again into llic (juict [)lodding ways

VOL. II. K

130 CANADA AND SOUTH AFRICA.

Avhich cliaracterised lier lono; before Enoiish states-
men egged on lier vanity to ape the neighbouring em-
pire. This is not a very satisfactory summing up of the
position of this old Enghsh settlement, or group of settle-
ments, and I wish heartily that I could make it more
cheerful ; but the facts are too many for me. Canada
has gone ahead far too fast ; her prosperity has been a
delusion, and her reckoning will be heavy. It may
rend the new-fangled Dominion to pieces, and wnll, at all
events, seriously disturb the gushing flow of its rather
blatant loyalty. England has herself much to blame
for this state of affairs, alike by the manner in which
she has neglected Canadian interests in the past, and
by the foolish measures which she has taken to try
and retrieve her errors. There might have been a grand
colonial empire in the north acting as a stimulating rival
to, and a healthy check on, the overgrown agglomera-
tion of states in the south, but that can never be now.
We have spent one way or another nigh 100,000,000/.
of good English money to prove tliat it is impossible.

Taken according to population and wealth. Cape
Colony, to which we shall now turn, is by no means next
to Canada in importance amongst English colonies. New
South Wales and Victoria at least are far more wealthy
and fully more valuable ; and had I been bound to go
by order of wealth I shoidd have taken these now.
But not bemg thus bound, T cannot pass by the Cape.
Our settlements there and in Natal are important

CANADA AND SOUTH AFRICA. 131

enough to call for some detailed notice, and at present,
when a nionientuus political question is still agitating the
whole of the settlements, English and Dutch, a review
of the position ought to be peculiarly interesting, since
I cannot deal with their economies without taking note
of their ])olitical condition. What strikes one at the
outset is that most of our dependencies in South Africa
have not been peopled in the first instance with English-
men. As in Canada the French were before us, so at
the Cape the Dutch held possession for 150 years before
the country passed into our hands, and to this day the
majority of the European inhabitants of the colony are
of Dutch descent. In some places, and particularly in
the newly added Transvaal territory, the people are
nearly all Dutch, just as the French in Lower Canada
or Quebec almost exclude every other race. From the
earliest time of our possession of the Cape this difference
in race between the governors and the governed has
given us a great deal of trouble, and coupled with the
constant bickerings and wars with the native tribes of
Kaffirs, Bushmen, and Hottentots, has led to the
gradual extension of Britisli territory northward until,
exclusive of the still independent Orange Eiver Free
State, mostly inhabited by Dutchmen, but including
Griqua Land, tin; Transvaal, and Natal, the Cape Colonies
now embrace a territory nearly as large as France and
Germany together. This territory is very diversely
endowed, some of it being nearly uninhabitable, and a

132 CANADA AND SOUTH AFRICA.

groat part of the inland portions of it being as yet fit
for little except pasturing ; but, on the otlier liand, there
are near the coast and in (lie river valleys splendid tracts
of country capable of the highest agricultural develop-
ment, and adapted for the cultivation of every descrip-
tion of semi-tropical product, of fruits and vines, whicli
latter can be carried to higli perfection. The wines of
the Cape are full of promise as articles of European
consumption, and might be better known now in this
country than they are, did not the 2^. 6d. duty hinder
importation. With a larger European population there
is thus nothing to hinder tlie South African settlements
from becoming most thriving communities, having the
possibility before them of growing into a nation. As
it is, many districts which in former years were con-
sidered waste and almost barren have been brought
into a promising state of fertility, and have proved
capable of sustaining large flocks of cattle and sheep.
At the present time the quantity and value of wool ex-
ported from Soutli Africa to the mother-country nre
greater than from any part of the world, except the
Australian colonies. 'Cape avooI' is an important
factor in our trade, therefore, and the south-eastern
town of Port Elizabeth has thixnigh the expansion of
this trade become an important centre of business.
The flocks of sheep which the Cape and Natal possess
exceed those of Canada by some eight millions, includ-
ing African sheep ; and year by year their general trade

CANADA AND SOUTH Al-IUCA. 133

increases as well as their revenue. In 187U llie I'evenue
of Cai)e Colony alone amounted t<> hut 735,000/., in 1875
it had risen to 1,015,000/. 1'he least prosperous of our
South African possessions is Natal, wliich has somehow
never become a favourite resort of emiirrants, in spite
of its natural advantages. It requires to discover
diamonds or gold in order to obtain the raw material
which it wants to subdue the land. Yet Natal is not
quite standing still. Its exports were smaller last year
than they have been since 1873, but they were three
times as much as in 1867, and her total trade is now
about 1,700,000/. a year, which is not amiss for some
20,000 Europeans or less, and a total pojmlation of
little over 300,000, mostly Zulus. Natal has, of course,
borrowed money — no British colony could live other-
wise — but it has not yet betrayed any Avild extrava-
gance ; and. coidd it only get Europeans o^ a good
stamp to emigrate to its unocciq)ied lands, might ui
time become one of the most flourishing provinces of
the dreamt-about South African Confederation. Its soil
is capable of producing sugar of good quality, and ^vill
also grow coffee and most excellent cotton, nltlioui>h
the frequent rains in some districts rather hindei' tlie
successful cultivaticm of the latter. For a long time
Cape Colony itself was most wretchedly prt)vided "wiili
])0])ulation, but tlui diamond discoveries in tiie territory
of the lialf-breeds — in Griqua Land West and the ( >range
Eiver Free State — and of gold in the Transvaal, have

134 CANADA AND SOUTH AFRICA.

given a little fillip to immigration. The population is
still, however, very sparse, and were it not that a
certain amount of labour is got out of the natives, par-
ticularly in the inland districts, there Avould be little or
no progress made. Behm and Wagner, in their ad-
mii-able compilation already cited,^ estimate the total
population of British Soutli Africa at 1,339,000, of
which 720,984 fall to Cape Colony proper, including
British KaflVaria. Cape Colony has, ho vever, only
236,783 inhabitants of European origin. All the rest
are either Kaffirs, Hottentots, or other native races,
except about 11,000 Malays. And throughout South
Africa the state of things is the same. The Transvaal
territory just added to the Britisli dominions has a
population of about a quarter of a million, of which
only some 50,000 to 00,000 are whites, mainly Dutch ;
and round its borders or between them and Natal it
seems })robable tliat native tribes numbering over two
million souls are to be found, with whom there may be
many difficulties before the hold of the English is
assured all over the laud. These are important figures
to bear in mind in judging of the position of this exten-
sive country. They reveal to us at tlie very outset
how much our vaunted success as colonists has here
also to be proved. South Africa is, as yet, a nation
only ill embryo. Xot only tliat, but it is a nation in
which the British element amongst the whites is greatly

' Die B('inlkefU7i(/ der Erdc : No. 4!) of Petermann's MiUheilunym.

CANADA AND SOUTH AFRICA. 135

in a minority. So inucli so, that iu tlie event of u con-
federation of tlie various states and provinces into a
South African Eepubhc, where all provinces would
have equal rii^hts, it is open to question whether the
English influence would remain paramount in the
country. I am inclined to think tliat it would not,
and therefore do not feel disposed to accord that un-
measured praise to the federation policy of Lord Car-
naj'von which it is customary to give Mr. IVIolteno,
the Cape Prime Minister, at the time oi the agitation
started by his Lcjrdship, appears to me to have liad
sound reasons for doubting whether the states and
pro\'iiices were yet ripe for such federation. Before it
takes [)lace, as it probably will some day, there ought
to be a larger influx of English settlers, so as to secure
the due preponderance to the English tongue and
English ideas in the future administration of the
country. This has become more necessary than ever
since Sir Theophilus Shej^stone annexed the Transvaal.
It should never be forgotten, as Mr. Froude has so for-
cibly ])ointed out in his memorandum to Lord Carnarvon
on this subject,^ that the Dutch have not many reasons
for loving us. Throughout our connection ■\vith the
colony we have subjected them to many injustices,
some inilicted wantonly, some in ignorance. The un-
lucky Boers have been held up to the rei)robation of

> J'iilc Correspondence on South African AfTairs, Coinnions Papers,
No. 1301), 1870.

13G CANADA AND SOUTH AFIUCA.

Engiisli ticctaiies as inousteis of cruelty to the luitives,
and under tlie force of gusts of uiissionary zeal we
have often done them, there can be no question,
grievous Avi-ong. So little have they j-elished our rule,
tlierefore, that for a time they may be said to have be-
come almost nomadic, wandering northward and east-
ward to escape from us, until, at length, we forced
them, in a measure, to constitute themselves into two
free repubhcs in the very heart of South Africa, shut
out from the sea, sur/ounded by natives, many of them
liostile, and capable of giving impleasant effect to their
hostility, and all of them treacherous and thievish.

By thus driving the Dutch outside the pale of
English dominion, we, as it were, confessed our inability
to govern them, and we certainly helped to increase
their abhorrence of us. This isolation has also tended
to sink them in ignorance, and to produce many com-
phcations on their frontiers, although they have
governed themselves and their siu'rounding natives in
many respects much better than we anticipated. Their
disputes with these have plunged them into debt, how-
ever, and their trade isolation has left them little o])por-
tunity of growing richer so as to be able to bear their
increased burdens. Thus, altogether the quarter of a
century or eo of their existence has been a time of de-
cadence and gradual a))proach towards almost helpless
subjection to the bolder among the native races. And
thus we are, in self-defence, comj)clled again to stej) in

CANADA ANJ) SOUTH AFJilCA. 137

and take one oflliese states into Hritisli keepinu, profit-
ing territorially by tlie very antipathies which sent the
Dutch settlers ot" the Cape on their wanderings.

Once independent in name, our injustice to these
Dutch might have been considered at an end, but it
was notliing of the kind. We liave liampered their
dealings with the natives, not yet at all events capable
of being anything but subject and governed ; and we
have annexed territory to which we had no clear right,
directly it became, by the discovery of diamonds upon
it, a worthy object of cupidity. To my mind, there
can be no doubt that the Dutchmen have been right
in many of the disputes they have had with us. We
have maligned them and abused them, not once or twice,
but dozens of times. If they should, therefore, get
control of the Cape by their voting power, there is fair
reason for sujjposing that they may seek to cast off all
allegiance to England ; and the true way, the only way
open to us, to prevent tliis is to encourage Englishmen
and Scotchmen to emiorate to this overlooked but
splendid South African territory. There is room for
millions where there are thousands in that land, and the
more go-aheail (jualities of the English would form an
admirable set-off as well as stimulus to the steady, quiet,
slow, and unju'ogressive Dutch. At the same time the
granting of self governing institutions might, after this
nation had been thoroughly made, nearly put an end to
the chances of renewed irritation between tlie races

138 CANADA AND SOUTH AFRICA.

over the wrongs whieli the conquered have had to suffer
from tlie conquerors. There has been no greater mis-
take in our South African pohcy than our ostracism of
the Dutch, only we need not cap that mistake by rushing
now to the opposite extreme and giving them tlie
control of the entire territory.

But there is another reason for the strong en-
couragement of emigration to the Cape to be found in
the remarkable stability of some of the African races
in the presence of the stronger European. As the
figures show us, South Africa may be said to swarm with
natives where the European is absolute master. The
Bechuanos and Hottentots form his servants and the
Kaffirs his dangerous, treacherous, and ofteu openly
hostile neiglibours. Without a large supply of Euro-
pean settlers there seems to be danger that those already
there may prove unable to hold thorough control over
these confused native elements. Natal and British
Kaffraria, tlie Orange Eiver Free State, and our own
more northern settlements, are all threatened more or
less seriously by this race difficulty, wliich is aggravated
rather than lessened by the numerous mixed breeds
which the loose htibits of the European immigrants have
called into being. It was the tlireatening aspect of
the native tribes which more than anything else offered
a colourable justification for our suuunary absorption
of the Transvaal ; and the responsibility we have thus
assumed, although it may have taken away the im-

CANADA AND SOUTH AFRICA. 139

inaliate danger, is of the gra\est possible cliaracter.
AVliat sliall we do with all these blacks in the event of
our succeeding in keeping peace? How shall we con-
trol them, and what position will they hold in the future
within British territory ? The annexation has perhaps
lessened one or two dangers that immediately threatened
us, but others more serious still loom in the near
future. And while all tlu^se difficulties beset our
territories in South Africa we can hai'dly call them a
great possession or cite them as a sample of successful
British colonisation. Territorially^ South Africa is
great, and its natural resources are magnificent, but we
have not yet stamped it with the genius of self-develop-
ment and made its people the father of a mighty nation.
It remains to be seen whether the Transvaal will prove
an acquisition, and whether the native tribes will settle
down there or in Natal and the Cape, like the negroes
in Barbadoes or in Maryland and New Orleans, in
moderately peaceable juxtaposition to the whites.

Thus the need of the Cape to my mind is not
at i)resent federation, but emigrants, and I cannot but
regret that so much is done to })ufr up some of our
other possessions while the Cape is com])aratively
neglected. If the Government Avould only t'ucourage
the trans})lantingfroni this counlry of farmers oppressed
willi rack rents and the competition of cheap-producing
lands, to such regions as are to be found in South Africa,
where landlords and game laws iloui-ish not, it would

140 CANADA AND SOUTH AFiaCA.

do ill linitely more good than by ])reaching peace, unity,
and concord amongst sections of comnmnities not yet
ready for that gospeh The race difficulty may be made
an insurmonntable one by the premature enunciation of
this evangel, wliereas, left to work its way to a natural
solution, it miglit in time lead to the creation of a
nation possessed of admirable unity and great qualities.
The French, German, PorLuguese, Dutch, and English
elements which arc to be found amongst the people
ought to be capable of producing this result, and of
making South Africa one of the greatest monuments of
English aggression and race vitality in the whole world.
But there must be less management from home, more
latitude allowed to Governors in dealing with these
natives — always hitherto a fruitful source of trouble
and strife — and far more sincere endeavours made to
get the colony peopled so as to make the English
dominant in numbers both over the Dutch and the
warlike blacks witliin the })ale. However grand in the
abstract or profital)le in tlie concrete a pastoral life may
be, it is none the less a primitive one, and no colony
can become a great nation which does not cease to be
merely pastoral. Nay, more, under modern conditions
a good ])art of tlie apparent prosperity of such a com-
munity is waste. The best is not made of tlie land ;
it is not liusbanded or tilled, hardly cleared, only wan-
dered over, Avitli tame flocks substituted for wild beasts,
and its sul)stance eaten up.

CANADA AND SOUTH AFRICA. IH

Since wc3 liave possessed South Africa it hns grown,
but the growth has been more in size tlian in substan-
tial development towards a true permanent settlement
of the country and such })rogress as we have made
has cost us many miserable wars witli miserable
barbarous tribes, some of whicb a more uniformly
stern policy miglit have mercifully prevented. The
recent prosperity of European countries, and especially
of England, lias, however, reacted favourably on the
trade of the Cape, and it has fortunately escaped in
some measure the ' progress ' fever which has swept
over nearly every other colony. It was not till 1872
that self-government on its present basis was finally
settled for the Cape and Natal, and before that date
South Africa stumbled on in the hands of the Governors
more or less busy with the inland Boers and the
everlasting Kaffir or Bushmen disputes, making the
Imperial Government pay what it could towards the
cost of the perpetual bickerings and occasional flashes of
war. Since the Colonial Government became possessed
of taxing powers, however, there has been a consider-
able advance made in more respects than one, and
the Cape, like our other ])ossessions, now borrows
freely, in token of its right to be considered civilised.
The position is still very favourable compared with
most of those, and the aims of the new State are
thoroughly practical and good. The increase in her

142 CANADA AND SOUTH AFRICA.

revenue also amply justifies so far the outlay of money.^
At the same lime it appears to me that without more
])opulation it is dangerous even for the Cape to push
the borrowing system much further. There is a great
deal of what I may call superstition about the value of
railways and costly public works to such an unde-
velo})ed new country. They are not alike valuable
even in different countries which may be classed as
settled, and before pushing them far eastward or north-
ward in South Africa it should be well considered
whether good waggon-roads would not serve instead.
The experience of the United States and of Eussia is so
far decidedly against the profitableness of expensively-
made raihvays far inland in a sparsely peopled
agricultural country, and few of the States of the
Union are now more thinly populated than the inland
districts at the Cape. There is no passenger traffic to
speak of, and the raw^ produce of such territories
caimot bear remunerative freights. Until there is a

^ The trade of the Cape has made very satisfactory pro;iress, as well
a.s that of Natal. According- to the official document lately issued along
with the prospectus of the last instalment of the Cape debt, the average
annual exports for the five years ended 1870 was 2,3-i2,000l., and for the
five years ended 1875, 4,012,000/. The exports of 1875 alone amounted
to 4,088,000/. Equally remarkable has been the growth of the imports,
which, of course, latterly betray the usual effect of borrowed money —
the figures for 1875, for instance, showing an excess of about 1,500,000/.
over the exports. The total trade of South Africa, outward and inward,
is estimated at about 1 5,000,(X)0/. to 1 7,000,000/., the gi-eater part of which
is carried on between the Settlements and the United Kingdom. The
trade of Holland with her old possession is, and has always been, extremely
insignificant.

CANADA AND SOUTH AFFJCA. 143

varied and lieavy trade both ways, the less expensive
roads, with their bullock-waggons, would therefore
appear to be undoubtedly the best.^ Eoads the Gipe
unfpiestionably needs, for it has no navigable rivers;
but railways, except inland in one or two directions,
for short distances, would only prove a wasteful folly.
There is no town in South Africa possessed of 10,000
European inhabitants, except Cape Town ; and, without
inhabitants of a kind given to movement, how can
railways pay ? At present the railway projects of the
Cape are, as I think, very ambitious, though modest
compared with those of Canada, which run over
certain almost unpeo[)led districts with a network
reminding one of the labyrinth around Clapham
Junction. There is a line from Cape Town to the
north-westward by Wellington and Worcester to Beau-
fort near the Nieuveldt hills, a distance of over two
hundred miles ; and lines start from Port Elizabeth
and Port Alfred, running to Graaf Reyuet and Cradock,
by Uitenhage and Graham's Town ; while yet another
system proposes to penetrate towards the Orange Eiver
from East London. To some extent this i)lan of
running lines for certain distances inland, from good

' Tliei^e bullock-waggons seem to me to be a peculiarly valuable
institution. They are of great capacity and strength, and travel at the
rate of from twelve to twenty miles a-day, according to the nature of the
road. For conveying the produce of the far interior and supplying
the wants of farnuns, there could not be a better medium in the present
state of South African Settlements.

144 CANADA AND SOUTH AFRICA.

seaports may, as I liave said, be justified ; but these
projects undoubtedly carry theui too far. Tlie western
system, from Cape Town, ouglit to stop at Worcester,
122 miles inland ; and the ' Midland,' from Port Eliza-
beth should rest at Uitenhage, unless the ' North-
Western,' also from the same port, were dropped,
when the line mi<2;ht be carried to Graham's Town.
Probably this extension would not pay directly any
more than the Western to Worcester, but it would
involve no serious loss such as will be sure to fall on
the colony if lines are to bo pushed inland beyond
the limit of towns and paying trade. Natal has also
her railway projects and is now borrowing a million
and a quarter for the purpose of making three short lines
of a total length of 105 miles. They will probably
benefit the contractors much more than the colony for
many a day, and so weak a colony acts very foolishly
in thus hastily pledging its credit. Still more foolish
will be any attempt to carry a line of railway into
the Transvaal, a project alreiidy mooted however, and
likely enough to be carried out if the glow over the
annexation does not speedily die out. In such
countries above all others, where the trade is of a very
primitive kind, where the formation of roads offers no
great difficulty, and where the coast is at no immense
distance, railways ought to follow lather than precede
pojmlation.

It must not be forgotten that there is not ihe least

CANADA AND SOUTH AFRICA. 145

likelihood of South Africa developing manufactures of
its own. So far as has yet been discovered, tliere are
no rich stores of coal or iron to form the basis of such
manufactures. But we invariably find that when once
a new country has got railways it betrays a craving for
mills and looms and all tlie paraphernaha of production.
It finds, of course, that these railways are expensive to
maintain and wants to create traffic for them. If the
Cape gets into this position, and has not the means to
sustain it, it will be temporarily ruined ; and the best
way to keep out of it is to l)e modest, to encourage
agricultural settlers, to be content with good roads and
old-fashioned bullock-waggons, and to study to keep
the taxes low.

For not only has the lack of population to be
taken into account, but also the nature of the produce,
which, in the case of South Africa, consists, and must
consist, almost entirely of articles of food and raw
materials of manufactures. These, in the present
developed stage of many parts of the world whence
competition comes, can afford little for land carriage.
The herds of cattle or sheep, for example, which may
be in the far interior of South Africa, are more cheaply
driven towards the coast alive than they could be carried
by railway, and their hides and fleeces do not require
to be hurried to the coast in forty-eight hours to catch
the mail boat at a given date. Conceive, also, the
strange absurdity of running a train across a plain tlirough

TOL. II. L

146 CANADA AND SOUTH AFRICA.

ostrich farms, where there would be only bundles of
feathers to transport sufficient in a year perhaps to fur-
nish loads for a dozen or so of ordinary drays, and one can
then reahse what railways in tlie interior of Africa may
mean. Her products are all of the crude kind, such as
copper ore, feathers, hides, ivory, wool and hair, except
a little prepared fruit and wine ; and her imports need be
in no luirry to get inland, consisting as they do for the
most part of articles of food and clothing, such as
wlieat and rice — for the Cape does not grow even
enouo-h corn for its own wants — cotton and woollen
manufactures, and so on, all of which the people do
not require express trains to take to their dooi^s.

Again, our South African colonies have a mag-
nificent coast-line, and the provinces already most
occupied lie nearest the coast, so that, at the very
most, all that can at present be wanted to open up the
country is short lines of railway inland from the handiest
port of shipment to the handiest up-country market
depot where roads would converge. I dwell on this
because I think South Africa, but recently emancipated
from Imperial control, has shown a rather dangerous
tendency to go ahead in this direction. In 1869, its
debt, including that of Natal, was under 1,500,000/.,
and now the total is nearly 6,500,000/., including the
Cape and Natal Loans recently issued. This growth is
due principally to the Public Works Department, and
cannot be too carefully \vatched. South Africa may

CANADA AND SOUTH AFRICA. 147

have a great future before it, if it ouly would abstain
from mortgaging its chances.

At the same time it has to be admitted that of
late years the trade and revenues of the Cape have
shown quite an extraordinary expansion. Every year
since 1871 there has been a surplus of revenue over
expenditure, although the expenditure has been steadily
growing. In 1875 this surplus reached 588,142/.,
the total revenue being 1,602,918/., and the expendi-
ture 1,014,77G/. A great part of this balance has
been devoted to public works, as it fairly and legiti-
mately might be. It must not be forgotten, however,
that one considerable portion of the so-called revenue
is not revenue at all, but capital, as I have akeady ex-
plained, and that the prosperity is so far only the result of
an alienation of future State resources in the shape of
huid sold. The land sales and land rents produced
together some 700,000/. of the total revenue of 1875,
or nearly one-half. The rentals are, of course, most
legitimate sources of income, but not so the proceeds
of sales, which ought to be treated as capital ; and I
think no better argument in flivour of a State's chari-
ness in parting with liglits over the land could well be
adduced than the prices at whicli nuich of the soil of
Cape Colony is alienated. Land can be bought often at a
shilling an acre, and in tlie Transvaal has been sold as low
as sixpence an acre, the Government surrendering all
rights, excej[)t a small quit rent, which in a few years'

L 2

148 CANADA AND SOUTH AFEICA.

time bears no adequate proportion whatever to the
value of the soil, yet which cannot be increased. The
prosperity of the Cape finances on this head ought not,
therefore, to be made too much of ; nor as immigrants
flow in must her financiers be deluded by the show of
wealtli which this invariably produces. Tliat they will
alter their policy so as to secure to the State some por-
tion of the increment of land value is, I fear, more than
can be expected, but if they did so they might, after
waiting a few years, build all the railways they require
out of surplus revenue and rejoice in progress without
State debt.

As to the indications which the customs receipts
give of growing prosperity there is much more satis-
faction to be expressed. No doubt, the loans which
tlie Cape Government has raised of late years have
swollen the imports till they exceed the exports in
value, and the customs receipts liave been thereby in-
creased ; but, that granted, the trade of the colony has
on the whole made very satisfactory progress ; and it
is a trade which has benefited Great Britain almost
exclusively. Our merchants have been the factors for
Cape w^ool, and our ships have brouglit it to Europe.
For the most part, also, the diamonds, gold, copper,
ostrich feathers, wine, and other products which it is
able to export have all gone to swell the totals of the
trade which passes through Englisli hands, and the
bills representing which are finally settled in London.

CANADA AND SOUTH AFRICA. 149

So with the imports of tl)e Cape and Natal ; tliey con-
sist mostly of British manufactures and as the pros-
perity of these settlements increases, and their Euro-
pean population multiphes, the dc;mand for these is sure
to increase, for the reason I have already given — they
cannot manufacture much for themselves. At present
the Cape appears to be buying too much, and extend-
ing her credit rather deeply, but should slie cease to
borrow, and at the same time carefully limit the issues
of paper currency by her banks, the trade account
will very soon adjust itself. Her enormous exports of
diamonds have, in recent years, no doubt helped the in-
flation too, and must be taken into account as a credit in
her favour. It is said that the Great Kimberley Mine
alone has furnished some 12,000,000/. worth of these
stones, the sale of which in Europe added enormously to
the buying power of the colony. Good while it lasted,
this wealth is, however, only temporary, and should not
be used to build a debt upon.

As the tariff is light both at the Cape and at Xatal,
there is practically little to hinder the natural develop-
ment of trade with the mother-country, and now that
two magnificent lines of steamers run regularly to
most South African ports, we may reasonably hope to
see a steady growth of tlie business between tliese and
Eiigl;iii(l. Tlie Cape and Natal have not yet entered
the competition either as sources of meat supply, or
as corn or cotton growers, but there is no reason in

150 CANADA AND SOUTH AFRICA

the world wliy they should not do so in all three
capacities. They are almost as favourably placed as
America, and more so than the Australian colonies, and
only want small capitalists as farmers and exporters to
begin the work. Looking, indeed, at the natural ad-
vantages whicli these small African settlements possess
• — at their favourable climate, their rich tracts of soil,
theirimmense plains capable of fertilisation if judiciously
tilled and planted with trees ; their mineral wealth in
copper and possibly in coal, their splendid harbours, and
their central position — I should say that they give in-
finitely more promise of future greatness than Canada.
But, I repeat, they must not be left empty. We
cannot have a continual feud in progress between the
inland Boers and the natives, nor the lives and pro-
perty of settlers, Dutch and English, even occasionally
at the mercy of these ruthless savages. The country
must be fostered, emif^ration encourao;ed and stimu-
lated, and the dream of universal federation and peace
given up just for the present. If the Dutch settlers
are all to be brought back within the rang-e of British
rule as those of the Transvaal have been, they must
be made to understand tliat it is British rule and not
the Government of the Par]i;imcnt at Cape Town ; that
in return for protection they must submit, for example,
to have certain privileges in their dealings with the
natives curtailed for a time. This need imply no in-
justice, but it would hardly be fair, on many grounds,

CANADA AND SOUTH AFKICA. 151

to the rest of the colonists to allow the suffrages of the
Dutch, many of whom hate England cordially, to em-
barrass or even to thwart English intentions and an
Enghsh policy in the development of the country and
in the treatment of these ti'oublesome natives. Fortu-
nately, the English settler has penetrated in consider-
able numbers into both the Orange State and the Trans-
vaal, and the process of assimilation is already on foot.
Out of the mixed races which are thus fusing in Africa
1 think we may hope to see come a nation possessed of
many high qualities. It will not, however, be just yet.
For the present, I fear. South Africa, like other lands,
may disappoint us. There will be no violent ex[)ansion,
no great rush of prosperity. There may be rather an
appearance of reaction and a time of dull business,
should the present modes of opening up the country be
persevered in, or should we have, one of these days, to
encounter another native war on a larger scale than
the petty squabbles which have sprung out of the
Transvaal misgovernment and annexation.

152 AUSTRALIA AND NEW ZEALAND.

CHAPTEE XII.

AUSTRALIA AND NEW ZEALAND.

If the iie^viiess of colonies like Canada and the Cape
strikes a student of English migrations, that of the
Aiistrahan and New Zealand colonies must do so still
more. As colonies in the modern acceptation of the
term, not one of these is two generations old, and even
as a penal settlement New Soutli Wales — the mother-
colony, as it is fond of being styled — only dates from
just ninety years ago. For a long time the magnificent
continent now divided amongst five independent colo-
nial establishments, as well as the neighbouring island
of Tasmania, lay neglected in the fashion common with
Enghsli Governments. Their only use in the estima-
tion of these Governments was as a convenient place for
the deportation of the home criminals, of whom our
admirable civilisation furnished a substantial annual
su])ply. Hence, for tlie first half-century of their exist-
ence the Australian settlements attracted few respect-
able inhabitants, and gave next to no sign of their
future greatness and commercial activity. In 1825
fully one third of tlie population of New South Wales

AUSTRALU AND NEW ZEALAND. 153

was composed of convicts ; and at tlie time of the
first gold discoveries, in 185], tlie entire inhabitants of
that colony, which then comprised both Victoria and
Queensland, did not number 200,000, So with the
other settlements which now exist as independent
colonies. Tasmania, or Van Diemen's Land, said to
have been originally discovered by a Dutch navigator
named Tasman in 1642, and whicli was subsequently
visited by both French nnd English ships before Eng-
land fastened on it as a convict prison, ranks next in
age to New South Wales. Yet it had not 10,000 in-
habitants in 1825, at wliich date Queensland, Western
and South Australia, and New Zealand had not, one
may say, been heard of. In short, a generation ago, or
hardly, the entire English settlers in Australasia did
not [)robably number more than 300,000, if so many,
and to-day they exceed 2,000,000.

This is newness and expansion uiiited in a fashion
which the world has never seen before, and, taken in
conjunction with the migrations from the motlier-
country to America, Africa, and Asia, oflers food for
much speculation. By what extraordinary force was
the English race suddenly stimulated into an expansive-
ness which made it found nations, and, as it were,
overrun the world almost witliiu tlic space of at most
two generations? Here we lune lived for many
centurios cooped up in great measure williin these
islands, increasing in numbers but slowly, and seeing

154 AUSTRALIA AND NEW ZEALAND.

other races distance lis in the task of siihdiiiiig the
savage and sohtary places of the earth, till suddenly in
these latter days we have overllowed in all directions,
and, outstripping every competitor, have planted
English-speaking communities east and west and south.
We have done this, too, without betraying any signs of
exhaustion at home, but, on the contrary, with every
fresh ofishoot have increased ia prosperity, wealth, and
nmnbers beyond all precedent. This is a very remark-
able fact, which is perhaps yet too intimately connected
with our new modern life to be easily explained ; but
it must make us at least cautious in coming to hasty
conclusions as to the future of most of these offshoots.
We dare not affirm positively either that the force
which led to their upspringing is spent, or that it will
continue. It is, however, unquestionably the fact that
the peopling of Australia and New Zealand has had
something in it akin to a spasmodic outburst. They
were neglected, little visited, and barely delivered from
their position as convict prisons, when the discoveries
of gold in 1851, 1852, and 1865 brought a rush on
one and another of the settlements which threatened to
overwhelm their undeveloped and scanty resources. In
the three years, 1853-55, about 180,000 persons were
registered as having left the United Kino^dom alone for
Australasia, and uj) to 1876 they have flowed thither
and to Xew Zealand in a diminished but still steady
stream; the total emigration between 1853 and 1876

AUSTRALIA AND NEW ZEALAND. 155

being set down at 804,272, or nearly one-tliird of the
emigTation to the United States during tlie same ])eriod,
and 20 per cent, of the total exodus from the mother-
country.^ Eacli colony, as gold was found in it, drew
a crowd also Avhich -was not English merely, but French
and German and American, and by this means the raw
material of future nations has been gathered together
with extraordinary rapidity. Undoubtedly, but for
this stimulus, the Australian colonies would not have
yet been worth much to the mother-country, or very
promising in themselves. But it is obvious that we
must not regard this kind of thing as likely to recur.
The novelty of gold-finding has died out for Australia
and New Zealand, and the business of gold-mining has
settled down into the luundrum aflair of capitalists
guiding organised labour and making what })rofit, or
submitting to what loss, that labour yields. Gold-
mining, in short, is in Australia much like lead-mining
at home — a speculative affair, conducted on sober dom-
mercial principles. Not one-twentieth part of the
crowds of people who raced to the ' diggings ' five-and-
twenty years ago, when gold was an all-potent allure-
ment, made money or remained long at the work, but,
once there, they had to find the means of living, and
they became squatters, farmers, cattle-keepers, busli-
men, or thieves, as their nature or chance determined,

^ Vide Tables in Mr. CJillcu'tiaJiuirablc lloport ou the papers rolatiujr
to Emigration for 1870,

156 AUSTRALIA AND NEW ZEALA^^).

doing on the whole an incalculable amount of good to
the new countries in ways which were never dreamt of
by them when they set out. The total yield of gold in
Australia and New Zealand from the time of the dis-
covery of the metal in Victoria till last year is estimated
at about 247,300,000/., independently of what may
have been carried off privately ; Ijut that is a small sum
compared Avith the wealtli which has come of the flocks
and herds and the corn which the soil of these colonies
has been made to sustain and yield. At the present
time Australia is richer in sheep, for example, than any
other country in the world. The colony of JSTew South
Wales alone has within a third of the number of sheep
possessed by the United States, and the wealtli of all
these colonies is in tliis respect prodigious.^ Equally

' The handiest data foi' a comparison of the agricnltural wealth of
the colonies witli European States and America are to be found in the
Af/ricultural Returns of Great Britain. According to the tables appended
to the number for 1876, the Australian colonies own altogether about
52,090,000 sheep, of which th» New South Wales portion reaches about
25,000,000, or nearly half. New Zealand possesses nearly 12,000,000;
80 that altogether this group of English colonies has fully 04,000,000.
This is a far larger number than any single European country possesses,
Russia claiming to have only about 48,000,000, and France only 26,000,000,
Avhile Gennany has only about 22,000,000. The United States, even,
comes far behind with but 34,000,000. Of course, sheep are in a measiu-e
the peculiar objects of the Australian landowner's care, and a comparison
made in other kinds of animals brings them out in a much less paramount
position. Yet New South Wales, if taken by itself, bears the test in
horses and cattle remarkably well, that colony having more than 3,000,000,
or nearly a.s many as Italy, which has a fiftyfold larger population. Judged
by population, indeed, it is astonishing that these colonies, taken altogether,
raise .so much ' meat,' for till within the last few years their cattle could
be of little use to them except for sustaining an export trade in hides.
Compared with other English colonic*, the position of the Australian and

AUSTKAIJA AND NKW ZEALAND. 157

remarkable has been their progress in the cidtivalion
of the laud, ^\•hich enables nearly all the colonies to be
now large exporters of grain ; and I cannot, indeed,
sum this matter up better than by quoting the glowing
words of Mr. G. H. Eeid, in his essay on Xew South
Wales, published at Sydney last year. He says : —

If proofs of material progress are demanded, we can
point to a population which rose in thirty years from 214,000
to 2,000,000 souls, or 834 per cent. ; whilst during the same
period the population of Canada and the United States in-
creased by 660 and 126 per cent. We can point to a trade
which rose in the same generation from less than 6,000,000?.
to over 63,000,000/., or 950 per cent. ; whilst the increase in
British trade was only 400 per cent., that of the United
States 335 per cent., and that of Canada about 650 per cent. ;
and if told that Australian progress has seen its best days,
we reply that the trade of Australasia rose from 63,000,000/.
in 1871 to 87,000,000/. in 1874, an increase of 38 per cent,
in tln-ee years. If we inquire further, we learn that upwards
of 5,600,000 tons'of shipping entered and cleared the ports of
the colonies in 1874 ; that there are 70,000,000 head of live
stock on our pastures, and nearly 5,000,000 acres of land
under cultivation. There are 2,000 miles of railway open,
and a far greater lengtli in progress or projected. Upwards
of 26,000,000 miles of telegraph, to wliich additions are be-
ing rapidly made, unite every part of the groTip with the rest
of the world. The annual revenues of the several Govern-
ments approach 14,000,000/. sterling. The reader has only

New Zealand settlements is altogether paramount, Canada having fewer
cattle and little more than a seventh of tlio numher of sheep possessed bv
New South Wales alone, and the wealth of the Cape in this respect
harely reaching that of New Zealand. Canada and the Cape excel most
of the new colonies, however, in the extent of land luider cultivation,
as with their larger populations they ought to do.

158 AUSTRALIA AND NEW ZEALAND.

to contrast tliese facts with our sparse population to get a
true idea of Australian progress.

Tliis is a very striking picture, and a true one, and
it proves very abundantly that those who came to dig
for gold stayed to perform labour more permanently
valuable. The gold nevertheless lay, in other ways
than as a bait to draw human beings, at the bottom of
this extraordinary prosperity. It gave a handful of
men an unprecedented command over every civilising
agency for years, such as no people but the Spaniards
of Mexico and Peru have ever had. When the Austra-
lians could export six, eight, or ten millions a year of
the precious metals, it needs no argument to prove
that they must be able to buy everything necessary for
the development of the soil in a profusion no other
people ever enjoyed. It is no wonder, with that fact
in view, that the Victorians alone estimate the value of
the machinery and impro\ements which they employ
in tilling the land at over 10,000,000/. ; and, of course,
England reaped at first nearly the whole benefit of this
prodigious export of gold, not only because it was
brouglit to her shores for the purpose of being sold all
over the world to the higliest bidder, but because the
Aui»tralians, l)y their very wants, made it a most potent
stimulant of her trade. They had no time, while sufier-
ing from the gold fever, to produce any tiling on the
spot — everj'thing was imported, ready made, from

AUSTIIAT.IA AND XFAN' ZEALAND. 159

' liome ; ' and thus, "almost from the first, the gain to
English manufacturing interests was very great. The
gold worked on the interchange of traffic between the
new lands and England with all the potency of huge
loans — everything was prosperous, everything progres-
sive and buoyant, and on the whole there could be no
prosperity more soundly based, less liable to suffer col-
lapse. There is, however, a side to this picture of
prosperity which we must not forget, because, without
noticing it, the position and prospects of these settle-
ments could not be justly estimated. Australia has
prospered beyond all precedent as a whole ; but all
the colonics have not prospered alike, nor have they
all dealt in the same wisdom with their seeminglj^ ex-
haustless wealth. They did not all, indeed, enjoy a gold
r ush, and some of those that did appear to have had
their heads turned by the possession of it a good deal
further than their safety warrants, and others have
rather unwisely sought, without it, to imitate the
extreme rapidity with which their gold-owning neigh-
bours have advanced from raw settlements to rich
colonies, and from rich colonies to ambitious embryo
States. We find a genenil indication of this in the
rather heavy debt that some of them have contrived to
heap up — an item not included in Mr. Eeid's glowing
summary. For all the colonies its aggregate at the
present time is about from 60,000,000/. to 02,000,000/.
exclusive of the municipal and other local bonds which

ICO AUSTRALIA AND NEW ZEALAND.

have been iiicuiTed. Even were this debt uniformly
distributed, it would be a serious burden for a new
region possessing only 2,000,000 inhabitants ; but
some colonies bear a iigliter burden, some a heavier, and
one or two of those that bear the heavier seem to me
to be courting bankruptcy. New Zealand, for instance,
has a debt of about 48/. per head of the population,
and that of Queensland is about 40/. ; and this in coun-
tries hardly yet capable of internal taxation is really
enormous. No doubt, besides the gold vanity which
acted on the former, and the emulative ardour spurring
on the latter to rival its ' mother,' New South Wales —
from whose apron-strings it parted so recently as 1859
— the possession of so much land has had a baneful
influence, as I have already noticed, in inducing this
extravagant mortgaging of the future. And that makes
the case all the more serious, as we shall see.

But I must not pass an indiscriminate censure, nor,
even in speaking of this debt, class it with those
enormous piles of obligations which older countries
have heaped together, either in wild extravagance or
in wars, and for every conceivable iniquity. The very
heaviest debt which any Australian colony bears has at
least been incurred for a practical, useful purpose ; and
the ' per-head ' test of a capacity to carry such debt
ought not to be applied to them very rigidly. It may
well be that communities composed almost exclusively
of energetic members of the English race can aflbrd to

AUSTRALIA AND NEW ZEATAND. IGl

take on themselves burdens much heavier than the
weak and nerveless French Canadians or the Kaffirs
and Hottentots of the Cape and Natal. Soils diflfer
too, and trade facilities, as well as mineral resources, so
that, of necessity, one must examine the state of these
colonies in some detail before endeavouring to form a
judgment as to the prospects of their continued growth
and prosperity. And I shall begin with New South
Wales, not only because it is the oldest, and in some
respects most prosperous of all the Australasian colonies,
but because the lessons it affords are most valuable as
helps towards an estimate of the position of the rest.
Indeed I may say frankly, at once, that I am attracted
to New South Wales because of its vigour, its wise
fiscal economy, and its free trade.

For a long time after Victoria found its gold it dis-
tanced the mother-colony altogether, but of late years
the latter has drawn to the front, and in many respects
it is now the most promising of all the offshoots of
England. It has a population of some 630,000, and an
enormous wealth in cattle and slieep, besides mines of
gold, iron, copper, and coal, which contribute not a
little to the general pros[)erity. It imports from the
United Kingdom alone more than 6,000,000/. worth a
year, chiefly in articles of clothing, hardware, and ma-
chinery, and its total trade outward and inward reached
27,000,000/. in 1875. The gross revenue last year

VOL, II. M

162 AUSTRALIA AND NEW ZEALAND.

nmoiuited to more than 5,000,000/., or fully 900,000/.
iu excess of that of 1875, and its public debt is only
some 13,000,000/. — not three years' revenue. This dry
enumeration might easily be filled up to great length,
but the skeleton must suffice. It is enough to record
tliat here we have a very thriving progressive com-
munity ; and in my opinion New South Wales is so to
no small extent because she has been wise enough to
let her resources have tolerably free play. Her cus-
toms duties — the taxes, that is, wliich almost alone are
left for a young English colony to levy effectually — are,
as a rule, remarkably light, except on some kinds of
iron and some food grains ; and it is the intention of
the present Government to lighten them still further by
the transfer of some fifteen articles to the free list, sub-
stituting in their stead an Excise on tobacco, which
will probably yield a good deal more than the 20,000/.
or so lost by the transfer.

Next to the tariff. New South Wales is, no doubt,
prosperous through its splendid mineral resources,
which enable it to take advantage of that tariff, and to
become, in a measure, the manufacturing colony of
Australasia No better example of the value of free
trade to the manufacturer could well be found than the
progress which New Soutli Wales is makmg in this
direction.' Without doubt this progress tells upon our

' 'Sir. G. II. TleiJ gives a valuable table in his essay on New South
Wales, showing the development of the manufacturing' industvies of that

AUSTRALIA AND NEW ZEALAND. 163

iutercoiirse with this colony. New South Wales is so
self-dejjendeiit that she does not need to buy irom us
so heavily as she would do were her system protec-
tionist. It is estimated, for example, by Mr. Keid that
New South Wales provides herself out of her own
resources with 10,500,UUU/. out of a total demand
amounting to 22,162,000/. for the mean population of
the colony in 1870-74. That is to say, calculating
that in the years 1860 to 1864 the population required
a certain quantity of imported goods, Mr. Eeid esti-
mates that as those requirements have in 1870-74 by
so much fallen behind the increase in population,
the home industries have therefore made the dif-
ference good. I doubt whether this reasoning will
altogether hold water, because the state of the popula-

colony since 1 855. I select one or two of the more important of these
as an iUustration of the text :

Agricultural implement works

Sugar works

Woollen cloth .

Tanneries ....

Soap and candle

Distilleries and sugar refineries

Engineering works, foundries, kc.

Ship and boat builders

Shoe factories .

Clothing factories

Coach and waggon factories

Besides these, there are of course many industries which are almost
essentially local, and necot^sary ^\h^'rever civilised populations gather, as
well as those which arise directly out of the agricultural development of
the colony, such as flour mills, saw mills, lime kilns, and wine presses, all
of which show remarkable increase in numbers, ai;d the wine presses
especially, which have increased in ten years from one to 367.

M 2

1855

1864

1874

—

114

108

158

—

103

—

164 AUSTRALIA AND NEW ZEALAND.

tion is not now what it was ten years ago — there is
probably a larger population of young in it now than
tlien — but there is, no doubt, a certain amount of truth
in the conclusion. We are not so much a necessity to
New South Wales in many respects as we were ten or
fifteen years ago, and her imports would be much less
than they now are were she not compelled by the
narrowness of her cultivated area to import nearly a
million and a half's worth of Hour and bread. In this
respect also she is, according to Mr. Eeid's tables, less
dependent than she formerly has been ; and it would
probably be far more satisfactory for the trade of the
mother-country with the colony were this dependence
to disappear altogether. What New South Wales
spends in bread must in her condition, to a certain ex-
tent, represent unthrift. As to her manufactures, how-
ever, we can well afford to witness the independence of
this colony, seeing that her wealth is to a great extent
still our wealth, and tliat it will probably continue to
be so for many a day to come. The chief currents of
her trade, as it were, will, through her banks, through
English capital and shipping, and English dominance
in Asia, continue in our hands, and we shall be par-
takers of her wealth however prosperous she may be-
come — to the benefit of both countries, for it is meet
that the hoardings of the old country should find fruitful
employment in the new.

Distance must, moreover, check our supremacy as

AUSTHAIJA AND NEW ZEALAND. - 165

manufacturers of many articles ; but it does not yet
fight against us as sea-carriers, uur as cotton -spiuners
or weavers, to any apprccial^le extent. And it is a
very healthy sign for the colony and for England that
New South Wales continues to sell us much more than
she buys, and thus year by year, out of her own re-
sources, increases her capacity for trading into all parts
of Asia with profit. The mutual advantages which
Australia as a whole and India and China ought to reap
from an interchange of their commodities cannot be
yet estimated, and ought to exceed the most sanguine
dreams. Of these advantages, as of others connected
with Asiatic trade, New South Wales is certainly pre-
paring to draw the principal share. And we must
look at this broader feature of her trade in judging
whether it will continue to be as beneficial to us as it
has been. Directly, I believe, we shall year by year
do a smaller export trade to this colony proportionate
to her population, and may hold our own only in special
branches of manufacture and in miscellaneous articles,
such as can be l^ought here cheaper than they can be
made there ; but the general intercom-se between the
two countries seems to me bound to grow, as well as
the profits which the mother-country will draw from
the entire trade ;of the colony. As a Free-trader, pos-
sessed of all the"^: natural advantao;es which iro to make
a flourishing seat "of manufactures, New Soutli Wales
must progress, not only in supplying her own wants,

1()6 AUSTRALIA AND NEW ZEALAND.

but as an exporter of industrial products, and with
every step which she takes in advance some branch of
our home manufactures will be touched ; but the situa-
tion in its general features offers, to my mind, ample
compensations.

There is only one heavy shadow which I can see to
the picture, and that is the danger which New South
Wales is in of rushing into a great railway expendi-
ture, which may inflate her trade with us for a time to
the ultimate hurt of both countries. On many sides
her Government is pressed to do so, and there are
projected extensions of her system, carrying the lines
far inland beyond the limits of profitable traffic, which,
if carried out too suddenly, might cause embarrassment.
Although the stream of immigrants has not yet ceased
to flow in Australia, as it has to the United States,
the same causes would produce the same effects in the
one case as in the other, and if taxation is made heavy
and the finances become entangled, assuredly the
stream will dry up. Yet population is tlie one great
need of all these colonies, and not least of New South
Wales, which has many millions of acres of splendid
land lying desolate, or httle better than desolate, and
winch has minerals of enormous value lying ready for
the miner. At present the taxation of New South
Wales is, one may say, next to nothing at all, because
the land sales alone last year yielded nearly half the
revenue, and in ordinary years land sales, land rents,

AUSTRALIA AND NEW ZEALAND. 167

and post-office and railway receipts yield about three-
fourths of it.^ Now, as I have already repeatedly ex-

' The following extract from a letter of the Times Sydney corre-
spondent, dated January 22, 1677, gives a very clear idea of the posiliuu
of New South Wales fiuance : — * Our Treasurer is to make his Budget
Speech this week ; but the publication of the Revenue Returns for the
past year lias anticipated to some extent the glowing statement it will be
his privilege to make. These Revenue Returns are not only unique in the
history of this colony, but have never been paralleled in the history of
any British community. Our population is not estimated at more than
020,000, and the gross revenue for the year was not less tlian 5,037,001/.,
or at the rate of more than 61. per bead. The previous year was a
prosperous one ; yet that wbicb is just concluded yielded the Government
a net increase of not less than 911,358/., or not far short of an increas3 of
30s. a head. We owe tliis financial prosperity almost exclusively to the
rapid rate at which we are alienating our public estate. The greater
part of our territory is held on pastoral leases, the rental having been
determined by an oflicial assessment, subject to arbitration in case of
dispute. The customary estimate of the proper rental has been based
mostly on the state of the wool-market a few years ago. The rapid
improvement in that market has enabled the lessees to make unexpectedly
large profits, and they iind it to their interest to spend these sm-plus profits
in the purchase of land, so as to turn tlieir leaseholds into freeholds.
The consequence is that the revenue from land- sales alone last year was
not far short of one-half of the gross revenue, and amounted to 2,345,240/ .
Adding to this the amount received from rentals and other .sources, the
receipts from the national estate alone amounted to more than one-half
of the year's revenue, being not loss than 2,772,U',)U/. Our revenue from
taxation, properly so called, is small compared with what we thus derive
from the Government being a large landlord. The Customs jielded
1,011,872/., and beyond this there is no taxation proper, except about
100,000/. from licences. The balance not accounted for by the receipts
from land and taxation is furnished for the most part by the income from
Government services, such as railways, the telegraphs, and the post-ollices.
These services, however, are not intrinsically remunerative undertakings,
and yield us no net revenue. On the contrary, they are carried on at
present at a loss of about 250,000/. per annum — a loss which, of course,
has to be made good from other sources of public income. Though the
receipts from services appear in the general statement of gross revenue,
they are more than counterbalanced by a set-ofT. The Government
speciUations iu the department of internal communication do not really
assist our revenue ; on tlie contrary, they burden it. But the burden is
one that is easily borne. So far from its provoking discontent, the

168 AUSTRALIA AND NEW ZEALAND.

plained, the proceeds of sales of land ought not to be
treated as revenue at all, but as capital, and if New
South Wales will act sensibly, she will so treat it. Did
the Legislature decide to spend on their public works
every year only the amount netted by the land sales, it
would afford ample means for extending railways and
telegraphs as fast as they were wanted, and for im-
proving harbours and making roads. Were this done,
and the other expenditm'e all provided for out of
revenue strictly so called — except the sinking funds on
the existing loans — the position of the finances would
be one of the soundest in the world, and in time the
pubhc works' revenues would yield the community
some return for the enormous sacrifice it is making by
parting with the soil in fee simple to squatters and
farmers at a price which will probably look monstrously
cheap ten years hence, as indeed it does in some dis-
tricts already. The railways which New South Wales
already possesses are yielding a respectable net return,
and will by-and-by, no doubt, meet the charge on their
capital debt ; but there ought to be no capital to pay
upon, except the savings of the community, and New

Gf)vernmentis incessantly besieged for still more railways, more telegraphs,
and more post-offices. "With such an overtlowing revenue, it is not
■wonderful that the Government spent very freely and managed to run
through 3| millions. It also extinguished the National Debt to the
extent of three-quarters of a million, and advanced a quarter of a million
to the Public Works account. Yet at the close of the year the Treasuier
had a credit balance of not less than 2,720,807/. — a handsome sum with
which to commence a year that is expected to be as prosperous as its
predecessor.'

AUSTRALIA AND NEW ZEALAND. 160

Soiitli Wales will need to take heed that the enormous
sales of land do not lead her into spendthrift ways and
many subsequent difficulties.

A very good example of what the wholesale alien-
ation of the soil may lead her into is furnished by
her ambitious neighbour, Victoria, which is at this
very time in the throes of something like a political
revolution upon the land question. Victoria has in-
deed been much more extravagant than her elder
sister in several respects ; but the land policy is essen-
tially the same in both, only the bad fiscal system of
Victoria, and its larger population, are bringing its
evils sooner to the surface. In all the Australian
colonies, in fact, the alienation of land has been most
reckless, and the system of renting huge tracts to
' squatters,' while reserving to farmers, or ' free selectors,'
the liberty to pick out and buy any portions they
please from the land so rented, has led to purchases of
large tracts at low rates by capitalists who can do
nothing with them except feed sheep and cattle and
prevent these farmers or selectors from finding a foot-
hold. Thus it has come about that, in Victoria espe-
cially, whole comities are held by single proprietors
in fee simple, to the detriment not only of the land
revenue, but of the colonial prosperity generally, and
already the Victorians feel hemmed iu.^ They cry

' Some iutcresting details aLoiit the lauds of Victoria are friven iu a
recent blue book ou Colouial allairs (p;u-t i., 187G) by the Colonial

170 AUSTRALIA A\r> NEW ZEALAND.

out that tliese linge estates must be broken up ; and the
party now in power, headed by Mr. Berry, came in on
the express understanding that a heavy tax is to be
imposed on holders of land above a certain average,
in order to com])el the squatters to disgorge for the
benefit of smaller men. At bottom there are very
strong grounds for the imposition of some sucli tax,
but the proposal to graduate it according to holdings
is a most unjust one. Probably enough, a sense of this
injustice has induced liesitation on the part of Mr.
Berry and his colleagues, and it will be well if they lay
aside their project for a time until the colonists come
to recognise more clearly what tlie true equities of land
taxation may be. There is just as much reason to
make a small farmer pay an acreage-tax on his 50

Government statist, Mr. H. H. Hayter. He says that the colony is
estimated to contain 3(3,000 square miles of rich light loamy soil and
12,000 square miles of rich black and cliocolate-coloured soils, besides
sandv tracts and <rrassv downs of large extent. Of the total area of the
colony, estimated at 50,447,000 acres, about 10,000,000 were alienated in
the end of 1874, of which 12,205,000 acres were occupied in 1875. Of
these little more than a million were under cultivation. More than half
the land suitable for settlements is said to be already sold. Out of the
entire population of about 800,000, of which the colony consisted in
1875, only .38,500 were holders of land. This is a dangerously small pro-
portion, and the fact that sucli enormous tracts are held uncultivated
suggests many ominous reflections. The recent purchasers of land appear
to have been in a majority of cases squatters, whose interest it is to keep
genuine farmers oil" the ground. Tlie percentage of cultivated to occupied
Is hence less now than in 1872 and 1873. Besides tlie land which the
squatters have bought, it would appear that some 804 of them leased in
1874 an area approximating 24,230,000 acres. It is their interest,
or they think it their interest, to keep farmers oft" this land as long as
they can.

AUSTRALIA AND NEAV ZEALAND. 171

acres as there is for compelling the squatter to pay on
his 5,000. This land question need never have come
on the colonies at all had they steadily refused to do
more than lease the land on short-term leases, or had
they even, as in the Cape, exacted the payment of a
perpetual quit-rent sufficient to prevent vast accumula-
tions. As it is, the combined policy of leasing large
tracts and selling small, without regard to the lessee's
interest, has already landed Victoria in trouble, and
promises to bring Queensland, and perhaps New
South Wales, into trouble too. At the same time a
most dangerous incentive to extravagance has been
furnished by the large revenues which these colonies
appear to enjoy without the necessity of paying taxes.
As wool-growing flourished, squatters made haste to
buy up the land, and poured their money in every
colony into the Treasury, just as they did last year in
New South Wales, where a rising wool market enabled
the squatters to pay over 2,300,000/., on account of
the counties they had purchased. This, when spent
as income and borrowed ii})on to boot, is a most dan-
gerous kind of riches, and presently, when the land is
all alienated and the squatter reigns supreme in his
wilderness, the cry will rise everywhere, as in Victoria
now, that the people have no room and that the
Governments have no revenue. Land alienations may
yet lead to revolutions in these colonies. Victoria, as
I have said, has almost reached the revolutionary point

172 AUSTRALIA AND NEW ZEALAND.

now ; parti}" because her area is smaller than her
neighbours' and more widely absorbed by the squatters,
partly, also, because she has wedded herseK to a bad
trade policy. It has seemed wise to the Victorians to
become Protectionists, and Protectionists especially
against the productions of their neighbours, and hence
their trade is not so flourishing as it might be. While
New South Wales goes on adding warehouse to ware-
house and manufactory to manufactory, Victoria
stands relatively stationary. Her cultivated area in-
creases very slowly, and if the New South Wales trade
which comes and goes at her ports be deducted, her
export trade is also by no means abounding in expan-
siveness. With a population at least 150,000 in excess
of New South Wales, her indigenous trade is not ap-
preciably larger. The totals amount to several millions
more, it is true ; but about 2,000,000/. has to be de-
ducted from each side of the statement on account
of New South Wales wool, which, coming from the
Eiverine districts over the boundary, is first treated
as imports to, and then, when shipped at Mel-
bourne, as exports from Victoria. This helps to
swell the api)arent volume of the trade of the colony.
Making this deduction, the total trade of Victoria is
only about 28,500,000/., which is substantially that of
New South Wales. The imports, moreover, have lat-
terly exceeded the expuits, in spite of the high tariff,
which is such a clog on the prosperity of the com-

AUSTIIALIA ANJ) ^JCW ZEALAND. 173

munity. This excess is not due altogether to tlie
borrowing propensities of the colony, though these are
considerable. A certain amount of capital is flowing
into this or into all colonies in indirect ways through
loan companies and banks, in the pockets of private
immigrants, and so fortli ; while, on the other hand,
many small hoards of money pass out of the colony,
of which no account is taken in the official records of
exports. All these help to swell the buying capacity
of the community, and no countries require more al-
lowance to be made for them under these heads than
the Australian colonies. From the money of immi-
grants alone, however, Victoria now gains perhaps less
than any of her neighbours ; and, unquestionably, the
loans which she has raised, and is raising, for State
and municipal purposes, had a strong influence on both
her buying capacity and her revenue. These heavy
imports, paying as they do large duties as a rule, make
the inflow of large revenue apparently a thing to be
counted upon. Should the imports fall off, therefore,
as they will sooner or later be seen to do under the
rigorous tariff, Victoria will be left to realise that she
has yet to find a sure basis of national income ; and
this it will be most difficult for her to do with the land
alienated and the country districts unpeopled. At the
present time, the net income of Victoria from taxation
— chiefly customs duties ^ — is only about 2,000,000/.,

^ The customs duties of \ictona ■svould no doubt be considered light

174 AUSTRALIA AND NEW ZEALAND.

and the entire revenue of the colony (including land
money) last year was fully half-a-milliou less than that
of New South Wales. Should customs duties also fall
off, therefore, the colony will have a sharp tussle before
it readjusts its burdens, and may, amid internal con-
vulsions, impose a land tax which will terrify emi-
grants from thinking of this colony as a home. How
much depends on the customs will be obvious from
the subjoined note of the Budget estimates of Victoria
for the year ending July 31, 1877.^ With a smaller

for many countries, and probably were felt at first to be so by the
colonists themselves, who were flush of new wealth. As a rule, all
articles of English manufacture, including clothing and tissues of most
kinds, machinery and millworks, hardware and furniture, pay 20 per cent.
ad valoreni. A few kinds of woollen goods pay only 10 per cent., and
some two or three articles are admitted free. "When we consider the
distance which English goods have to be carried by sea, however, as well
as the fact that the colony is less superabundantly wealthy now tlian it
was even six years ago, there can be no doubt that duties which rule at
20 per cent, ad valorem i'or most articles of utility are oppressively high.
The Victorians clamour, however, that they are not high enough. By
the latest accounts the Protectionists, who have come into power, are
likely to act more vigorously in raising the customs tariff than in imposing
a land tax, although there are considerable numbers of Free-traders in
the colony.

' The estimates, as given in Gordon and Gotch's excellent Australian
Handbook, were — Customs, 1,0.30,050/.; Excise, 166,600/.; land, in-
cluding rents, 889,850/. (the proceeds of land sales alone appear to amount
to about 600,000/. a year, all of Avhich is properly chargeable to capital
account) ; public Avorks, i.e. roads, railways, and waterworks, 1,170,500/.,
and various otlier small items, making a total of 4,385,716/. The ex-
penditure is placed at 2,851 ,206/., but that obviously does not include the
' working expenses ' of railways and other public works. The expenditure
for the year L"<73-74 was 4,177,.'i.j8/., and since then the total luis not
decreased. Victoria has spent from first to last over 13,000,000/. on her
railway system, some portion of which has cost more than 50,000/. per
mile, a most exti avacrant sum ; and the average for the Government lines
is u2,80o/., which is also exceedingly high, and raises suspicion of con-

AUSTRALIA AND NEW ZEALAND. 175

revenue, the debt is larger tlinu that of New South
Wales, and the railway and other improving schemes
are by no means near an end. Altogether, Victoria
ought to be a warning to the mother-colony to take
care and not dissipate or alienate her resources, lest she
also find herself in difliculties.

As regards the trade of Victoria with the United
Kingdom, it is large and fairly satisfactory. Fully fifty
per cent, of the total imports come from this country ;
both her jealousy of her neighbours and her incapacity
for providing for her wants at home rendering such
import a necessity. It is, indeed, a remarkable fact
that, in spite of her tariff, Victoria is a much larger
customer of the mother-country than New South
Wales, and a much less promising manufacturer. Let
her settle her laud difficulty, check extravagance, and
lower the tariff, and she may in some respects be a
smaller buyer of our home manufactures, although
probably a larger and more prosperous general trader,
and capable, therefore, of affording a much wider field
for the employment of Englisli capital tlian she now
has.^ That is a long task, I fear, and we need be in

siderable jobbery. Nearly the whole of the capital thus absorbed has
beeu borrowed.

' Some figures given in Messrs. Gordon and Gotch's Handbook enable
us to measure the position of 'S'ictoria as a maimfacturiug centre. In all,
the number of manufactories, large and small, was 1,G84 last year,
employing 2r),(>47 iiands, and with machinery, land, buildings, &c.,
estimated as worth G,7U8,820/. Now, of these manufactories 16 were
' account book,' 47 'agricultural iiu])leuient,' 9 'cutlery,' 107 'coach and
waggon,' y3 ' clothing and boot and shut',' 12-4 ' aerated water," 67 ' tannery,

176 AUSTRALIA AND NEW ZEALAND.

no hurry to take alarm at the prospect of being ousted
from the markets of tlie colony just yet. We are more
likely to sufler by the temj)orary poverty into which
Victoria seems to me to be drifting. Not that she will
become absolutely poor ; but she tends to fall into the
condition of the United States, and, with pampered in-
dustries languishing, with people out of work, and arti-
ficially kept from settling on the land, may in her very
infancy put on tlie appearance of a worn-out nation,
burdened as if with the sins and mistakes of centuries.
No fate could be more deplorable ; but Victoria is at
present courting it, and although I believe she will
learn wisdom by her suffering, like other people, suffer
she must. At present reaction has barely set in. The
yield of the gold mines, is, however, steadily falling
off year by year, and thus one strong direct purchasing
power of the colony is lessened ; while all around her
she has competitors running her hard in whatever
she can produce. Her coal deposits are believed to be
enormous, and she is rich in copper, possessing also
iron, zinc, tin, and silver in more or less abundance ;
but of none of these has she a monopoly, and the

52 ' fellmongery,' and 70 ' iron, brass, and copper/ with a host of lower
numbers devoted to the production of either household requisites or of
prepared foods for export. None of these compare for a moment with the
substantial industries of New South Wales, if we except ' iron ' and
* agricultural implement ' shops, which are, we suspect, of an extremely
insignificant kind for the most part. At all events, Victoria mines an
almost infinitesimal quantity of iron ore and not much more copper. In
fact, the production of the latter metal has no importance at all.

AUSTRALIA AM) NEW ZEALAND. 177

Newcastle collieries in New South Wales, to take an ex-
auiple, dislauce her mines aU-ogelher as a source of coal
supply, while tlic mineral centres of that colony are also
better located for ready develo[)ment . Tn order to utilise
her wealth in these directions Victoria must, in short,
have a larger population, and deal more freely with her
neighbours. All sound industries are built up upon a
liome market to begin with, and there can be no
sound homo market without a large population of
varied wants and pursuits. I am by no means sure,
however, that Victoria is going to get a large population
speedily. The great exodus to her shores from Europe
is over, and the .sti'cam which now flows towards
Australasia is both small andnnich distributed. Victoria
does not get the excessive share she did when gold
was supreme. Nay, New South Wales, South Aus-
tralia, and, above all, Queensland and New Zealand,
entice, or, as it were, drive the emigrants towards their
shores, and many colonists have lately passed from
Victoria to her two nearest neighboiu's on either hand.
If a shadow of dull trade or of internal fiscal dissen-
sions overtake Victoria, her })0[)ulation may actually
begin to dwindle.^ New countries can never afford to
trifle with economic laws and trust to their [)eo[)le
enduring it. Colonists are not rooted to the soil like
the bulk of till' pt'oj)K' n old countries, and are only

' Tlie number of immijrrants into Victoria, deductiug re-emigration, is
miicli smaller now tlian it was a lew years ago. Thus, according to a

VOL. IL N

178 AUSTRALIA AND NEW ZEALAND.

too ready to follow the nomadic instincts when in the
least degree prompted by their discomforts to do so.

In many respects, then, the condition of these two
leadings colonies differs. Neither of them is free from
dangers, but the danger of Victoria is the greater.
New Soutli Wales promises to be a great country in
time, but she must move cautiously, and beware of
the allurements of sudden wealth. As a country for
emigrants there is, to my thinking, and in spite of
I'ocks ahead, none to compare with her ; and in propor-
tion as popidation increases, her prosperity ought also
to increase. Our trade with her, as I have said before,
may not directly increase at the same ratio, except
along certain lines of business, but our general pros-
perity cannot fail to be enhanced as she grows more
prosperous, and while intimate relations with the
mother-country continue.

It is time now to turn to the other colonies of the
group. Some of them demand only brief treatment,
but most of them have some qualities worth noticing.

table given in Mr. Havler's report, the niimljer of arrivals in the jenrs
1865 to 1869 inclusive aggregated 30,738, and in the years 1870 to 1874,
28,134. In 1869 and 1870 the numbers were unusually large, amounting
to over 22,000, but since tlien tliey bavebeen extremely small, only 1,752
settling in the colony in 1872. Gold in New South Wales, and the
attractions mentioned in the text, no doubt in part account for this falling
oft", which might therefore be esteemed temporary did no other causes
crop up to frifrhten people away. The very unsatisfactory feature of the
investigation into all tlie colonies, which I may note here, is the extreme
paucity of women. In 1874 there were only 91 5 females to 2,452 males
entering Victoria. This is not merely bad for the morals of the immi-
grants, but also very detrimental to the rapid increase of a native
Australian population.

AUSTRALIA AND NEW ZEALAND. 179

South Australia, for instance, wliirli lies west and
north of Victoria, resembles New South Wales in its
general economic position. The colony has made con-
siderable progress without at the same time endangering
its future. The discovery and working of cnornKJiis
deposits of co])per at Burra-Burra in 1845 has con-
tributed, like the gold elsewhere, to the wealth of the
community, and lielped to place it tliird in popula-
tion and trade amongst the colonies of the Australian
continent, without, at the same time, turning its head.
At the date of the discovery of these valuable ore
deposits, the population of the colony was barely
65,000, and its export trade under half-a-miUion sterling.
By 1876 the population had increased to 213,000, and
the export trade to about ^,000,000/. The mineral
wealth had not succeeded in diverting the colony from
agriculture either. On tlie contrarv, the acreage under
crops is larger, relatively to the population, than in any
other Australian colon3\ South Austi-alia possesses
many natural advantages, and nuich valuable soil on
which it can grow not food grain merely, but grapes
of fine flavour and quality, and every descri})tion of
semi-tropical or other fruit, as well as valuable timber ;
and these are not neglected. Attention is also paid to
sericulture, and the attempts have been so far very
successful. Of course, like its neighbours. South Aus-
tralia has in some measure forestalled its resources;
but its debt is comparatively very light, and it lias, as

X -2

180 AUSTRALIA AND NEW ZEALAND.

yet, been under no necessity to depart from tlie almost
free-trade policy on which its customs laws arc based.
English manufactured goods pay, as a rule, a duty
merely of five per cent, ad valorem^ and the taxes on
luxuries and articles of food are, as a rule, light. It
certainly seems strange to English eyes to see potatoes
and pi'cpared animal foods paying duty, and no doubt
the sooner that all petty endeavours, such as these
indicate, to be inde})endent of sister colonies are aban-
doned the better ; but, as a whole. South Australia is
to be commended for an enlightened mercantile policy,
and has imdoubtedly benefited by it. There is little
chance of manufactures being established there on a
large scale inimical to the products of England, were its
population thrice wdiat it is ; and so long as the colony
continues to develop the soil, to introduce new objects
of cultivation, and to spend spare energies on the
mineral wealth within easy reach, it will continue to
grow in prosperity and in importance as a customer
of the mother-country. Its trade is as large with Eng-
land now, and as healthy, taking its size into account,
as that of any colony we have. There is a magnificent
territory belonging to it, wliich only wants peopling, and
the people will, no doubt, in time be found, although
lately there has been some slackening in the arrivals
and a corres[)onding falling away in the demand for land.
One great danger which the colony is subject to
appears to be drought. This season's wheat crop, for

AUSTKALIA AND XKW ZEALAND. 181

instance, has been seriously imperilled for want of rain,
and so scarce was fodder for the cattle, that in the
early part of the season a considerable acreage of corn
crop had to be cut down unripe to sup})ly them with
food. Owing lo this, it is estimated that altliougii
neaily 970,000 acres were put under wheat originally,
the yield of the present crop will not equal that of the
two preceding years, although the hitest accounts were
much more favourable. As is to be expected in a new
country where high farming is not pursued, the farmer
preferring to draw on the natural resources of the soil,
tlie ordinary yield of wheat per acre does not rank
high at the best of times in South Australia, compared
with the yield in England or France, being only about
11^ bushels to the acre. This averaue will not be
nearly reached by this season's crop, however, which is
estimated at about 6 bushels to the acre only, or a
decline of nearly one-half. Fluctuations of this sort
may not be of frequent occurrence, but they happen
now and then, and ou^yht to increase the caution with
which the colony commits itself to heavy outlays.
After the po})ulation has spread, and the face of
large regions has been changed by culti\ation, by tree
planting and irrigation, the climate and physical con-
ditions mav be so far chansed a? to make the countrv
secure. In the meantime, cautious growth is the
best. No doubt the bad harvest of 1877 will tempo-
rarily decrease the exporting ])ower of the colony, ami

182 AUSTEALIA AND NEW ZEALAND.

that may react on its imports from England and Asia ;
but on the wliole we may expect its trade with us to
grow, and it seems to be now on a very sound basis.

Very different, to my mind, is tlie position of
Queenshmd, wiiich, as a colony, has followed in the
footsteps of Victoria rather than in those of Xew South
Wales. Its population is considerably less than that
of South Australia, being but 180,000 or so, and its
export trade is lower by about a million. Yet the
colony has continued to amass a public debt, which
amounts to nearly three times that of South Australia ;
and it has made so little progress in solid agriculture
that the total acreage under crop last year was only
about 80,000 acres. ^ The natural fertility of the land
is apparently higher in Queensland than in any of the

' Perhaps I could not do tetter than give here a sort of rough
comparative estimate of the progress of agriculture, exclusive of mere
sheep herding, in the various Australian colonies and New Zealand. The
figures in detail are obtainable from the abstracts appended to our own
agricultural returns, or more diffusely from the statistics scattered through
Messrs. Gordon and Gotch's Handbook. According to Mr. Gifien's tables,
South Australia is by far the largest wheat-grower, having had 898,820
acres under that species of grain in 1875-70, as against 322,000 acres in
Victoria, 134,000 in New South Wales, 4,500 in Queensland, 01,000 in
New Zealand, and 43,000 in Tasmania. These figures give a fair idea of
the progress of corn-growing in the various colonies, although the areas
under wheat crops were in several colonies less in 1876 than in the previous
year. Some of them also devote larger acreages to other kinds of s:rain.
Victoria, for example, had last year 124,000 acres under oats and 32,000
under barley, and New Zealand 108,000 and 28,000 acres respectively,
or much more than all the rest of the colonies put together. If we include
lands partially cultivated, such as lands under permanent artificial grasses
and bare fallows, as well as the various experimental efibrts at cotton and
tobacco growing and the land under root crops, we get the following

AUSTJiAlJA ANL> NEW ZEALAND. 183

other colonies except New Zealand, and that ofl'ers the
greater and not the less reason for extending culti-
vation as rapidly as possible. Instead of doing so,
however, Queensland has turned her attention to a
large extent towards mines, seeking to develop gold,
tin, and copper mining in particular, by eveiy means
in her power.

Queensland lias, it is true, extended her sheep-
fjirming more rapidly than even New South Wales, and

table as showing the progress -which each colony has made according to
its population in the reclamation of tlie land : —

Colony

Population
iu 1875

Aci-eage

under all kinds

(.f crops

Acreage

cultivated

per head

New Soutli Wales

. 595,405

451,138

0-8

Victoria

. 815,034

1,126,831

1-4

South Australia .

. 206,470

1,444,586

Western Australia

. 20,459

47,571

1-8

Queensland

. 172,402

77,347

0-5

Tasmania .

. 103,920

332,824

3-2

New Zealand

. 375,721

2,377,402

6-3

New South Wales has a less total in 1876 by nearly 14,000 acres than iu
1875, and would appear to be iu some danger of neglecting the due
extension of lier agricultural pin-suits iu following after sheep-farming
and mining and manufactures. According to the figm-es given in the
last column of the table she has less than an acre per head under crops,
and her imports show that she is not raising bread enough for her popula-
tion. South Australia stands out most prominent of all, and New
Zealand follows, Queensland lagging behind New South Wales without
possessing the justificatiou wbich New South Wales has either in the
wealth of minerals or extent of tlocks. New South Wales has such vast
tracts which are not yet suitable for agriculture, being, compared with
Victoria and Queensland, badly watered, that there may be some excuse
for her slow ])rogress in this direction, although 1 admit it involves danger;
but there can be no excuse for some of these colonies. The true progress
is that which goes neither too fast — outstripping population and foreign
markets — nor too slow, nuiking the community dependent on foreign
supplies. The tirst thing which all coloniesought to study to do is to feed
themsehes with the products of their own soil.

184 AUSTRALIA AND NEW ZEALAND.

cannot, therefore, be considered backward in all re-
spects ; but when all is said, sheep do not form a first-
rate permanent soiu'ce of national wealth, and ought
hardly to be taken as a justification for heavy expendi-
ture on public works. Yet Queensland has spent and
is spending very freely. Her railway system is already
nnich laroer than that of South Australia.^

From this it follows, of course, that the taxation is
very heavy, notwithstanding the efforts made to import
immigrants, and get them settled in tlie land. Accord-
ing to a very useful table appended to Mr. Eeid's essay
already cited, the taxation of Queensland was higher
per head in 1875 than that of any other colony in Aus-
tralasia except New Zealand. It amounted to 3/. 5,s'. Sd.
against 1/. IS-s-. 3rf. in New South Wales, lL12sA0d.
in South Australia, and 31. 28. Oc/. in Victoria. This
is, of course, exclusive of the ])roceeds of land sales
and leases. In the financial year ended June 30, 1876,
the revenue of the colony, including land revenue so
called, amounted altogether to 1,288,377/., and the
expenditure to 1,314,932/. There w^as a deficit, there-
fore, as there had been the previous year, and the colony

' According: to the accounts of the Treasurer of tlie colonj' for the
half-year to December 1870, the amount spent on immigration during" its
courFe out of borrowed money was 55,000/., and tlie railway outlay came
to 220,000/. This kind of expenditure is constantly going on, and the
colony lias spent over ((,000,000/. on its railway system already, on which
money it does not get a direct return of 2 per cent. Over a hundred
thousand a year spent on immigrants, uj)wards of half-a-millioii on
railway.", form no slight outlay for so young a community.

AUSTRALIA AND AKW ZJ:aLAND. 185

has no means of making ends meet except by either
increasing the taxes, l)y seUiiig more land, or Ijy bor-
rowing as other spcn(hln-if"t and impccunions states do.
Taxation cannot be much increased, however. The
im])ort tariff is not indeed heavy, but it is pretty widely
distributed, as is ])roved by the fact that it yielded
nearly 500, OUO/. on a total import trade of less than
4,000,000/., or say, roughly, 12i per cent, over all ad
valorem. Much of this is, of course, paid simply with
the proceeds of the loans which the colony has raised
in England, just as part of the income from land arises
from the same source. Emigrants are settled on claims
under Government guidance, and to some extent with
Government money, so that the colony is not anywhere
resting on the solid basis of its own resources. Xor
with all these efforts at forcing is the land revenue in-
creasing. There is rather a tendency to fall off shown
by this source of apparent income. Possibly the enor-
mous discoveries of tin said to have been made a year
or two ago will help the colony out of its difficulties,
but that is doubtful. I look rather for another financial
and mercantile crisis there similar to that of 186G, only
more disastrous, because now the credit of the wliole
community may be affected for years, while then it
was mainly the credit of banks and private traders.
Queensland is, in short, a country far too undeveloped
for the pace at which it has gone, and with too few^
resources to fall back upon, thereft)re, when dilliculties

18G AUSTRALIA AND NEW ZEALAND.

overtake it. There are no inauufactiiring industries of
a solid character in the country, nor can there l3e any,
so for as I can see, because Queensland is not favoured
with the matei-ials most essential to a country setting up
in this way for itself. It cannot even take shelter in
protection, and has no realisable wealth but its wool,
hides, and tallow, its preserved meats, and its min-
erals, in the sale of every one of which it meets with
the keenest possible competition from its neighbours.
I can see no way out of the tangle for this colony,
therefore, but through much fmancial disorganisation
and long-continued struggles, for its debts and taxation
are now direct hindrances to the rapid extension of land
cukivation ; and many of the inmiigrants who arrive at
the colony's expense leave it and take refuge in Xew
South Wales or Victoria from this very cause. For
all that, Queensland nibbles at becoming a great manu-
facturing country, and has, amongst other ventures,
recently established a joint stock woollen-weaving mill
at Ipswich, from which much is hoped.

I am reminded by Sir Julius Vogel that I have
sinned in omittiiig to mention the progress of sugar
cultivation in this colony as a sign that it is not
neglecting its opportunities, and also that an important
gain has been secured by the works for storing water,
Avhich have rendered immense tracts of territory valu-
aljle. To the latter omission I plead guilty, though it
does little to alter the real economic situation of the

AUSTRALIA AND NEW ZEALAND. 187

colony wliose pi'ospeiity is reared on a basis of debt.
But as regards the culti\ation of sucrar, I may at least
plead in extenuation of my ap[)arent remissness the
fact tliat Queensland su_tz:ar has never reached England
in noticeable quantities; not even last year, when the
j)rice of sugar was high enough to tempt supplies
from the most distant quarters, did Queensland sugar
find its way to this country in (juantity sufficient to be
noticed in our customs returns, if at all. No doubt
the colony is making some progress in the production
of sugar, for which it finds a market in neighboui-ing
colonies, just as it is advancing in its wool-growing,
although that progress is in a measure balanced by the
comparative failure of cotton cultivation. What I com-
plain of, however, is that much of this i)rogress is, at
best, progress under mortgage. Nay, it often means
mortgage upon mortgage till there is no discovering
the hard foundations of wealth beneath the pile.

But if the condition of Queensland be dangerous,
that of New Zealand is much more so, although New
Zealand is the most diligent of all the colonies in
developing the soil. That colony has not been content
with trying to rival Victoria ; it has sought to imitate
Canada. Nay, it is almost unjust to liint that Canada
has been as reckless as this, almost the youngest of all
our great colonies. It is not yet foity years old, and
it rejoices in a debt of nearly 20,000,000/., which is
obviously a heavy burden for a population which does

188 AUSTRALIA A^^D NEW ZEALAND.

not yet reacli 450,000, Maoris included. Its taxation
was ITkv. per head liighcr than that of Queensland in
1875, and has since been increased, as has also the debt.
Only the other day the Government of the colony had
to borrow 500,000/. in Sydney, and the public works
to which it is committed nuist entail a large expenditure
for many years beyond the available income. By means
of the huge borrowings in which it indulges, the colony
is able to import far more than it exports, and is, next
to Victoria, the largest customer to the mother-country
of any in the group. All its railway materials, most of
its clothing and its hardware and cutlery, come from
England, and it has to go to New South Wales for
some of its coal. The entire trade of the colony, out
and in, was about 13,500,000/. in 1876, and the im-
ports exceeded the exports by about 2,500,000/. ; and
this lias been mucli the state of its account for at least
three years. A large proportion of the apparent pros-
perity of the colony is, therefore, based on a quagmire
of debt, and it is impossible to say what its real pro-
gress or prosperity may have been. A stinmlant has
been applied wliich has made its influence felt in every
department of business ; and whether the colony will
be richer or poorer for the efforts it has made may al-
most be considered an open question. In the immediate
future a disaster is not merely probable, but to my
nhnd certain. The colony cannot go on spending, as
it has done, without a severe recoil, and when that

AUSTRALIA AND NEW ZEALAND. 180

recoil comes a great p;iil of the present show of pros-
perity will disappear. Instead of being able to import
more than she exports, New Zealand will be rednced
to bnying only what the interest on her debt abroad
leaves her money to pay for. And tliat interest will
be by no means so easy to meet as it looks now, wlicn
the quickening efl'ect of the foreign money is every-
where felt without any strong indication of the coming
exhaustion and languor. But by-and-by, when this
money is all spent, when it is no more to be had for
paying the wages of thousands of men employed in
carrying out a railway system far more ambitious and
extended than that of Victoria, when the customs
receipts are no longer swollen by duties paid on goods
imported with this money, and the country sinks back
on itself with a thousand miles of railway to maintain
out of its own resources, besides interest to pay on
its heavy debt, New Zealand must inevitably face
bankruptcy and a trade demoralisation which it is
appalling to contemplate. Her gold mines will not
serve her then, nor her wealth in copper, silver, iron-
sand, and coal. She will be fortunate if she holds
to<Tether and weathers the storm without the loss of
half her population.

I speak strongly, because this subject is of vital im-
portance. New Zealand has spoilt almost at the starting
what might have been a career of prosperity sucli as
few other countries could point to. The soil is rich and

101) AUSTRALIA AND NEW ZEALAND.

virgin, and no less tlum 12,000.000 acres are at present
estimated to be ada[)ted for cultivation, while 50,000,000
would be suited, when cleared, for pasturage.^ There
are many valuable minerals and some natural products
of value, whicli by a judicious exploitation might all
have contributed to increase the wealth of the coh^ny.
New Zealand, in short, had the properties within
herself for becoming a comfortable self-contamed
colony, of a quiet, homely, and peaceful kind, such as
the world does not readily furnish now-a-days ; but it
took the gold fever and tlie ' progress ' fever, and
presently will have to pay the penalty in exhaustion,
and, I fear, considerable misery.

The only satisfiictory feature that we can dwell upon
is the fact that, so far, a certain success has attended
the efforts of the Government at colonisation. New
Zealand receives a larger proportion of the British
emigration to Australasia than any other colony, and
retains most of those it receives.^ Land is being
rapidly absorbed for pur[)oses of cultivation, and the
true wealth of the country is thus being developed.
According to the returns up to March of last year,

' Gordon and Gotchs Handbook, article 'New Zealand.'
"^ The statement of the Registrar-General of New Zealand, Mr. \V. R.
Brown, for 1874, which is the latest availaVjle, gives the imiuigration
of that year at 43,0Co, of whom 18,135 were females. The emigration
was 5,859, so that the net increase in that year to the population of the
colony was .38,100. Out of this total 2!),025 persons were imported
entirely at the colony's expense. The total emigration to Australasia
from the United Kingdom in that year was, according to official returns,
about 54,(XJ0. New Zealand had therefore a very large share.

AUSTRALIA AND NEW ZEALAND. 10]

about 2,400,000 acres were under cultivation, of wliidi
91,000 acres were sown with wheat. Tliis is a small
proportion, and, of course, precludes tlie colony fi'oni
being able to export this grain. Indeed, it has to im-
port, which is always an extravagant position for a young
colony to assume. Still the yield per acre — ol to \^1
biishels — shows both good soil and remarkably good
agriculture. Were new settlers to arrive spontaneously
in large numbers, the colony might pass through its
crisis without prolonged suffering. In the fece of the
enormous taxation, however, I do not see how these
numbers are to be obtained except by a continuance
of the present ruinous outlay. They will then cost the
colony more than it can afford.

A certain amount of relief will also no doubt be
given by the abolition of the provinces into which New
Zealand was, till last year, divided. These provinces,
with their separate councils and superintendents, were
a source of expense to the country which was by no
means necessary, and in a time of financial difficulty
they would have almost certainly indulged in separatist
views with the object of shirking their share in the
national burdens. The agitation which preceded the
abolition of these provinces gave indications of a ])arty
in Otago — the Scotch settlement — capable of raising
the separatist cry even before the storm came on.
There will now be no detlnite rallying point for such
parties, and that will prove a very great advantage.

102 AUSTRAIJA AND NKW ZEALAND.

Otago, liowever, promises to be very restive under
burdens wliieh have been imposed upon it by tlie poli-
ticians to a considerable extent against its will ; and, I
fear, the cry for subdivision may again rise there to
add to the general impotence when the colonists begin
to reap the fruits of their rash lavishness.

In a short reply which Sir Julius Yogel made in
'Fraser's Magazine' to this essay as originally published,
most of my conclusions regarding New Zealand are com-
bated. Sir Julius denies, for instance, that this colony
needs to import food grains ; but my statement referred
merely to wheat, the main food staple of the people.
The chief object of his paper, however, is to prove that
New Zealand is not over-burdened, and to prove this
he first of all denies that the debt of New Zealand, all
told, is 20,000,000/., and then proceeds to show that the
burden per head is less than that of England. His
figures and reasoning on these points ai'c, in my opinion,
not quite fair, and in order to show their unfairness I
will allow Sir Julius to speak for himself : —

There is no reference made to the native wars which in
times past desolated that colony, whilst it is asserted that
none of the colonies 'have tasted the bitterness of war taxes.'
Nearly a third of the public debt of New Zealand might be
attributed to native disturbance, instead of all being set
down to voluntary expenditure on the part of the colonists.
New Zealand, the writer says, rejoices in a debt of nearly
2(),()00,000/., or something like 50l. per head of the popula-
tion, which itself does not reach 400,000, Maories included.
This statement exceeds the license which may be permitted

AUSTRALIA AND NEW ZEALAND. 103

to a statement in round figures. The population at the end
of 1876 is officially estimated at 399,221 exclusive of Maories,
or with INIaories added over 444,000. The public debt, less
the amount cancelled by sinking fund and tlie money un-
expended in hand, could not have amounted at the end of
1876 to more tlum 18,500,000^. This gives a debt of less
than 42^. 158. a head, instead of the 50/. stated by the
author. He is right in including the Maories, for they
contribute largely to the taxation, and many of them are
very ricli. Supposing, however, they were excluded, the
debt would be less than 46?. 10,s. per head. I do not attach
much importance to the excessive estimate which the author
has made, for the debt per head of the population conveys
no meaning if it is unassociated with the question of what
the debt is for, and the capacity of the population to meet
its annual charges out of their earnings. With the wages
prevailing in New Zealand, the labouring classes, as well as
the more wealthy, would not be distressed by double the
amount per head of population payable for taxes in this
country. Tlie only true test of a coim try's burdens is the
weight with which they fall on the earnings of the people.
I raiuht also ask the author to consider what Government
expenditure in the colony means. In Great Britain the
expenditure from the consolidated revenue does not mean
interest on the cost of railways, nor does it mean much of
the cost of education, police, gaols, and lunatic asylums. In
the colony the revenue supplies all this, excepting some fees
for education. When the capital burden per head of the
public debt in this country has to be compared with that of
New Zealand, the capital cost of the railways should be
added, and the capitalised burden of the poor rates. In a
paper recently read by jNIr. Hamilton before the Statistical
Society of London, the following passage occurred : —

In contrasting the indebtedness of New Zealand with that of the
United Kingdom we must add to the National Debt the cost of railways,

VOL. II.

104 AUSTEALIA AND NEW ZEALAND.

and caiulalise the poor-law rates, wliicli do uot exist iu the colnuy,
thus : — ■

United Kingdom.

£
National Debt, as it stood 1875-76 . . . 777,000,000
Expended on the poor, average for ten years
ending Lady-Day, 1875,9,210,053^. capitalised

at 4 per cent 230,000,000

Eailways, 1G,G14 miles open December 1875 . 630,000,000

Or, 49/. ]2s. \d. per head for United Kingdom.

1,637,000,000

I have already said that at the end of 1876 the public debt
in New Zealand amounted to 42L 15s. per head, including
Maories, or 46?. 10s. without them. It has to be borne in mind
that New Zealand has an immense landed estate. The railways
have enormously added to its value. Its extent is about
thii-ty-four millions of acres. For the last five years it has
averaged for sales and leases an annual return of 820,000?.
The population of the colony increases so fast that calcula-
tions based on the population to-day are fallacious to-morrow.
It is evident, if population is to be a test, that a country
whose population increased rapidly would be justified, nay,
would be prudent, in more largely discounting the future
than one whose population was nearly stationary. Again,
railways in New Zealand may be regarded as substitutes
for ordinary roads. These used to be made at the cost of
the colony, and it was considered fortunate if the tolls
yielded enough to maintain them. Now the railways are
yielding a considerable part oftlie interest on their cost. The
balance may fairly be set down against the cost of ordinary
roads, only that balance will soon be bridged over. And,
meanwhile, in place of ordinary roads they are equipped roads,
including in their cost and net results the means for carriage
and the motive power.

Now first of all I Iimvc to point out that it is an

AUSTRALIA AND NEW ZEALAND. 195

indisputable fact that tlie population of New Zealand
does not meet the debt chames out of its earnino;s.
Not one-half the revenue eomes from taxation, the
larger proportion being made up of the proceeds of
land sales and the gross earnings of the railways, whose
net return does not pay more than half the interest
on their capital. Judging by the tax-paying power of
the community, therefore, New Zealand is enormously
overburdened. I have again and again pointed out
that the larger half of the revenue of all these colonies
is not revenue but capital, and that to borrow on the
security of capital is the height of folly. Further, the
table of the debt of England given as a means of showing
the relative burdens of the mother- country and her
colony is inaccurate, inasmuch as it takes no account of
local taxation other than poor rates, while it includes
railway capital, which is not, strictly speaking, national
debt at all ; l)ut it would be nothing to the purpose
were it perfectly correct. The two countries cannot
be compared, because the one pays out of its stored
wealth and the other out of its borrowings. But in
giving this as the English biu'dens Sir Julius should
have been equally eager to include all the obligations
of New Zealand. Has it no city debts, no local taxes,
or needy people? He gives us the total of the State
debt less sinking funds, but I have treated Christ-
church, Dunedin. and Wellington as parts of the State,
and hence my total of 20,000,000/., a total that will

196 AUSTRALIA AND NEW ZEALAND.

soon be exceeded. He says furtlier tliat railways in
New Zealand may be regarded as substitutes for or-
dinary roads ; and tliat is partly correct, partly non-
sense. The greater part of the colony could have
done for a generation yet with roads instead of rail-
ways, and the imposition of the costly burden of the
latter on the raw and scattered communities has really
no justification. The biuxlen is not imlikely to be-
come intolerable, since the lines will not pay and will
have to be maintained.

I miglit go on to notice other portions of Sir
Julius's paper — such as his glowing picture of the happy
prosperity of tliis privileged colony, of the abundance
of work, the eager buying of land and constant inflow of
immigrants, — only that pictures of this kind have so little
value against the broad plain facts of the situation.
There are annual deficits in spite of the large expendi-
ture of capital as revenue, enormous public works
which do not return the interest on their capital,
immigration and settlement stimulated by borrowed
money, and every kind of industrial undertaking up-
held by credits from English banks and loan societies.
They are of little value, either, in the face of the gradual
dying away of the outburst which Sir Julius himself was
instrumental in producing. After another five years
of the career which he mapped out for the colony
before he left, we may feel more disposed to look at
them closely.

AUSTRALLV AND NEW ZEALAND. 197

Sucli being the general features of tlie economic
position of this colony, it is hardly necessary to discuss
the question of its tariH', or tlie minuter probal)ilities of
the trade between it and the mother-country. Whether
the tariir is high or low, that trade is sure to suffer a
sharp recoil when the borrowed money is done. We can-
not hope to sell to New Zealand the quantities that we
have done of any of our manufactures except clothes,
and even of these the demand must become less if
the people get poorer, as the diminution in the average
savings bank deposits would seem to indicate they
are already doing. No doubt the tariff, Avhich is as
near as possible about 11 to 12 per cent, ad valorem
on the invoice prices of the goods, will exercise a very
strong effect ao-ainst Enoland in certain directions when
the inflation passes away, although apparently it is
not felt at present. Poverty will induce thrift, and
thrift may stimulate the people to avoid the tariff
charges by providing for their supreme civilised wants
at home. To take one example : nearly all the Aus-
tralian colonies had at lirst to import most of their
boots and shoes, and manufacturers in England did a
very fine business hi consequence. But gradually, as-
they grew up, the colonies took to establishing manu-
factories of their own, and imported less and less of
these primary articles. I'his has not yet been the case
Avith New Zealand or Queensland to any large extent ;
but the tariff and pinching times may almost at once

108 AUSTRALIA AND NEW ZEALAND.

stop the liome business in this line witli these colonies.
This is one of several domestic arts, as it were, whicli
a new country is indeed justified in setting on foot as
soon as it can, and New Zealand will certainly have
every temptation to do so now. The hardware exports
thence will also fall away for other reasons, and if we
retain a business in cottons and woollens to any amount
we may consider ourselves fortunate. The outlook for
New Zealand is not bright, take it how we will. The
colony has many mistakes to suffer for before it can
emerge into greatness, and the old country must suffer
along with it, were it for no other reason than that the
colony has many millions of our money.

Of the minor colonies, Western Australia and Tas-
mania, it is hardly necessary that I should speak in
detail. Both are at })resent too poor to be very extra-
vagant, but the latter has contrived to get together a
reasonable amount of debt, which appears to hinder its
advancement to some extent. The island is a beauti-
ful one, and full of natural riches, but its wealth is not
yet developed by the presence of an enterprising popula-
tion. Hardly yet free from the convict taint which
stuck to it as Van Diemen's Land, it has not attracted
the number of population which the country deserves
to have, and, unaided by ' great gold discoveries ' to
dangle before the wealth seekers, it has -been passed
over. All the same, it has in it the elements of a very
solid prosperity, and has displayed considerable energy

AUSTRALIA AND NEW ZEALAND. 109

ill taking iri and improving land. The colonists of
Tasmania shonld become comfortable and even reason-
ably wealthy, although they will never take a gi'eat
place amongst nations, or figure as large traders with
this or any other country ; and the pity is that so few
colonists seek its shores — the population barely in-
creased 4,000 in the five years 1870 to 1875. Should
the recently reported gold discoveries in the western
part of the island prove correct, this stagnation may
pass away, to the ultimate great benefit of its business.
Western Australia, again, is entirely a colony in embryo,
about which little can be said, except that the territory is
apparently a very attractive one, capable of sustaining a
large population, and possessed of much timber, which
ought to become a valuable article of export in time,
were men found who coidd cut it and brinf? it to the
coast. At present there are not 30,000 people in the
entire colony, which, it is estimated, embraces an area
eight times larger than the United Kingdom. Much of
that vast amount of land is, however, as yet irreclaim-
able, like that of South Australia and Queensland ; and
indeed, speaking generally, all the Australian colonies
are still more or less of the nature of coast settlements.
Inland the population everywhere thins gradually off,
so that the central territory, uninhabitable as it is said
to be, for the most part efTectually shuts off all chance
of overland communication between one colony and
another on opposite sides of the continent. Yet there

200 AUSTRALIA AND NEW ZEALAND.

is great room to spread, and to join hand to liand all
round the masrnificent coasts.

This isolation overland, to turn again to the general
questions involved in the future of these settlements,
nuist exercise, however, a most important bearing on
the possibilities of a federative union of the mainland
and Tasmanian colonies. There is no great central
colony to form a rallying point for the rest, as it were ;
and the mere fact that all communication between east
and west must be practically by sea for many a day
to come, will make the colonies of New Soutli Wales
and Victoria strenuous rivals in the fight for leadership.
Each will say that it is best placed for the seat of su-
preme government, and neither will give way until, as
a refuge from conflict, some petty corner like Tasmania
may possibly be chosen as a sort of neutral groimd,
just as the capital of the United States is planted in the
insignificant ' District of Columbia.' That is, suppos-
ing the federation project carried out, which is, I con-
fess, taking a great deal for granted. So far is it now
from being so tliat I almost fear the past history of
several of the colonies, brief as it has been, makes it
impossible until many revolutions have occurred. Each
colony has grown to have its own aims and ambitions,
and its own burdens, to such a degree, tliat necessity
alone will drive them towards union; although union is,
more than any other conceivable thing, a necessity for
them all, wdiether we look at them as requiring more

AUSTRALIA AND NEW ZEALAND. 201

population, as aspiring States, or as sitting defenceless
and apart, ready to be a prey to almost the first sturdy
marauder who penetrates to these southern seas — not
by any means an impossible event.

I firndy believe that, were the Australian colonies
to unite now under one federal government, the neces-
sity which impels some of them to tout for emigrants
would be at an end. Peo})le will grow used to have a
great country in their eye over wdiich they could
wander at will, as in the United States, and the
new greatness which would thus rest upon these
colonies would draw many to their shores. Not only
so, but the abolition of all customs barriers between
the various States would materially aid the develo})-
ment of the peculiar resources of each, and might put
an end, partially at least, to costly schemes of rivalry.
The natural resources of New South Wales and Vic-
toria would seem to fit them for becoming the in-
dustrial centres of the continent, while the others are
adapted for every description of agriculture, and can
furnish many raw materials, includinsc cotton and silk
of a most valuable kind, l^reak the artificial barriers
away, and each district or province of the federation
would attract to itself the kinds of labour most suited
to its wants. We should have harmonious develop-
ment rather than, as at present, rivalries which tend
to hinder progress.

It is also necessary that these colonics should con-

202 AUSTRALIA AND NEW ZEALAND.

cert together and become one for purposes of self-
defence. At present they he open, and ahnost utterly
witliout means of defence in the event of an outbreak
of war between the mother-country and any ambitious
European power, and tlieir isolated efforts at self-pro-
tection are of necessity quite inadequate to their pos-
sible, or even probable danger. These colonies are, in
short, only conununities of miners, shepherds, and farm-
ers ; and, however admirable as such, they require to
have at least the capacity for calling into existence the
means of fighting for their possessions, should they be
threatened. Great Britain has so many possessions, and
such heavy stakes of another kind in India and China,
that in all probability no European war involving her
participation could occur now which would not tax
her utmost spare energies in keeping the peace in Asia.
There would hkely be neither men nor means forth-
coming to help the colonies, except so far as sparing
them, perhaps, a few ships of war. In the main, there-
fore, they must look to their own resources, and federa-
tion would enable them, in a very short time, to do so
effectually. By forming a Bund, or a single State, such as
that of the American Union, they could introduce a mili-
tary and naval organisation of sufficient strength to protect
tliem against any but the strongest aggressive powers.
I fear the world has hardly yet reached that state of
civilisation which renders this unnecessary ; but the
colonists do not seriously occupy their thoughts Avith

AUSTRALIA AND NEW Z1:ALAND. 203

gloomy contingencies of this kind. Till tiiey do lliere
will be no serious inovenient towards federation, and
witlioiit federation their settlements can never be strong
and great. Union, in short, must at once lead to
enormous clianges in the government systems of
several of tliom, and mig'ht also give them all an oppor-
tunity for revising the land laws, with a view to im-
posing taxation on the only kind of property capable of
bearing it pretty heavily. A land tax and a light cus-
toms tariff should provide for nearly all wants, federal
and provincial, as the country filled up with people, and
the railways, if not feverishly extended, became re
munerative. The obvious necessity which exists for
providing for self-defence ought also to be a strong ar-
gument in favour of prudent spending with all the colo-
nies, especially if they should have to make such pro-
vision separately. No cost that a community can bear
at all weighs on it and cripples its resomxes like the
cost of maintaining armed forces. But for the army
and navy of England, we might at present have no
naliunal debt, and might almost enjoy the entire reve-
nues of our railway systems as a relief to taxation.
Armies and navies protect trade no doubt, but they
cripple the competing force of the trader also ; and
were the colonies in Australia to have to betake them-
selves to arms, they would find themselves in dillicul-
tiesofa financial kind, hinvever clieaply they organised
their forces. At present only New South Wales and

204 AUSTRALIA AND NEW ZEALAND.

Victoria possess any semblance of a force, and none of
tlieni have tasted the bitterness of war taxes. It will
be well if they unite as one nation before they have to
do so, and I wish the dread of that contingency would
force them to cease their rivalries. At present they are
weak because divided.

I must look on the Australian colonies, then, as at
best a nation in a nebulous state, of which the frag-
ments sliow here and there vigorous life, but whose
coming greatness can only be guessed at. As regards
the future course of British trade with them generally,
there is little more to be said. Obviously it will be
larger in some cases and smaller in others, and over
all may perhaps be expected for years to come to show
small augmentation, so far, at all events, as exports of
British manufactures thither are concerned. As the
more vigorous colonies develop their own resources,
however, they will also do a wider foreign business, by
which, as I have said, England will more or less bene-
fit ; but it by no means follows that they will then buy
more English goods. Freights alone are against us, and
iiuist grow more so as money sinks in value in the
colonies, and they become able to employ labour of the
same quality as our own at something like an equiva-
lent price. The wealth of England may then come to
Vje increased, not so much by the sale of home-made
goods to the Australians, as by the employment of her
surplus capital in the sustenance of new industries there.

AUSTRALIA AND KEW Zl-llLAND. 205

This has been the course, in fact, hitlierto ; and every
industry which Australia has — ^just as almost every in-
dustiy possessed by the United States — owes its origin,
and no little of its prosperity, to English money. A
new country has no saved money, strictly speaking, of
its own ; it has only the raw products of nature ; and
hence the price or value of saved money, or ' loanable
capital,' in a new country is very high, by reason of its
scarcity. On the other hand, labour is in most in-
stances even more urgently needed than money ; and
frequently, in new countries, the purchasing power of
money over labour is extremely low. This curious
double scarcity tells, on the one hand, in favour of a
strong How of money from tlie mother-country, where
it is cheap, to the colony, where it is dear, and, on the
other, induces an equally steady flow of all kinds of
home manufactures which the colony cannot afford
to make for itself. Gradually this state of affairs
should equalise itself, and industry after industry start
into vigorous life, as the cajoital to start it and the hands
to keep it going are found. The enormous amount of
gold which the Australian colonies have found made
their ])rogress in this respect remarkabl}' rajud ; but
home supplies of money have also had an immense
influence. What that supply has amounted to no one
can say, because the i)rivate importations of emigrants
cannot be even guessed at ; but we may gather some
notion of its magnitude from the cajutal of tlie lui-

206 AUSTRALIA AND NEW ZEALAND.

mcrous banks and other companies with Enghsh capital
en<>"ased in the Australian trade.

The capital involved in the banks of Australia and
New Zealand — which may be considered of English
origin — amounts to about 9,000,000/., most of which
has been found by this country ; and besides this capital
there are large deposits, and in some cases large re-
serves, portions of wliich may fairly be assumed to
come from Engiisli pockets. The banks are not all,
either. There are large numbers of mining adventures
and agricultural companies, whose money, furnished by
Engiisli investors, is employed either in lending upon
mortgage or in developing property under direct Eng-
lish management. The finance companies, in particular,
have not their capital merely, but also large deposits,
all drawn from home, and employed in loans to squat-
ters or farmers at higher rates of interest than could
be got in the mother -country. By this means land is
bought and, apparently, paid for ; and by this means
farms are stocked, produce raised, and the whole ma-
chinery of trade put in motion. The work done is
most necessary and valuable ; but the statistics of pro-
gress and wealth which the colonial budgets are
founded on may well, under such a system, be most
misleading. I am unable to give an exact statement of
the amount of English money thus invested in the
farming and mining of Australia and New Zealand ; but
the paid-up capital alone of the finance and loan com-

AUSTRALIA AND NEW ZEALAND. 207

panics amounts to over 3,000,000/., and it is a mode-
rate estimate wliich plaees the deposits borrowed on
the uncalled portion of many of these companies at
another 5,000,000/. Add another 2,000,000/., which
is within the mark, as investments in mines, and w^e have
a very respectable total of more than 19,000,000/. —
say, in round figures, 20,000,000/. — as the lent Eug-
hsh money actively embarked in the internal develop-
ment of the Australasian colonies. Were we to add
private fortunes carried to the colonies, as well as Eng-
lish investments in strictly colonial companies, this total
would be probably quite three times that amount, but I
wish to avoid any appearance of exaggeration.^ Even
this total reveals a good deal regarding Australian pro-

' The following extract from a Melbourne paper, the Insufcince and
Bankiiifj Record, shows the total assets and liabilities of the Australian
banks. From these figures it will be seen that the colonies now use
enormous means of their own in maintaining the flow of their commerce,
and that for their population they are perhaps the largest employers of
banking credit in tlie world. 'At the end of 1876, in the six leading
colonies, the banks' capital and reserves employed were 15,765,000/., the
advances 52,288,000/., their liabilities were 48,133,000/., and their assets
63,898,000/.

' Looking at the figures from the stand-point of intercolonial comparison,
it will be observed as between 1872 and 1870 how th(> largest increase of
advances has been just in those colonies where general knowledge of
their development would lead us to expect it. The contrast will be shown
best thus : —

.\iivances 1872 1876

Victoria . . . £13,505,000 . . £19,138,000

New South Wales . 8,726,000 . . 13,627,000

New Zealand . . 4,060,000 . . 10,017,000

South Australia . . 2,761,000 . . 4,749,000

Queensland . . . 1,487,000 . . 3,400,000

Tasmania . . . 892,000 . . 1,357,000

208 AUSTRALIA AND NEW ZEALAND.

gross, as well as of the source whence England draws
so nuich of her wealtli. Mere trade figures do not
show nearly all her gains, and trade figures alone
ought not, therefore, to be dwelt upon as an exclusive
sign of the good which she reaps from her possessions.
This huge capital engaged in banking has also another
significance when we remember tlie pecnliar dangers to
wliich banking always subjects commerce ; dangers
heightened in new countries in need of money by the
constant borrowings on the security of land. Loans of
all lands are made by banks in their eager competition
for business, and these loans often inflate prices like
doses of paper-money. By-and-by a liquidation be-
comes necessary, and amid general loss and frequent
ruin, values sink back to a point perhaps below their
real level. It is to dangers like this that I refer when
I speak of these colonies as buried under mortgages.
The employment of capital in a new country is legi-
timately very profitable, but the tendency is always
towards excess. Banks lend beyond their means, Go-
vernment borrows, private individuals take great risks
with no adequate means, and for a time all goes swim-
mingly ; but the reckoning day comes round, and then
everyone finds that lie has not means enough to meet
his liabilities. Farmers cannot pay for their land or re-
pay the banks ; the whole conmiunity has been trading
beyond tliemselves, and treating as profits or revenue
what sliuuld have Ijeeu considered cajntal, and the

AUSTEALIA AND NEW ZEALAND. 209

consequence is a general smash. These liquidations have
occurred in the colonies before, and they will occur
again, involving wlien next they do some of the Go-
vernments in the ruin. In the meantime, however,
the mother-country gams in all ways by their lusty march
ahead. We get high usury on our money and good
markets for our productions, and much of the saving of
the colonists fmds its way directly back to us. By a table
published in the last emigration papers, I find that,
between 1848 and 1876 inclusive, emigrants to the
colonies and the United States are estimated to have
remitted to their fi'iends no less than about 19,800,000^.
in money, all of which, in one shape or other, has
added to our spending power. That again takes no ac-
count of the fortunes brought home by retmiied emi-
grants from all parts of tlie globe, or in part re-invested
in the enterprises of the country in which they were
originally won, in order that the interest thereon may be
spent here. In all these ways England gains by the pros-
perity of her colonies, and, in one sense the more she
lends them, the greater her tribute in return, whether
their direct exchange ofgoods with her increases or not.
All I deprecate is the lavish mortgaging of the re-
sources of the State or community as such by heavy
borrowings. Money is best risked on private account,
and the states of Australia and New Zealand are too
new to have laid on themselves the load which most of
them carry. This I say, bearing in mind fully the wise
VOL. II. p

210 AUSTRALIA AND NEW ZEALAND.

provisions wliich they have all more or less made for the
repayment of debt, because I deem these in themselves
something of a snare, inducing more and more outlay
in the faith that one day all will come round, and that
the community will ultimately have, as it were, for
nothing what it pays so dearly for now.

The outflow of capital from the mother-country to
the colonies is thus, in several ways, at once a chief
source of her gain and main danger of the future.
Their lavishness will produce miserable reactions, the
sufferings of which will recoil on this country as well
as on the colonists. The position of the settlements we
have briefly looked at is therefore rather a chequered
one. We cannot say with surety what their future may
be. All of them have difficulties before them, and
though I think the Australian colonies, with one or two
exceptions, much better off" than Canada, and rather
more prosperous than South Africa, I yet cannot say
tliat any of them will make good in the future the startling
advances which the generation passing away has wit-
nessed. Yet the greatness of some amongst them seems
secured, and so long as they are peopled by an English-
speaking race, their union with the old country must be
intimate in a mercantile sense, and the good they do her
will in the main far exceed the evil. We shall in the next
few years, perhaps, see our trade with Australasia both
shrink considerably and shift in character ; but it will
still be in the aggregate a great trade ; and if the colo-

AUSTRALIA AND NEW ZEALAND. 211

nies there would but unite in one, the field they would
offer to the old country for emigration, for capital and
enterprise of every kind, is such as North America alone
could rival. This I say, bearing fully in mind the
expectation that some at least amongst them must soon
enter upon times of financial depression and shaken
public and private credit.

p 2

212 I^IEXICO AND BRAZIL.

CHAPTER XIIL

MEXICO AND BRAZIL.

The condition of the Soiitli American Continent, taken
as a whole, is not a satisfactory one, whatever way we
vieAv it. Pohtically it is spHt up into a number of
separate States, few of which possess any real political
vitality, and nearly all of which are too poor to obtain
any stable position as traders amongst the nations of
the world. The same dominance of the soldiery which
has nearly destroyed Old Spain has helped to prevent
hitherto the development of most of those offshoots
from her which form the States of Central and South
America. There is, to all appearance, an absence of
the capacity for creating solidly based civil institutions
in the Spanish race ; and although these Spanish
colonies have all thrown off the yoke of the mother-
country, they have made next to no progress in the art of
self-government. Not one of them all can show even an
orderly, well-knit system of authority, such as Prescott,
for instance, says — no douljt with exaggeration — the
Incas of Peru or the Aztecs of Mexico possessed. The
Spaniard of America is civilly a degraded being, by

MEXICO AND BRAZII,. 213

reason of his tyrannies and llirough the superstitions
wliich have so long moulded the quahty of his mind,
and the mixed races and natives whom he has called
into being or subdued, have never risen to the position
of the peaceful, order-loving citizens of free States.
Therefore we find continual wars going on, brigandage
and murder rife, in even the most promising of tliebe
States, and an absence of any progress worthy of the
name in every Spanish Eepublic save one. Public
offices are filled through corruption, and integrity and
fair dealing between man and man are qualities almost
iniknown. When contrasted with the United States,
the utter backwardness of all South American States
comes with startling force on the mind of the poUtical
student. The beginnings of hfe which society does
evince there serve but to suggest, as it were, the cor-
ruption which makes one ahnost despair of these States
ever developing into healthy political organisations.
Chili alone amongst the Spanish States of South America
has made real progress in the art of self-government,
and has been blessed with internal peace for a genera-
tion. Amongst the rest the Argentine Confederation,
Peru, and Mexico stand prominently forward as com-
munities of whom much has been expected, but which
have yet performed little. The Argentine Confedera-
tion had a war on the occasion of the election of the hi^t
President, and has had more than one civil disturbimce
since. The Government is too weak either to repress

214 MEXICO ANB BRAZIL.

the soldiery or to prevent crime, and its outlying pro-
vinces are subjected to a terrorism from bands of ruffians
which at times tlu'eatens to depopulate the country.
What progress and enlightenment the Eepublic has
is due mainly to the influence of people of other than
Spanish nationality — English, German, Italian — and if
these cannot get and maintain the upper hand, revolu-
tions, bloodshed, possibly dismemberment, attend the
future of this State. More disheartenmg still, perhaps,
is the condition of Peru, where the Spaniard has more
exclusive possession of the destinies of the country,
and wastes its wealth to the top of his bent. To find
another orderly government we have to leave Spanish
possessions altogether, and betake ourselves to the vast
Portuguese Empire of Brazil, which under the old
reigning house of Portugal has attained to a certain
importance and order. Poor as this may be, compared
with the higher civilisations of the Old World, it never-
theless places Brazil first amongst the States of South
America.

Of the petty States of the north lying between that
Empire and Mexico I need hardly speak. They are
all insignificant in every sense of the term. At the
present time the United States of Colombia are enjoying
one of their many civil wars, and the scattered com-
munities of Ecuador, Guatemala, Costa Pica, Bohvia,
and the like are both politically and commercially too
insignificant to demand much notice here. Most of

MEXICO AND BRAZIL. 215

thein liave interest for the English i-eader onlj' because

they have contrived to get deeply into our debt.

Having spent all that they could wring from the land

or the natives in the comitries to which as robbers they

had gone, the Spanish settlers in these latter days took

up the brilliant idea of [)]undering the English, and

succeeded in a way that must have gone beyond their

expectations. Hardly any of these small States do a

steady trade with England, and their short flush of gold,

with its accompanying burst of impoi'tation, has passed

away, leaving them poorer and more wretched than

before. Colombia has a considerable overland transit

trade by the Isthmus of Panama, but it hardly benefits

tlie Republic, and its own internal trade is extremely

insignificant. More than one attempt has been made

to establish an industry such as sugar growing and

manufacture, but with the most indifferent success.

Militarism and priestly superstition are the bane of all

civil life, the malarious social exhalations which blight

every enterprise. It would be waste of time to discuss

at any length the fortunes and possible futures of these

pettier States at present, even had we the materials.

Possibly some day a brighter era may dawn on them,

and the conflicts and jealousies give way to order and

good fellowship, industry and peace ; but that day's

dawning is not yet visible. I shall, therefore, only give

a few general figures regarding the trade of South and

Central America, with a view to bring out more

216 MEXICO AND BRAZIL.

strikingly the contrast between these regions and the
northern half of the Continent, and then pass on to the
larger States indicated at the head of this chapter.

Exact statistics are not, of course, obtainable, but,
putting together such as we have, the total export and
import trade of all the Spanish States and Brazil
together cannot have exceeded 115,000,000/. at the
most inflated period of their trade, and last year did
not probably exceed 106,000,000/., including the
movements of bullion. This is just about the amount
of the imports of merchandise alone into the United
States in 1 875, and the total trade of the States and
Canada together last year exceeded that of Central and
South America by from at least 150,000,000/. to
180,000,000/. I exclude, of course, British and Dutch
Guiana from the estimate, as well as Cuba, and speak
only of the Spanish and Portuguese States on the main-
land. If we were to judge of this great difference
between the trading capacity of the Anglo-Saxon and
Iberian portions of the American Continent by the
numbers of their respective populations, we should
find little ground for altering the opinion which a mere
contrast of the trade figures gives. In numbers alone
S])anish and Portuguese America is almost as well
off for inhabitants as the States and British America.
In area and in quality of the soil, as well as riches of
mineral resources, the former is even more favoured
tJian the latter ; so that, by whatever standard we judge

RIEXICO AND BRAZIL. 217

the position of the two, Spanish Amorica hes far
behind.

GeneraHties of this kind are, however, little satis-
factory so far as our purposes arc concerned, and we
must look at several of the prominent States more
closely if we are to form a sound o])inion on their
future. Population as between Saxon and Spaniard
may be equal in numbers but of totally divergent quali-
ties, and mere trade figures may give but little indica-
tion of the true nature of the progress or absence of
progress which marks the history of any one State. I
v^ill, therefore, now take up the leading States one by
one, beginning with Mexico and going southward so as
to take Brazil by the way. The review shall be as
brief as possible.

Mexico ^ is, perhaps, the finest territory in the whole
world. Excluding the hot malarious lowlands by the
gulf, the climate is generally exquisite, the soil surpass-
ingly rich, and the mineral resources nearly inexhaust-
ible and of the finest kind. This lano;uaofe seems like
exaggeration, but it would be hard to exaggerate the
excellences of Mexico in these respects. Had it been
the fortune of Englishmen to possess that magnificent
plateau, we should have prized it as the most precious
of all our colonies. This favoured land has, however,

* Muck of the iuform.ition given in the text regai-ding Mexico has
"been comnnmicated to me by my friend, Mr. J. W. Barclay, ^l.T., who

visited the coiuUry in the autumn of 1870.

218 MEXICO AND BRAZIL.

fallen to the Spaniard, and how he has used it takes
not long to tell. The Spanish idea of wealth is summed
up in three words — gold, silvei", and gems. No matter
how fertile a territory might be which they conquered,
it had no temptations for them but as a store of these ;
therefore the Spaniards never developed the lands they
settled on. They overran them, ravaged them, ground
the indigenous po})ulation down to the very dust,
hunted for silver and gold as wild beasts hunt for
prey ; and then built churches to show how pious they
were withal. I speak of the mass of Spanish colonisers,
and of the general characteristics. The results of such
behaviour have been made abundantly manifest in
Mexico, where the soil has been neglected for the mine,
till the population of the present day — only a sparsely
sown 8,000,000 to 9,000,000— does not find half
enough work to do, and can often only relieve the mo-
notony of idleness by forming bands of robbers, or
indulging in ' pronunciamientos ' against the Govern-
ment. After half a century of so-called indepen-
dence, Mexico is still a country almost without govern-
ment, so far as the outlying provinces are concerned,
without settled trade, and as uncultivated, speaking
generally, as an Australian sheep-run. The present
President of the country, if such he can be called, won
his seat at the sword's point, and the 'ordeal of battle '
has always been the chief test of fitness to rule in this
' Eepublic' The Mexicans have theoretically one of

MFA'ICO AND BR.VZIL 219

the best forms of goveriimenl in the world, and their
laws are hberal and enliglitened, but they get no good
therefrom. Tlieir constitution is like a giant's garments
put upon a pigmy, who can move only by casting them
off. Trade or industry, in such circumstances, Mexico
can hardly have, and in spite of her magnificent soil and
climate, almost her sole prominent article of export to
this day is silver. The w^ealth of precious metals which
she has displayed for centuries has, in short, been one
of her greatest curses. Next in importance to her
silver is timber, and in recent years England alone has
taken from 300,000/. to 400,000/. worth of mahogany
from her ports. Some progress is said to have been
made in the cultivation of coffee, for which the soil and
climate are admu'ably fitted, but none of the produce
reaches England, and the quantity sent to the United
States is very insignificant compared to what Mexico
might easily produce. The clearing away of the old forests
which is essential to the true development of a country,
just as judicious replanting may be to its continued
fertility, is but beginning, and betokens as yet little ad-
vance in the arts of peace. Were Mexico to devote
herself to sugar growing or to coffee, cotton, indigo, or
tobacco planting, or were she even to come down to
the commonplace business of growing corn, after, say,
the fashion of ChiH — a bv no means hi"fh standard, a
few years might transform her territory into a land of
peace and plenty ; her patient Indian population, the

220 MEXICO AND BRAZIL.

bearers of the national burdens in every sense, would
become happy and contented farmers, and a bulwark
would rise up against revolutions and civil crimes, which
not all the vile machinations of a stripped but still
powerful and repulsive priesthood could throw down ;
ships would frequent her ports, and, instead of being
known in the markets of the world almost exclusively by
her ' dollars,' she would be as influential in international
markets as the Southern States of the North American
Union or California. What she is capable of, Cali-
fornia, indeed, teaches us ; and Texas, Colorado, and
New Mexico, of old possessions of the Spaniard, will
in due time give the Avorld the same lesson. Take
Mexico out of the hand of the priest-ridden Span-
iard and it will grow rich. The country would,
probably, be far better in the hands of the old Indian
race, and the only earnest progressive reforming Presi-
dent it ever had Avas a ' full-blooded ' Indian — Benito
Juarez, who died in 1872. To him, more than to any
other, is due the partial emancipation of the people
from the gross tyranny of the corrupt Spanish priest-
hood. He disestablished and disendowed the Church,
and through liim it became possible in Mexico city for
Protestant congregations to buy and worship in one of
its ])rincipal Catholic churches. He it was, too, who
stemmed the ton'ent of French invasion, when the clerical
party, beaten at all points at home, got France and Spain,
and, I am ashamed to say, England, to interfere, and

MEXICO AND BIJAZIL. 221

who seized the opportunity whicli the withdrawal of
French troops gave him of reasserting the right of the
Mexicans to govern themselves free from foreign do-
mination. To Juarez, more than to any other man, the
Mexicans owe the secularisation of the enormous pro-
perties of the Church and the diversion of at least a
portion of the enormous wealth thus released to purposes
of education. He it was who decreed the abolition of
nunneries and monasteries, and Avho forbade the priests
to wear distinctive garbs in jmblic ; and a generation or
two hence the fruits of his on the whole enlightened
and vigorous reforming policy may perhaps become
apparent in a liigher enliglitenment among the people.
In all Spanish provinces priestcraft has played a
part which it is no exaggeration to describe as dia-
bolical; and if Juarez could but have abolished the
priest in the minds of his ignorant fellow-countrymen
as easily as he seized the Church property, we should
say that Mexico was on the high road to a new gran-
deur. But that he could not do, and, like the civil
constitution, tlie laws for the regulation of education
are as yet nearly inoperative.

The most hopeful period of Mexican history lias
on the whole, however, been the last decade, and the out-
look of the future is not entirely black. The default
committed on her debt, in the beginning of 1867, efTec-
tually shut her out from the money markets of Europe
when so many of her neighbours came to gather the

222 MEXICO AND BEAZIL.

gold they could no longer find at home, and to make
shipwreck of their good name. Isolated from the
sympathv of every foreign nation save the United
States, after the death of Maximilian — whom, by the
way, Juarez had a good right to shoot — dehvered from
the curse of French occupation, and left entirely face to
face with her difficulties, Mexico may be said in a sense
to have progressed. It would, however, be difficult to
say the Mexicans have themselves improved or to show
what Mexico has actually and in substance gained in
these ten years. Property outside the capital is not
much, if at all, more secure now than it has ever
been. Bands of armed robbers haunt the country,
and private feuds lead to murders now just as much as
ever, and the old annoyances to the peaceable inhabi-
tants on the Texan border fi'om Mexican marauders have
not a whit abated. The native Mexican, capable as he
may be of great social improvement, if working under
the guidance of apt masters of industry, has little or no
opportunity of showing what is in him, and is content,
apparently, to shed his blood in the cause of any bla-
tant Spanish bravado who chooses to take the field
against the lawful Government or to join the first rob-
ber-chief who gives him a chance of hving in idleness
and crime. The Spaniards in the country are indeed,
to all appearance, incapable of doing any good as im-
provers of the soil, and all its best commerce is in the
hands of Germans and Englishmen. Jealous, greedy

MEXICO AND BRAZIL. 223

of gold, cruel and arbitrary, the Spaniards can wield
with effect only the slaver's lash in hounding the people
on to dig for precious ores. Every solid improvement
of which Mexico can boast, in short, she so far owes to
the enterprise of Teutons or Saxons. Her railways
have been built mostly by an English company with
English money ; her city improvements, where there
are any, come from the same hands ; and what manu-
factures she has flourish only when in foreign control.
Nay, her very mines are passing away from the Span-
ish race, and becoming the property of Germans and
Englishmen ; and it is to the latter that she owes the
economy and management of her mint as well as the
best part of her banking.

It is our habit to speak of Mexico as a homogene-'
ous Eepublic, over the whole of which a President who
holds Mexico city has no difficulty in extending his
sway ; and here also we make a grievous mistake.
The provinces of Mexico hang very loosely together,
as those of any country must do where the means of
intercommunication are few and difficidt, where pro-
vincial antipathies run strong, and where corruption is
so deeply ingrained in the official class. The very
demands of the tax-gatherer are enough to place pro-
vince at enmity with province, and so Httle cohesion is
there amongst the component parts of the Eepublic
that at present one province taxes the produce imported

224 MEXICO AND BRAZIL.

from another.^ This provincial jealousy and want of
co-operation is itself a strong retardant of trade ; and
to tins we must add a most burdensome general im-
port tariff. Allowing for the difference of wealth between
the two countries, I believe I am not beyond the mark
when I place the import tariff of Mexico at about
twice the weight of that of the United States. So
heavy is it that the Government gets little or no
revenue. The customs officials at the various ports
simply strike a bargain for tliemselves with importing
merchants, and pocket what they please. But for
some such arrangement, Mexico could scarcely import
any Eiuropean goods. The folly of such a tariff as
this is all the more marked in that the erroneous but
specious plea of ' protection ' cannot even be set up in
its behalf Mexico has no industry worth mentioning
to protect.

Tlie picture which tliis Eepublic presents to us is
altogether a very chequered one. Some things cause
one to hope ; but, on the whole, the reasons for des-
pondency seem to me at present to predominate. We
hear from time to time of the sincere desire of the
warrior now in power, Porfirio Diaz, to do this and that
for the good of the country ; to build railways, to arrange
for the payment of the debt, and so forth ; but his tenure of
office is as yet too precariously based for him to be able
to carry his intentions out, however good. And as for

* Geiger's Peep at Mexico,

MEXICO AND BRAZIL. 225

railways, Mexico has already about as many of tlieni
as she can manage. Bustle and a forced external trade
along lines of railway are not what the coimtry wants,
but only a quiet or steady slow dispersion of the popu-
lation over the land, and a gradual linking of all the
parts of it together by local interests. The iron way
can neither make a nation grow hke plants in a hot-
house nor ensure wealth and comfort to a people, and
the evils of Mexico are certainly not such as a few
pubhc works and a little more debt would cure. TJie
best thing that could ever happen to the country would
be its deliverance from the Spaniard and Spanish
bigotry and superstition ; but the native Mexican is
not yet capable of effecting that deliverance without
extraneous aid. Therefore I am disposed to lean
towards a gradual absorption of the country by the
United States, and I am disposed to think that this is
how Mexico will become civilised. The population,
commerce, agriculture, and railways of the Union will
gradually work their way southward until Mexico
becomes in a manner absorbed. Those constant border
robberies and Mexican raids also always help towards
that end. It will be well for the poor Mexican,
and not amiss for the Spaniard, when the order-loving
Yankee takes liokl of the magnificent land which the
Spaniard has laid waste so long. In the hands of the
North American Eepublic, Mexico would become a
great province — perhaps, in time, a great independent

VOL. TI. Q

226 MEXICO AND BRAZIL.

State— rich in many products really conducive to the
wealth and well-being of the world. As it is now, the
country is a burden to itself, and almost grows poorer
by its increased trade, because its increase represents
in too many instances not reproduction but waste.
Not even its silver is utilised in developing the mercan-
tile resources of the people.^

In marked outward contrast to this old Spanish
settlement is the Empire of Brazil, which stretches
over nearly half the South American continent. Ever
since Brazil became an independent State, which it did

» The aggregate trade of Mexico with Great Britain appears in recent
years to have axeraged rather over a million and a half sterling, and Mexico
has bought from U9 in some years twice as much as she has sold. Small
as this trade is, it justifies the agitation now going on for a resumption of
diplomatic relations with Mexico by England. That step ought not
to have been delayed so long. Ifc is not possible to get anything like
accurate figures of the general trade of the country, but it would seem to
amount to nearly 12,000,000^. a year including the silver exported, on
which, in a coined form, a duty of 5 per cent, is levied, or little more than
the trade of Ceylon. The gi-eater part of the trade of Mexico is carried
on with the United States. Mexico has a debt of the nominal amount of
C4,0(X),000/. ; of which, however, by far the larger portion was created by
the French inroads and is repudiated utterly by the State, which in effect
acknowledges only about yOjOOOjOOO/. altogether. It does not appear to
matter much what is acknowledged, or what repudiated, for no interest
is paid or has for many years been paid on any portion of the debt. In
spite of this summary lightening of the burdens of the exchequer, there
is very frequently a deficit on the budget. Jobbery, the difficulty of
collecting taxes, and general maladministration in the provinces, help to
produce this result ; and while it remains the normal condition of
Mexican finance, it is a purely fanciful proceeding to add year by year the
over-due coupons to the foreign debt and say Mexico now owes so much.
Her internal floating debt must have crept up since the French war to
ten or twelve millions sterling, and that will have to be paid in some
shape before the foreign creditor can come in for a share in the surplus of
the future.

MEXICO AND BRAZir>. 227

about, the same time as Mexico, it has been, after certain
fashions, a progressive one. A quiet trade has been
carried on with Portugal and England ; the Govern-
ment has been, in a measure, good and secure ; and
population has slowly increased. Had the Empire
been content to go quietly on, it might have been
pointed to as one of the soundest in the world, and it
is, in natural resources, probably one of the ricliest ;
but in these latter days it has caught the universal
fever, and, by launching into all sorts of attempts to
force on progress, has seriously endangered its financial
stability and possibly its internal peace. Made up, as
the Empire is, of a number of vast provinces, which
hang rather loosely together, the heavy burdens Avhich
the Government of the present Emperor has assumed
may not improbably lead to internecine conflicts of at
least a civil kind at a not distant date.

But though that be a danger, it is impossible not to
appreciate and commend the spirit in which much of
the modern efforts at development have been under-
taken. Enormous physical difficulties, for example,
prevent free intercourse between the various parts of
the Empire, and it has only one great navigable river
at its command, the Amazon, which runs through
boundless regions of tropical country diffifult to reclaim
by Europeans, and very thinly tenanted by any race.
The eastern side of the Empire is, for the most part,
mountainous broken country, and the fertile valleys

Q 2

228 MEXICO AND BRAZIL.

whicli lie inland, or by the beds of the insignificant
rivers, are devoid of roads that would enable them to
convey their produce to the coast. Eailways of some
kind have, therefore, been a first necessity to the
internal development of Brazil, and most of the
expenditure which the Government has sanctioned or
made, on its own responsibility, to procure them is
most praiseworthy. At the present time, the country
possesses some 1,300 miles of lines, but except the
Don Pedro II. and the San Paulo lines, which are
together about 750 miles in length, they form only the
merest rudiments of a railway system, consisting of
upwards of twenty short lines, which penetrate a short
distance inland from the ports of Eecife, Bahia, Eio,
Natal, Santos, and others, or branch off from small towns
on rivers in the interior valleys whence they go as yet
nowhere in particular. They are all nearly a dead loss to
Brazil. It will be a matter of great difficulty, however, to
carry these lines far inland, or to connect them so as to
establish land intercourse between maritime provinces
or with the interior, not only because of the mountain
passes which have to be crossed, and the swamps that
must be filled up, but because of the extreme paucity
of population and consequent insignificant chances of
trade. At the present time, although two lines con-
structed with EugHsh capital pay good dividends, the
fragmentary ' systems ' cost the country a considerable
sum annually to make good the guaranteed 7 per cent.

MEXICO AND BRAZIL. 229

interest, and thus add to the embarrassments of a
State wliose debt charges amount to a full third
of the entire revenue. Brazil is, in short, in this
dilemma. Without railways of some sort, inland
prosperity can never be assured, and railways cannot
be built to pay without population. All the territory
from a short distance inland to a few given points
is at present shut out from commerce with the
rest of the world ; and the magnificent plain of Matto
Grosso, which is drained by tributaries of the Amazon
and by the great rivers of the Argentine Eepublic, is
nearly tenantless for want of the means of reaching the
markets of the civilised world. What has been done,
though in its way to be praised, is hence but a mere
first step. The Empire of Brazil is, therefore, only a
great possibility, and all the attempts it has made to
seize a permanent share of the trade of the world have
been more or less failures. Along the shores of the
Amazon a trade is being fostered by an English steam-
ship company and a tug company, which may in time
lead to important consequences, especially if the pro-
ject for opening up the route to Bolivia by means of a
railway past the IMamore Eiver rapids should ever be
carried out ; but even this promising field is difficult to
cultivate for want of people.

In the main, therefore, Brazil must be considered a
country beyond the reach of rapid improvements, and
its physical conliguration alone would demand much

230 MEXICO AND BRAZIL.

greater caution in making dashes at developmeut than
has liitherto been observed. Large sums of money
have been spent in Brazil foohshly, both on pubhc
works and in attempts to supply the lack of popula-
tion. It must, I fear, be said that the grossest jobbery
has, for example, characterised the efforts made to im-
port Engiisli and German settlers into Brazil ; and the
miseries which most of these colonists have had to
undergo have certainly been of the most distressing
kind.^ Not only has it been found that the Teutonic
element would not fuse with the Spanish and Indian,
that there were religious and social differences prevent-
ing anything like free intercourse, but the mere possi-
bilities of existence have often been absent. Eich as
Brazilian soil may in places be, it could not support
spontaneously crowds of people thrown at haphazard
on particular spots. Emigrants from Europe have,
therefore, often starved, rarely prospered, and usually
were much more of a burden on the State than a bene-
fit to it. They were sent out by enterprising emi-

^ In tlie Blue Book (c. 777), 1873, a very harrowinj^ account of the
miseries endured by British emigrants to Brazil may be found, and the
statements therein given have been fully confirmed by later reports. We
read there of skilled artisans going out to starve, of settlements without
food, colonies that have no market, land occupied and no means afforded
for tilling it, and altogether get a picture of ofllcial neglect, and of the
consequent misery of the settlers, wliich ought to be known to every
household in tlie land. No greater mistake could be made than for an
English or German workman to emigrate to Brazil, Only merchants or
engineers havea cliance of doing any good there. The whole condition of
tlie country, its social economy, and its poverty are against progress, as
we understand the word in our own colonies.

MEXICO AND BHAZIIv. 231

gration agents for the sake of the commission earned,
and whether they starved or Hved was matter of indif-
ference to them, and every immigrant tluis imported
and neglected is calculated to have cost the State
100/.

Brazil has thus lost in all ways in the attempts to
bring money-getting settlers to her soil, and I tliink
many of her other efforts at wealth-getting have been
nearly equally disastrous. Her population is peculiarly
unfitted for competition with those of more civilised
countries in the higher orders of industry, and even in
skilled agriculture the common people do not by any
means excel. Most of the ten or eleven millions of
people who inhabit the country are cross-breeds, and
inherit, as sucli usually do, the prominent vices rather
than the virtues of both progenitors, or, at all events,
are subjected to a social system which develops the
worst features of their character. There are also
numbers of so-called Indians, settled and nomad, whose
labouring capacity is small ; and the best workers in
the Empire are unquestionably the negroes. The pure
Portuguese settler is, like his Spanish brother, mostly a
lazy animal, who prefers to live by the labour of others
ratlier than by his own. Had he been active and enter-
prising in any industrial sense, he would have cleared
some portion of the immense Amazon forests ere now
to give dayliglit and civilisation a chance. Tliey do
not possess the energy to be even decent lumberers, and

232 MEXICO AND BRAZIL.

prefer clearing the land for crops by burning — a waste
ful and treacherous mode of obtaining a passing fertility.
Slavery is, besides, not yet abolislied within the Em-
pire, the law passed for that purpose in 1871 being as
yet wholly inoperative as a means of alleviating the
abject condition of the masses and awakening them to
work for self-interest. It is one of those compromise
measures which, while declaring the slave free at a
future date, leaves him for the present at the mercy of
his owner. Labour is, therefore, highly inefficient, and
owing to the stoppage of the slave traffic with Africa
• — or its extreme restriction — labour is also scarce.
Slaves fetch high prices and do httle work, the result
being that Brazil is wholly unfitted to compete with
British possessions or the United States, or even with
distracted Cuba, in many walks of industry. Another
result, of course, is that in Brazil, as in Eussia,
there is next to no middle class beyond a few mer-
chants at the ports. There are the slaveowners, and
the abject classes, Indians, negroes, and half-breeds,
which make up the vast majority of tlie population of
Brazil. The wealth of the Empire is, therefore, in
comparatively few hands, and the Government has but
a narrow basis on wliicli to rely for its supply of taxes ;
and in consequence heavy import and export duties
have to be levied, with a view, as is supposed,
of making foreigners pay, a] id year Ijy year, with
these restrictions on trade and growing binxlens, the

MEXICO AND BRAZIL. 233

power to make ends meet grows more difTicult. Tirazil
wants to raise yearly about 25.9. per head in imperial
taxation alone, wliich is — tlie situation of tlie mass
of the popidation considered — a far heavier taxation
than that boi'ue by om- most heavily burdened Austra-
lasian colony; and yet it tries to raise this witliout tax-
ing land. Although land is thus free, however, agri-
culture is not benefited. On tlie contrary, nowhere in
America, perhaps, is the tillage of the soil pursued in
a more slovenly manner. The soil is not cared for, but
merely cropped till it becomes exhausted, and then
new clearings are squatted on. The agricultiuists of
Brazil appear therefore to be as a class wretchedly poor,
and in the hands of usiu"ers Avho exact, it is said, as
much as 75 per cent, interest on their advances in
some provinces.

Out of a congei'ies of unpromising subjects, such as
her ill-mixed and abject population and lier disjointed
provinces afford, Brazilian statesmen have, in short,
sought to build up a great Empire, and it is no wonder
if they have hitherto practically failed. Brazil does
not grow, and never keeps hold even of any great
branch of trade which accident may throw temporarily
into lier luinds. Tlie United States have louii ao-o
taken l)ack their supremacy in cotton ; and in all other
leading articles of trade, exce})t perhaps cocoa and
caoutcliouc, Brazil has to be content to come in for
such sliare as her stronger rivals in all parts of the

234 MEXICO AND BRAZIL.

world leave her. The physical disabilities, so to say,
already mentioned, may have something to do with
this, but the poverty of the people and the dearth of
labour have more. Brazil is, for example, a large ex-
jDorter of sugar, Avhich, one would imagine, might be
refmed most profitably on the spot ; but it is not, and
it is very doubtful whether it could be on a paying
scale. Even in sugar, moreover, our own West Indian
colonies, liampered as most of them have been, more
than hold their own against her, and she is, of course,
beaten by Cuba. ISTay, her trade in diamonds even is
in danger of being destroyed by South Africa. With
immense tracts, suitable for sheep and cattle grazing,
with fine corn-growing regions, and an enormous ex-
panse of tropical and semi-tropical forests, Brazil ex-
ports very little wool or tallow and hides, and her tim-
ber exports do not deserve mention in the same day
with those of Mexico. The commercial reports of our
consuls at her principal seats of trade are nearly all
gloomy. Xothing is stable, little thrives, and as to manu-
facturing industries the population are probably quite
unable either to initiate or to maintain them. Brazil
has had great sums spent on her by private as well as
public energy, and yet she sees trade elude her grasp.
The money is spent, and Brazil is no better than be-
fore. A cln^onic financial crisis has for years prevailed
jit licr linanciul centres, and trade is as unstable as the
morning breeze. Yet, utterly inideveloped and utterly

MEXICO AND BRAZIL. 235

unable to hold its own as the country is, it has contrived
to get deeply into debt. About 50,000,000/. were spent
by the Government on the insane and most disastrous
Paraguayan war, and about 19,000,000/. has been raised
in Europe, mostly in England, on Government account,
for the purpose of making internal improvements, buy-
ing ironclads, and the like. At tlie present time, therefore,
l^razil has a funded and lloatino- debt amounting at the
lowest computation to about 70,000,000/.,^ if we in-
clude the paper currency and Treasury bills. Besides
the national debt proper, the provinces of the Empire
have each se})arate deficiencies of their own, being but
little controlled in their spending by the central power.
In the aggregate these debts amount to about 2,700,000/.,
according to the table in Mr. O'Conor's last report on
Brazihan finances. These debts are held in the country
of course, and no doubt help to swell the totals of Bra-
zilian banks ; but, none the less for that, they embarrass
the administration, and tend to push still further apart
provinces whose loose political adhesion and divergent
circumstances have already made them far more in-
dependent and jealous of each other than tlie well-being
of the Empire should allow.

' I Imvo reckoued the Brazilian luilivis or dollar at 2Td., wbicli is
taking about our average par of exchange. If it wore not for the depre-
ciation wliich huge issues of inconvertible paper have caused, the milreis
ought to be worth nearly as much as the United States dollar. I see,
however, that ^[r. O'Oonor, in his report on 77/c (rcueral Condition,
Finances, and Economic Progress <>f lirazil, a report WiU'th reading (tvV/e
Legation Eeports, part III. 1877) habitually counts the milreis at 2s.

236 MEXICO AND BRAZIL.

Besides this debt there is also, of course, the inci-
dence of the railway capital, almost entirely foreign,
Avhicli has been laid out upon the country. When the
roads now projected and under construction are com-
pleted tliis debt will amount to fully 15,000,000/., in-
dependent of what the Government has spent on the
lines built out of its English loans. The system of
raising money on guarantees is thus rapidly working the
same mischief in Brazil that it wroudit in India. The
budget of tlie financial year 1876-7 showed a deficit
amounting in reality to nearly 4,000,000/., although dis-
guised and ^vrapped up to appear much smaller. All
the revenue obtainable from every source amounts but to
about 11,000,000/. During the past financial year the
internal funded debt has been increased by the amount
of this estimated deficit, and the annual addition to the
indebtedness of Brazil from deficiency of budgets has
rarely been less tlian a million sterling for a number of
years. There was an apparent, not a real, equilibrium
in the inflated years 1871-2 and 1872-3 ; but ever since
no expedient of issuing 'apolices ' or internal bonds, no
raising of the note circulation and treating of foreign loans
as revenue, has been able to conceal the yawning gaps.
Hence we may expect to see the estimated deficit for
the year 1877-8, wliich is under a million, greatly ex-
ceeded, in spite of the anticipations of the finance
minister from his ^liort-sighted attempts to adjust the
customs tariff by increasing its weight and extending its

IMEXICO AND BEAZIL. 237

incidence. The revenue of 11,000,000/. or 102,000,000
milreis cannot be extended by such an expedient as
raising tlie tax on imports of articles of luxury to 40
per cent, when the country is getting poorer every day,
or by the imposition of a coasting duty, as it ought to
be called, when foreign goods, which are already duty
paid, are shipped from one part of tlie Eni[)ire to an-
other. Still less likely to do good are the duties of 5
or it may be 10 per cent, imposed on goods imported
for behoof of the foreign corporations whose money
has been used for the development of the country
These may indeed do more to turn awa}' foreign ca[)i-
tal from Brazil than any recent act of administrative
folly — such as the decree ordering preference to be
given to the railway iron of France over that of Eng-
land — for they imply a direct breach of faith. Eng-
lishmen have made and worked railways in Brazil on
the distinct pledge that they were to be allowed to im-
port their materials duty free ; and tliough this would
have been an unjust distinction had there been any
native capital or native companies capable of doing
similar work, yet in the circumstances and seeing that
the Government made such a stipulation in order to
attract foreign capital and enterprise to a country devoid
of both, the imposition of these taxes now is an unplea-
sant breach of faith and a piece of folly to boot.

The deficit, I think it may be safely predicted, will
certainly next year exceed the estimate, for already an

238 MEXICO AND BRAZIL.

enormous pressure lias been put on the country to bring
the revenue up to its present level, a pressure borne
by the interests most vital to the development of the
State — those of its external commerce. Stronger proot
of this pressure could not well be given than is to be
found in the fact that the revenue has risen within the
last ten years from about 6,000,000/. to its present
amount. At the very time when the revenue of Brazil
was thus only half what it is now, her trade was pro-
bably better than it has ever been since, for she was
reaping her full share of the benefit which flowed to
other countries from the civil discord in the United
States. It is no exaggeration, therefore, to say that at
the present time Brazil is labouring under an intolerable
burden. Year by year the financial distress must in-
crease as the Government forces more and more of its
paper on the country in payment of debts for which it
can find no cash, at the same time that it recklessly
fosters unprofitable schemes for the improvement of the
country. Every budget thus comes to be supplemented
by ruinous ' extraordinary credits.' As the country is
manifestly working up to and beyond the limit of its
resources, the ever-recurring deficits are well calculated
to excite the keenest alarm. Unless more money can
be borrowed in the European market before long, or
unless fortune l)rings a new wave of temporary pros-
perity, Brazil must soon pass through another crisis
much more severe than that wliich has raged during

MEXICO AND BRAZIL. 239

the past few years like a low fever eating the vitals of
the country away. Of course it is said that the heavy
deficits are not real, being, like tliose of India, due to
public works extraordinary ; l)iil that is a mere delusion.
A country wliicli mortgages its future for the sake of
works which are iiot now productive is guilty of the
most dangerous of all extravagances. Brazil has not
within her borders the raw materials for great national
advancement.

The import duties now existing stille the inward
trade almost altogether, and })revent at the same time
any healthy development of other sources of revenue.
Brazil has a total trade amounting only to some
35,000,000/. on the average of recent years, and it
must tend inevitably to grow less year by year, in the
absence of artificial stimulants. At present the exports
usually exceed the imports by some three or four
millions sterling a year, and were that the result of
cautious trading it would be a hopeful feature. As
the result simply of poverty and a prohibitory tariff,
it merely indicates that the absence of fresh loans must
lead to a decrease in the demand for Brazilian pro-
ducts, and that from imports the diminution will pass
in time to exports, till Brazil emerges from her troubles
nearly stripped of her recent advantages. England, at
all events, has little to hope for in the way of increased
business from Brazil lor some time to come, both the
financial and the political influences being against her ;

240 MEXICO AND BRAZIL.

and an embarrassed Government must, in any event,
cause increasing disturbances in the trade balance.
The progress which Brazil has made of late years is,
in fact, as nothing to Avliat she will require to make
before her position is secure. Increased issue of paper
to cover Government deficits means increased deprecia-
tion in the exchanges, increased difficulty in developing
industry, and a greater risk to trade in all its branches.
At present, the credit of Brazil stands high here in
England, because people do not trouble to look at the
situation of the country ; but distress that cannot be
hid is approaching with rapid strides, and Brazil, the
most peaceable and in some respects the best-governed
State in South America, will have to wade through
deep waters before she can master the evils of her
position. A better description cannot be given of the
trade evils of that position than that of the Pernambuco
Chamber of Commerce, quoted by Acting-Consul
Corfield in his report for 1875.^ ' The crisis,' says the
Chamber, ' against whicli our unfortunate commerce
has contended for upwards of four years still continues !
From each year as it passes an appeal is made for
the ensuing one, but the evil assumes each time more
serious proportions ! Failures continue, confidence
disappears, credit is considerably restricted, trade is
diminished. Well-established houses are ruined, and
this tremendous concourse of alarming antecedents

* Commercial Reports, part v., 1870.

MEXICO AND BRAZIL. 241

drags along witli it the hope of seeing alTairs take their
former course, bearing in mind above all tlie guilty
indilTcrence with wliich these things are observed by
the supreme authorities of tlie State.'

Pernambuco may possibly be at present suffering
more extremely than some of the other provinces
along the Atlantic coast. Labour is being drawn away
from this and the other northern provinces to Rio and
the south for public works and coffee planting ; and both
in sugar and cotton these northern provinces are beaten
nearly out of the market. In the main, however, this
description applies to the whole of Brazil. The country
groans under the weight of its burdens, and little short
of a miracle can prevent a disaster. At this very time
famine stalks through the land, and the fliilure of the
food crops will seriously add to the dangers of the
financial situation. This is cold comfort to persons
interested in Brazil ; but it is a conclusion which mioht
be supported by a volume of fixcts. I content myself
with appealing to the general considerations I have
here advanced.^

' The trade of Brazil with the United Kingdom has been nearly
stationary for the last three years so far as our imports thence are con-
cerned. So far as re;.mrds tlie exports of British produce to Brazil, tie
tendency is towards decline, and no doubt this decline will grow more
clearly visible unless we will lend the Empire a few more millions to
keep things going. In the aggregate, including the foreign and colonial
produce sent through English agency, the trade of this C(Uintry with Brazil
represents about 21,000,000/., or more than one-half the entire business
of the Empire. It is no insignificant item even in our trade, and its diminu-
tion cannot be viewed without concera. At present, liowever, there is

VOL. II. R

242 MEXICO AND BRAZIL.

notliiug ill Yiew to stop tlio decliiio, and wo must to content to put up
■with it, trusting that a few years hence the Empire may master its
difliculties and emerge a sounder and larger customer than ever. The
\alue of the raw cotton imported from Brazil to this country was only
1?,344,000/. in 1875, and in 1872 it was as much as 4,730,000^. Raw
sugar yields a much more favourable comparison, but Brazil cannot hope
to compete permanently with advantage in that article under her present
labour arrangements. Ooflee alone, amongst her important articles of
export, shows a steady growth year by year, and may continue to be a
large trade, though competition has lately prevented it from being a very
protitablft one. N'jxt to ourselves Brazil's best customer is the United
States, but its trade consists mostly of imports by tho States. Brazil
buys coniparativelj little in return. Brazilian coll'ee of course enters the
Union free.

243

CHAPTER XIV.

THE EIVER TLATE, CHILI, AND PERU.

The so-called republics of South America with whicli
we must next deal possess more interest for the histori-
cal student than for the political economist. They are
hardly so far consolidated or civihsed — if we except
Chili — as to make them full of any interesting lessons.
Yet in some respects they are capable of affording
warnings, not only to older communities, ])ut to sucli
recent settlements as our own colonies. Some of the
Eiver Plate republics, and Peru in particular, possess a
record which, when closely studied, might make one
despair almost of the possibility of fragments of old
races being able to found new vigorous and prosperous
States. The vices of the mother- countries seem to
breed and develop in tlie new to an extent wliich
makes them a curse to tlie earth ratlier than a blessino-.
I need not speak of Paraguay, which lias been crushed
nearly out of existence by its wars witli Brazil and
Buenos Ayres ; but wdiat shall be said of the Argentine
Confederation, or above all of Uruguay.? Except
under a despot, neither the one nor the other has made

K 2

244 THE RIVER TLATE, CHILI, AND PERU.

substantial political or social progress since the yoke of
the motlier-country was cast off. At the present time
the Confederation is said to be ripe for a new revolution,
and Uruguay rejoices in the grasp of a dictator. ' Self-
government' is in such communities a grotesque
mockery, and respect for law and order a fair but
unrealisable dream of the closet student. The little
republic of Uruguay, which we may look at first, is
endowed by nature with many advantages. As a
pasture ground for sheep and cattle its uplands excel
much of tlie ' bush ' land in Australia, and its harbour
of Monte Video at the mouth of the Eiver Plate is one
of the best located in all South America. Attached to
Erazil, this port and the navigable rivers stretching
away inland from it might prove the means of deliver-
ing that Empire from its torpor, and help to solidify its
scattered and disjointed efforts at progress. Left to its
own devices, however, Uruguay merely wastes all its
chances and destroys tlie possibility of progress. For
a few years it had a kind of feverish prosperity, owing
to the loans it raised, and to the inconsiderate en-
deavours of English capitalists to develop industries in
the country ; but these have all ended, and Uruguay
lurches towards a deeper anarchy than that from which
it for a moment emerged. We here in England under-
took, for example, to furnish Monte Video city willi
waterworks, and lost our money in tlie attempt ; we
built the repul^hc a railway or two, and can get no in-

THE lilVER PLATE, CIIIIJ, AND PEIIU. 245

terest for the money ; and then, to crown all, we kindly
lianded several millions sterling to the shifty unstable
government of the country, only to find ourselves
laughed at when there was no more to be had out of
us and pay-day came. The only terms on which we
could get motley out of Uruguay was by lending it
more. The Uruguayans do not see the good of labour-
ing to pay interest to the English merely for honour's
sake, and prefer to spend the money at home and enjoy
themselves. Of course this wealth, poured in from
without, had the usual stimulating effect on the
Uruguay trade, and in 1872 and 1873 its imports from
this country reached a total of nearly 2,000,000/.
annually, all kinds of produce included. Since then,
however, the inevitable consequences have followed ;
and although we still buy nearly as much there as ever,
or at least ship as much at Monte Video, we did not sell
in 1875 much more than half what we did formerly.
In 187G our purchases from Uruguay were worth just
about two-thirds of the entire value of the previous
years, and the exports thither, though larger than in
1875, were little more than half those of 1872 and 1873.
That they realised the figure they did was no doubt
due in some decree to the flict that the Government
and public works borrowed on have paid nobody. If the
real consumption of Uruguay were alone taken, it would
be found, I believe, that we do not in the best of times
export to that country a million's worth of goods a year.

246 THE EIVEll PLATE, CHILI, AND PERU.

but, as the returns from Monte Video include merchan-
dise intended for Buenos Ayres and up-river provinces,
it is not possible to give an exact estimate. Should,
however, the English settlers be compelled to leave the
country, and should the English companies and trade
institutions established there collapse, as seems probable,
our trade may almost die away altogether. Not but
that there is a certain amount of private wealth in the
country — every settlement containing civilised beings
has some wealth — but the social disorganisation is so
great, and the national and mercantile credit so utterly
rotten, that active business is fast becoming almost
an impossibility. Uruguay might compete successfully
with our Australian colonies in the supply of wool of a
superior kind, but, instead of that, gets hopelessly beaten.
A great trade might be done in prepared meats and in
i-aw or tanned hides, but nothing stable of the kind
can, under the present order of life, be hoped for. A
few years or months of peace, followed by a fresh
struggle by the military brigands for the spoils of office,
during which public works are destroyed and public
credit ruined — this is, in brief, the ever-repeated history
of this unhappy ' republic' The best thing that could
liappen to it perhaps would be its seizure by English
bondliolders, who might forcibly ' attach ' tlie land as
secui-ily i'oi- their del)ts, and drive out the wortliless
bpani.sli haU'-brceds and adventurers, colonising it with
sturdy Anglo-Saxon farmers. In tlie days of Elizabeth

THE RIVER PLATE, CHILI, AND RJ'RU. 247

or of James I. that j)lan miglit have been tried, but in
these times no one has pluck enough to make the
attempt. In all fairness to Urugua)% liowever, it
should be said tliat it has not been well dealt witli
either when under the mother-country or when in tlie
grasp of Brazil, and to some extent its present degra-
dation is, no doubt, due to the hardships and demoral-
ising troubles of its youth. The question is, whether
the present elements of which its population is com-
posed bode a better manhood. I doubt it. The people
have been trodden upon till they have degenerated
into weeds of humanity.

The Argentine Confederation, which lies on the
other side of the Uruguay Eiver and the La Plata
Estuary, and stretches northward by the side of
Paraguay to the borders of Bohvia and Brazil, and
westward to Chili, is in some respects in a worse
plight than Uruguay, and in others much better. High-
sounding as the name is, the republic itself is a very ill-
hung-together group of so-called provinces, not one of
which has any present good government, or, if we
except that of Buenos Ayres, any substantial realised
wealth. There are European settlers all over the
Riverine Provi nces it is true, and the territory between
the Uruguay a nd the Parana is admirably suited for
nearly every description of farming, so much so that it
has attracted not a few Englishmen. There are also
lands in the interior uf a \ery high qualit}-, whicli,

248 THE RIVER PLATE, CIIILT, AND PERU.

although deprived of water communication with the
east coast, might, if peopled and well governed, support
comfortable and even wealthy communities. In short,
nearly the whole of the eastern and central parts of the
republic, as well as a great proportion of Buenos Ayres,
and perhaps some of the land south in Entre Eios del
Sur, are well suited for the European colonist, and
might become the seat of a wealthy and highly civilised
nation. The area of the republic is nearly six times
that of the United Kingdom, and except in the centre,
nortli, and north-w^est the country is by no means
mountainous. On the contrary, it abounds in flat
])lains interspersed with grand forest regions that
resemble the prairie lands of North America, and
whose stock-feeding capacity probably excels that of
nuich of the Australian bush. Nearly all these
advantages have, however, been hitherto vitiated by
bad government and internecine strife. The Con-
federation has almost always been more a name than a
reality, mainly because the maritime province of Buenos
Ayres, which, as lying at the throat of the country, so
to say, and possessing much of the finest land in the
temperate region, was best peopled and richest of all
the settlements in the south, determined and still
determines to be supreme and to legislate in elTect for
all the rest. Buenos Ayres was the seat of the old
t^pnnish Viceroyalty, and that of itself gave the province
a sort oftradiiional su[)remacy, wliicli the people of the

THE RIVER PLATE, CIIILT, AND PERU. 249

inland regions liavc always sought to overthrow. So
lately as the last elections in 1874 there was an enieute
in Buenos Ayres because it was said tliat the new
President, Dr. Avellaneda, was not sufficiently a Buenos
Ayres man, lie being a native of Tucuman ; and disaffec-
tion at the ])rcscnt moment slumbers, waiting only for
the next favourable opportunity, while there are con-
timially some disturbances occurring inland.

We may say that the provincial jealousy of Buenos
Ayres is foolish ; that as the inland districts in a
measure depend on its port they shoidd be content to
let it rule ; but common sense has unfortunately as yet
little or no part in Spanish politics anywhere, least of
all perhaps in these misnamed republics of the south.
The Argentines are bent on aping the United States,
and must have their provincial legislatures by the
dozen whetlier they can afford them or not, each of
which goes its own way and defies the Central Govern-
ment when the whim takes it. Accepting the facts as
they stand, we find that the Argentine Confederation at
present practically makes no progress at all — in weahli
or in anything else, but that lately it has to all ap-
pearance been going backward. The Supreme Govern-
ment is too weak-kneed to be able to punish offences,
political or other, done in the provinces or sometimes
even at its own doors, and rebelHon is, therefore, at
times the most profitable trade a man can take to.
The more successful he is tlie more certain is his

250 THE RIVER PLATE, CHILI, AND PERU.

pardon and probable liis advent to power, and even if
lie fails he stands a fair chance of gaining much more
respect than if he had kept quiet. This weakness and
this rivahy between the sections of the Confederation
have of course the effect of quickening the strenuous
efforts at concentration made by the Buenos Ayres
Government. A crying want of the inland country is
railways, in order that they may sliare the markets of
the more favoured provinces ; and so railways have
been built in all directions often quite without regard
to the chances of their paying, chiefly to give the central
power greater facilities of control. One line was opened
in 1S7G as far as Tucuman, a province lying close
to the Indian territories of the north, and liable to be
overrun by them, therefore a province little inhabited
and incapable of furnishing trade to the line. The
population is less than four to the square mile, and of
that number more than half are of Indian origin.
There are magnificent tracts of land in it, and it is
well wooded and watered ; but except the small sugar
and distillery industries round Tucuman there is little
basis of trade, and what there is stands hable to be
destroyed in the next eruption. But it must have a
railway for all that, though the rails should rust
under one train a week. A railway would place it
in communication with the capital and render control
more easy.

If the Government can affoRl the expense, how-

THE RIVER PJ-ATE, CIIILT, AND PERU. 251

ever, the railway may do good, and in time con-
duce to a more secure and peacefid state of affairs.
But the ' if is just the question. Altogether the re-
public possesses about 1,000 miles of railway, built
for the most part by the National or Provincial Go-
vernments, and of this not more than one-sixth at the
present time can be said to yield an approach to a
satisfactory net return. The Central Government has
got itself into difficulties by the lavishness witli which
it has set itself to ' improve ' the country before there
was anything in it to base improvements upon, and at
the present time, as for nearly four years past, the
whole comiuunity has been struggling in the throes of
a national bankruptcy. Falling into ari'ears with its
payments, the National Government has been compelled
to adopt a number of questionable expedients with a
view to make ends meet and provide for the service of
the foreign debt, and under the pressure of these trade
has been almost paralysed. I know of no more
striking example of the effect of rash expenditure on a
coiuitry than that afforded by this ambitious but ill-
compacted State. So long as it could get the English
people to lend it money, either in the shape of national
and provincial k)ans or as private ventures, there was
quite a brilliant outburst of seeming prosperity.
Without any internal taxes to speak of being imposed,
tlie revenue rose to an unprecedented figure, and every-
body was, (o all appearance, making money fast.

252 THE RIVER PLATE, CHILI, AND PERU.

Directly the iullow of foreign money stopped, liowever,
tins process was reversed. Everj^body began somehow
to lose money, the national income dwindled, and with
the growing impecuuiosity of Government and people
lawlessness and crime got a new lease of life. This
temporary prosperity was found to be very costly,
and it has brought the republic to the verge of
an abyss over which I fear it must yet plunge. It is
not very easy to give accurate figures regarding Argen-
tine finance — there has been such an enormous amount
of unblusliing falsehood published about it — but the
latest figures are of the most ominous kind. Wlien
this essay first appeared I appended a note here giving
President Avellaneda's gloss of the situation ; but I
have since then received the public accounts of the
republic for the last financial year, and they prove that
Avellaneda did not tell the truth. He placed the
debt of the Confederation at 12,000,000/. or so, and it is
actually nearly 17,000,000/. exclusive of the excessive
issues of paper made to keep up the national credit. At
the present time the National Government appears to
owe some 500,000/. of floating debt in London under
vaiious heads, and it is at its wits' end for money. I
have therefore substituted for the original note an
analysis of the budget given in the ' Times.' ^

^ The subjoined is from the Times of August 18, 1877: — 'We have
before us the accounts of the Finance Minister for the past financial year,
and tliey give more striking testimony than ever to the distressed con-
dition into which a mad financial policy has broiiglit the country. They
also let us see something of the manner in which dividends, and, what

THE RIVER RLATE, CTIILI, AND TERU. 253

It must be remembered, too, that figures such as
these by no means represent all the debt of the Con-
are still more onerous, sinking funds, on the loans are provided. As there
are the us^ial attempts made by interested persons to mystify the public
on these points, we shall take the opportunity to state a few of the facts.
The basis of all is, of course, the revenue, and tliat for the past year was
1^13,583,633, neither more nor less ; all beyond this was, in some shape or
other, borrowing. The actual expenditure on administrative purposes was
as- follows : — Ministry of the Interior, $ 3,479,604 ; Foreign Affairs,
;J? 1 58,602 ; Justice and Instruction, ;^1 ,474,953; and War and Marine,
^7,378,930— making altogether ^^12,492,089, or within little more tlian a
miUiou dollars of the entire revenue. But the Ministry of Finance
required in addition ^9,660,959, mostly for the service of the funded
and floating debt ; so there was a deficit of ^^8,569,415 on the accounts
of the year, or more than the amount required for the entire debt service
by about ^2,000,000. These are plain figures which there is no getting
over, and this deficit has to be added to one of ,^9,877,645 brought from
the previous year ; so that altogether the floating debt at the end of the
last financial year was ;^18,447,060. This sum is juggled away by the
manner in which the various fiduciary note circulations are brought in as
sets-ofi' to floating debt ; but, apart from these fiduciary issues, these are
the facts, and even with these the official figures show, contrary to tlie
assertion of those who make it their business to uphold Argentine finance
regardless of facts, that the debt has considerably increased during the
year. According to the summary of the total debt of the Confederation
for the year ended March 31, 1876, the net total debt, funded and floating,
was ;^80,203,958 ; and at the end of last year, after deducting the amounts
of two issues of notes, one of which was for ^15,000,000 in provincial
currency, estimated as worth ,^600,000 in silver, and the other for
;gfl0,000,000 nominally metallic, both of which sums went in part to
meet Government obligations, the total debt was ^^84,01 3,129. But for
the amount of these notes actually issued it would have been nearly
^89,000,000 — a tolerably large rise in one year, especially wlien it is
remembered that heavy sinking funds are constantly in operation.

'Such being the simple oflicial facts as to the position of the Argentine
revenues and expenditure, we think it may be taken as proved that the
dividends and drawings on the debt have not been provided from revenue,
and the prospect of a further deficit is so decided this year that what lias
been true in the past is plainly true now. But how, then, have the
dividends been met ? Partly by borrowing in London on pledged stock,
and partly by tliese note issues in Buenos Ayres. We will take the
dividend paid last September as an example, because tlio accounts
relating tci it are given in the official report, all save one, wiiicli has been

254 THE rvn'ER plate, chili, and peru.

federation. One source of confusion in estimating
its total has been the separation of the Buenos Ajtcs
debt from that of tlie Confederation, because it is in
the nature of things only a fictitious separation. Since
Buenos Ayres reasserted its supremacy in General
Mitre's war in 1868, it has practically been the republic.
All the revenues worth mentioning are collected by it,
and it may be said to have complete control of the
Customs ; for although the two great rivers are
navigable far inland, there is really little river trade
independent of the capital, and the Customs House of
Buenos Ayres is therefore the main prop of the national

sent in too late for insertion. Of the money then due (^600,000 was
provided by the above-mentioned issue of ^15,000,000 notes of the
Province of Buenos Ayres, the currency of which is so depreciated by
successive issues of this kind that the doUai* note is worth now only some
three halfpence or twopence. The rest of the money was provided by
Messrs. Baring Brothers and Co. on the night before the dividend became
payable, apparently on the security of 1,000,000Z. unplaced stock of the
1871 loan which had been handed over to them some time before by the
loan contractors, Messrs. Mun-ieta. Many people remember to their cost
the anxiety, misery, and distress which the probable failure to meet this
dividend caused, and the accounts show both how it was provided and
how narrowly the republic escaped default. The last dividend paid was
met by the issue of metallic notes — i.e., notes supposed to be convertible
— by the Provincial Bank. An issue of 2,000,000/. nominal was author-
ised, but it was not all ref-[uired at that time. Should the deficit on the
current year prove to be anything like ^^7,000,000, however, all the
balance and more will be required to enable the Government to pay its
way ; and there can bo no doubt that it is now compelled to have recourse
to credit, as usual, and that the present dividend and drawing is no more
paid from revenue than the last, whether the Government paid the needful
money into the Provincial Banlc or not. Last year the Minister tells us
that he had recourse to temporary borrowings to the amount of ^^1 4,017,782,
which cost him ;^1,. 307,822, or nearly 10 per cent., and with a dwindling
revenue and an increased floating debt ho can scarcely be in less necessity

now.'

THE mVER TLATE, CIIILT, AND TEKU. 255

finances. Apart from that, Buenos A5Tes is the sole
substantial part of the repubhc, and contains more than
a fourth of the entire population — by far the most
industrious and wealthy fourth. In Buenos Ayres
city and province there have been large numbers of
Enghsh settlers and merchants, and many of them
remain still, with the Germans, quite the most solid
part of the population. There are also Italians and
French, in greater or less number, all contributing to
make Buenos Ayres more important than the whole of
the rest of the republic put together. The provinces
of Santa Fe, Entr6 Eios, Tucuman, and Corrientes,
whose joint population nearly equals that of Buenos
Ayres, have no revenue to speak of, and perhaps would
not pay it to the National Government if they had.
Two of these have also their own foreign debts, and
these ought to be added to the Confederation debt and
included in the total. Now including the blown-out
obligations of the poverty-stricken Buenos Ayi'es city
itself, the debt of these provinces in Europe alone at
present amounts to about 5,500,000/., bringing the total
direct interest-bearing debt of the republic up to over
22,000,000/. The average rate paid on this debt is
probably not less than 12 per cent., perliaps more
including the sinking fund charges, which are in
themselves now of monstrous amount compared wilh
the results which the country gets from the money.
By means of the cumulative system which makes all

256 THE RIVER PLATE, CHILI, AND RERU.

these loans merely tcrminal)le annuities for the holder,
the capital coming back in an ever-increasing ratio as
the amount needed for interest dwindles, the sinkinof
fund charges on these loans now almost equal the
charge for interest. Time was when the suspension of
this foolish drain of capital might have saved the
republic from default, but I fear that time has gone by.
The houses involved in these loan operations have pre-
ferred to keep up a show of complete solvency when
the reality was not, and the rickety fabric they
have laboured to build will now probably tumble
altogether about their ears. For the funded debt of
republic and provinces is by no means the entire financial
burden ; as will be seen from the extract from the
' Times,' the currency paper is swollen most recklessly,
and the Buenos Ayres paper dollar is now not worth
twopence. The so-called hard dollar currency is fast
following in its wake, and it is no exaggeration to
say that under the accumulated weight the republic
staggers towards financial ruin.

Treating the debt of the republic as a whole,
whether called national, provincial, or guaranteed, we
find that there is a total interest-bearing debt of about
25,000,000/. borne by less than 2,000,000 of people, of
whom a large portion are either Indians or half-breeds.
This includes the railway guarantees the exact amount
of which I have not been able to ascertain, but which I
have taken to represent about 2,000,000/. of capital.
The borrowing of this money in one shape or other has

THE UIVI':R plate, chili, and PERU. 257

led tlie whole country astray ; and were it not so rieli,
so liiglily favoured by nature, one would say at once
that there must come, on the heels of the recoil,
collapse and national disruption. Since 1873 trade
has, indeed, fallen olT, especially import trade, to an
enormous extent. The Government has had to borrow
secretly in London to sustain its credit and to issue
paper-money at home, till trade has become a gamble,
and at the same time lawlessness has spread in the inte-
rior till the settlers are fleeing for their lives. Nothing
could well betoken more obviously decay and dissolu-
tion than the accounts which fill even the Government
papers of the crimes of robbery, murder, and ra})ine
committed, apparently, with impunity in the inland
regions, where with so much assiduity the authorities
have laboured to plant ' colonies ' after the manner of
Brazil. These colonies were in themselves good, and
had, probably, a much better chance of success in
many parts of the Confederation than in Brazil, owing
to the two magnificent navigable rivers ; but in some
regions they are almost threatened with dissolution, if
they be not altogether broken up.^ With this, the

^ I had collected a number of extracts from the Argentine papers
illustrating: the dangerous condition of tlie rural settlements, Tiut find that
thev would be both too horrible in detail and too long for embodiment in
tliis chapter. Instead of the details, I confine myself to the following
extracts from the Buenos Ayres Standard, a paper which cannot be accused
of painting the affairs of the republic in lights unfavourable for the
Government : — 'The state of the camp is now such that it is unsafe to
go alone in broad daylight. Armed gangs of ruffians, well known to the
public, hover about the enviions of the small towns, to follow the single

V(»b. If. S

258 THE RIVER PLATE, CHILI, AND I'ERU.

normal state of affairs, revenues are of course ruinously
aflected, and every year shows a yawning deficit, which
the Government has no means of making up except by
the printing press. Dependent for gold on the customs
receipts, and unable to pay the foreign debt charges
without gold, a heavy tariff has been imposed on both
imports and exports, part of which is exacted in coin,
with the result that the imports have dwindled to half
tlieir amount in the years of inflation, and the total
revenue of the Confederation is not now much more
than half what is required. Confusion and embarrass-
ment haunt all departments of the administration
and of trade for want of means, and by reason of the
absurd restrictions imposed. The Government now
actually levies a 10 per cent, export duty on several
staples of export, with which it has to compete closely
with several other countries in the markets of the world.
In tlie midst of these most severe financial pressures
the deputies of the Argentine congress vote themselves
increased salaries.

At the same time it would be unfair to hide the fact
that the Confederation has made some progress in
material resources during the past generation, or to

traveller. Tliey are splendidly mounted, and laugh at the authorities ;
it is therefore as much as a man's life is worth to travel alone.' ' On all
sides we hear people complaining of tlie awful increase of crime, both in
town and camp, which is causing such alarm among peaceable Europeans
that many are thinlnng seriously of leaving the country. It seems a
similar plague of blood afUicted Buenos Ayres from 1828 to 1833, until
checked by a strong hand.'

THE RIVER PLATE, CHILI, AND PERU. 259

deny that this progress gives ground for hope that the
future may yet see something of the dreamed-of pros-
perity. Discarding the ilhisory inferences to be drawn
from revenue and imports in tlie past few years, both
bolstered by borrowed money, a very brief statement
of the growtli of its export trade and its character will
prove tliat all has not been waste labour or money.
The export trade rose from 4,240,000/. in 18G0 to
8,200,000/. in 1870, and to over 9,000,000/. in 1873.
In 1875 the figures were still higher, reaching about
11,000,000/., in spite of the stagnant condition of trade
nearly all over the world. In 1876 there was, it is
true, a considerable ftdling off; but there can be no
doubt that, in spite of such backwardness, very sub-
stantial progress has been made, proving the great
capacity of the country. Its Hocks and herds bear
witness in the same direction. The numbers of sheep
in the republic must be greatly exaggerated at
80,000,000,^ and they are, whatever their number, of
very inferior quality ; but that the farmers and cattle
graziers of Buenos Ayres possess enormous wealth in
this direction is beyond question. The Confederation
is hence a rival to AustraUa in the supply of wool, and
competes with our colonies with some success for the
Continental demand. The ox hides of the Confedera-
tion are also very valuable staples of trade, for which it
linds a growing demand ; and it is not improbable

' Miilhall's Handbook of the River I'hifc ItvjnihUcs.

s 2

2 GO THE rJVER tlate, chili, and peru.

tliat tlie present war in the East may temporarily divert
still more of that trade to the Eiver Plate. Efforts are
also being made to iitihse tlie meat supply for the
European markets ; and should they be successful, the
Confederation will have every ground to hope for an
accession of wealth in that direction. At present al-
most the sole use that can be made of its superabund-
ant meat supply — the republic is said to have witliin it
from fourteen to fifteen niilhon horned cattle of a kind
— is to convert it into jerked beef, or to reduce it to
the substance known as ' Liebig's Extract.' As yet,
however, the export trade of the country rests on a very
narrow basis, and the swollen figures of the last few years
may represent exhaustion as much as progress. The
country has had to strain and to sell all it could get
tof^ether to meet the calls of the usurers into whose
grasp it has let itself fall. With all this growth, there-
fore, the republic can hardly be said to have any land
under cultivation, as we understand the term ; tliough,
undeniably, progress has been made by the farmers of
Buenos Ayres, and all that is wanted is good, econo-
mical, and secure government to enable it, after the
storm, to surmount all difficulties. These wants are,
however, very large indeed wlien a Spanish colony is
in consideration, and at the present we can only hope
doubtfully. The National Government is affected with
the weakness of impecuniosity, and knows not which
way to turn in order to rej)air the gaps in a crumbling

THE raVER PLATE, CHILI, AND PERU. 261

revenue. We might suy that the high customs tariff
ouglit to be reduced, and tluit a land tax should be im-
posed, seeing that the provinces now reap what bene-
fit there is derivable from its rule ; but these remedies
are hardly possible in the United States, and in the
Argentine Confederation may not be dreamt of. The
customs revenue is about the only thing on which the
national executive can depend, just because it is the
only kind of revenue which it has strength enough to
collect with reasonable completeness, and the country is
now so mortgaged that it may be doubted whether a
reduced tariff would for some time add much to the
revenue from this source. Be that as it may, Argen-
tines are not in the mood to be convinced that it would
be good to reduce the tariff now. On tlie contrary,
the present high tariff is triumphantly cited as a means
of reducing the imports, which have in 1876, ' for the
first time this century ' a newspaper says, been brought
lower than the exports. As there is next to no gold
in the country, this reduction must continue, and go
further, if means are to be found to pay the foreign
debt charges, towards which the proceeds of the larger
exports must go. Hence the high tariff, both import
and ex])oit, but es[)ecially import, finds nuidi favour-
It is like cutting a man's throat to prevent him from
choking, perhaps ; but desperate diseases need despe-
rate remedies, and the Confederation must be allowed
to nuiddle its affairs as it best can. In the meantime,

2G2 THE RIVER PLATE, CHILI, AND PERU.

whether national bankruptcy supervenes immediately
or not, it is certainly not a place to which Englishmen
should emigrate. They stand a good chance of losing
their money if they do, and perhaps their lives also.
Every mail brings accounts of outrages perpetrated on
the peaceful settlers ; and the zone of anarchy is, it
would seem, a widening one, as is to be expected when
the Government is weak-kneed, childishly extravagant,
and incapable.

Xor can we expect to do a larger trade with the
Confederation in the immediate future than in the
past. Not only are the anarchy, the poverty, and the
tariff against us, but the trade connections of the re-
pubhc appear in any case to be drifting partially away
from us to the Continent. France, Italy, Belgium, and
Germany are all coming forward ; and this competition,
combined with tlie other causes I have named, reduced
our exports to the Pdver Plate in 1875 to little more
than half what they were in 1872, and reduced those
of 1876 to only some two thirds of 1875. Our im-
ports thence have only once exceeded 2,000,000/., and
appear to stagnate at about 1,500,000/.^ This is, of

' Our principal trade willi the Confederation consists in the import
of hides, wool, sldns, and tallow, and the export of cotton and woollen
goods, and metal-works, hardwares, &c. As regards our imports, the
values of the tallow shipped 1o British ports fluctuate considerably, but on
the wliole are preltj' well maintained, ailbrdiug rather an evidei.ce of tlie
extreme variability, of the trade capacity of raw undeveloped countries
than a sign that we buy less from the republic. The same maybe said of
skins and furs, which ran from 750,000/. worth in 187.3 down to 39l»,000/.
worth in 1874, and up again to 62-3,000/. worth last year. Hides, bones,

THE RIVER PLATE, CHILI, AND I'ERU. 263

course, matter for regret, but until Englishmen can
venture to settle in that country as they would in the
United States, we can hardly expect it to be otherwise.
This I doubt whether they will ever do ; race antagon-
isms, creed antagonisms, and a climate only in parts
favoiu-able to the propagation of northern Europeans,
all tell against wide-spread settlement by people from
this country. We must therefore be content to do but
a limited part of the trade of the Confederation, and
may for some years see that trade dwindle to figures
much within even those now rulino;. The Ari^entines
Avill, indeed, buy as much from us as we please, if we
will lend them the money to pay their purchases with ;
but since we have ceased doing that, they are cither
not buying at all, or inclining to carry their custom
elsewhere ; our possessing the bulk of the carrying
power alone giving us any great foothold in the country.

and so forth, show the same movements. As regards exports, however,
the tendency of values is steadily downwards. Cotton goods have sunk
in value from 1,300,000/. in 1872 to 556,000/. in 187G; hardwares have
dwindled from 202,000/. to 54,000/. ; linen and jute manufactures almost
as much ; and metals, wrought and unwrought iron, were much less last
year than in 187-4, the highest year, the figures being for 1874, 883,000/.,
for last year, .325,000/., the lowest figmvs since the inflation began. It is
just the same with woollen goods, wliich have sunk without intermission
in five years from 474,000/. to 150,000/. These serious diminutions ai'e
of course reflected in the smaller articles of trade, sucli as leather goods,
machinery, glass, and earthenware, haberdasliery, and tlio like, and must
be atiril)uted more to the growing jiovert}' of the republic and tlic bad
tarili' tlian to the success of other nations in competition with us. It is
in buying and carrying the exports of the republic that these are beating
tho I'higlish importer and shipowner, ratlier than in supplanting us as sellers.
AVitb the further advance in tlie tariiVmnde in the end of 1877 we may look
for a still greater contraction in tlie trade.

264 THE RIVER PLATE, CHILI, AND PERU.

Altogether the picture wliich this republic presents is a
curiously chequered one, and we can only say that in
its government it is unfortunately as yet thoroughly
Spanish, while the best elements in its material pros-
]^erity are not Spanisli. The struggle between the
elements of corruption and decay, and those of progress
and order, is not yet half over ; and what the end will
be no one can predict. For myself, I look for further
strife and attempts at disruption, or at the very least
for a iinancial overturn sure to come when some of
the banks and financial houses now neck and cars in-
volved in Argentine affairs give way, if not before ;
and that being so, I say, ' Avoid the land.'

Passing westward to Chili, we at once enter a
territory where this struggle of opposing forces may be
said to have ended on the whole in the triumph of the
best elements, which at the time of its hard battles for
freedom helped to form the interesting and singularly-
placed little community. As everyone knows, Cliili is
a long narrow strip of territory cooped up between the
Andes and the Pacific Ocean. It has a coast-line of
about 2,000 miles, and its greatest breadth does not much
exceed 120. Much of this long fringe is qidte unfit
for cultivation, owing to the manner in which it is cut
up and intersected by spurs of the mountains, which
run down to the shore ; but there is also a dcnl of
it very fertile, and the warmer nortliern and midland

THE laVEIi PLATE, CHILI, AND I'EliU. 205

parts abound in mineral*. Everywhere, moreover,
there is easy access to the coast, so that water com-
munication is extremely abundant, and the Chilians
suflfer little pciious inconvenience eitlier from the ex-
treme leniith of their country or from its being cut in
two by the little semi- independent Indian State of
Araucania — the only aboriginal community left on all
the American continent that has any pretensions to be
a State. Though thus shut in to itself and the trackless
ocean, as it were, Cliili has been a fairly prosperous
country, as well as a singularly peaceful one, and to-
day unquestionably enjoys the most settled Government
of any offshoot of Spain. This may be due in part
to the neglect with which Spain treated it while she
had it, but more ])crhaps to the mixed character of the
inhabitants, and the facility with which any part of the
country can be reached by sea from the seat of Govern-
ment. This in itself makes successful insurrection
nearly an impossibility.

The trade relations of Chili have always since her
independence been ver}^ intimate with England, and
her population contains a large admixture of English
or English-descended people. The gallant efforts
which Lord Cochrane made to free the country from
Spain, and the heroism he displayed, have given the
English name a prestige in Chili wi)ich it has never yet
lost. That being so, her trade })rospects and ca])a-
cities have a peculiar interest for us, and I am happy

266 THE RIVErv PLATE, CHILI, AND PERU.

in being able to direct the reader to a recent official
publication, which contains an elaborate and most
valuable account of tlie country.^ I can do little more
here than summarise the conclusions of this report, if
indeed I have space left efficiently to do that.

Chili being a country at peace with itself, we need
not concern ourselves with its Government, except when
the acts and policy of that Government touch the
springs of trade. And on this head there is on the
whole not much ground for complaint. The debt of
the republic is only about 10,300,000/., involving an
annual charge of some 85. per head, and the Govern-
ment is not very extravagant in its pursuit of develop-
ment projects. More than three-fourths of the debt is
due to railways, of which the State has about 400 miles
in operation, and most of the rest .is due to the last
struggle w^itli Speiin, so that the country is not over-
driven. It does not indeed require to be in this
particular direction, having such easy communication
with the coast. What difficulties Chili has, therefore,
are not due in the first instance to its debt. Yet the
country can never be said to have established a sound
and permanent trade in any staple, except its copper,
and in that also it is now experiencing and has for
years experienced a keen competition from Spain and
Australia, which has seriously impaired its supremacy,

^ - Pi^port by Mr. Rurabold on the ' Progress and General Condition of
Cliili' (Einbass;/ Reports, part iii. 1870).

THE TUVEIl PLATE, CHILI, AND PERU. 207

and is in tliese dull times so reducing prices as to make
the entire trade un] )rolitable. The rise of the American
settlement in California and of the English colonies In
Australasia, gave misleading spurts to the trade ot
Chili in another direction which have not been main-
tained. Its old customers have become its successful
rivals in corn-growing, and Chih is finding itself almost
beaten in the supply of an article which many of its
fertile valleys are peculiarly fitted to })roduce. The
same instability which has marked the course of
Brazilian trade also marks that of Chili, which requkes
a large population in its own neighbourhood to become
in reality, what some have named it, the England of
the Pacific. We find, however, that there is a certain
progress, although marked by many severe fluctua-
tions and return waves, and, as a rule, the exports of
the country have exceeded the imports in a whole-
some decree. Chili has succeeded in widenino; the
range of her trade in the midst of her very defeats,
and can now export, not merely corn and coffee, but
also cattle, horses, timber, wool, and hides in moderate
amount. According to a table given by IVIr. Eumbold,^
the proportion of the total exports which now falls to
agricultural products is 43"G0 per cent., that of mines
451 7. There could b(^ no more satisfactory sign than
this advance in the agricultural prosperity of the
country. Mr. rdunbold indeed points out that the

' Report already cited, p. 373.

2GS THE rJVEI^ TLATE, CHILI, AND TERU.

balance of trade has been against Chili of late years,
and this is no doubt a danojer which must not be lost
sight of; but, should no fresh stimulus be given to the
import trade by fresh borrowings abroad, it is a danger
that must soon right itself. The difficulty of obtaining
a market for the produce of the country for a year or
two should itself tend to check • the over-luxurious
habits of the Chilian upper classes and compel a whole-
some retrenchment. This, of course, means a diminished
import of foreign goods, and that is a consequence
which we shall have probably to look for during the
next few years. The Franco-German war gave the
last brief period of feverish activity to the Chilian trade
in cereals, the effects of which on the spendthrift
luxurious class have hardly yet passed away. Tliat
Chili will altogether lose by the present stagnation
what she has gained as an agricultural nation I do not
for a moment believe. Slie has the task of supplying
Peru, at all events, on her hands, and partially
furnishes Bolivia and the Argentine Confederation with
bread ; for in what I consider real agricultural develop-
ment she is ahead, not of these only but of every
other State in South America. The commonplace
business of growing corn is, after all, a liigher occupa-
tion than drivuig cattle over boundless plains ; and an
unsettled country, which grazes cattle but does not till
tlie soil, is a far way from solid comfort and established
wealth. Owing partly to their increased poverty, how-

THE rjVEK TLATK, CHILI, AM) I'EKU. 2G9

ever, tlie Argentines are not sucli free buj^ers of Chilian
corn now astliey were a few years ago, and ^vere peace
assured witliin tlieir borders tliey niiglit soon tlicm-
selves turn exporters. Overpowered in the markets of
Europe, Austraha, and Soutli America tliougli Cliih
may be, slie is still able, liowever, to send her corn to all
markets, and to sell it in all at a price, and that of itself
is an innnense gain.

The least satisfactory feature which I find in the
country is the peculiar manner in which the farmer is
liampered. Land is ap})arently held on a tenure quite
as bad as our own, and the country is affected with the
absenteeism inseparable from the possession of huge
estates. Leases where they prevail are short also, and
little incentive is therefore given to improvement, so
that the tendency is rather to exhaust the soil. There
have been many improvements made in the Civil Code
of late, however, and perhaps the day of a revised
tenure of land is not far off.^

* The condition of the Chilian peasantry would appear to be very
ahject. A portion of them are settled on the land attached to the lar-ife
farms, and may, in some cases, enjoy a 'rudimentary state of comfort and
civilisation,' but larjre numbers are miserable prolet^iires, who have no
fixed abode or regular family ties. These wander from place to place
where work may be had, or, like the Irish peasantry, leave their native
land altogether, and find work elsewhere. Many have gone to Peru to
work on the railways. Clearly a class of people such as this affords no
basis on which to build up a soundly prosperous State, and before Chili
can attain to substantial greatness, commercial and political, the numbers
of the settled small cultivators must be greatly increased. The state of
the rural economy of the country at present will be best seen from the
foUowiu"- table, which has been compiled by Mr. Kumbold from olhcial

270

THE EIVER PLATE, CHILI, AND PERU.

Considerable results may not unlikely flow from the
extensive silver mines lately discovered in the nortli.
Till the mines of La Florida were opened up Chili was
almost without precious metals ; but the annual out-
put of silver is now considerable, and will at least
lielp to make good the probable decrease, not to say
absolute cessation, in the out-put from the copper
mines of Atacama and elsewhere. The trade of Chili
must, however, be dependent in the future on its
agriculture more than on its mineral wealth, even sup-
posing it possessed large deposits of gold ; and every-

statistics, and from whose report the above particulars are taken. The
fiu-ures relate to five of the most productive provinces : —

Kame of Province

T.jtal
Numter of
Projxjrties

Total Area' Number of
of Provincej Haciendas'

Aggregate Area of
Haciendas

Cuadras^

Cuadras"

Conccpcioii

087

217,740

136,362

Linares

205

232.831

134,370

Nuble

3,869

252.667

216

169,978

Curico

498

197,154

158

127,899

De lartment of Talca

656

258,448

101

131,730

(The returns fur tlie

whole [)r<jvince of

the same nnmo are

incomplete.)

Acoucagua .

1,462

562,85 1

Theareaofthehacien-

das i.s not gi ven; Init
some of the largest
and finest estates in
Chili are situated iu

this province.

' Large estates.

^ A little over three acres.

This is a most unhealthy state of afl'airs in a young country, and accounts
for the fact that, althougii a new country. Chili enjoys the privilege of
sending' no small proportion of her .scanty population to help to people
other lands. ^L•. llumbold says that 7o,00U, out of a total population of
about 2,400,(XX), arc at present supposed to be away from their native
land.

THE RIVER PLATE, CHILI, AND PERU. 271

thing wliich tends to stimulate the people to efTorts at
higher cultivation, and tliat induces a widening in the
range of crops produced, must be regarded as of the
utmost importance to the country. There should be no
restriction on exports in the shape of either customs'
duties or vexatious port dues, and every encouragement
ought to be given to the peasantry to settle down to
the cultivation of the soil. Government expenditure
ought to be reduced as far as possible within limits
easily bearable, and every encouragement given to the
breaking up of swollen estates or to the granting of
loni^ leases.

At present there is a tax on all leases of more than
ten years, amounting to 4 per cent, on the rental,
and this acts as a practical prohibition of any but
short-term holdings. Nine years and eleven months is
therefore the common term, and that does not induce
capitalists to occupy or to spend money upon the land.
This tax should be removed, and free opportunity given
to those who have means either to lease the land or
buy it. The latter step would be the preferable, and
it seems that a certain pressure is now being put on the
enormous estates, through the operation of the agri-
cultural tax, which falls heavily on large properties
wdiile exempting small, and by the law wdiich compels
an equal subdivision of property bctwt'cn children.
The Government, on the other hand, cannot be alto-
iretlier exonerated from the charge of extravagance

272 THE I^IVER rL.\TE, CIKLI, AND TERU.

and tlie recent animal deficits ^vllicll threaten to Ijecome
chronic ou^lit not to be allowed to exist, if tlie nation
is to maintain its pre-eminent position in South
America.

The deficit in the budget for 1874 was as much as
1,3G9,000/. — a very large sum on a total expenditure,
ordinary and extraordmary, of 4,502,000/. For 1875
the estimates were nearly as unfavourable ; the budget
showing again a deficit of more than 1,000,000/. No
doubt this is, like our Indian deficits, a result to be
chiefly ascribed to the prosecution of public works, and
may so far be justified ; but it is not all so, and Chili
ouo-ht not to indulize in heavy outlavs on such works
while her ordinary budget cannot show a favourable
balance. Moreover these estimates and amounts, as
well as those for 187 G, are to all appearance the most
favourable that can be made. In Chili, as in Spain,
finance miListers like, it seems, to make a fair show in
their anticipatory statements, which tlie stern facts at
the year's end belie. Accordingly all recent years have
shown an actual deficit beyond the estimates in the
ordinal y revenue, while the expenditure has always been
swollen by supplementary credits. Tiiat this should be
so is a grave circumstance, and the country cannot be
considered free from financial danger till these over-
drafts and irregularities are at an end. If they cannot
be put an end to, the country will in time go the w^ay
of its neighbours

THE EWER PLATE, CHILI, AND PERU. 273

One significant fact may be pointed out in this con-
nection as throwing light on the public capacities of the
Argentine Confederation to bear its burdens. Chili has
a larger population than the Confederation and a much
smaller debt, it has rich mines and splendid agricultural
resources, peace has ruled within its borders for a
generation, and it has had special windfalls of trade, yet
apparently it cannot make ends meet. How much less
its neighbour and rival, whose country is untilled,
whose inhabitants are preyed on by Indians and escaped
thieves, and whose ambition is beyond measure more
costly !

The trade of England with Chili may not increase
much in the next few years, it may even decrease ; but
what of it there is may be looked upon as sound, and
we have little cause to fear home-grown competition
there. As in other parts of the world, there is a high
tariff against the English merchant, some 25 per cent.
ad valorem on the average, and that will no doubt tell
very severely should prosperity cease to shine upon
Chilian efforts at development ; but it is not unlikely
that the worst force of this has been spent already, and
at all events the tariffdoes not bolster rickety industries
at home. The trade of the last three years has been
contracting, and we may hope that, tariff or no tariff,
the hmits of this contraction have been nearly reached.
If they have not, Chili will suffer by the dechne much
more than England, for the aggregate trade between

VOL. n. T

274 THE RIVER TLATE, CHILI, AND TERU.

the countries, though only 8,000,000^. or so at the best
and reduced last year to but 5,500,000/., is all-important
to Chili. I cannot do better than quote Mr. Eumbold
on this point : —

The trade between Great Britain and this country is on a
sound basis. The imports and exports nearly exactly bal-
anced themselves up to the year 1855. The exports then
took the lead by one-third, and in 1861 rose to double the
imports. They have not ceased since then to exceed the
imports, and last year did so to the amount of 1,000,000Z.
sterling. But not only is the Chilian trade with England on
a sound basis, it may be said to exhibit peculiarly healthy
features. Chili sends us seven-eighths of her bar copper (in
1874 7,063,710 dollars' worth of copper bars out of a small
total value of 8,143,661 dollars), and almost all the rest of
her mineral produce. She further ships to the United
Kingdom nearly three-quarters of her surplus agricultural
produce. On the other hand she takes from us over fifty
kinds of raw and manufactured articles, most of which are of
first necessity, and, whether worked up or consumed in the
country, largely contribute to its general wealth and well-
being.

The only remark I would make as to this pleasing
summary is about copper. The price of that article
has fallen in the last four years 40 to 50 per cent.,
and I doubt whether it can be now mined and exported
by Chili save at a loss. At all events the stocks of
Cliilian copper in both England and France have been
accumidating lately for want of a market, and a crisis
in the copper trade generally appears to be approaching.
I^erhaps the loss on this head wliich Chili will have to

THE PJVER TLATE, CmLT, AND VEJIJJ. 275

sufTer may be made up for the time being by a larger
demand for her cereals — wheat, maize, and oats. Our
exports to Chili have, of course, fallen off like those
of other countries, compared with the inflated years,
especially woollen exports.

Mr. Eumbold's summing up of the general position
of Chili seems to me also so exceedingly good that I
willingly substitute his words for mine in taking leave
of this part of my subject : —

The hlessings which Chili enjoys she owes to the pure
traditions implanted in her administration by the founders of
the republic ; to the preponderating share taken in pubHc
affairs by the higher and wealthier class ; to the hapjiy
eradication of militarism ; to the sedulous cultivation of
innate conservative instincts ; to the nearly entire absence
of those accidental sources of wealth so lavishly bestowed by
Providence on some of her neighbours ; to the consequent
necessity of strenuous labour rapidly repaid by a bountiful
soil ; to the patient endurance and capacity for toil of her
hardy population — above all. perhaps, to the neglect of her
former masters, which, when she had cast off the yoke, drove
her to create everything for herself, and called forth excep-
tional energies in the nation. Most of these may be summed
up in two words : work and shrewd sense {trabajo i cordura).
It must, of course, not be forgotten that she is indebted for
much to a climate as nearly perfect as any to be met with
on the globe ; to a smiling sky, beneath which everything
thrives ; to the grand mountains which not only have con-
tributed to her wealth by an abundant supply of the baser
but more useful metals, but in the critical period of her
infancy guarded and isolated her from too immediate a
contact with the troublous communities around her. Not a
little, finally, she owes — and slumld not forget tliat she owes

T -2

27G TIFE rJYEIl PLATE, CimJ, AXD TERU.

■ — to foreign, mostly English, energy and assistance ; to the
strangers wlio have fought for her, taught her children, built
her railways, and traded to her ports, and to the not incon-
siderable admixture of foreign blood that leavens her popula-
tion. The Cliilian people have now attained a remarkable
degree of prosperity ; but, if friendly criticism may be per-
mitted to one who sincerely wishes them well, they have lately
shown some signs of the intoxicating effects of good fortune.
Though partly at present under the sobering influence of a
commercial crisis, which is likely to be protracted longer
than is now apprehended, they are still inclined to go some-
what too fast. They have certainly withdrawn very much from
excessive speculation, but they are still bent (the Grovern-
ment and upper classes in this giving the example) rather
on decorating and beautifying their house than on setting
it in more perfect order. A first visit to the City of Santiago
cannot but be matter of agreeable surprise to an intelligent
European, but after a more lengthened stay the ambitious
growth and luxury of the town will probably seem to him
out of due proportion with the power and resources of the
country of which it is the capital. One is, indeed, scarcely
prepared to find ninety miles inland, at the foot of the Andes,
a city of some 160,000 inhabitants, with such handsome
public buildings, stately dwelling-houses, and exceptionally
fine promenades. What, perhaps, strikes the stranger most
— next to the marvellously beautiful situation of the town
— is the atmosphere of aristocratic ease and exclusiveness
pervading it. Unfortunately it is an absorbing place, draw-
ing to itself too much of the wealth of the country. The
dream of the provincial Chileno is to make enough money to
build or buy a house in Santiago, and there live at ease. It
has thus become an idle, expensive, and, so to express it, an
artificial capital of a busy, thrifty country. It is also a place
of ugly contrasts, for cheek- by-jowl with palatial structures
the most dismal hovels are to be seen there, poverty flaunting
its rags at every step in the broad sunshine, instead of being

THE RIVEK PLATE, CHILI, AND PERU. 277

relegated to remoter suburbs as in European great cities. It
is termed by its inliabitants ' the Paris of South America,'
but is more like slices of Paris dropped down liere and there
in the midst of a huge, straggling Indian village.

Only two republics now remain to be dealt with —
Bolivia and Peru. Regarding the former there is little
to be added to the general observations made in the
previous chapter, for Bolivia is a coimtry till recently
nearly shut out from the rest of the world — a country,
as one of its friends has assured me, that has been
' fearfully wronged.' Its outlet towards the sea is a
sandy waste, and its chances of foreign trade, though
much improved by a railway to the coast, are still small
unless it can get the free use of the Amazon and the La
Plata rivers, or find better accommodation through Peru.
Containing within its area a population perhaps as large
as that of the Argentine Republic, and endowed witli
enormous mineral deposits, amongst the rest its famous
silver mines of Potosi, and large regions of magnifi-
cent agricultural land, Bolivia is yet one of the most
insignificant States in South America — a country go-
verned by the priests and the swash-buckler adventurers
who are accustomed to carve a way to the Presidential
chair with their swords. Altliough material improve-
ments have been made lately therefore — roads built to
many parts of the republic, and a certain degree of
order maintained — we cannot speak with great cou-
dence of the future of lhi> State. However inex-

278 THE RIVER PLATE, CHILI, A^'l) PEllU.

htuistible the ininenil wealth of tlie country may be, its
gain tlierefrom is and has been small, because this
wealth passes into the possession of the few who have
been too ready always to retire to Europe to spend it,
while the mass of the population grovel in abject
poverty. The revenues of the State are under
600,000/., and there are the usual deficits which weak
and cxtravac^ant Governments cannot exist without
creating. The total direct trade of Bolivia with this
country is a little more than half a million a year, of
which our exports thither did not, up to 1875, repre-
sent as much as 100,000/. In the last two years the
figures show some improvement, reaching nearly
223,000/. in 187G, and so far this may be taken as a
good sign. Yet, and granting that a certain amount of
merchandise finds its way into the republic by way
of Peru or Chili, of which we cannot give an estimate,
the trade of Bolivia with England is at the best small.
So insignificant a result, even supposing these totals in
fact doubled, with a wealth of natural resources so ex-
cellent and varied, tells its own story. There is little
to hope for from Bolivia for some time to come. The
day may come, however, when Bolivia will emerge from
its darkness, and when by way of the Amazon or through
Chili or Peru, if not by its own sohtary port at Cubija,
intercourse with England will be greatly extended ; for
the possibilities of the country are very great At present
the people arc too acutely poor to be good customers ;

THE inVER PLATE, CHILI, AND PEKU. 270

but tills may change iu time, althougli the possibiUty
is too remote to be much dwelt upon. All we can do
is to aid the advent of the better day by all the means
in our power short of abetting the Government in ex-
travagance.

We must now direct our attention to Peru — the
land of Pizarro, the country of the Incas, those wise
despots whose empire seems a fabidous dream when
placed side by side with the picture which the unhappy
country presents to-day. There is indeed no portion
of the Spanish possessions in America which presents
so miserable a spectacle as this fragment of the ancient
dominion of the ' children of the sun.' From beimr a
fertile, thickly-peopled region stored with all riches, it
has become ' a howling desert.' Instead of good
orderly government we have often the most lawless
brifrandaire — at best bri2;audacfe orcranised — and the
only developments to Avhich this brigandage has
treated the much -abused country have been debt and
jobbery. No longer able to work the valuable silver
deposits which Peru contains, the enterprising officials
worked guano instead, and borrowed on it, and so got
credit at home and abroad to the fabulous extent of
nearly 40,000,000/. nominal.^ From first to last tliis

* The go-ahead recklessness of the rulers of Peru cannot be better
illustrated than by comparing its financial position with tliat of the
Argentine Confederation. The interest-bearing debt of the latter is
roughly little more than half the amount per head of Peru ; yet Peru,
with a popuhvtion of at loast a million mm-o than the Confederation, lias
a total foreign trade which barely equals the Argentine exports. Nearly

280 THE RIVER PLATE, CHILI, AND RERU.

new source of gain has probably poured from
70,000,000^. to 80,000,000/. into Peru in one sliape or
other, enriching tlie adventurers wlio ruled it, and the
innumerable satellites of the contractors — loan-mongers
and the multifarious linancial leeches who delight in
such countries. All this money has gone in two ways :
to enrich the governing classes and enable them to
despise honest labour or anything honest or honourable
on the face of the earth, and to fill the pockets of
financial schemers. If there be a third use to which it
has been put, we find it as a corollary to the first —
the ruling cliques being able to buy useless ironclads
and to surround themselves with soldiers out of the
foreign money. Here, in short, we have a country
which by a little wise handling might have been one
of the richest in South America, which at one time
mined large amounts of silver and gold, which latterly
quarried millions of tons of precious manure, yielding
vast sums of money ; whose slopes, valleys, and moun-
tain plateaux needed but irrigation and the husband-
man's care to yield rich harvests of nearly every
tropical and semi-tropical product that could be
named; and what does it exhibit to us? Sloth,

four-fifths of the Peruvian exports, moreover, are made up of substances
wliicli are, as it were, forced out of the country in order to provide means
for the enjoyment of the rapacious drones who eat up the country. With
so little trade, with a population that the Government cannot tax as it
would, and with revolutions a matter of nearly annual occurrence, it is
easy to understand that tlie condition of this wretched country must be
low indeed. If the Argentine Confederation has a doubtful future, who
thall dare hope for Peru r"

THE RIVER RLATE, CHILI, AND PERU. 2S1

barrenness, corru})tion, anarchy, misery, debt, railways
' to the moon"; ' ironchids, for wild spirits to rebel witli ;
and nearly every conceivable social scandal and political
abortion. The advantages of Peru have originally l)een
greater than those of any other Spanish American
State, except Mexico, and all we can now say of her
is, that her disgrace and ruin have also been greater.

To-day Peru is a spectacle among the nations. At
this very time, after having become miserably bankrupt,
instead of directinir her attention to the true sources of
her wealth — irrio-ation and the tillaf:^e of the soil — her
head is turned with the new project of the Yankee
railway contractor, who has engaged to build the
remainder of one of the maddest, and in some respects,
I believe, one of the worst constructed railways in the
world — the line which he boasted was earned to an
elevation of '1G,000 feet above the level of the sea.'
This railway, called the Oroya, cost, it is said, about
4,500,000/.; it has been an absolute loss in every
respect — a worse loss than the many similar projects
tliat have cursed Peru. But it is to be completed to a
point further inland, because the contractor has held
out the prospect of being able to reopen the ilooded
and abandoned silver mines of Cerro de Pasco. A
company has been formed, and its paper is now pour-
ing out on an already paper-swamped population at
home, or is (inding its way in the shape of bills to
London. Peru lui^ built over 2,000 miles of railway

282 THE RIVER PLATE, CHILI, AND PERU.

altogether already, and not one line out of the wliole
twenty odd making up the total is at present a paying
concern ; hardly any yield 1 per cent, on their
capital. Even the little Lima to Callao line, owned
and worked by an English company, which formerly
paid pretty well, has been brought almost to the verge
of ruin by a competing line, built by the Government
as a means of plunder in reckless disregard of private
rights. The bulk of these railways must, to all ap-
pearance, go to ruin, if the cliaracter of the adminis-
tration of the country does not change. The devastat-
ing sloth-loving Turk has not done more harm to the
old Eoman Empire of the East than the Spaniard has
done in Peru.

It may indeed be said that calamities such as that
terrific series of earthquakes and the tidal waves in-
duced thereby, which lately wrought such havoc in
the country, could not fail to demoralise the hardiest
spirits and induce a disregard of everything solid and
progressive. This might, no doubt, be the case were
these calamities of frequent occurrence, but they are so
rare tJiat their effect on the minds of the people should
not l^e greater than that of Vesuvius on Southern
Italy. Not only so, but tlic uplands and vast plains
which stretcli from the inner flanks of the Andes far
across the continent are nearly exempt, if not altogether
exempt, from the evil effects of these earth-storms.
They affcrt the coast and tlie huidy by the coast, not

THE lUVER PLATE, CHILI, AND PEKU. 283

of rem merely, but of Bolivia and Chili. Peru lins,
indeed, no more excuse for her disgraceful condition
on the score of these visitations than Chili has, and
we cannot avoid laying all the blame of her misery
on the race that nearly three centuries and a half
ai^o "ot a foothold in the laud. Three centuries aL!;o !
South Australia, a creature only of yesterday, with a
handful of people, has as large a trade as Peru. All
the Australasian colonies together have not got her
population, and yet they carry on a trade greater almost
than [all Spanish America ever knew, except in tlie
palmiest days of the robbery of the races whom the
Spanish marauders overthrew. •

At the present time the trade of this magnificent
country is mostly composed of substances, every ship-
load of which, in present circumstances, means a step
nearer the ultimate utter impoverishment of the land.
These substances are guano and nitrate of soda (cubic
nitre), both powerful fertilisers, which it does not seem
to strike the Peruvians to utilise to any ap})reciable
extent at home. They are simply good things to sell,
and to borrow or cheat upon. No doubt Peru could
allbrd to export a large portion of these valuable
deposits in any case ; but it seems bent upon exporting
all as fast as possible for the sake of gold, the thief's
only wcidth, and certainly no regard whatever is })aid
to the true interests of the land. What miulit not
Peru do in slieej) -farming alone, wore agricultural

284 THE RIVER PLATE, CHILI, AND PERU.

pursuits to be as industrially cultivated there as iu the
Argentine Confederation even ! Probably no wool in
the world would find so ready a market or be so widely
prized as the soft silken coat of the Peruvian llama or
alpaca sheep. So also Peru could produce excellent
qualities of cotton in almost limitless quantities, and,
instead of being dependent on Chili for food-grains,
ought to be herself a large exporter. Owning the
rich plains of the Montana, irrigated and fertilised as
they are said to have been when the Spaniards de-
scended on the country, Peru is capable of becoming
almost the Mexico of South America. Alas ! that we
should speak of all these capacities only to realise the
more forcibly the impossibility of anything worth
mentioning being made of them in the present condi-
tion of the country. The Peruvians want gold and
silver, and will build railways, will flood the world
with their promises to pay in order to gratify this
lust ; but they will not work. With few exceptions
Spaniard and Indian are alike in this respect, only that
the Spaniard idles of an evil nature, and the Indian
from the hopelessness of a life that long oppression has
made a blank.

At the present time Peru has no important exports
except raw sugar and wool, and these are insignificant
beside the figures of guano and nitre. The sugar
cultivation is cliiefly in the hands of foreigners — not
Spaniards — and is the only cultiviilion of any promise

THE RIVER PLATE, CIITLI, AXT) PERU. 2So

ill roru. But it is carried on imdcr considerable
difliculties ; and llie probabililies are, that once Cuba is
free, and witli South Austraha successful, Peruvian
growers would, like Brazilian, find themselves at a
disadvantage. Her production of cotton appears to be
on the decline, and India is sweeping out of her hands
the once profitable trade in Peruvian bark, while no
sensible increase is visible in her exports of llama and
alpaca wool. Iler exports to England alone were, in-
deed, larger in value last year than in previous years,
solely because of heavier shipments of guano. They
reached a total of over 5,500,000^. ; but, on the other
hand, her imports from England have dwindled steadily
till they are now httle more than 1,000,000/. The
financial condition of the country is, indeed, such that
it is hardly possible for it to either continue a good
customer to any country or to establish any industry
with the hope of success. Owing to the fraudulent
manner in which the Government has taken advanta<i;e
of the banks, either in borrowing from them and not
paying back, or in emitting inconvertible paper, all
business has suffered most ruinously on exchange
operations, and credit within the country is nearly
destroyed. In spite of this, the extravagance of the
governing class continues, apparently, as great to-day
as ever. Political opponents are pensioned off by the
parties in poAver, and a herd of loafers is thus gathered
to cat up the resources of the country. After the

28G THE rJVEPv TLATE, CinLT, AXD TET^U.

IIlisIi of wealth wliich elated these people from 1S6S to
1873, they have no nerve left in tliem for self-denial,
liad they ever possessed it ; and although there are no
more foreign loans to be had, although the import trade
on which the customs revenue mainly depended has
been largely reduced, and although the population of
three milHons odd — more than half Indian — is either
unable or unwilling to pay taxes, the ' civil establish-
ments ' crave for their usual mess of pottage. Only the
other day the Government wanted to borrow from the
banks of Lima half a million soles (dollars) in gold,
and it made no scruple to break its most emphatic
obligations, when making the new guano contract last
year, in order that 700,000/. a year might be secured
out of the proceeds of the guano exports for the bene-
fit of the loafers aforesaid. For the same reason,
every effort is made to push the nitre trade in opposi-
tion to the guano. The Government is not, it is true,
inhumanly selfish in this, because it must pay its backers
to be allowed to exist. It does not, therefore, itself
pocket all the proceeds of this large traffic : part of the
money goes to soothe its political opponents, and to
keep the permanent wire-pullers of corrupt political
cliques in good humour. This very diversion of the
proceeds of the large exports is itself, however, a barrier
to any sound import trade in the country. The money
released by the default on the debt does not enlarge
the spending power of tlie general community. What

THE RIVER PLATE, CHILI, AND PERU. 2S7

of it is not absorbed by usurers in London and Paris
enriches rogues in Peru.

This is a most distressing spectacle, tlie details of
which might be multiplied almost indefinitely ; jjut I
foibear. All that need be said is, that when compared
with Peru, the Argentine Confederation seems a land
of plenty, and even Mexico a country of promise.
There is at present little to hope for in that quarter,
then, and the trade of England cannot develop there
for many years, if ever. More probably it will sink
into greater insignificance, as it has been steadily doing
since 1873, or even 1872, unless we are prepared to
tempt the Peruvians with another supply of money,
either to help heirs of that ' Messiah of Eailways,'^ the
late ]V[r. Henry Meiggs, to develop the neglected silver
mines of the interior, or to enable them to clear
out with greater expedition the nitrate deposits that
nearly cover the province of Tarapaca.

I have now done with Spanish America. The
review has been rather summary perhaps, for the
subject is in some aspects supremely interesting ; but,
judged by the present or proximate value of the com-
merce of that region with England, it has been full
enough. I only regret that it has not been favom-able.
Perhaps the necessary brevity of these observations

^ Such was tbe blasphemous epitliot applied to this Yankee contractor
by some of the yenal press iu Lima — vide Dufliold's Peru in the Guano
Aije, a graphic little book ; also the recent effusions published on Meij/gs's
new project.

288 THE EIVER TLATE, CHILI, AXD PERU.

may have heightened the depressing effect of the
picture as a whole, because I have been compelled to
leave out of sight all those minute details which serve
to relieve even the shadows. In the main, however, I
fear my observations have been too mild rather than
too harsh and gloomy. Dismembered, ill-governed,
mostly priest-ridden, Spanish America will, to all
appearance, grovel through its history till races capable
of higher destinies take possession of the land.

Although for more than three centuries in Spanish
and Portuguese hands, a large part of South America is
still an undiscovered country. There are gleams of
light, however, in some regions of it. We may ven-
ture to hope doubtfully for Mexico, for the Argentine
Republic, for Brazil, and more surely for Chili, partly
because they are not exclusively Iberian. Nay, there
is even a chance for the distracted republic of Columbia
and for Venezuela ; and slowly, but possibly with good
prospect of ultimately gaining a position amongst
civilised nations, Bolivia, thanks to foreign enterprise,
has lately been emerging from her darkness.

Some of these countries will, we may hope, always
give England a certain share of their trade, whatever
its volume ; but on the whole I fancy the destiny of
their foreign trade, be it great or small, lies more with
the United States and with our Australian colonies
than with us, and that the regenerating forces which
they nearly all need will come mostly from the former.

THE RIVER PLATE, CIULI, AND PERU. 289

Already the enterprising North Americans are pushing
their wares into all the markets of the South Pacific
and Atlantic, and the trade between Chili and
Australia, at all events, though dipping very low, has
never been altogether submerged. As one looks at the
map one sees that such trade currents, north and south,
east and west, would be the natural ones, and it is by
no means an extravagant notion to entertain that at
some future day the busiest marts of the world may
lie on that continent and between it and the Anglo-
Saxon settlements in the Southern Ocean. The North,
with its enormous stores of coal and iron, its fine
energy, and order-loving communities, may dominate
in time over Central and South America, and command
the heavy manufacturing trade and the machinery
sup[)ly of the whole continent : w^hile an equally
energetic race in Australia and New Zealand may find
outlets there for special products and command at
least a fair share of custom in the South, as well as
give an im]3ortant impetus to local development along
the South Pacific coast. In this contest England will
in time be worsted, just as in the far East her children,
working from their vantage grounds in Australia and
Western North America, may in time be greater mer-
chants and rulers of labour than she is now. This is a
far-ofi* dream, perhaps ; yet it is impossible not to see
that foundations for its realisation are being laid, and

\0L. II. u

290 THE RIVER PLATE, CHILI, AND PERU.

that the commercial future of South America, when its
yet distant better day comes, at all events, does not lie
with us. We hold much the largest share of the trade
at present, partly because of our splendid steam mer-
cantile marine, but we are being elbowed now and
may by-and-by be beaten. Be that as it may, in the
meantime trade is dull and the prospect by no means
bright in South America, wherever we turn, for the
EugHsh manufactm'ers. In the most prosperous States
there extravagance has been rife within the last
decade, and a burst of extravagance means always an
after-fit of parsimony, forced or voluntary. If we our-
selves are now suffering from the effects of long-con-
tinued extravagances, how much more must those still
half-organised communities be whose po]3ulations have
httle or no realised wealth? I fear that the worst
point is not yet reached by some of them, and that
business in most parts of South America will be
slow and nearly profitless for the English exporter for
several years to come. When it revives again he may
find himself partially forestalled by Germans and
Americans. That, however, is not a matter in itself to
create alarm, for were the trade worth fighting for
now we could perhaps beat both in the supply of most
staples ; yet that probable conflict, as well as the present
depression, must be taken into account in any casts
ahead, and the very lowness of the stream of business

THE RIVER PLATE, CHILI, AND PERU. 291

just now conduces to make us give up the conflict.
German houses are forcing tlieir way into strong posi-
tions in Brazil and the Eiver Plate, as well as in
Mexico, and draw the business out of our hands even
for the supply of our own goods.

V 2

292

CHAPTER Xy.

THE WEST INDIES, AND OTHER MINOR BRITISH
POSSESSIONS.

Much that would be interesting might be written about
the minor foreign possessions of England — those which
are not colonies strictly speaking, but merely estates to
be worked for the benefit of their alien masters. Their
trade is not, however, of sufficient importance to war-
rant any extended inquiry into their condition, and I
shall content myself therefore with a very brief indica-
tion of the more sahent features therein. As everj^one
knows, the small properties of England abroad are
very numerous, ranging from the minute Heligoland,
Gibraltar, and Hong-Kong to the Gold Coast, the West
India Islands, and Ceylon, Most of the smallest in the
long list are quite without the range of my subject ;
but the West Indies, in the widest sense of the word,
and the Gold Coast and Ceylon, deserve a moment's
attention. I shall begin with the West Indies as the
oldest and in some respects still the most important
of these minor territories. Commercially the most im-
portant portions of the Britisli West Indies are Ja-

THE WEST INDIES, ETC. 21) 3

maica, Trinidad, and the strip of mainland known as
British Guiana.

Jamaica and Demerara have been for long — the
former especially — a source of sugar and rum supply
for this country, and in recent years these countries
and Trinidad have rather risen in importance, owing to
the disorganised state of Cuba. Not only has part of
the trade of Cuba passed over to the comparatively in-
significant island of Jamaica, but a minute part of its
population also, with results very favourable to its in-
dustries. Others of our West Indian possessions have,
of course, benefited in a like degree, and in, at all
events, the tw^o articles, sugar and rum, trade has of
late been reasonably flourishing throughout the British
West Indies and Guiana, while in some fair promise
has been afforded by the efforts to cultivate coffee and
tobacco, although in others the former industry has
almost died out, owing for the most part to the compe-
tition of Ceylon and Brazil and to the lack of labour
which has weakened all these colonies for generations.
The supplies of cocoa make up, however, in some
degree, for this falling off in coffee.

The possible subjugation of Cuba, however, may
do a good deal to upset this promise of prosperity,
especially if pacified Cuba be able to retain her slave
labour as heretofore. Cuba has always been the flivour-
ite source whence the North Americans have drawn
theii' foreign supply of sugar, and none of the British

294 THE WEST INDIES, AND OTHER

possessions have been able securely to divert the course
of that trade towards themselves. The cotton cultiva-
tion experiments in Jamaica have, moreover, been
complete fiiilures, and the progress made in the pro-
duction of sago is quite insignificant. In Guiana and
Trinidad there seems further to be a difficulty in
maintaining the population at its present level except
by constant coolie immigration ; while in Barbadoes the
blacks tend to swarm too thickly. Trinidad is better
off than Demerara, and flourishes ; but is rather isolated,
and does not escape feehng the want of labourers.
Throughout the West Indies there is, in short, nearly
everywhere some special drawback to complete pros-
perity either in the competition of neighbours, or the
rivalry of cheaper producing regions, or in the
climate, the disorganised state of the population, and the
fluctuating demands of foreign markets. There has been
a great deal of mistaken legislation and much wasted
money in these regions since the emancipation of the
slaves in 1834 ; and there can be no doubt that the sudden
liberation of these poor creatures in a state utterly un-
fit to enjoy freedom was nearly entirely ruinous to the
British West Indies as Enghsh trade tributaries, whatever
the ultimate good to the blacks may be. The only justifi-
cation of the measure was the practical impossibility of
making emancipation gradual. The hope of some of
them has therefore come to be fixed on coolies brought
from East India, and in others it is just possible that a

MINOR BRITISH POSSESSIONS. 295

race of native negroes may grow up capable of work-
ing and willing to extend by small farming the pro-
ductiveness of their regions. In these circumstances
the future of these islands and territories is a matter
which calls for much more attention than the English
public is likely to give it. Putting the Spanish colo-
nies out of the reckoning, there are enough elements of
difficulty in all of them, except perhaps in Trinidad, to
make the Government somewhat anxious. The effects
of the labour revolutions are not nearly at an end in
any one of them. Considerable accumulations of debt
affect almost all, and there is great difficulty in making
ends meet in some, even in prosperous years, owing in
the main to the excessive cost of the imported labour.
Should trade reverses overtake them, the home Govern-
ment may possibly have to lighten their burdens more
than it has yet done, and it has had to do a good deal.
In Jamaica itself, the Government debt has been, in
one sense, considerably reduced within the last ten
years, if we deduct the invested sinking funds ; but con-
siderable local obligations have been, on the other
hand, contracted, which help to make the total un-
covered debts of the colony still about three-quarters
of a million. British Guiana, again, has been put to
the expense of nearly 250,000/. for immigrant coohes,
and owes altogether, under various heads, about
340,000/. Trinidad has also a debt of 200,000/., and
most of the smaller colonies have either already in-

290 THE WEST INDIES, AND OTHER

curred a certain amoimt of debt, or are an annual
charge upon the Imperial Treasury, and some of them
are miquestionably, for all that, ill-developed and in-
diill-rently looked after. Others, such as the Bahamas,
seem to be gi'adually losing their trade,, and to be in a
measure dying of inanition. Other parts of the world
more favoured than they beat them out of the market,
and the money spent on them yields no adequate re-
turn. Yet nearly all of these possessions are, or
ought to be, of high value to this country for their trade
alone. The West India Islands send us on an average
nearly 5,000,000^. worth of raw produce every year, and
buy more than half as much from us exclusive of their
direct trade with other countries. Jamaica, as it fills
with the younger race of thrifty, industrious, negro
small cultivators, will, it is to be hoped, in time get
over its troubles, and become a very valuable posses-
sion in a commercial sense. Every step which the
thrifty class of negroes takes towards comfort and
affluence will increase the importing power of the island.
Its exports are now steadily rising in value and amount
to more than 1,500,000/., but this is a small figure to
what Jamaica may yet reach if judiciously governed
and nursed.

There are other ways, however, in which these pos-
sessions have a high value — those on tlie mauiland
particularly — and it is a surprising tiling that more
has not been done with tliem. Guiana forms an ad-

mNOR BRITISH POSSESSIONS. 297

niirable point cVappui for trade with the inland region
of the Nortliern Amazon valleys and with Southern
Venezuela, were these countries opened up as trade
intercourse with Europe might open them. Trinidad
is, in this respect, also admirably placed for intercourse
with Northern Venezuela and tlie valley of the Orinoco,
and does now have a limited business in that direction.
The island is at present perhaps about the most pros-
perous of all our possessions in tliat quarter, and has
(for its size) a large trade, partly of a transit character,
with the United States, as well as with Canada and
several countries in Europe. As the States of that
part and Soutli America get settled, a new life will come
to some of our territories, and we shall find that their
possession enables us to command at least a fair pro-
portion of the trade of that region — a trade which is
oTowing even now. But for the foothold which these
islands and our ])Ossessions on the mainland give us, I
am inclined, at all events, to think that our chances
would in no long time be small as against the United
States, should tliese become wise enough to throw off
the hampering manacles of protection. Their inge-
nuity and perseverance are threatening to beat us in
certain departments of engineering trade in spite of the
fetters.

In the home aspects of this West Indian trade the
chief factor is sugar. Had the West Indies not been
able to supply us with very cheap raw sugar during

298 THE WEST INDIES, AND OTHER

the last few years, the French must, I think, have
beaten our merchants and refiners almost entirely out
of the market. Many West Indian growers have been
put to great straits by the competition as it is ; but so
far they have on the whole enabled us to hold our
own in the main departments of the trade, and the
comparative failure of the French beet crops for the
last two years compelled French refiners actually to
resort to our possessions for part of their supply, to
the injury of their best monopoly. The high prices
which ruled in sugar during the autumn and ^vinter
of 1876-7 have brought direct benefit to the West
Indies ; and were labour cheaper or more plentiful,
there is little doubt that our planters could hold
their own in the now less buoyant markets against all
comers. While they can plant with even tolerable
success in didl times, there is no danger of England
being driven permanently out of the sugar markets of
Europe, although for certain qualities of refined sugar
she may not be so good or so cheap a source of
supply as countries like France or Holland, whose people
are taxed to keep up the profits of the manufacturer
and secure a monopoly to a knot of rich people.

These are but one or two of the interesting points
connectc^l with the trade capacities of our West In-
dian and Central American possessions, but tliey will
suffice to show that England should not lose sight of
them amid her many greater ones. Once on a time

MINOR BRITISH POSSESSIONS. 299

they, no doubt, were dreamt of as forming the begin-
ning of a great empire in that quarter — a counterpoise
to the Spaniard, a means of wrenching trade from tlie
Dutch — but that dream has gone and has given place
to an unmerited neglect. We cannot colonise Central
America, it is true, with Englishmen ; but with care and
attention, with some of the vigilant self-seeking master-
ship which is so diligently carried out in India, more
might be made of what lands we have there than
is now the case — possibly also much good might be
done to tlie wretched communities which surround us.
The labour difliculty is, next to English apathy, the
most serious drawback on the prosperity of some of
these colonies. Much more care is no doubt taken now
of the coolies imported from India than was formerly
the case, but there must always be a certain amount of
callousness and cruelty connected with this method of
importing hands. It is slavery more or less disguised,
and may seriously impede the development of these
settlements if great vigilance be not exercised, both
over the expense which the import system causes, and
over the condition of the indigenous population who
are in some cases injuriously competed against by this
State-subsidised labour.^ In time, perhaps, the mischief

1 Mr. J. L. Oblson, the secretary to the West India Planters and
Merchants Committee, wrote to Frasers Mmfuzine {vide the No. for
October, 1S77), to Cftll in question my remark tliat the coolie immig-ration
is disguised slavery. He points out that these people are well treated ou
the whole, and return to their native laud generally with a considerable

300 THE WEST INDIES, AND OTHER

may be got over by the spread of the negro population
— already overcrowded in Barbadoes — and every en-
couragement should be given to tlie free negroes to be-
come small farmers in Trinidad and Jamaica, and also
perhaps on the mainland. The old system of immense
[)lantations cannot be successfidly carried on without
slavery of some kind, call it by what name you please,
and the subsidised labour immigration of tlie West
Indies may yet bring some of them to ruin. In all of
them it induces a most illusory kind of prosperity, in-
asmuch as no real prosperity can spring from any source
outside the people who live and die on the land.

amount of saved money. Their engagements are entered upon volun-
tarily, and there is no kind of fraud or chicanery practised upon them.
I am very glad to liear this, and I have allowed the observation originally
made to stand in the text partlj' in order that I might give publicity to
-Mr. Ohlson's statement. I maj' be permitted, however, to say that I did
not refer so much to the methods of importation — which I indeed knew
and stated to be much improved — as to the condition of the coolies in the
West India Islands. It will not, I take it, be denied that during the
term of their indenture they are not their own masters, that they are
herded together without any ties of home, and that few women are ever
to be found amongst their number : nor will it be asserted that in this condi-
tion of dependence they are not subject in a large measure to the caprices
of individual overseers and owners. Now, what I meant was, that in
elements of existence like these there is hardly room for much human
kindness. The coolie gets his wages and his food, and after a certain time
he is free ; but othei-wise I do not see how he differs much from the old
slaves. Ilis going home again with money in his pocket is not to my
mind the happiest feature of the case either. If he is so well off in the
islands, why not let liim bring his wife witli him and settle there if he
chooses ? Why the perpetual renewal of immigrations which is sapping
the resources and mortgaging the future of some of the most promising
of these possessions ? The whole system is economically false, whether
it be directly cruel or not, and I fear it is not without traces of 'callous-
ness and crueltv.'

MINOR BRITISH POSSESSIONS. 301

Perhaps tlie most important minor possession of
England, after tlie West Indies and adjacent tracts of
mainland, is Ceylon. Its trade now reaches a total of
nearly 11,000,000/. a year all told, and with England
alone a total of from fonr to five millions. Tlie profit
of a good deal of the balance is, no doubt, absorbed by
Englisli merchants, manufacturers, and planters, and
the island is altogether a considerable source of
wealth to this country. The character of its trade is,
however, such as we might expect from the position of
the country. Its subject races are almost throughout
made to work for the benefit of their masters, and for
that alone. Hence the prosperity of Ceylon is for tlie
most part the prosperity of the English coffee planter
who has taken possession of its uplands and absorbed
the labour of the population in the one industry which
he has found profitable. There has, indeed, been
some improvement in tlie condition of the natives of
late years, and there liave been several public works
executed of a kind that may in time prove highly
valuable to the people, but as yet these changes cannot
be said to have reached the nation at large. It is the
European who benefits almost exclusively by the rail-
ways, by the harbour works at Colombo, and by the
roads and irrigation works. Here, as in India, the
labours of the European in making his own fortune
have borne hardly on the masses whose wages are not
raised though their living may be dearer, whose in-

302 THE WEST INDIES, AND OTHER

dustrial area is narrowed, and to whom the emokiments
of higher official hfe are perforce almost entirely-
denied. The greater portion of the import trade
of the island consists in food for these people, who,
were their energies not devoted to growing coffee
for the benefit of Europeans, could well raise more
grain than they require within their own island. I
am, therefore, inclined to doubt whether Ceylon is
really more prosperous than her big neighbour, and
whether the process now going on be not a process of
decadence and exhaustion. There is no native middle
class extending throughout the island, no fusion of
races going on ; and all enterprise is in the control of
the European, or at the very most of the European and
the mixed white races descended from the European
races — Portuguese, Dutch, and English — who have suc-
cessively held the island. Should by any chance the
artificial state of prosperity now subsisting be swept
away, either by the competition of cheaper-grown
coffee from other countries, such as Mexico, or by
some change in the circumstances of the ruling power,
it would probably be found that Ceylon has been in
considerable measure impoverished under English do-
minion, and its condition, in short, is not very different
from that of the Dutch East Indies.

It must always be remembered that prosperity is a
treacherous term to use in speaking of the dependencies
of any country which are not in the modern sense

MINOR BrJTISII POSSESSIONS. 303

colonies — dependencies, in other words, whose dominant
classes grow rich in great measure at the expense of their
subjects. Still it would be unfair to deny that accord-
ing to our lights we have lately striven to do something
for Ceylon. We are bestowing education on such of
the natives as will take it ; we are restoring some of the
gigantic irrigation works of the island's ancient kings ;
and the extended attempts which are being made to
introduce the cultivation of tea, as well as the mining
and other e0brts engaged in for bringing out the re-
sources of the country, may all perhaps tell in time in
some degree for the benefit of the people. They will
tell very slowly, however, and in the meantime it must
not be forgotten that with all the increased trade of
Ceylon the bulk of the population hang now as much
as ever on the verge of want all their lives long. The
more one thinks of it, the more one sees that there is
no tyranny on the whole so oppressive, no exactions
so severe, as those of the modern trader and modern
English appropriator of the lands of the weak. He
does not mean to be unkind, probably enough never
suspects that he is so ; but his object is gain, and it is
an object which compels him to give his servitors no
peace. In the keen race after wealth he has to grind
the faces of the poor, he learns to regard the people
he has made subject from the one [)oint of view of
profit and loss, and in all his efibrts at improving tlie
land this profit and loss is almost the sole regulator of

304 THE WEST INDIES, AND OTHER

his calculations. The man who has once embarked on
tliis course becomes blind to the simpler and nobler
dictates of humanity, his ideas of justice are warped by
his worldly interests, and his rule becomes a degrada-
tion to himself and to his subjects.

Making all allowance for exceptions honourable to
the English race, I fear it cannot be denied that such
is broadly the effect of our rule in Ceylon. The island
is prosperous only in a diseased, feverish fashion, not
naturally and by reason of improvement in the con-
dition of the people. And as to the mere trade, its
prosperity is, even in this narrow sense, by no means at
present a growing one — at all events with England.
Some portion of our export trade thither has been
diverted to the mainland of India by the compe-
tition of English manufacturers established there, and
aided in some slight measure by the tariff. Its total,
therefore, stagnates at about a million, and our imports
from Ceylon, which fluctuate more decidedly according
as the yield and prices of coffee are good or bad, do not
show much real progression. The trade of the island, so
far as it grows, grows therefore with our colonies and
with the mainland of India. Fortunately the island
has little debt, and its taxation is not perhaps excessive,
so that there does not appear to be the discontent in it
which exists in India, nor the extended misery. It
does not progress much, however, nor has it so many
hopeful elements in its position as one might expect.

MINOR BlUTrSII POSSESSIONS. 305

We are not able to interest its native races in our rule,
or to make thcni take on Englisli liabits and absorb
Enoflish ideas as the nej^roes do, nor can we assimilate
them tlieone with the other. What another century of
our rule there mi^lit do, with our efforts at educating the
people, it would be hard to say. Perhaps the land would
be cultivated more thoroughly and the exports and
imports would be much greater, but I doubt whether
the people would be substantially the richer or the more
European in their ideas. Ceylon would almost have had
more chance of becoming again a happy prosperous island
had we been possessed of slaves there whom a British
l^hilanthropy could have emancipated to the discomfiture
of their masters and the ruin of the island — from their
point of view — for some generations. In the meantime
we cannot calculate that Ceylon, with its two millions
of people and upwards, will do much more than it has
done to extend British trade. Our coffee planters there
may continue to keep it in a foremost place amongst
European markets, and it may export a little tea and
Peruvian bark or a few pearls and a little plumbago,
but its trade will not be much more than it is now for
some time to come, if at all. The Smghalese and Tamuls
and Malays are now what they were under the Dutch
and Portuguese in nature and habits, with oiil}- tlie
difference that we do not treat them with the hard
cruelty of their former masters. They get wages for
what they do — low wages, it is true, but still wages,

VOL. II. X

300 THE WEST INDIES, AND OTHER

and they get a certain measure of justice as between
man and man. For all that, it appears to me that our hold
over the people is essentially weak, and that we cannot
really spm^ them up to take part with us in the reno-
vation of the island even if we would. Our trade in
Ceylon will therefore remain what we ourselves make
it, and that alone.

There is little to be said about any other posses-
sion of England except perhaps West Africa, about
which it would be easy to indulge in much speculation.
I must refrain, however, were it for no other reason
than that our trade in that region is yet too insignifi-
cant to deserve analysis. The possibilities of the future
are also, to my thinking, vague and not over-promising.
Should we be drawn into expeditions and tentative ap-
propriations in the Congo valleys — a course which the
discoveries of Stanley may perhaps render possible, as
they certainly may make it tempting — I believe we may
incur serious troubles in that region. As it is, with
the king of Dahomey on our hands and the unsubdued
Ashantees still threatening us on the Gold Coast, the
game of ruling them is hardly worth the candle. Our
total trade with this region is not more than a million
and a half a year — surely not enough to justify expen-
sive wars and demonstrations and a heavy annua^l waste
of Hfe. We have, in my opinion, subdued quite
enough of the world witliout tackling the bloodthirsty
African tribes who infest the Gulf of Guinea. I should

MINOR BltlTISII POSSESSIONS. 307

be sorry tlierefore to see energies wasted in this
quarter whicli might be mucli more profitably spent in
our colonies proper. Let the Portuguese expend their
energies there, where their possessions are botli larger
and older than our own.

Perhaps it may be interesting to say, in conclusion,
that the aggregate trade of England with all her minor
possessions, exclusive of those particularised here and
in other parts of this book, amounted in 1876 to about
9,000,000/. This does not of course include the trade
of IIong-Kong, which must be considered part of the
trade of China, but it includes that of Gibraltar, which
consists almost entirely of the export of stores for the
use of the fortress. The exports to these possessions
exceeded the imports by nearly a milhon, owing for
the most part to the demands of the military stations,
and the excess may therefore in some sort be taken as
a measure of the money cost which these stations are
to the country. It is not, of course, a true measure of
that cost any more than the total figures are a true
index of the total trade of these minor possessions,
but roughly it shows us that we have to pay away
at least the major portion of the profits of our trade
with the small possessions in the mere daily expenses of
our Im})erial outposts on the Mediterranean and East
Atlantic. Compared with our total trade, such a cost
is a mere bagatelle, however, and, so long as the trade
of our minor possessions suffices to meet it, we may

X 2

308 THE WEST INDIES, ETC.

have good reason to be satisfied. When we find, how-
ever, that some of them grow Uttle or no richer under
our rule, that many of them get into debt and trade
considerably on credits. Government and other, we may
have some doubts whether the position is so very sound
as it looks. As a whole the smaller spots which we
own all over the world have not qidte so bright a re-
cord or so hopeful an outlook as we could wish, and I
doubt wlietlier some of tliem, such as the Mauritius,
the West Coast settlements and Ceylon, will have much
to thank us for when our day of supremacy in them is
over.

309

CONCLUSION.

The end of this prolonged investigation has now been
reached. Necessarily brief and imperfect as the data
are, enough has been, I trust, advanced in regard to
most of the countries under review to enable us to
form a judgment on the questions raised at the outset.
We can tell what lias in a general way affected British
trade, and also what is likely to affect it in tlie near
future. Although the details of the position may be
continuall}' shifting, there is enough fixed and lasting
in the tendencies of events to enable us to say, with a
certain approximation to dogmatism, what England has
to expect. When I first began to write on this subject
in ' Eraser's Magazine ' nearly eighteen months ago, I
dwelt on the general stagnation of business which was
affecting everyone with gloomy forebodings as to the
future of our trade. To-da}^, as I wTite, that stagnation
is in some respects greater than it was then. It touches
all departments of business almost alike, and extends,
more or less, to all quarters of the world. The hoped-
for revival could not fail to be put off in Europe by the
long agitation over the Eastern question, and the ulti-

310 CONCLUSION.

mate outbreak of war between Turkey and Eussia ;
but in quarters wliere that dispute could exercise only
a very remote effect, trade has gone from bad to worse
month by month. In the United States and Canada the
liope was all the winter of 1876 in the coming of spring,
and when spring came and passed it was transferred to
the outbreak of hostilities, which the Americans eagerly
hoped would throw business in their way. A moment-
ary spurt of activity in the corn trade seemed to justify
this hope, but when it passed off everything settled
down again to the dreary level of hand-to-mouth busi-
ness. Not even the exportation of dead meat, so suc-
cessful during the winter, coidd reanimate the droojjing
eiiergies of the trade speculator or pioneer. Nor did
the demand for instruments of destruction do more than
stir for a brief period that section of trade. And now
the hope of the United States lies once more in their last
year's overflowing harvest. Should it prove in the end as
profitable as men have eagerly hoped it might be, activity
will spring up again in all directions, weare told, and the
great ltei)ublic, witli the weaker British colony dang-
hng at its heels, will rush ahead in a new career of pro-
gress. I venture to disbelieve in this revival almost as
much as in those that have gone before. Nothing affect-
ing the j)ermanent economic condition of the country
has in the least been changed; and mitil its industries
are delivered from the oppression of bad laws, let
alone overgrown ca])italists, America must continue to

CONCLUSION. 311

go tbroiJgli depths of suflbring and spells of idleness to
an extent of wliicli she has not dreamed.

As in the States and Canada, so in most parts of
South America, and in all the leading countries of
Europe. Everywhere there is a stagnation and a nega-
tion of hope. Only the Empire of Eussia, India, and
some of our Australian possessions can be said to keep
up the export level of the few inflation years, and in
some instances to excel them. Yet India has again been
groaning beneath the burden of grievous famine, and
China is devastated in parts by lioth flimine and pesti-
lence, so that her trade prospects also grow darker and
darker ; while Eussia is in the position of a man in a
desperate financial situation who parts with all he has
at any sacrifice, in order to try and save himself from
bankruptcy. I am not exaggerating, then, in describing
the low condition of business enterprise and possibili-
ties as at present nearly universal. It is fully more
universal now than it was twelve mouths ago, and
England, from her far- ramified trade, feels it more
now than she did then. Month by month her ex
ports have been declining, and month by month pro-
ducers are content to take lower prices in order to get
rid of their wares, till the country feels the strain with
something hke acute pain. Our only consolation is that
none of our near neis2;hl)0urs are better off than our-
selves. Germany is feeling the miseries of checked
enterprise, and the recoil of wild gambling, more

3 1 2 CONCLUSION.

acutely tliaii we do, because so immeasurably poorer ;
and even rich, self-sustaining, and industrious France
finds that the ways of the world are not all smooth-
ness to her, for her exports also are falling off this
year as well as every other country's, and her general
foreign and domestic business is sensibly weaker now
than it was a year ago. Should her harvest be so poor
as to necessitate considerable imports of grain next
year, her financial troubles may develop themselves in
a manner not ' hitherto looked for. Everywhere, of
course, a quiet business of a kind is going on, because
everywhere people have to live, but that also sinks more
and more in all countries to the level of necessities.

There is, further, a certain amount of work and
a certain expense which has to be incurred for the
maintenance of much of modern improvements in the
means of intercourse established nearly everywhere ;
and as countries have, on the whole, become greatly
more wealthy in recent years than they used to be, the
level of necessity is in tliis and other respects a
higher one now than at any previous time in all
civilised countries. What may be called the potential
credit of most trading countries is also more deve-
loped now than ever it was before, through banks,
financial companies, and the consequent utilisation of
the savings of communities. Trade does not in any
country, therefoie, sink down to a point which it stood
at, say, twenty years ngo. It only goes back a few

CONCLUSION. 313

points, in tlie case of English export trade not more than a
niilHon or two a month at worst, and in other countries
in proportion to their staying power. Thus, also, home
trade, pure and simple, may be even greater than ever,
especially if, as with us, a country has given large
credits abroad. This relative retrogression causes in
itself, however, a great amount of misery, loss, and dis-
organisation, and I wish I could hold out hopes of its
coming to an end, but I cannot. A vast medley of
causes are at work tending to prolong the present stag-
nation, and perhaps to aggravate it, until it trenches on
what I have called necessary business. Some of these
only have I been able to indicate. Nothing has, I hope,
been made more clear in tlie i)receding cha[)ters than
the startling extent to which nearly every country with
any pretension to civilisation, and some with none, have
rushed over head and ears in debt, often without rhymo
or reason, and nearly always with an utter disregard for
the consequences. Many of these countries cannot hope
to master the effects of this conduct within this genera-
tion ; some of them have yet to taste the bitterest of
its fruits ; and while this is the case it is impossible to
say when trade prosperity, advancement in scientific
development, in the arts of peace or in social indus-
try, can again bu their lot. Any estimate of the amount
of this debt, taking all countries together, is almost an
impossibility ; but I am sure tliat the (estimate of Mr.
David A. Wells, in (he })aper already cited, is nuich

314 CONCLUSION.

williin the mark. He says roughly that since 1860
the debts of the world have been increased by about
0,000,000,000/., of which nearly one-third has been
wasted in wars, one-third in unproductive enterprises,
and one-third in private industrial enterprises now yield-
iii!'' no revenue. I think that this last third should
be probably half as much again, and that the sheer
waste or almost sheer waste of the world during
the last seventeen years lias not been less than
8,000,000,000/. From the time of the Crimean War
till now it cannot be less than 10,000,000,000/. The
mind is unable to conceive what such a sum means,
and in one way it is an utter mistake to treat it as dead
loss to the world. This money and more may have
been lost to individuals and communities, some con-
siderable portion of it may have been used to blow
tens of thousands of the working population of the
earth out of existence, and in all lands whole classes of
people may be poorer in consequence ; but it does not
follow tliat the work done by means of much of this
money has not been good, any more than that the
money is now all out of existence. Just as much of
the money has foinid its way into the pockets of those
who grow inordinately wealthy at the expense or by
tlie folly of their fellow-men, so does much of the
work endure which the money was sunk in accomplish-
ing. The industrial capacities of most countries have
been increased by their capital expenditure, and the

CONCLUSION. 315

area of human em[)l()3'incnt ])iobably ])erinanently ex-
tended. ]jut the burdens of nations have also been at
the same time extended, and for not a few of them it
is still a question whether tlie burdens or tlie advan-
tages will win the day. The debt problem is hence a
most serious one in every country, and in some it is more
than serious. It contains within it the elements of
greater disaster to nations than any that the world
lias witnessed, and may yet destroy the fair prospect in
more than one community. A community of nations can
always afford to risk and lose outright a considerable
portion of its savings without serious injury, but what
no comminiity may be able in the long run to with-
stand is the after-bui'den of this lost money. France,
England, America, Kussia, and other prominent dealers
in credit, may find a day come wlien their separate and
national debts choke up the very springs of national life,
embitter the existence of their people, and serve to stir up
widiin them uiieontrollablesocial ferment. Clearly debtis
a momentous agency in modern progress, of which but
some of the tendencies have yet been recognised. The
enormous masses of capital which are still productive —
probably at least three times the sum lost — are them-
selves elements of danger, for none can say how soon
they may become improductive ; and the manner in
which debt is made to beget debt, credit to ui)hold credit,
and in whicli cosmopolitan money-lenders dexterouslv
manipulate the very dangers of a connnunity for the pur-

316 CONCLUSION.

pose of deepening tlieir liold on its life-springs, cannot
be looked at without misgiving. Suppose a reckon-
ing day to come, and real value to be demanded for the
thousands of millions which figure as the ' assets ' of

credit institutions all over the world, what would they
fetch ? This may seem an absurd question to those
who treat the credits which swell the totals of banks,
say, as realised or realisable wealth, but I am by no
means sure that we may not have to ask it some day
with anxiety. How much of the so-called wealth
of the world is realised wealth, in short, and how
much mere credit notes and lOU's for wealth dissi-
pated? ,

Questions like these would lead us to rummage
among the very foundations of modern civilisation, and
I cannot linger over them. There are others of nearly
equal present importance to the subject in hand, and,
amongst these, the first place should, I think, be given to
the i)olitical and social questions still unsolved in nearly
every civilised country. As we turn them over one by
one it is hardly possible to resist the impression that the
world is standing on the threshold of strange evolu-
tions, and perhaps a new era. We have but to look
across the Channel to France to see society quivering
to its utmost verge in the throes of a momentous civil
contest ; one of hundreds it has already gone through,
and to all appearance by no means the last. The time
has not yet come for victory to be decisive in either

CONCLUSION. 317

camp, nor will it come while Ultramontanism is treated
by National Governments as a product of civilisation to
be i)aid for with money from the national treasury,
and the Papacy as the visible embodiment of Deity.
The possibilities of prolonged conflict almost make one
despair that a worthy and satisfactory decision can ever
be reached. The priest and the soldier band together
in France to keep men in slavery. Turning to Ger-
many, can we say that the signs there are much more
hopeful ? Undoubtedly there is calm — hardly ruffled —
strength apparently defying assaidt, but what is beneath?
Possible social upheavals, a great groaning under the
intolerable load of a military rule ; hordes of armed
men kept from their honest toil for the glory of a
power-grasping family, which brooks no rival even
in those preteuntios, sham deities of the Vatican.
We see creed hatreds ke})t under only by this iron
heel ; and beneatJi all, mutterings of anarchy — dreams
of ideal States and a world all at peace to be reached
by a great blood baptism, wherein all these producers
of human misery — emperors, soldiers, priests, and
placemen — shall be cleansed away for ever. I do
not for a moment say that German energy, German
love of order, and German patience may not in time
overcome all these elements of discord ; but, in the
nieantune, they exist, and the very poverty of the land
airirravates the dansj^er which they threaten. The land
is full of pinching and misejy, stagnant industries, and

318 conclusion;

a sense of weariness and ])ain, wliich give more force
to the doctrines of communism than if they were
preached by a voice from heaven. The German Em-
pu'e will have to justify itself by new conquests, as all
empires have had to do, or by-and-by perish.

And as to Austria, the broken-limbed, race-divided
Empire-kingdom which limps along in perplexity and
fear, have we need to say anything of it, except to
point to the unfusible fragments of old enemies found
within its rai^f^ed borders ? Can it advance to the
position of a great trading power while trembling for
its existence ? Or if we turn to the north and east, to
Eussia and Tnrkey, now wearing each other out in
a struggle that seems likely to seal the doom of both
as despotic empires, do we not find abundant food for
thought but Httle for hope ? Is the future bodeful of
tinjlhing but change, of upheavals which may usher in
orders of government and of life all over these regions
of which we can now shape no distinct outline? All
the world, in truth, is shaking itself as if out of a long
uneasy slumber, and, from far-off China to the new
settlements in the United States of America, men's
minds stir with problems religious, social, political, and
ethnological, which bode the world little rest till a great
settling of accounts has taken place. What the future
sliall Ije none can tell, but on many points of the
horizon the glare is lurid enougli to please the Prince
of JJarkness himself; on all there are dark clouds

CONCLUSION. 319

which sliow tliat tlie new age of science and so-called
development has yet to justify itself.

Witliin a narrower range the same disorder, tlie
same signs of change, are abundantly visible. Look,
for example, how imsettled are the relations between
master and servant, how unsatisfactory the position of
labour as against capital : the open discontent, tlie fre-
quent mutinies, and never-ceasing discord which goes
on between employers and employed. This is a branch
of my subject which I have forborne to dwell much
upon when treating of individual countries, because it
woidd have led me into discussions for which I could
not possibly have found room ; but it is an all-important
element in determining the future prosperity of every
country. As far as I can judge, England is probably
fully the furthest advanced towards a peaceful and
just solution of this most dilFicult question ; but that is
not saying much. The boards of arbitration which
have lately become prominent in the North are already
exercising a beneficent influence, on the whole, in pre-
venting strikes and in adjusting with an approach to
fairness the reward of labour. But these are only in
embryo, and do not as yet work without strain, as the
strike in Xorthumberland and the dispute recently
submitted to Mr. David Dale proves. It is, there-
fore, dillicult to say whether they do more than
hint at what the ultimate basis of junicc must be.
One thing alone is certain, that in all count rios^ as men

320 CONCLUSION.

grow in intelligence, as education does its work, those
arrangements of business and industry which conduce
to the enricliing of the few and relative impoverishment
of tlie mass of men will have to be largely modified ;
and in England that truth is hardly admitted yet by
even the most earnest advocates of the arbi<"ration
panacea. Abroad, the position of the working classes
seems to me a ver}^ backward one. Their means of
influencing employers of labour are perhaps as strong
in France as anywhere, because of the hold which the
people have upon the land ; but in the case of the few
large industries which France possesses — the silk and
linen weaving, the sugar refining, the iron works, and
the woollen manufactures — the workpeople are, as a
rule, quite unable to effect any change in their condi-
tion, except by resort to the ruinous expedient of
strikes ; and these are so liable to be stopped by the
soldiery, or are so feeble from lack of cohesion and
funds, that they cannot be called eflficacious. French
artisans and mill hands still work, therefore, on the
average quite twelve hours a week longer than those of
England. In the United States, again, the working
man appears to me to be in a far more hopeless condi-
tion than with us, in proof of which I may cite the re-
markable ease with which the leading i-ailway compa-
nies of the Union lately decreed autocratically a 10 per
cent, reduction in their employes' wages. These wages
had been already reduced nearly to the bare existence
level. The temporary success of the servants of several

CONCLURION. 321

of the leading companies in stoj^ping or disorganising
all traffic in revenge for this reduction was no real sign
of strength. It was rather the fleeting triumph of
despair, and ^vas, moreover, due, more than to railway
men, to the riotous aid of the hungry artisans and
miners who crowd the centres of industry, enjoying the
blessings of protection and the privilege of earning
starvation wages in order that a few capitalists or
speculators may be able to boast that they are estab-
lishing the competitive capacities of the Union on a
sound basis. These railway riots — when taken in con-
nection with the hunger and discontent of the general
working population — are, indeed, a ghastly commentary
on the progress of the Union, and their suj)pression,
which was certain from the first, proves not merely the
helplessness and mad folly of the workpeople in seek-
ing to fight protection, but rivets their chains anew.
The sympathy of order-loving citizens has left them, and
they seem now likely to remain subject to the tp-anny
of prohibitive laws and selfish corporations till rich and
poor threaten to plunge headlong together into the
same whirlpool of ruin. The despotism of the four or
five railway autocrats has at all events been made
secure till bankruptcy threatens or overtakes their
overgrown debt- consumed roads. And as to the
general working population, it is enough to say that the
community in America oilers no wide variety of small
employments to which men can turn. Tliere are few

VOL. II.

322 CONCLUSION.

separate and independent centres of mannfacture, either,
some of which might be flourishing while others are
dull. The whole body politic languishes together, and
a time of languishing is a bad time for the working
man in any country. In the States it probably means
death by hunger to many, before a better day dawns.
At present it indubitably means low wages, half work
or no work to hundreds of thousands.

This question of the future of labour is indeed a
most interesting and tempting subject, but I must not
pursue it. I referred to it only to show the chaotic
and unsettled state into which the new wealth of this
generation has hurled society, in its larger sense, every-
where. That a new order will come out of the chaos
in time I doubt not, but it has hardly yet begun to
appear ; and until the position of the servant is elevated
till he becomes a sharer in some well-defined and
governable shape of the profits which come from his
labour, we cannot be said to have approached peace.
Where, as in America, democracy has hitherto played
into the hands of the capitalist exclusively and in the
most barefaced fashion, the war which must precede a
lasting peace can hardly be said to have begun. No-
where in the world is the capitalist so merciless and so
much a law unto himself as in the ' free ' Union, and the
railway despots afford but the most prominent example
of what [)ervades all branches of industry, and must
pervade them till the people make the laws for the

CONCLUSION. 323

benefit of all instead of for that of a very selfish and
rather contemptible though very rich handful.

It lias often surprised me that some of our great
English railway companies have never tried the partner-
ship experiment with their servants. They are in a
better position to do it than almost any other large em-
ployers of labour, not only because of the numbers
they employ, but because they serve a very imperious
master — the public. This would itself put upon the
bulk of their servants the necessity of complete subor-
dination, and they would only at most occupy the
position of small shareholders, whose stake in the wel-
fare of the company would suffice to hold them inte-
rested in doing their work well. The most enlight-
ened of all our railway companies — the Midland —
gives, I believe, a sort of gratuity to its well-behaved
servants every Christmas, but its manager might carry
his sympathies with democratic thoroughness farther,
and institute, say, 1/. preference shares, convertible in
time into ordinary stock, and open for investment by
servants of the company only. The effect would, 1
believe, be almost magical, and the risk of insubordi-
nation just nothing at all. The ' captains of industry '
everywhere must in time admit their servants to a
partnership of this kind ; and I am inclined to think
that, other things being equal, tlie corporation or
country which does this first and most thoroughly will
command the strongest hold on its markets, because

T 2

324 CONCLUSION.

the best power over its workmen. Co-operation in the
sense in ^Yhidl the word is now used is a pleasing
dehision, but partnership in the sense of all sharing,
according to a degree determined by their thrift, in the
profits of labour, partnership which would not inter-
fere with the management and controlling interests of
the large capitahst, but which would yet check his
tyi'anny and order his greed, is a practicable enough
end to aim at. At present the effects of much of the
labour which men have to undergo are debasing and
even brutalising. Modern science is, indeed, making
us pay a fearful price for what it has given us, and we
cannot contemplate the changes which are everywhere
being introduced by the adaptation of forces of nature,
by skilful machinery invented for doing what without
it would have been beyond the reach of human powers
and endurance, without almost a dread. These mighty
forces and ingenious engines are fast becoming in their
turn men's tyrants.- More and more the labour which
is wanted from us is brute labour — the work of trained
animals. No wonder that men thus reduced feel a
deep misery in their lives, and occasionally break out
in revolt. No wonder that they need the strongest
inducement to work steadily and well.

At present, however, there are more obviously
pressing questions affecting the trade of England and
of tlie world than this one of labour and capitalist.
Apart even from the political aspect of the immediate

CONCLUSION. 325

future, there lie many questions which have been
partially raised in the preceding chapters and directly
touching our own trade, which therefore possess for us
a deep interest. It is obvious that whatever upheavals,
social or other, may occur, people must, as I have said,
live, and in living they create trade. The teeming
millions of China and India, of our colonies and
America, require some clothing and food. Population
is nearly everywhere more or less on the increase too,
and that in itself enlarges the range of human wants,
while wealth is accumulating still, and in spite of waste
and folly, in many centres of industry and amongst
thrifty peoples. Almost every rush of speculative
adventure leaves behind it also certain permanent
results, a modicum of gain, and, therefore, the aggre-
gate trade of civilised nations can never altogether die
away, or often recede to a point which would imply
return to the level of a generation ago. In our own
case the dulness which now exists by no means yet
implies that our trade has sunk to what it was even
ten years ago. On the contrary, it is in more respects
than one as great as it has ever been. Last year, for
example,our imports reached the largest total ever known.
This is a signal proof of the wealth of the country, and
still more, perhaps, of the enormous grasp which the
distribution of that wealth over the world has given us
upon the products and trade of every other country.
So far our investments, at all events, have not pioved

326 CONCLUSION.

generally unproductive. Whether last year's large
import totals were clue to the fact that, as some think,
we were calling part of our invested capital home
because it had become unproductive abroad, or whether
we accept them simply as a proof of our abounding
riches and a widespread foreign trade, they are nearly
equally significant. We have possessed, and so far do
still possess, almost immeasurable hold over the pro-
ducing capacities of other countries. But in laying out
our money to develop them we must, in many instances,
have been adding to their intrinsic wealtli also. By-
and-by, in the natural order of events, some of them
ought to be able to do without us as money-lenders, at
least, and perhaps may be able to estabhsh as against
us a competing power in other directions where our
wealth may now be supreme. Setting aside political
and social considerations, this is one of the most urgent
questions which we have to determine, and it is this
which gives such deep significance to the steady retro-
gression of our export trade at the present time. In all
that I have written on this subject, it has been my
object to point out not merely the extent to which
English money may have benefited or hurt other
countries, but to examine into the growth of their
competing power.

Now it has, I hope, been demonstrated tliat what-
ever the investment of English capital may have done
for the investor it has not as yet, except in a modified

CONCLUSION. B27

way in one or two cases, led to the actual establisli-
ment of a solid competing power against ourselves.
The competing power, where it does exist, is witli
countries to which we have not lent heavily, and with
whom it ought to be noted our business rather improves
than otherwise when the competition is strong. To
some borrowers, public and private, English gold has
hitherto proved almost a pure curse, increasing tjie
burdens of the people, corrupting tlie Government,
leaving behind it hardly a trace of good. Of these
Turkey, Egj^pt, Peru, Paraguay, and other South
American petty States form the most prominent, if not
the only, examples. To others, such as the Argentine
Confederation, Brazil, Eussia, Spain, and Portugal, the
borrowed money, English and French, has been but
a doubtful blessing. Amongst our own colonies also
a certain diversity is visible, some of them, such as
Canada, having become steeped in debt to little good
purpose, and others, such as New South Wales,
showing signs of wonderful progressive vigour. In all
cases the outpour of gold, chicily English, the spoils of
the commerce of the world, has had, to a certain
extent, an inflating iniluence more or less injurious
according to the energy or lack of energy displayed
by the borrowers, and to this inflation has been due
in part the extraordinary expansiveness of British trade
in the last quarter of a century. Hitherto we chiefl}'
have reaped the advantages of this inOution, but when

328 CONCLUSION.

the weak comniiinities have gone to tlie wall, or when
the sound nations have recovered, have as it were
assimilated the over-doses of progress to wliich they
have been treated and again start forward, will this
supremacy be continued ?

This question is to me, after all that has been said,
still most difficult to answer. I have spoken of two
classes of countries which have come under our power
as traders and money-lenders — the weak and wastefnl,
and the strong and enterprising ; but there are otliers.
We have India to deal with, which is ours and not ours,
whose poverty and whose competing power, so far as
relates to internal commerce, are both unquestionably
developing to some extent by the very eflforts we are
making to extract the most from a possession which we
inwardly feel convinced we shall one day have to give
up. Then there is China, a mighty nation of deft
toilers, with a destiny, uncontrolled by any external
force, as yet hardly to be guessed at ; and there are
various nations of Europe which, possessed like ourselves
of an old civilisation and great industry, much intelli-
gence and enterprise, and a large amount of wealth, can
assume the position of rivals without having first to adopt
the burden of being our debtors ; while, iinally, we
have the United States, the largest receptacle of our sur-
plus population and our surplus wealth in the world, and
which, though by no means independent of us, is yet
hardly in our power. What shall we say of these ? Has

CONCLUSION. 329

the wave of cliange and development, which has stirred
the world, done nothing to lift them nearer our own
level ? Will the supremacy, which we have so sig-
nally maintained at the start, continue ours even in
the near future against the forces which have been
awakened in most of them in part by our own instru-
mentality ?

Those who have read the preceding essays will
remember that I have generally come to the conclusion
that as yel our supremacy has not been substantially
interfered with. The backward wave which has swept
the trade of the whole world downwards has been due
to causes too universal to lead us to suppose that any
special decrease in the producing and monopolising
capacities of England has occurred. This age has been
an age of eager development and of equally eager
borrowing, outside as well as within the range of our
influence, and a period has come to these correlative
manifestations of its spirit. Exhaustion has shown
itself in many quarters, and in all soberness has
supervened on the previous mad haste. Hence dull
trade, hence retrenchment everywhere. We can
safely say, therefore, that the dominance which free
trade and an admirable natural position, as well as
very abundant national resources, have given us has
not so far been lost. Let the conditions be the same
as they are now when business enterprise again revives,
and we shall on the whole be able to retain the posi-

330 CONCLUSION.

tion we now hold. We shall be the largest carriers In

the world, the largest manufacturers, and the most

extensive employers of both labour and money. Tlie

resom'ces and advantages of this country in ships, in

machinery, in mines, in skilled labour, in teeming

population, in unopened stores of coal and iron, and in

geographical position, are sucli as no other country

can at present lay claim to, and with these we have

nothing to fear. Not only so, but year by year the

growth of our own colonies in wealth and certain

kinds of producing capacities must tend to strengthen

our hands, and to make the trade supremacy of

England more assured. No other country that the

world has ever seen has had so extended an influence,

and run over the lengtli and breadth of it as ours has

done, and as yet there are almost no signs of the decay

of this vast empire. Judging by the length of time

that previous communities and nations have held a

similar dominance when once attained, we ought to see

none of these signs for generations to come ; and the

vigour of some, at all events, of om^ most prominent

offshoots is emphatically still the vigour of youth.

This is the assming side of the picture ; but it has
its darker side as well, and to this we must not foolishly
close our eyes. To begin with, wherever we turn
almost we fmd among civilised people a disposition to
coml)at our supremacy growing more and more keen.
Others as well as ourselves have treasures of coal and
iron, flocks and licrds, and the means of organising

CONCLUSION. 331

labour ; others have magnificent harbours, and an
ambition to share in tiie industrial movements of the
time. In Europe alone there are not wanting signs
that our manufacturing and maritime supremacy is
disliked and being fought against with steady persistence.
During the past year or so an agitation has, for example,
been going on in both France and Germany for the
imposition of higher protective duties as a means of
keeping out English competition ; and the protectionist
party in Germany hopes yet to win the day. In
France tlie battle is not yet fought out, and it would
be impossible in the still by no means fixed state of
French politics, to say how it will tm'u, but the signs
that crop to the surface indicate that a strong and
possibly prevaihng party intend to erect a ring fence
round the commerce of France if they can, and the
triumph of democracy would, as we know by sad
experience, by no means ensure the adoption of a
liberal trade policy. Even Spain is putting up the
import duty on coal, on English manufactures, and
otherwise endeavouring to mend her tariff in tlie
direction of self-containedness — especially as against
Enghsh goods ; and Austria, if politics leave her time,
will not fail to follow in the same course. The very
dulness of trade wdiich lias succeeded the burst of
prosperity tends to aggravate these symptoms. While
the world was going ahead, while anybody could
borrow to the top of his bent, and above all, while
Englishmen opened their purses to every adwnture

332 CONCLUSION.

from every clime wliicli promised them biisioess, there
was a sufficient stir and show of prosperity to prevent
people from feeling pinched. But that is now all
changed. The money is done, or all in the hands of
those who can exact hard usury ; the dreams are over,
and nations are left with huge public works on their
hands — railways, mines, shops, machinery of all kinds
— that the)^ do not know what to do with, so they
raise the cry, ' Englan 1 is ruining us by underselling ;
we must be protected.'

Most prominent of all in taking this attitude have
been the United States of America. That country has
received more of our money in one shape or another
than almost all other countries put together ; and
being enterprising, it has gone ahead as no other has
done, anticipating the future with a fury of activity
which threatens to embarrass its progress for at least
another decade, perhaps for a generation. It has not,
however, been money borrowed for public works,
reckless speculation, and the envy of ambitious
traders, which alone have caused the determinedly pro-
tectionist attitude of the States. They have a huge
war bill still to pay, and this has itself given a force to
the protectionist arguments which a less needy treasury
would never have suffered them to have. During all
the so-called prosperous years a high tariff was there-
fore maintained, which, now that poverty has come on
the people, is clung to, by those who benefited by it

CONCLUSION. 333

most and wlio are the last to suffer, with more energy
and feverish anxiety than ever.

The more stagnant trade becomes tlie more per-
sistently indeed do the Americans cling to their pet
notions. At the present time the whole country is
suffering more or less severely from over-trading and
over-speculation in railways and mines, and tlie
suffering is greatly aggravated by protection. Yet the
free traders can hardly get a hearing. As tlie adventi-
tious props of large railway loans are removed, there-
fore, the commerce between England and the Union
gi'ows narrower and narrower ; certain de[)artments of
English manufictures are shut out from the American
markets altogether, and others barely keep a foothold.
At the same time internal competition is dimiuishmg
profits within the Union itself, and reducing wages,
until the nation, which ought to be full of vigorous
life, busy in expanding over the unoccupied interior the
benefits of civilisation, and absorbing surplus [)opulation
from all parts of the Old World, is filled with men in
forced idleness, and actually sending emigTants from
its shores to free-trading New South Wales or back to
England.

We cannot expect that this protectionist delusion
will be over soon in the States, which must suffer until
they learn wisdom. They may niaintaiu their barrier
against our merchandise as high as it is at present for
some time to come ; and being at the same time much

334 CONCLUSION.

less likely to obtain the large sums of English money
which ponred into the country before the panic of
1.873, there is little chance that our trade in that
quarter can revive. The Americans will not have the
means of paying for imported goods at tariff prices,
however willing to do so, and as we repay to them the
bonds we hold in exchange for bread our purchasing
power will decrease also. Other markets must soon in
part take the place of that of the United States for both
our buying and selling. And as in the States so in other
wealthy countries. We shall have to face, therefore,
not only a greater preparedness for competition in
some of our best customers when trade does again
revive, but also a barrier put up against us more or
less high, and in not a few instances may find our
natural and acquired advantages unable to overcome
the opposition. Our enormous wealth and the extent
of our investments in many countries will of course, to
a certain extent, give us a mastery ; but it cannot do
all, and if nations see fit to shut us partially out of
their markets, we must, for a time at least, submit. I
do not believe that the trade of the world can be long
carried on upon the one-sided principle that each
country is willing to sell as mucli as it can, but none
willing to buy ; but it is so now in some quarters and
may be so in more before truer ideas prevail.

Necessity gives the excuse for it, and it is not
apparent to the average Frenchman, the Austrian, the

CONCLUSION. 885

Italian, the American, or to the Spaniard, that taxes on
international commerce are of all taxes the most
onerous and far-reaching iu their disastrous conse-
quences — the cruellest to the labouring man, and
favourable only in modified degree to the capitalist.
To one class almost alone in the world would protective
duties now be of any real value, and that class is the
English landowner. He is a monopolist of a very
ancient but by no means satisfactory type, and free
trade seems to me to threaten his monopoly more and
more every year, just as his monopoly at present
threatens to prove a serious check on the retiu'n of
prosperity. We have now come to the real ordinary
level of a humdrum plodding existence, and on that
level, with all foreign nations free to send us their
spare bread and meat, with the great extension which
production has attained iu countries where land is
cheap and unincumbered, English landlordism, in the
old sense, is rapidly becoming an impossibility. The
land monopoly is doomed under free trade just as
utterly as any other monopoly, and the sooner our
landowners wake up to the ilict the better. Not only
so, but the sooner the peojile take cognisance of the
dangers which may soon threaten us by reason of
our land being but half tilled and determine to find a
cure, the sooner may our trade depression pass away.
We are accustomed to think that the buying powers of
the country make us perfectly secure, and tliat we

336 ■ CONCLUSION.

can go on neglecting our home agricultural resources —
wortli from 300,000,000/. to 400,000,000/. a year even
now — because it pays to spin yarn and weave cloth.
But supposing the market for that yarn and this cloth
grows less, wliat then ? What but a decrease of our
buving capacity under which unthrift of any kind be-
comes a serious danger. We can easily see this by the
course which our trade is taking now. With much
diminished exports our food imports are larger than
tliey have ever been, and in order to pay for them we
are parting with some of our savings— with the bonds
of other countries, which we bought in the days of our
prosperity; we are, in other words, exchanging our
available capital to a certain extent for food, and in
proportion as we do so our power to regain dominance
over the w^orld's commerce when it revives is lessened.
The extent to which our population is crowded together
in towns, the badness of our agriculture, the expanse of
our baronial parks, of our waste lands, common lands,
and game preserves may therefore become the sources
of enormous danger to the country. In order to main-
tain our position we must utilise all our resources to the
best advantage, and we have not done this with the
land at any time, least of all since we became world
caterers. Enghsh land-laws and landlordism will there-
fore have to be modified so as to permit us to increase
the producing capacity of the soil, and I am disposed
to think that the manner in which new countries hke

CONCLUSION. 337

America, where the st)il is ])ut little encumbered, can
beat down the price of agricultural produce in our mar-
kets will materially help to work the necessary revolution.
Bad harvests in former times often crushed the agricul-
turist and land owner at the expense of the community,
but they now impoverish them, and the English land-
ow^ner has, above all men, cause to curse free trade.

In all respects except this, free trade has been an
immense boon to nearly all classes of the nation, and.
what it is to us it cannot fail to be to other nations.
In the meantime, however, these nations do not see
this ; and in addition to the natural dulness which comes
of reaction, wc shall have to feel more and more the
effects of an artificial one. At the present time it may
be said that none but some of our own foreign posses-
sions are in a position to carry on an increasing trade
w^ith us in the near future. The export trade from
England to the United States is not now half what it
was in 1872. With Germany, Spain, and Italy we
may possibly do a greater business in the immediate
futiu-e, but generally the European outlook is not, any
more than the American, very hopeful. We have but
the negative consolation that none of the nations whose
business is now less with us sliow a decided capacity
for becoming our successful rivals as manufiicturers
and traders.

The complications in Eastern Europe, which have
resulted in the present huge and ghastly war, must of

VOL. II, z

838 CONOLrSTON.

CDiirsc disarrange our trade with llisit quarter of the
world ; and, as I have already pointed out, the triumph
of Eussia means our partial, if not complete, exclusion
from a large and very profitable market. By- and- by
'We shall discover, and mourn over, the unspeakable
blunder "sve committed in siding with the Turks, not
alone in this momentous quarrel, but over the quarrel
of a generation ago. In the event of Eussian victory
the traders of Eussia are certain to supplant us, with the
aid of the German perhaps, all over Turkey in Europe.
Not all our ironclads ten times over, nor all our fleet
of trading steamers, nor our huge factories and bound-
less wealth, will turn the heart of the liberated popula-
tions of European traders towards us, or prevent a
high tariff from shutting us out then, as we are already
shut out in Central Asia. English supremacy has re-
ceived a moral shock which will be felt in India and
the Eastern seas, and which may touch our profitable
position even there. Nor would it be much better for
us were Eussia beaten, for then the devastating capaci-
ties of the brutal Turkish horde would most likely leave
little basis for trade with any body in the country.

The lesson of all this is not hard to learn. What
is done cannot be altered, and we must strengthen our-
selves while and where we still have the power. Our
colonies, on the whole, continue our steadfast friends,
and we cannot too assiduously cultivate their friendship
au^l trade, whatever form it takes. Some of them

CONTLUSION. 339

may be embarrassed ami needy, some liave deep waters
to pass tJiruugh ere tliey grow to mauluxjd, but they
olTer a great field winch we cannot now safely neglect
for other dreams. In order to maintahi their prosperity
and our own, we ought first of all to encourage emigra-
tion to them without ceasing ; and it would be well if
some of the energies which we are, I fear, wasting in
the popular endeavour to Europeanise and ' develop '
India, were spent in reclaiming the lands of Australia,
or of New Zealand, or of British Africa, whose plains
might yet rival America as a source of cotton supply
cheaper than the American. One day this country
may bitterly regret the millions of Englishmen whom
India has swallowed up for nothing but the seeming
o;ain which the sacrifice of their lives has brouirht to
the traders and the leisure classes in England, for whom
we are working that empire to the death. Emigration
is, moreover, absolutely necessary at the present time
to extricate some of our colonies from their most
dangerous position in other respects. I will not dwell
on the financial position of Canada, which hopes that
the present harvest will regenerate all, and hopes, I
believe, in vain ; but take the case of New Zealand.
In spite of Sir Julius Vogel's sanguine anticipations I
can see nothing but disaster in store for that colony,
unless it receive within the next year or two laro-e
additions to its population and to its available working
capital. It is now in a position when the least strain

z 2

340 CONCLUSION.

miglit bring on an acute crisis, tlie elTects of wliich
^voiild retard tlie growth of that fine settlement for a
generation, perhaps as an Enghsh colony for ever. So
with Victoria and most of our Australian colonies in
one sense or another. There is abiuidant room, at least,
in all, and where there is room there is need of men.
It amazes one to see how apathetic the English Go-
vernment is to emigration in view of these great ne-
cessities. The mere trader's ground is not indeed the
strongest which one might urge for a diversion of the
superfluous energies and capital of England to her
habitable colonies — the colonies, that is, where English-
men can live and multiply. Of still more importance
is the retention by England of a paramount position as
a military and naval power, and as the possessor of an
unrivalled mercantile marine. More than anything that
tarifls can do to hurt us, and than any downward turn
in the tide of international trade, do I dread the con-
sequences of the growth of powerful competition on the
high seas for the mihtary and naval dominion. Up to
the emancipation of Italy and the consolidation of the
German Empire w^e may be said to have been without
serious over-sea competition in Europe ; and the Civil
War in America had thrown into English and Canadian
liands almost the total sea-carrying trade of the Union,
as well as given our navy complete dominance all over
the world. We were, in short, the greatest naval power,
and possessed immeasurably the largest and finest mer-

CONCLUSION. 341

cantile marine in tlie world. Here and there a feeble
and subsidised competition might be kept up ngainst us,
and a certain amount of trade might thereby be diverted
from our shores and from our merchants, but we
did not seriously feel any bad consequences from it.
To day, however, this is very much altered. Xot only
is France fighting us more keenly, if despairingly, for
the China and East India trade, but Germany and
Italy are developing powerful competition ; and Ger-
man merchants and traders are penetrating into our old
Eastern monopolies in the w^ake of their steamers —
almost beating us in China and fighting us closely in
Japan, in Singapore, and even in our own India, for a
share of the trade. Towards South America and the
States the same competition is in marked progress, and,
in spite of defeats at given points, is, on the whole,
making way. The dismemberment ci Turkey, which
is certain to come before long by some means, and
the liberation of the Black Sea coast is, as I have said,
sure to afl'ect us injuriously in this direction ; and,
whether Greek or Euss inherit the Golden Horn, we
may expect to find new rivalry springing thence, on
the Suez Canal route to the East especially, which may
be in the lonii; run a greater l)oon to the revivin£!: races
of Central and Southern Europe than to us, unless we
direct our energies to the strengthening of positions
which the Anglo-Saxon race can hold witliout perishing
off the face of the earth.

42 CONCLUSION.

This maritime competition is extending elsewhere
at present steadily, and in the United States tliemselves
we hold no longer the supreme position which we did
five years ago. The Americans have got an ocean line
of six fine steamers of their own, and mean, if they can,
to build additional ships for it at home as their trade
grows. On this side, therefore, om* trade is every-
where most keenly touched, such as the tariff war and
speculation has left it ; and should anything occur
to cripple us for a time, we should probably find it
gone from us never to return in its old volume,
however great the aggregate trade of the world might
still be.

Now a naval and, in one sense, a military supremacy
is an essential adjunct to a trade supremacy. We must
not merely liave many and well-appointed merchant
fleets, but we must back them, protect them, and clear
a way for them, if need be, by an all-powerful navy,
and be ready to protect our chief trade centres with
abundant troops, surrendering only that trade wliich
we cannot fairl}^ hold. No nation that has ceased to
he masterful and stronn; has ever retained long the
leading position in trade ; and in some respects, though
the British Empire be still the strongest, in others it is
one of the most vulnerable on the face of the earth.
Witness tlie clamour over this oft-cited Eastern war,
tlie foaming excitement amongst certain classes, tlie
shouting about ' Britisli interests,' the sympathy with

CONCLUSION. oi;;

the brutalisL'd Turk and liis allies, and llic a])])areiitly
insane hate of" Kussia. What is it all but an unacknow-
ledged consciousness that we are endangered l)y
liussian success on our vulnerable side? India is,
after all, [it stake, in a fashion, in this conflict, and
that, too, quite apart fi'om any question of Eussian inva-
sion. Our Mahometan poimlation there watch ihc
struggle with growing keenness, and watch England'.s
attitude with OTOwino" discontent. Our old enemies
there, in fact, have all along tied our hands in this
business, contributing not a little to drive our Govern-
ment into the miserable would-and-would-not policy
which it has pursued. Yet that creed and race hatred
is not the greatest danger of all just at the moment.
It lies in the probability that the re-shaping of the East
cannot take place without making the maintenance of
secure comminiications with India more costly than it
has hitherto been, A naval power in the Eastern
Mediterranean would increase that cost and our danger
most materially, Egypt or no Egypt, and there is
hence a very great stake of ours in this struggle. It
affects our weakest part, which is very weak now, and
yearly grows weaker still, by the mere increase of
poverty in India and by the increase in the tension
between rulers and ruled. It would be unwise, no
doubt, to withdraw from India before this danger
grows into the elements of a new and [)erhaps disastrous
conflict ; but we should at least recognise our danger

344 CONCLUSION.

sufficiently to streugtlien ourselves where we are already,
in one sense, strong, by all the means in our power —
in our Colonies. We have neglected them, proud as
we may be of them ; and instead of running any longer
to and fro in the earth, wasting our energies on aims
that cannot yield an adequate return, ought now to
concentrate our efforts on building up their strength.
Nearly all our spare military strength has been con-
centrated in India, and that one fact reduces us at once
to a third-rate military power. In order to hold its
popidations down, we exhaust ourselves ; and the colo-
nies, which might be an enduring element of English
strength in all times, are left to provide for their own
defence or not as they please, with neither the spare
men nor the spare cash with which to make jDrovi-
sion. At least let us try to give them population in
time, if w^e have no soldiers to spare from that India
where we waste them all in maintaining a sway which
our melodramatic Premier lias succeeded in making
ghastly with his gewgaw of an imperial crown, 1)e-
stow^ed Avhen eaunt famine was threatenintr half the
empire with destruction, and which wins us the hate
and envy of our neighbours. Trade interests of all
kinds hang on such a change of our policy, and per-
liaps the very existence, in time, of the British
Empire, about the real power of which there is now a
sort of hysterical, fidgety interest that must make the
strong ones around us laugh.

CONCLUSION. 345

The rise of a new and ambitious })ower like Germany
offers at our very doors powerful reason in this direc-
tion. At present Germany has no colonies of her own ;
but the Germans are an emigrating people, and the
tyranny of the Prussian military system is making them
increasingly so. Should the ambition of German rulers
assume in time a colonising fit as a vent to the home
discontent, or as a means of controlling for purposes of
imperial aggrandisement the already formidable exodus
of discontented and impoverished people, what is there
to hinder them from seizing, if not colonies already
English, but containing many Germans, at all events
points near English colonies which wuuld seriuusly
endanger and damage them and our trade with them ?
I have already pointed to the dangers which threaten
us from a German absorption of Holland, but I must
recall them here for a moment because I think they
are real and more imminent than most people believe.
The Dutch colonies would be the very best medium
which the Germans could get for spreading their com-
mercial inihience in the East, for overlooking Australia,
for impeding the trade of England. We have been so
long accustomed to peaceful possession of the high seas
that we are ready to laugh at warnings such as these.
' Mere heated alarmists ! ' we say, and go on our way
self-assured. A little time spent in looking the facts
steadily in the face, however, will in this instance cure
us, I hope, of our boasting confidence. Unless Ger-

3 40 CONCLUSION.

many is broken up by iiiternal dissensions — which is a
possible but not a probable event — nothing is more
likely than that she will turn her attention to extending
her dominions abroad. Her very poverty, her inter-
nal discontent and large emigrations, her boundless
self-confidence and ambition, all drive her towards
such a course. No empire that the world has ever
3'et seen was an empire of peace. It is of the essence
of em})ire to make war : how else would emperors
justify their claims to divinity .^ And Germany is hard
at work getting ready for war at sea as well as on land.
Her fleet and arsenals are being steadily increased, and
she is already in possession of a by no means insigni-
ficant navy, while her military chest is unquestionably
the best filled in the world. From such contingencies,
therefore, I am disposed to regard the dangers of
English commerce in the future as nuich more grave
than from all others put together. We are so vulner-
able in India and defenceless in our colonies that tenfold
our oflensive force at sea would not protect us at all
points should we drift into war, or should a new
marauding power set about preying on us as Ave have
in times ])ast preyed on others. All our colonies might
be torn from us — nay, some of them, such as the hetero-
geneous South African settlements, might elect to go —
and the German element in them all might cause us
much li'inible and anxie(y should Germany and we
lake o])posite sides in a quarrel. What we should

CONCLUSION. 347

now cl(^, lliercfore, is to turn by every means in our
power the stream of liome emigration towards these
places, so that the Enghsh element might dominate in.
all, so that the communities themselves miglit soon
grow able to act in self-defence with effect, and so that
our mercantile navy, by having strong fortified ports
at leading points iu (he world, might still hold its own,
if not as supreme amongst pigmies, as the greatest
amongst many competitors. The defenceless state of
our colonies, one and all, is a danger and a disgrace to
us ; while we perforce keep in India a huge host — a host
that strains the military system of England to its utmost
in times of peace, and abstracts permanently from our
working population some 8,000 men.^

This subject is also a seductive one ; but I have
already pursued it far enougli to earn for m^'self the
title of a prophet of evil, whom no man should hsten
to, and I shall refrain therefore from particularising
further the many dangers which, ii my opinion, beset
us. I trust that at least 1 have said enough to justify
my pleading for watchfulness, thrift, and forethought
amon<]i;st our statesmen and merchants, and for aliiuher,

' Recent Australian papers speak of a waking' up iu the colonies
themselves to the necessity of being prepared for the possible advent of
war. But how inadequate can their preparations be at boat ! There are
not inhiiliitants in all Australia and New Zealand exceeding half the
population of London, and their work leaves them no time for soldiering.
They have a few forts and a few volunteers in New South AN'ales and
Victoria, and tallv of getting up corps of them elsewhere and of building
an ironclad or two ; but ^hat coidd tliey do against a few gun-boats or
even a few boats' crews of trained men judieiuusly directed ?

■48 CONCLUSION.

more far-seeing, and prudent colonial policy in our
statesmen. Enough has also been said, I know, to
demonstrate the extreme difficulty which surrounds the
questions which I set myself to answer in this con-
cluding paper regarding the future course of British
trade. What affected it in the past we have seen
clearly enough ; Avhy it has been inflated to so great a
pitch, and why it is now suffering from collapse ; but its
future course w^e cannot with certainty predict. We
may hope that it will rise again and enter on a new
course of expansion and speculation ; that we shall
still, as heretofore, furnish a third of the world and
more with the clothes it wears and the tools it uses ;
but there are many considerations that tend to dash
this hope. It is more rational in the face of these to
look for a general progress amongst nations in which
we shall have, if we take good heed, our full share — a
share large enough to compensate us for the loss of
great monopolies. This would be indeed an extremely
probable outcome of the industrial expansion of the
last generation, were we sure that the world would at
last consent to beat its swords into ploughshares ; but
the glim events now happening, and that have happened
of late years, are too horribly barbaric and mediasval
to permit us to trust in the regenerating effects of
modern civilisation. Civilisation, indeed ! with Europe
all armed, standing expectant by the side of combatants
waging war witli the mu^t denioniacid weapons of

CONCLUSION. 349

destruction, and in tlie most ficntlisli way that the
world lias ever known since Saul slew the cliildren of
Amalek ! Civilisation uplield by torpedoes, monster
shells, milrailleurs, breech loaders, revolvers, and all
the refined scientific methods of accomplishinn; murder
by wholesale ! Dare anyone trust to such a thing ?
Tlie world seethes with the elements of conflict ; nations
strain beneath the burden and the curse of horrible
despotisms, and long for even the liberty to die fighting ;
and yet we hope for the peaceful development of a
trade rivalry amongst these nations, fold our hands, and
leave our great possessions to take care of themselves
amid the fire. Alas for the hope ! and alas for the
world ! Not in the signs of the times do I read that
peace and brotherly concord are to secure for England
her status quo through even the near future. The day
is coming when we, too, may have to fight, not for
supremacy only, as others have fought, but perhaps for
dear life ; and with that outlook before us who shall
predict the coin^se of trade ?

All that can be said is what I have alrcadv said,
that we possess the capacity for work still, the
industrial facilities and qualities which will command
success ; and no doubt wlien the storms have passed by,
and the world has once more settled into a time of
recuperation and [)eace, if we liave preserved our
empire as we ought and may, we shall piu'sue our way
as we have done heretofore, or at least like a lari^er

350 CONCLUSION.

Holland ; hut I tliink the storms must pass before that
new day of advancement comes.

Europe lias been all nnhiuged by the events of the
last twenty years or less. The yeast of the first French
Eevolution works through its society still. JSTew
military powers have come forward, new peoples have
risen np to claim their freedom, and old empires find
tliemselves borne on by a tide they try in vain to con-
trol. Work will go on still, and people will grow rich
or poor, all the world over, whether these clouds break
into storms or not. But, whilst they are felt to be
hanging over us, it would be idle to predict that we are
to have a new rush of prosperity in the near future.
Against any individual existing power, and against any
single nation, we are still most fit to compete for the
trade that is to be done ; but even on this supposition,
and granting peace restored, the aggregate capacity of
working industrial communities is greater now against
us than it was five or ten years ago. The desire to
measure strength with us in the great markets is also
keener, and economic fallacies are fully more powerfid
for mischief than ever. At the best, therefore, and on
any view, I can only say that we shall continue to do a
large trade — as against any single country a prepon-
derating trade ; but that a new rush of conquest and
wealth, like that which the past generation has en-
joyed, cannot be looked for. If we do not strenuously
develop our Colonies we may even see our commercial

CONCLUSION. 351

prosiK'i'ity dwindle yet many degrees further, for many
countries are deliberately pushing us away from them
and thereby endeavouring to make us poorer. Should
the long continued cheapness of credit come to an end
soon this dwindling may even become a rush, for dearer
money will not this time mean ruined trade, as it has
always hitherto done, but greater poverty. The low
price asked for loans by the banks of this country for
the last ten years nearly is so far a sign that the busi-
ness now done is sound in character, but only so far.

Banking, like everything else, has undergone strange
developments of late years, and I am inclined to think
that most of the seeming stability which has consoled
people in the present time of depression is hollow.
Banks, private and corporate, have identified their in-
terests more or less closely with the fathomless masses
of public securities in which their customers have be-
come accustomed to speculate and with the trade specu-
lations of private persons, and they endeavour above all
things to make business go smoothly. They hide
away losses, temporise with difficulties, and, backed by
their immense credit, carry on concerns, and sustain
values, to an extent which we shall only be able to
measure when the day of reckoning comes. We see
something of what is done, however, in the extraordinary
way in which prices are sustained on the stock ex-
changes of the world. English railways, foreign loans,
sound and unsound, are all more or less at absurdly

0\:

52 CONCLUSION.

liigli prices, and they are maintained at these by the
agency of the banks, By-and-by enormous losses will
have to be faced somewhere on account of these, and
only then sliall we be able to realise what the world
has lost in the years of depression, how much poorer
England has grown. To be sure, a collapse of this kind
will afflict all countries where banking is developed nearly
alike, but for that very reason we are likely to lose most,
and the supervening bankruptcies may cripple trade
for a generation. Mercantile credit nowadays hangs
everywhere together and through the cosmopolitan
agency of banking — an agency which knows no coun-
try and which moves the trade of all countries. Should
any link in the chain of banking credit which girds
the world snap, therefore, we may have money un-
usually dear, public securities millions in value and
concerns of all kinds hurled into bankruptcy. The
reckoning day has yet to come, in short, for the busi-
ness inflation of a generation, and all that cheap money
has hitherto meant is that tlie financiers who did much
to create this inflation have hitherto been able to stave
it off. Will they be able to do so much longer ? Will
the world recover itself so as to bridge over its losses
with its further accessions of wealth and prevent the
necessity for a reckoning ? These are the important
questions of the immediate future, and according as we
answer them shall we hold sanguine views or the reverse.
For my own part I do not believe in the recuperative

,CONCLUSTON. 35 o

powers of the world to tliat extent, nor do I think
that biismess can revive in any solid fashion till the
reckonin£>: has been made. The swollen credits of
all countries must be brought down to the level of the
actual facts before confidence which is essential to pro-
gress can be restored, and before lending can again
become partially wholesome. The profit and loss ac-
counts of the world will prove difficult of adjustment I
fear, and it would not be at all surprising to find many
fair-seeming institutions, and some few more nations,
bankrupt before the adjustment is made. France has
not yet paid her war bill ; Eussia does not know the
amount of hers ; the debts of Egypt and Turkey have
not produced their worst consequences, nor have the
United States mastered the evil effect of their lavish-
ness in railway and industrial developments. A promise
of a revival of business may indeed be the first thing
that will put an end to the hoUowness of the entire
situation, and whether or not, the increasing poverty of
some communities, and the very necessity of coming to
a settlement, will force a solution in time. My impres-
sion consequently is that a temporary return to peace
if nothing else, will in Europe probably be the signal
for an outbreak of financial troubles. Everyone waits
now and hangs back, but then everyone would be try-
ing to push forward, and the means for doing so would
prove to be wanting. Thus at all points we find in-
dications that the world cannot advance anew till storms

VOL. II. A A

854 CONCLUSION.

are over, that the universal habit of trading on credit
and progressing under mortgage cannot be renewed till
tlio old accounts are settled. On all grounds in con-
sequence I look for a further depression in the trade
of this country, and when I consider how unprepared
we are by our habits and social condition for a pro-
longed time of retrogression, I confess the prospect is to
me an alarming one. There is strength enough in the
nation to endure it, perhaps, but there may not be
strength enough to renew the trade warfare on the
same advantageous footing when the time of distress is
over. This is not a period like those which followed
ordinary panics, in short. It is more likely the begin-
ning of a new era for ourselves and for the world. All
the world has come to hang together in matters of
trade by a chain of debt. There has been a world-
wide issue of irredeemable currency, as it were, in
the sliape of bonds and banking credits, by means of
which prices have been inflated, production unhealthily
stimulated, and a feverish activity engendered; and when
this inflation has died away all nations will be poorer,
many crippled for generations, some perliaps almost
extinguished. In the revolution of values wliich such
a recoil will cause we must be heavy sufferers because
we have been the most reckless takers of promises to
pay, the greatest squanderers of a splendid inheritance,
that the world has ever seen.

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358

APPENDIX II.

APPENDIX IL

General Domestic Exports of the United States in Tv)enty-six Years.

LOW DUTY TERIOD

Fiscal
Years

Raw or
Crude Products

Partially
Manufactured

Manufactured

1849

1850
1851
1852
1853
1854
1855
1856
1857
1858
1859
1860
1861

^^85,853,726
90,607,712
128,408,208
106,980,864
130,672,592
128,452.625
117,884,310
171,523.494
186,265,094
169,957,814
197,099,732
224,413,148
104,722,026

^28,106,978
21,668,384
22,524,815
21,977,876
28,853,385
48,216,776
35,165,696
53,551,701
49,052,887
39,108,683
34,708,626
39,901,791
50,542,437

;^17,749,377
22,624,137
27,687,115
25,972,407
30,343,185
37,315,835
39,701,129
41,362,856
43,588,732
42,274,536
46,583,722
51,927,484
49,685,153

Totals

;{?1,842,851,345

^473,380,035

^^476,765,668

Annual
average

^141,757,796

^^36,413,849

^^36,674,282

PROTECTIVE PERIOD

1862
1863
1864
1865
1866
1867
1868
1869
1 870
1871
1872
1873
1874

^^75,456,352

99,249,116

75,463,144

81,601,107

337,572,897

252,959,905

226,686,087

222,615,504

305,571,539

301,048,092

283,941,261

3K),t95,286

381,517,951

^67,664,631

88,276,256

85,176,267

91,640,548

77,644,663

67,416,036

80,220,222

87,414,017

87,372,543

103,548,993

1 24,099,942

151,084,296

1 58,656,238

;^38,903,885
62,366,064
58,922,226
85,883,408
52,823,343
63,225,175
63,649,429
61,015,628
62,264,259
73,518,207
68,380,275
83,647,435
90,135,179

Totals

^^2,987,208,241 ' /1. 270,21 4,652

;g864,734,513

Annual
Average

^229,785,249

^7,708,819

^^66,518,039

APPr<:Ni)ix II. 359

'The total exports for the first period were ,?2,7 92,997,048,
and for the second period, ^$5,1 22,1 57,406, showint^ an
increase in exports of nearly 85 per cent, in the second
period over the first. The increase in population in tlie
second period did not probably exceed 35 per cent. It was
just 22*6 per cent, in the decade 1860-70. We have thus an
increase in our exports, after making due allowance for
increase in population, of nearly 50 per cent, in the second
period over the first. The great waste of productive power
and the serious interruption to commerce, caused by the war
in the second period, may fairly be regarded as a sufficient
offset to the fact that the exports in the second period are
stated in currency values except the exports from the Pacific
coast, which are in gold values. Protection, therefore, has in-
creased our exports since 1861, notwithstanding the disturbing
influences of a great war, and despite the higli prices for labour
and all materials and .products which that war created.' —
SivanJvS Report.

360 APPENDIX m.

APPENDIX III.

Subjoined is the abstract statement of the debt ofKussia,
given in the ' Economist ' of December 9, 1876, and alluded
to in the chapter on Eussia. It will be seen that all the floating
debt obligations were taken at 29d. per rouble, in my view
an untenable mode of reckoning. By admitting it the State
would practically be able to release itself in time from all its
burdens by merely issuing roubles until they sank to almost no
value at all. According to this mode of computing debt the new
bm'dens which the war has imposed are, so to say, neutralising
themselves, for as fast as the Government prints and issues
new paper the value of the rouble recedes. It is now only
24:d., and the following abstract would, therefore, if calcu-
lated on that basis, show a reduction of the debt obligations
payable in paper of fully 20 per cent. This fact needs only
to be stated to show the injustice and even absurdity of thus
releasing a State from the letter of its promises to pay.
Fairly reckoned, the debt of Kussia according to this abstract
is close upon 500,000,000/.

Since it was drawn up, however, the war has supervened,
and with it has come a new debt of unknown amount. Be-
sides one abortive foreign loan for 15,000,000/. created to
serve as security to the Berlin and Amsterdam bankers, who
have been engaged this twelvemonth past in supportingKussian
credit with their money and by speculation, there have been two
internal loans issued for together 300,000,000 roubles nominal'
or say, 42,000,000/. The note circulation has also been in-
creased by an indefinite amount wliich we cannot be exagge-

APPENDIX m. 361

rating in placing at another 300,000,000 roubles, and we
have therefore roughly a debt of about 100,000,000^. added to
the previous burdens of Russia as the result so far of the
present horrible war. Created as most of this debt is in that
most pernicious of all forms an inconvertible and depreci-
ated paper currency, the deep miseries and credit disorganisa-
tion which it must ultimately bring on the Empire will
prove to be enormous. Russia will not recover from the finan-
cial results of the present war within the next twenty years,
even should the period be one of profound peace.

The following is the abstract statement of the debt of
Russia on January 1, 1875, asgivenby the 'Economist.' Itdoes
not appear, however, that the 4^ per cent, railway loan for
15,000,000?., issued in 1875, has been included in this table :

1. Loans Repayable in Specie, Taken on Converted at Par —

£
1815-64-66 Dutch and Anglo-Dutch .... 7,796,083

1861-66 Anglo-Dutch 4,794,700

1846-60 4i% Loans ....... 8,100,000

1858 Compensation to Denmark 186,489

1830-63-64 4 % Bank bills (metallic) Es. 50,409,000

—at ZM. per rouble 7,981,425
1820-22-54-55 5 % Loans . . . Es. 136,500,700

—at 38r/. per rouble 21,612,610

1862 Seventh 5 % Loan 15,000,000

1859 8 o/q Loan (Thomson, Bouar, and Co.) . . . 5,148,700

Total 70,620,007

2. Loans Repayable in Taper Currency — Roubles.

1840-42-43-44-47 Five 4 % Loans
1864-66 Two Lottery Loans
1363-69 5 % Bank Bills
1817 6 o/q Loans ....

1859 4 % Consolidated Stock

1860 Perpetual Deposits

Total ....

18,600,000

192,050,000

23,504,000

47,123,773

153,865,225

288,377

43.5,431,375
Converted at 29<?. per rouble 52,614,622

Total Loans 123,234,G2U'

^ Tlie totals iif these loans have been reduced slightly by sinking fund
operations, but the totals are not thereby materially affected, as the sink-
iD<r funds arc small.

3G2 APPENDIX III.

3. Floating Debt :

(rt) Floating Debt repayable in Paper Currency —

Roubles. £

Treasury Bills 21(5,000,000

Debt to Credit Institutions (no inlerest) 118,284,976

„ „ State Bank „ „ 5,220,797

„ „ Kedemption Fund „ „ 2,317,000

Banknotes uncovered „ „ 5GG,086,396

Liabilities in respect to Kingdom of Poland 84,762,852

Total 992,672,021

Converted into Sterling at 2'Od. per rouble 119,947,869
Total Loans and Floating Debt . . . 243,182,498

{h) Liabilities in respect to Railways, in Specie —

Francs. £

4 % Nicholas (Moscow) Railway Bonds . 571,585,000

£
Converted into Sterling at \Qd. per franc 23,816,041
1870-73 5 % Consolidated bonds . . 53,882,200

Total 77,698,241

Capital of Railway Companies, the interest
on which the Government was called upon
(1875) to pay under its guarantees
160,000,000 roubles, converted at 29 rZ.
per rouble 19,333,333

Total .... ... 97,031,574

(<;•) Liabilities in respect to Redemption of Roubles

Peasant Lands 382,425,234

Converted into Sterling at 29<^. per rouble 46.209,715
{d) Liabilities in respect to Issue of State Roubles.

Bank 5 % Bills 220,462,250

Converted into Sterling at 29rZ. per rouble 26,639,188

Total Liabilities almost covered by special resources 169,880,477

General Summary — £

1. Loans 123,234,629

2. Floating debt 119,947,869

Total Loans and lloating debt . . . 213,182,498

3. Liabilities (at present almost entirely covered) —

Issue of 5 % Bank Bills, in respect to Railways and

Peasant Redemption Fund 169,880,477

Grand total of debts and liabilities , . . 413,062,975

APPENDIX III.

363

ThefollowiitgStatrmont of the Grovith of the Public Debt of Russia since
the Year 1817 is also taken from the 'Economist^ of the same Date: —

Detscription of Debt

I.— Loans.

1. Terminable Loans — Foreign

,, „ Internal

2. Interminable Loans — Foreign

(Rente Pcrputuelle)
Interminable Loans — In-
ternal . . . .

Total

-Floating Debt and
Liabilities.

1. Debt of Treasury for moneys

borrowed from ' Credit In-
stitutions '

2. Treasury Bills

3. Bank Notes (uncovered)

Grand Total

1817

1827

Eoubles Roubles

28,842,000 2o,!l<)2,000

18,408,359 10,225,832

— 70,980,180

46,355,906 74,541,316

93,606,265

181,739,328

20,000,000' 24,000,000

1238,857,000 170,221,828
352,463,265 375,961,156

1837

1847

Roubles Roubles

45,645,250, 37,251,121
42,471,820' 53,714,212

105,594,720' 160,409,000

72,7 26,918 73,909,514
266,438,708 325,283,847

127,359,000'266,528,000

11,428,571 1 45,000,000

170,221,228' 171,686,918

575,447,507 808,498,765

Description of Debt

5.
6.

I. — Loans.
Tenninable Loans— Foreign
„ „ Internal

Interminable Loans — Foreign
(Rente Perputuelle)
Interminable Loans — Internal .

Total

n. — Floating Debt and
Liabilities.

Treasury Hills ....

Debt of Treasur}' for moneys bor-
rowed from 'Credit Institutions '

Debt of Treasury on account cur-
rent with State Bank

Debt of Treasury for Loan from
Redemption Fund

Bank Notes (uncovered)

Liabilities in respect to Kingdom
of Poland

Liabilities in respect to Railways
,. ., Redemp-

tion of Peasant Jianils

Liabilities in respect to issue of
State Bank 5% Bills (1st issue)

Grand Total

1857

1867

On 1/13 January,
187.5

Roubles

47,369,000

15l,.530,113j

'319,434,894'

Roubles
211,129,500
209,1 ;!0,0<)0
("278,925,160

203,863,385

518,834,007

93,000,000
320,000,000

612,458,889

1,543,792,896

903,048,045

216,000,000
37,119,000

568,467,029

216,889,358

258,356,000
2,199,879,432

Roubles
1 67,060,600
272,021,080
296,170,609

201,277,375

936,529,664

216,000,000

118,284,976

5,220,797

2,317,000
566,086,396

84,762,852
703,170,555

' 382,425,234

I
220,462,250

3,235,259,724,

> On 1/13 Jnly, 1875.

NoTK.— The fi;,'uro^ for 1817-18t;7 have boon o^tractod from the Slalisliail R--vieui of t/ie Russian
Emniiv, by W. l)c f.ivron, KoUo'.v of tlio liiipenu! Geograjihical Society, St. Petersburg, 1875. The
statement" for 1875 has liocn conipiled from Rus-ian Official Returns, collated with au article ou the-
Tublic Debt of Russia, in the liussisclte liicu*', vol. ii., 1876.

364 APPENDIX IV

APPENDIX IV.

THE FINANCIAL POSITION OF EGYPT.'

It will be remembered that on the issue of the 1868 loan,
Mr. J. W. Larking, in his capacity as agent for the Viceroy
of Egypt, stated that the country had a clear revenue of
6,000,000/., and by the last few budgets that revenue has been
swollen to about 10,000,000?. How has this growth been
brought about ? If we examine the statements of imports and
exportspublished, we find that last year the figures did not reach
so high a point as they did during 1863 and 1864, when Egypt
was basking in the prosperity induced by the American Civil
War. From 1863 to 1870 inclusive, the exports only twice
rose above 9,000,000?., as against 13,000,000?. and 14,000,000?.
in those two years, and the imports fell proportionately low.
In 1874 the exports rose, it is so set down, to nearly
15,000,000?., although the English portion of them — say
three-fourths of the whole — had fallen to 10,500,000?., but
last year they again fell below the figures of the war period.
Yet in 1863 and '64 the debt of Egypt was a mere bagatelle,
and as late as 1868 the revenue claimed was only 6,000,000?. :
what then could have made it so much bigger since ? Have
the loans done it ? ' The profits of the Khedive's estates and
puljlic works,' some say; but that is an absurd answer,
because all these profits are confessed to be quite insufficient
for the loans ' secured ' on them. Not only so, but these
profits are a delusion, so far as the Daira is concerned, if Mr.
Cave is to be trusted. He tells us that the whole of the

' Extract from an Article in Fraser's Magazine for Juno 1876.

APPENDIX IV. 365

Khedive's property only yields 422,000^ a year, or not one-
third of the debt charji;e for which it is liable. This statement
has, indeed, been disputed, and a fresh estimate published
since, but without reason given ; and if it is considered that
the extravagant sugar and cotton growing speculations do not
pay, by the admission of the Egyptian officials themselves, the
estimate of Mr. Cave may well be accepted as near the truth,
if not excessive. Are we to look then to the improved
condition of agriculture amongst the people ? We fear not.
Take the following description from a letter in the ' Times '
of April 15, written by a correspondent not disposed to take
a pessimist view of affairs, and judge what improvement
Egypt has obtained from the bloated debt that has been
put upon her by, I fear I must say, devices as vile as any
ever conceived : —

The situation of the town labourer will be acknowledged to be
not very enviable. I thought, perliaps, the condition of the culti-
vators, the fellaheen, the ' sous of the soil,' would be lictter. Egj'pt
is the most fertile country in the world, produces its three crops a
year without exhaustion, and it was only reasonable to suppose
that the class who gave their laboiu" to such a reproductive coiuitry
would, at any rate, secm-e comfort for themselves. I talked with
all classes about them — Europeans, natives, employers, employed,
sheiks, fellahs themselves ; but they all concurred in describing the
condition of the countryfolk as very miserable. So I Avent to see
for myself. I rowed up the river from Mansoorah, landing here
and there at the villages, and thus I saw, not only the homes of the
fellahs, but I also obtained an idea of the country which I could
not have got in the town. The villages are very frequent, and
always in aspect the same — a cluster of brown mud huts, window-
less and chimneyless, round a dome and minaret, by way of village
chiu'ch and spu-e. I landed from time to time to see these human
beehives. The walk always lay thi-ougli great reaches of verdure,
along the banks of the small canals which form a vast network over
the whole of the Delta. I found every^vhere an almost incredible
squalor, l^et me, by way of example, briefly desci-ibe two villages

366 APPENDIX IV.

I saw. I first called on the Sheik- el-beled. He is the headman of
the village, responsible to Government for the taxes of the village,
its contingent of forced labour, and its contribution of men to the
ai-my. If the village is large there are several Sheiks. Nominally
the Sheik holds office for life, but the Moudir of the province can
practically do what he pleases with him. ' "We elect him, yes,' said
some fellaheen, ' but the Moudir sends Avord whom we ai'e to elect.'
The Sheik of this particular village was well dressed, in Oiiental
fashion, had a house of many rooms, and even glass windows. He
gave me sherljet and coffee, and then took me round his village.
The mud huts are all built one against another, like the cells of a
beehive, save where they ai'e divided by the little lanes that i-un
through the village. I chose a hut at random, and asked if I might
go in. * Yes,' said my companion, ' but it is very poor, and there
is nothing to see.' We went to the entrance, these huts having, as
a rule, no doors. An old woman — at least, she looked old, but the
women are old at forty — barred the way. I offered money, but
that was not enough to overcome her feelings that her house was
her castle, where no Chiistian should enter, and the Sheik had to
insLst. One small room — miid walls, nnid roof, mud floor — was all
w^e found. Foiu- bricks made a small fire-place, but there was no
fii'e. A small basin of maize, five water jars, an earthen pot for
ai-tificial hatching of chickens, a cock and three hens, a small heap
of sacking by way of bed-clothes, constituted all the furniture of
the house. Four yards by five was the extent of the house, and
this was partly taken iiji by a raised dais of mud, which serves as
the family bed in every fellah halntation. A family of four lived
in this space. The head of the family was considered pretty well-
to-do by the fellah world, as he is the owner of five feddans (acres)
of land. I tried another house, taken similarly at random. It
was still smaller and more pitiful than the last. The mud bed
occupied half the space. Three yards by one was my measurement
of the rest. A water jar and a reed pipe were all the signs of
habitation. There were no boxes or cupboards in which other
goods and chattels might be hidden. A family of three, labourers
on the lands of others, lived here. I have seen pigs better housed
in England. . . . Excess of population is not the cause of the
miser}- I saw. Five millions are not too many for the countiy.
. . . Com, formerly B.<?. the ardeb, is now 18s. Eggs, once twelve

APPENDIX IV, 367

a penny, are now a lialfpenhy each. Fowls, which used to cost a
piasti-e, are now worth four or five. Cotton, the staple of the
country, has fallen in pi-ice from 55 dollars the cantar,whicl lit fetched
during the Ainerican War, down a gradually declining .scale until
it has reached 11|- dollars, and now it hardly repays the cost of
cultivation. Wliile the source of wealth has thus decreased, the
number of workei's is diminished by the conscription in a way that
almost recalls the days of Mehemet Ali, when, for a long series of
years, the country was drained of its bast men by the demands of
jnilitary service. Forced labour is another cause of misery. It
may not be unreasonable that districts should labour in common to
maintain the roads and canals. But it is hard that fellahs should
have to give their time to works of no benefit to their district, and
even to works of no public utility at all, however high in position
may be the person who demands it. Last, but by no means least,
comes the burden of taxation, which the Government, with its
costly schemes of internal development and external conquest, has
increased year by year.

These extracts give a picture worth pondering over.
Egypt, instead of being richer by all this money, has, it is
clear, become poorer than ever, till, for the majority of the
wretched people, existence is not worth having. If the
revenues of Egypt have increased, therefore, it has been by a
burden of taxation, such as this which I cut from tlie same
letter : —

I give the following list of charges per feddan of good cotton
land actually paid by a cultivator in the Delta, between July 31
and December 29, 1875 : —

' Maintenance of Nile banks, 19 piastres 10 jiai'as; two-twelfths
of an ardeb of wheat (said to be collected to enable Government to
fulfil contracts made in Alexandria), 20 piastres ; Moukabaleh
(annual sum paid in redemption of half land tax), 172 piastres 20
paras ; National Loan (a forced loan of five millions at 9 per cent.),
108 piastres; irregvilar expenses (unexplained what expenses), 5
piastres ; Amour de la Patrie (thought to be a war tax), 38 piastres
20 paras ; one-third jMoukabaleh fm- the coming year. Cif) piiistrcr,
— total 423 piastres 10 paras.'

368 APPENDIX IV.

Ninety-seven and a half piastres are equal to a pound sterling.
The value of good land has fallen. What was formerly worth 301.
is now only worth 20/. Some of the poorer land, where water ia
not easily obtained, has even been abandoned. Other land of
better character has been sold in payment of taxes. Great quanti-
ties of ]n'oduce have been seized and sold for the same purpose.
The people themselves do not run away, as families, friends, and
even Adllages are held responsible for unpaid taxes. No reduction
is made for a bad crop or low prices. Considering that the average
pi'oduce of land is now only worth, on an average (taking cotton,
which can only be planted once every three years, wheat or maize,
and clover together) about 9/. per acre, and that out of that taxes
and cost of irrigation have to come, there is not much left for the
jicasant proprietor. It is not surpiising that they are selling their
lands, and coming into towns, where, if they do not earn a fortune
by theu' laboui', at any rate they escape much of the heavy tax-
ation.

A flourisliing state of things, truly ; but not even all this
grinding taxation and abject misery suffices to wring out of a
population of over 5,000,000 a revenue of 10,000,000L The
budget, and budget surplus, and definitive accounts of the
Egyptian Government are utter deceptions upon this point, as
can be easily shown.

For example, the second and improved budget for
1873-74 exhibited a surplus of over a million, and the
definitive account of the income and expenditure for the year
or fifteen months in 1874-5 showed an almost exact balance;
wliile the budget for 1876, published as an appendix to Mr.
Cave's Eeport, exhibits a surplus of over 1,700,000L, which
the Egyptian Gfovernment has, as usual, the hardihood to
point out as sufficient to pay the charge on the floating
debt. According to these figures, disjointed though they
be, the Egyptian Government should now have little or no
floating debt at all; for, although the 1873 loan is said to
have only netted 20,000,000^., and, therefore, left 9,000,000?.

AITENDIX IV. 3G9

or 10,000,000/. f,() })o carried on, that should have, with these
surpluses, lieen lessened rather than increased. The Egyp-
tian Government has itself, however, knocked down all
support to this pleasant fiction. As was well pointed out by
the 'Daily News,' the lumped-together statement of revenue
and expenditure between the years 1864 and 1875 (given in
Mr. Cave's Eeport), when compared with a similar statement
issued two years before, shows that, even with an income of
10,000,000?. per annum and a paper surplus, the last two
years must have involved a deficit of 8,243,628?. per annum.
The figures come out thus — income of the two years, 1874
and 1875, 21,348,838?.; expenditure, 37,836,094?.; deficit
on the two years, 16,487,256?. The detailed budgets are,
therefore, entirely illusory by the confession of Egypt itself,
and, as the ' Economist ' says, drawn up only with a view to
deceive. The doubts which such comparison induces as to the
budgets naturally extend to the revenue itself. If there was no
source but increased taxation on an already impoverished
people from which to draw an augmented revenue, how could
it possibly be raised from under 5,000,000?. in 1864 to
6,000,000?. in 1868, and to 10,000,000?. in 1874? Previous
to 1864 it had, as stated in Mr. Cave's Keport, taken thirty-
fom* years to augment 1,600,000?. Does not this mysterious
growth suggest that these large figures were merely put down
to look as well as possible beside the swelling debt charges ?
There are few direct means of answering the question, but
some approach towards its solution is gained by examining
(1) what has become of the money that was raised on the
various loans, and (2) some of the items of the budgets and
accounts in the light of the explanations of Mr. Hemy Oppen-
heim and others, as well as of the Government itself.

First as to the loans. Egypt, as we have seen, began to
borrow in 1862, and, including the floating debt, taken at

VOL. II. 15 n

370 APPENDIX IV.

Mr. Cave's estimate, and addiiii*- to it, for the sake of a
correct account, the 4,000,000L got from England, has,
within fourteen years, borrowed an average sum of nearly
i),500,000^. per annum. What has become of this money ?
INIr. Cave says that Egypt has nothing to show for it except
its Suez Canal, which is in itself an absurd statement,
seeing that the Canal is leased to a Company, and that
Egypt gets at present loss rather than gain from its existence.
Still it is tnie that the money which has not gone into that
undertaking has gone mostly to keep the ball of loan-concoct-
ing rolling merrily, and to gratify the whims, improving and
other (mostly other), of his Highness the Khedive. The
Canal, according to a calculation of Mr. R. H. Lang, a
gentleman acquainted with Egypt, had cost the Viceroy
1 7,423,1 78Z., including interest up to the end of 1873, and
the railways 11, 899,411 L, also including interest, money
liaving been raised at 27 per cent. Eeyond these sums and
the other interest and sinking fund charges there is nothing
to show for the whole 80,000,000/!. or 90,000,000L that have
been nominally squandered. Of course, it must not be
forgotten that that big sum is probably more tlian double
what the Khedive ever received. All his loans were issued at
a greater or less discount, and those of 1870 and 1873 were
never thoroughly ' absorbed ' by investors. He paid exorbitant
rates for short advances at times, and always very high ones,
so tliat, altogether, if he got 40,000,000L or 50,000,000^. out
of the gTOss sum owing, he did well. We can put the net
n.'ceipts at about 45,000,000^ But that makes no difiference
t<» Ihc Egyptian lia])ilities. When we come, moreover, to
analyse the import figures of Egypt, we find that the utmost
that could have been spent on works of utility is al)0ut
1 ,000,000^, per annum, against a lx)rrowing that latterly much
exceeded 10,000,000^., and tliat has averaged over 6,500,400^
per annum. In one sliapc or otlior, therefore, the bulk of the

APPI-INDIX IV. 371

money roceived has gone to jnako f^ood revenue deficits ; aufl
as these deficits grew rapidly larger after each new loan, it is
but fair to infer that they did so because legitimate revenues
did not augment with the rapidity that has been set forth.
That inference is the more likely when we consider that the
most favourable period in the commercial history of modern
Egypt was 1863 and 1864, when the revenue was set down at
only some 5,000,000^, and that since then poverty and
misery have been steadily on the increase amongst a popula-
tion that stagnates at about 5,250,000.'

The most important item in the Egyptian revenue is, of
course, the land tax ; and it is also the most difficult to get
any just conception of. In the first budget of 1 873-74 it was
set down as yielding 4,579,000^., exclusive of the date-tree
tax, tithes, and the Mokabala. When the amended budiiet
came out, however, this sum was altered to 4,185,000/., and
Mr. Henry Oppenheim puts it down at 3,368,000/. ; while
Mr. Cave says in his Report that in 1871, the year before the
Mokabala arrangement came into force, the land tax yielded,
'as nearly as we can judge,' 4,793,459/. a year. According
to the highest estimate for 1873-74, therefore, this item of
income would appear to have diminished rather than increased.
How, then, has the total revenue grown to 10,000,000/. ? In
1871 Mr. Cave says it was only 7,377,912/., and in 1873-74,
according to the first budget, it was only 7,000,000/. ; so tliat,

' The account may be made up tluis : —
Net income from loans PLxpenditurc on Suez

according to Mr. Canal (exclusive of

Cave's Report . , £4.5,000,000 interest) . . . £10,760,000

For interest and repay-
ment of loans, ac ord-
ing to Mr. Cave's
Report . . . 29..57 1,000

£40,331,000
Balance spent by the
Khedive 4.r.r)ii.()()()

£4 5,000,000 £45,000,000

B B 2

872 APPENDIX IV.

on any showing, its growtli since has been sufficiently striking.
Part of the answer to this conundrum is to be found in the
magic word ' Mokabala.' When the amended budget came
out in 1873, that mysterious item stood for l,576,OOOL,
which had not appeared in the previous one, although deduc-
tions had there figured on its account to the amount of
099,000^., which, in the new fabrication, dwindled to 132,000L
What, then, is the Mokabala ? It is an arrangement wherel)y
the Khedive forces double contributions from the landholders
over nominally a term of years, on conditions which are thus
described at page 5 of Mr. Cave's Eeport : —

The reverme of Egypt has increased from 55,000^. a year in
1804, 3,300,000^. in 1830, and 4,937,405^. in 1864, the second year
of the Khedive's administration, to 7,377,912^. in 1871, the year
previous to the changes caused by the law of Mokabala. Under
this law all landowners could redeem one-half of the land tax to
which they were liable by the payment of six years' tax, either in
advance in one sum or in instalments. Those who paid down this
contribution in one sum received an immediate reduction of their
tax ; those who elected to make the payments in instalments receive
a discount of 85 per cent, on their advance, and tlie i-eduction only
takes place on the conipletion of their contril>ution. The extreme
term for the entire redempticn of each contributor's tax was at
first fixed for six years ; but as the law was either not pi-opeily un-
derstood, or the small owners were unable to make so heavy a pay-
ment annually, as their land tax plus its amount minus 8^ per
cent., the term was extended from six to twelve years, two years
after the first promidgation of the law, so that it has now ten more
years to run, daring which the contributing landowner has to pay
land tax plus one-half the tax (G-12) and minus 8^ per cent, of the
same. It Is most advantageous to the landowner who can afford
the present sacrifice, as, in addition to the advantage of securing
ill perpetuity the redemption of half his tax by a payment of five
and a lialf times its present amount, to which it is reduced by the
discount allowed (8;',-100-J- x 12 = |), he secures an indefeasible title
to his land, the tenure of wliich is at present of an luicertaui char-
acter. To the State the arrangement is a ruinous one fi'om a fiscal

APPENDIX IV. 37 o

[(oint of view, as the Khedive has bound himself in the most solemn
manner not to re-impose the redeemed moiety of the tax in any
shape whatever, .ind he luis thiLS siicrificed for all time 50 per cent,
of revenue from this source in order to realise eleven times the
annual amount remitted during a period of twelve years. The
original intention of the law was to realise at once, or in a few
years, sufficient capital to pay off the floating debt, but by extend-
ing its operation the sum raised annually has only sufficed to pay
the interest on it.

In other words, for the first year the landholders paid
their tax twice over, less 8| per cent. ; for the second twice
over, less 1 6f per cent., and so on until, at the end of twelve
years, they are released from half the burden of the old
permanent tax for ever. By this means, we are told, the
Khedive hoped to pay off his floating debt. He has failed to
do that, however, and, instead, this is what happens. For a
few years — supposing every landholder able to pay the tax,
which he is whipped to do — the land revenue is excessively
swollen, and then it gradually drops away, until, according to
Mr. Cave's calcvdationsj it will amount, at the twelve years'
end, to 1,805,1 3 IZ. Mr. Cave was first told that JMokabala
would only involve an ultimate loss of 1,531,118?., but
afterwards the Khedive confessed to him that it would
actually come to 2,500,0007., while in 1873 an anonymous
estimate, generally attributed to jNIr. Oppenheim, counted it
at 3,022,000?. : but their estimate of the original land
revenue differs so much that these other discrepancies
ultimately come together in almost the same result as
regards the final issue. By this means, then, the land
revenue was temporarily raised, according to the amended
budget of 1873, to 5,029,000?., and it will sink in 1880 to
less than 2,000,000?. Nay, by virtue of the cumulative dis-
count, it is becoming less every year, and never would have
sufficed to make 5,000,000?. into 10,000,000?. And what is

374 APPENDIX IV.

there to fill up the gup now yearly on the increase ? The
upholder of Egyptian finance could only find two sources of
consolation, and only one of compensation. Before the
jMokabala is lost the permanent charge of the Egyptian debt
would, they say, be lessened by the liquidation of several of
the short loans. That would be most satisfactory were there
not new debts growing, and had not the recent decree of
consolidation swept these hopes entirely away, for no loans are
to be paid ofif now for sixty-five years. The second consolatory
and compensatory consideration lies in the augmentation of
land revenue from new cultivation brought under taxes. Mr.
Cave says that 620,000 feddans may be expected to yield
revenue soon, and he estimates that revenue at 320,000L, or
about 10s. per feddan, which, contrasted with the 20s. and 21s.
per feddan said to have been got from the old acreage before
the imposition of the Mokabala, excites reflections. At that
rate the whole land registered as cultivable, and amounting
to 1,098,000 feddans, would not, were it brought into cultiva-
tion now, suffice to make good what would be lost in 1886 by
a couple of millions sterling. But there is little chance of any
such good fortune. Land is rather going out of cultivation
than coming in. The people are too experienced in oppression
to be eager to open new ground on which taxes could be laid.
All things considered, therefore, there is much force in the
observation with which the anonymous pamphleteer aforesaid
sums up his favourable review of the Mokabala arrangement : —
' It must not be forgotten,' he says, ' that, although the remis-
sion of the land taxes promised as a return for the Mokabala
instalment is absolute, the income of the taxpayers is increased
by the remission, and would be available to the State in some
form or other if necessity sliould arise.' No doubt it would.
Tlif liiiif is a Tiioht suggestive one; and if one may judge by
the list of burdens borne by the poor fellaheen given above, it

APPENDIX IV. 375

lias not been lost on the astute, conscienceless ruler of Egypt.
But the taxation that increases poverty, that causes culti-
vators to sell land rather than bear the burden imposed for
five years' purchase, does not augur well for the productiveness
of this source of fresh income. Mr. Cave forgot these views
of the situation when he expressed the hope that the
Mokabala remissions would give an impulse to cultivation —
the more is the pity. And the new vmifying decree which
has been applied to the debts actually announces the aban-
donment of the entire arrangement. The Mokabala is to be
no more, and the land revenue will return to its old footing.
Those who paid double tax in the hope of obtaining remis-
sions and a fresh title to their land must renounce their land
and pay again as best they can.

So much for the land tax, which we think it would be
hard to fix the actual yield of amid the confusion of budgets.
The item next in importance is the receipts from the railways,
and here again we have nothing but conflicting data to go
by. In the four documents which condescended to loose
particulars regarding Egyptian finance, viz. the two budgets
of 1873-4, the 'definitive account' of 1875, and the budget
of 1876, we have their net receipt set down thus — first
budget, 750,OOOL, second ditto (for the same year), 878,000/.,
1875 account, 9GG,066L, and the 1876 budget, 990,800L
No details are given of the working of these railways, except
an account published in 1873, which shows that they are
worked at about 40 per cent, of their gross receipts, and that
it only costs 107,722L to keep over 1,000 miles of railway
and telegraph lines in repair. It is remarkable, too, that
this should have been accomplished while the Klicdive
considers that he has the same right to use his railway for
nothing in the carriage of freight and soldiers and for plea-
sure, as he has to goad his people under the lash to work

37 G APPENDIX IV.

without compensation on liis estates. So far as I know, no
other system of railways in the world could yield such
extraordinary results under these conditions. And if the
loss of Indian transit traffic, as well as the decrease in Egypt-
ian trade through the opening of the Suez Canal, be taken
into account, the enormous amount of the receipts becomes
striking beyond the capacity of human credulity. The net
receipts of these railways were, moreover, set down as only
282,853Z. in 1864-5, and at a still less sum the year before,
when Egypt was in the full tide of its fitful cotton prosperity,
and while it had an enormous transit trade to and from India.
Where in the world, therefore, has the sudden increase come
from since ? I do not believe that it exists. The increased
mileage has not brought increased profits; but if the truth
were told, the reverse, as a moment's consideration of the
falling prices, reduced trade, and general situation will make
evident. If the railways yield a net revenue of a quarter of
a million, they do better than many of our Indian lines that
are quite as well situated for traffic, and not so burdened
with the caprices of unreasoning despotism, or with the
weight of money borrowed at 27 per cent.

Almost equally difficult to believe is the statement as to
Customs receipts, although Mr. Cave says that they appear
to have been imder-estimated-last year, the income from the
whole Customs being taken at 17,500Z. less than an indepen-
dent authority has set down, on ' imperfect data,' for
Alexandria alone. Tlie sum ranges from 528,000Z. to
G24,000Z., and we will let it pass with this remark only, that
it was levied on about five and a half millions of imports in
1875, according to the official statement, of which at least a
fifth passed in free for the Khedive's account, while a good
portion of the remainder was simply goods in transit ; and,
further, thai the English Board of Trade returns show that the

APPENDIX IV. 377

Eiryptian imports from tliis country liave fallen from 8,829,000^.
in 1S7() to 3,()74,()()()/. in 1S74. How could it Le otlierwise
with a population hardly al)le to buy the necessaries of life ?
It is only the Khedive and his Court and the Europeans in
the country who can afford to import duty-paying luxuries.
Everything is, however, so loose that relates to Egyptian
trade, that we find a wide disagreement in the import and
export figures publislicd two years ago and those given in
Mr. Cave's Report. For example, the old figures stated the
total exports of the period 1852 to 1861 at 27,386,000^.,
and the imports at 21,755,000^., showing a surplus on the
right side of 5,631,000^. Mr. Cave, on the other hand, gives
a table for the same period in which the exports are set
down at 29,870,000^ and the imports at 24,763,000L, which
shows a larger total and a smaller sum on the right side.
JNIatters are still worse when we come to the period from
1862 to 1875. The old ta])le which comes down to 1871
states the gross exports at 123,241,000?. and the imports at
52,682,000/., while Mr. Cave's table, which comes down four
years later, shows a gross export total of only 145,939,000/.
and an import total of 61,940,000/. This gives an import
for the last four years of 22,698,000/., or only 5,675,000/. per
annum, and an export of 9,258,000/., or only 2,315,000/. per
annum. It is not so set down in the tables of course, being
accounted for l^y a general cutting down of figures over the
years embraced in the period ; but all the same this is how
the totals work out, and we have to conclude either that the
table issued in 1874 was grossly exaggerated, or that both
statements are a mere haphazard guess, prompted, in the
case of the figures furnished to Mr. Cave, by a desire to make
things look a little like the totals in the English home
accounts. On the whole we may, therefore, leave the
Customs revenue as an undiscoverable quantity, which, what-

378 APPENDIX IV.

ever it be, does not tend to grow bigger. Nor does our quest
for big revenues get clearer when we deal with such items as
the salt monopoly, which figures in the original budget for
187,000/., and in last year's accounts for 299,000/., although
consumption is necessarily about the same. The tobacco
duty is equally puzzling. In 1873 the inspired anonymous
pamplileteer had many reasons to give why this item, which
did not figure for a farthing in the first 1873 budget, should
be made to show in its duplicate or amended version for
500,000/. He said H lb. per head was no extravagant con-
sumption of tobacco for the poor people, and Is. 6d. per lb.
no heavy sum to pay as tax ; and, in short, proved to his own
satisfaction, that the tax was the most sure in Egypt — admit-
ting, however, that it might yield but half the estimate just
at first. His sanguine anticipations have not, unhappily, been
fulfilled ; the tax has yielded, by the comparison of succeed-
ing documents, only from 250,000/. to 260,000/. Once more,
receipts from provincial governors figure in the first budget
for only 223,000/., but in the 1875 accounts they have been
swollen to 703,000/., including municipal receipts, which do
not figure in the first budget at all. In the 1876 budget
they are higher still. In one budget the miscellaneous
receipts of the Ministry of Finance do not appear at all, in
another they figure at 272,000/., and in yet another at
455,000/. General miscellaneous receipts, octroi, &c., stand
in the first budget for 167,000/., and in the 1875 account
for 493,000/., and so on ; it is hardly necessary to go through
all details. All that can be said of some of these is that
they represent illegal ' squeezes ' and * backsheesh ' on which
no reliance can be placed as regular revenue. Enough has
been said in the mere recapitulation of these figures to show
the utterly untrustworthy nature of every statement regard-
ing the income and trade of Egypt, and to prove that any

APrEXDix IV. 371)

just estiinalo of what the reveimos really are is almost
iinpossihle ; all we can assert is that ilny are lower than
officially set forth. We must perforce fall Lack on general
considerations, and, remembering that the revenue was
confessedly under 5,000,000L in 1864, think whether in the
interval Egypt has ' progressed ' so as to be able to douljle it.
Her trade is by official statements smaller now than it was
then and much less profitable, the population by all accounts
poorer, the yield of soil not greater ; the private ventures
of the Khedive do not pay, his ' new provinces,' with the
possible, but only possible, exclusion of the Soudan, entail
loss ; where then is this augmented revenue to come from ?

How is a poverty-stricken population subject to corvees,
hardly able to get bread, whose goods are liable to be sold at
the bidding of the ruthless tax-gatherers, who must pay
' squeezes ' to every corrupt official in order that he may
get speedily rich — how are these to pay 21. per head in taxa-
tion, young and old, infant and imbecile, or 8^. per family, if
we suppose each family to consist of four persons ? Worked
to death, often hurried ofif to the Khedive's foolish wars,
driven to build the Soudan Eailway under the eye of an
English contractor who ought, because he is an Englishman,
to be ready to cut off his right hand rather than touch such
work, where are these wretched creatures to find every year
such sums of money ?

The question hardly needs putting to reveal the absurd
impossibility of realising this preposterous revenue. All the
financial statements of Egypt are illusory. If the revenue
was under 5,000,000Z. in 1864, when Egypt was compara-
tively prosperous, not all the squeezing of the JSlokabala
exactions can have forced it beyond 7,000,000/. now, and I
doubt if it has ever really exceeded six. How could it
possibly do so when the civil administration livcti by plunder ?

380 APPENDIX IV.

Let anyone conceive what it would be to wring 10,000,000L
sterling out of a population of some 5,000,000 souls, all but a
few thousands reduced to a state of poverty more abject than
tliat of tlie dwellers in the bye-lanes of Soho, Seven Dials, or
Drury Lane, or tlian that of the Irish labourers before the
potato famine, and that it is, moreover, wrung out of these
people at a cost of from 20 to 30 per cent, additional, which
goes as ' backsheesh,' and tax-farmer's profit, after approved
Turkish fashion, and he will have some idea of what the
budgets of Egypt must mean. The parrot cry always rises
when this view is advanced, ' But Egypt is a very fertile
country, and its people need little to live on beyond a few
dates.' Yes, Egypt is fertile ; but of wliat use is fertility
when there is neither capital nor security to enable that
fertility to bear its due fruit? Mr. Henry Oppenheim
estimates the yield of this fertile country at from 41. to 61.
per acre, and the ' Times ' correspondent says it averages 91.
Compare these estimates with what a Scotch farmer contrives
to get out of his bleak moorland or bare hill-side, and then
talk of the fertility of Egypt as much as you like. It will
be found to be but one more Egyptian dream.

People will, it is to be hoped, not forget, when these
glittering empty schemes are paraded before them, the
budgets which have always shown a surplus and have lied
systematically in so doing ; that the ' floating debt ' was,
like Moses's burning bush, inconsumable — always about to
be extinguished by the newest loan, always reappearing
bigger and more importunate than ever. Yet there is no
telling what mankind may do. Where the temptation of
gain is large, men grow blind to all risks and to all iniquity
too. I can hardly conceive of a man with a conscience in his
bosom sitting down and looking calmly at the state into
which the miserable loan-dealing of adventurous rogues has

ArrENDTx IV. 381

brought Kgypt without l)oing awakened to pity, and, if lie
has been partaking in tlic gains, to remorse ; and yet such
men are often to be met with. They liave become accus-
tomed to look on these matters as merely so much per cent.,
and the agonies of the wretched slaves of Egypt reach not
the peaceful luxuriousness in which these percentages enable
them to dwell. By the toil of those weary millions these
people have grown rich, and to them riches are more than
luimanity, an easy life better than the refusal to live by the
sweat of another's brow, the slow draining of another's blood. I
meet such men often, and wonder and fear also that with a new
bait there will be a new rush after the gold, and a new impetus
given to an oppression that has already mounted to an agony
crying to heaven for vengeance. It is a gamble after all
with the mass of tliose who join such ventures, and 'devil
take the hindmost ' their cry. These people, the majority
of them — men and women of all classes, sober priests and
professed gamblers, one-idcad sliopkeepers and jewelled
dwellers in palaces — can only be kept away by fear of loss,
and hence I have iterated and reiterated the utterly baseless
character of Egyptian financial statements. I appeal to
prudent greed ratlier than to the hearts and consciences of
men. If people will believe that on any terms the Egyptian
fellaheen can find means to pay the charges on the present
funded debt alone, and will lend further money to Egypt on
that belief, they deserve their fate. But I would fain liope
yet, and after all said, for humanity's sake, tliat the end
of this modern system of fraud and oppression lias come so
far as Egypt is concerned ; that neither the English Govern-
ment nor the English people will any more associate them-
selves with crimes so great as tliose tliat liave been perpetrated
tliere under the name of progress. Whetlier from dou])t of
gain to be had or from an awakened consciousness of the harm

582 APPENDIX IV.

that lias been done, let us hope that ouv part and lot in the
affair is over. The more what has been done in the past is
looked at the uglier will it seem. It is melancholy that the
wealth of England should ever have been turned to such a
use. Tliat the wealth so employed should be lost may prove
to be the lightest part of our retribution.

THE END.

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INDEX.

Aifcy &' Ovcrloii's English Church History 15

Abneys Photography 10

Acton s Modern Cookery 20

Alpine Club Map of Switzerland 17

Guide (The) 17

Atnos's lurisprudence 5

Primer of the Constitution S

50 Years of English Constitution 5

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Sermons 15

(T.) English Literature 6

Poetry and Prose ... 6

Arnott's Elements of Physics g

Atelier The) du Lys 19

Atlicrstonc Priory 18

Autumn Holidays of a Country Parson ... 7

Ay re's Treasury of Bible Knowledge 20

Bacon's Essays, by Whatdy 5

Life and Letters, by 5/<:rf<///// ... 5

Works 5

Bai^chot's Biographical Studies 4

Economic Studies at

Literary Studies 6

Baileys Festus, a Poem 18

Bain's [anics .Mill and J. S. Mill 4

"Mental and Moral Science 6

on the Senses and Intellect 6

Emotions and Will 6

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Beacon sfi eld's (Lord) Novels and Tales 17 & 18

Speeches i

Wit and Wisdom 6

Baker's Charicles and Gallus 8

Beesly's Gracchi, Marius, and Sulla 3

/?«•«/' J Memoir of Garibaldi 4

Bingham's Bonaparte Marriages 4

Black's Treatise on Brewing 20

Blackley's German- English Dictionary 8

Blaine's Rural Sports 19

Bloxam's Metals 10

Bolland and Lang's Aristotle's Politics 5

Bosco's Italian History by Mo-ell 2

Boultbce on 39 Articles 15

's History of the English Church... 15

Bourne's Works on the Steam Engine 14

Bcrjudler's Family Shakespeare 19

Bramley-Moore' s Six Sisters of the Valleys . 19

Brande's Diet, of Science, Literatiu-e, & Art 1 1

Brassey's British Navy 13

Sunshine and Storm in the East . 17

Voyage of the 'Sunbeam' 17

Browne's Exposition of the 39 Articles 15

^r^^ww/zi/^ Modern England 3

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Health in the House 12

BulFs Hints to Mothers 21

Maternal Management of Children . 21

Burgomaster's Family (The) 19

Buried Alive 18

Burkes Vicissitudes of Families 4

Cabinet Lawyer 20

Cfl/£j'j Age of the Antonines 3

' Early Roman Empire 3

Carlyle s Reminiscences; 4

Cates's Biographical Dictionary 4

Cay/iryj Iliad of Homer 19

Changed Aspects of Unchanged Truths ... 7

O^jw^y^ Waterloo Campaign 2

Church's Beginning of the Middle Ages ... 3

Colenso on Moabite Stone &c 16

's Pentateuch and Book of Joshua. 16

Commonplace Philosopher 7

Comte's Positive Polity S

Conder's Handbook to the Bible 15

Conington's Translation of Virgil's ^neid 19

Contanseau s Two French Dictionaries ...7 & 8

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Cordery's Struggle against Absolute Mon-
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Colla on Rocks, hy Lawrence 11

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• Crusades 3

M Greeks and Persians 3

Creighion s Age of Elizabeth 3

England a Continental Power 3

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Shilling History of England ... 3

Tudors and the Reformation 3

Cresy's Encyclopaedia of Civil Engineering 14

Critical Essays of a Country Parson 7

Culley's Handbook of Telegraphy 14

Curteis's Macedonian Empire 3

Z>i3!wVjo;?'j New Testament 15

De Caisne and Le Maout's Botany 12

De Tocgueville' s Democracy in America... 2

Dixon's Rural Bird Life , ii

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Hints on Household Taste 14

Edwards on Ventilation &c 20

£'///ci?//'i' Scripture Commentaries 15

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Elsa and her Vulture 19

Epochs of Ancient History 3

English History 3

Modern History ,... 3

Ewalds History of Israel 16

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Information for Engineers 14

Mills and Millwork 13

Farrar's Language and Languages 7

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English in Ireland i

History of England i

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Thomas Carlyle 4

Gairditer's Houses of Lancaster and York 3

Ganot's Elementary Physics 9

Natural Philosophy 9

Gardiner's Buckingham and Charles I. ... 2

Personal Government of Charles I. 2

Fall of ditto 2

Outline of English History ... 2

Puritan Resolution 3

Thirty Years' War 3

German Home IJfe 7

Goethe's Faust, by Birds 18

by Selss 18

by Webb 18

Goodeve's Mechanics 10

Mechanism 13

Gore's Electro-Metallurgy 10

Gospel (The) for the Nineteenth Century . 16

Grant's Ethics of Aristotle 5

Graver Thoughts of a Country Parson 7

Greville' s^OMmzX i

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Grove on Correlation of Physical Forces... 9

Gwilt's Encyclopcedia of Architecture 13

Halc'sYsXloiihc Stuarts 3

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Hoskold's Engineer's Valuing Assistant ... 13

Hullalis History of Modem Music 11

Transition Period 12

Hume's'Essz.ys 6

Treatise on Human Nature 6

Ikne's Rome to its Capture by the Gauls... 3

History of Rome 2

Ingelow's Poems ; 18

y^^oV Inorganic Chemistry 12

Jameson's Sacred and Legendary Art 13

Jenkins Electricity and Magnetism 10

?errold's Life of Napoleon i

ohnson's Normans in Europe 3

Patentee's Manual 21

Johnston's Geographical Dictionary 8

Jukes's New Man 16

Second Death 16

Types of Genesis 16

A'a/wA'j Bible Studies 15

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KerTs Metallurgy, by Crookes and Kohrig. 14

Knatchbull-Hiigcssen s Fairy-Land 18

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Latham s English Dictionaries 7

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Lecky's History of England i

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Leaders of Public Opinion 4

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Leisure Hours in Town 7

Zfj//^'j Political and Moral Philosophy ... 6

Lessons of Middle Age 7

Z«f£/ J History of Philosophy 3

Z,ew/j on Authority 6

Ltddell a.nd Scott's Greek-English Lexicons 8

Lindley ^inAMoore's Treasury of Botany ... 20

Lloyd's Magnetism 9

Wave-Theory of Light 10

Longman's (F. W.) Chess Openings 20

Frederic the Great 3

Longman's (F. W.) German Dictionary ... 8

(W.) Edward the Third 2

Lectures on History of England 2

Old and New St. Paul's 13

Loudon's Encyclopcedia of Agriculture ... 14

Gardening 14

Plants 12

Lubbock's Origin of Civilisation 11

Ludloiv's American War of Independence 3

Lyra Germanica 16

Maca lister's \'ertebrate Animals n

Macaulay's (Lord) Essays i

— . — History of England ... i

Lays, Illustrated Edits. 12

Cheap Edition... i3

Life and Letters 4

Miscellaneous Writings 6

.Speeches 6

Works I

Writings, Selections from 6

MacCidlagh's Ir^iCis 9

McCarthy's Epoch of Reform 3

McCulloch's Dictionary of Commerce 8

Macfarren on Musical Harmony 13

Maclcods Economical Philosophy 5

Economics for Beginners 21

Elements of Banking 21

Elements of Economics 21

Theory and Practice of Banking 21

Macnamara's Himalayan Districts 17

Mademoiselle Mori 19

./1/<7//(7^'' J- Classical Greek Literature 3

A/i7rj/i7«<7«'5 Life of Havelock 4

Afizr//«fa«'j Christian Life 16

Hours of Thought 16

Hymns 16

Maunder s Popular Treasuries 20

MaxwelTs Theory of Heat 10

Mays History of Democracy 2

History of England 2

Melville's (Whytc) Novels and Tales 19

Mendelssohn s Letters 4

Merivale's Fall of the Roman Republic ... 2

General History of Rome 2

Roman Triumvirates 3

Romans under the Empire 2

Merrifields Arithmetic and Mensuration... 10

Miles on Horse's Foot and Horse Shoeing 19

on Horse's Teeth and Stables 19

Mill (J.) on the Mind 5

Miirs{]. S.) Autobiography 4

Dissertations & Discussions 5

Essays on Religion 15

Hamilton's Philosophy 5

Liberty 5

Political Economy 5

Representative Government 5

Subjection of Women 5

System of Logic 5

Unsettled Questions 5

Utilitarianism S

il////«r'j Elements of Chemistry 12

Inorganic Chemistry 10

Wintering in the Riviera 17

i1//7/'/f/j Country Pleasures 11

Mitchells Manual of Assaying 14

Modem Novelist's Library 18 .^ 19

Monck's Logic 6

Mcnsells Spiritual Songs 17

Moore's Irish Melodies, Illustrated Edition 13

Lalla Rookh, Illustrated Edition.. 13

Morris's .^ge of Anne 3

Mailer's Chips from a German Workshop. 7
Hibbcrt Lectures on Religion ... i6

Science of Language 7

Science of Religion 16

Selected Essays 7

Nelson on the Moon 3

WORKS published by LONGMANS 6- CO.

Nrc'tle's Horses and Riding 19

Newman's Apologia pro Vita SuJl 4

Nicols's Puzzle of Life 11

Northcott's Lathes cS: Turning 13

Orsi's Fifty Years' Recollections 4

Onnsbys I'oem of the Cid 18

Our Little Life, by A. K. H. B 7

Otrr/tv/'^ Life, <S;c. oi Law 4

Owen's Comparative Anatomy and Phy-
siology of Vertebrate Animals 10

Owen's livenings with the Skeptics 7

Payen's Industrial Chemistry 13

Pewtners Comprehensive Specifier 20

/'/Vj^^'j Art of Perfumery 14

Pole s Game of Whist 20

PowclTs Early England 3

Preece & Sii •cwrigh t's'Yt\ egraphy 10

Present-Day Thoughts 7

/'wt7t)r'j Astronomical Works 9

' Scientific Essays 11

PubUc Schools Atlases 8

^i7a>//«j(?«'j Ancient Egypt 3

Sassanians 3

Recreations of a Country Parson 7

Reynolds' s Experimental Chemistry 12

Richs Dictionary of Antiquities 8

^/trrj'j Orchard House 12

Rose Amateur's Guide 12

Rogers's Eclipse of Faith and its Defence 15

Roget's English Thesaurus 8

Ronalds' Fly-Fisher's Entomology 19

/?t;w/^yj Rise of the People 3

Settlement of the Constitution ... 3

Rutley's Study of Rocks 10

5t7«^arj'j Justinian's Institutes 5

.S'<7«^<ry5 Sparta and Thebes 3

Savile on Apparitions 7

Seaside Musings 7

Scott's Farm Valuer 21

Rents and Purchases 21

Seebohm s Oxford Reformers of 1498 2

Protestant Revolution 3

Sennell's Marine Steam Engine 14

Sewells History of France 2

Passing Thoughts on Religion ... 16

Preparation for Communion 16

Private Devotions 16

Stories and Tales 18

Shelley's Workshop Appliances 10

Short's Church History 15

Smith's (Sydney) Wit and Wisdom 6

(Dr. R. A.) Air and Rain 8

(R. B.)Carthage& the Carthaginians 2

Rome and Carthage 3

(J.) Shipwreck of St. Paul 15

Southey's Poetical Works 19

& Bowles's Correspondence 4

Stanley's Familiar History of Birds 11

.S'to/ on Diseases of the Ox 19

5^(://^«r«' J Ecclesiastical Biography 4

Stonehenge, Dog and Greyhound 19

Stoney on Strains 13

Stiibbs's Early Plantagenets 3

Sunday Afternoons, by A. K. H.B 7

Supernatural Religion

Swinburne's Picture Logic

Tancock's England during the Wars,

1778-1820 3

Taylor s History of India 2

Ancient and Modern History ... 4

{Jeremy) Works, edited by Eden 16

Text-Books of Science 10

Thomi's Botany 10

Thomson's Laws of Thought 6

Thorpe s Quantitative Analysis 10

Thorpe and Muir's Qualitative Analysis ... 10

Thudichum' s Annals of Chemical Medicine 12

Tildcn' s Chemical Philosophy 10

Practical Chemistry 12

Todd on Parliamentary Government 2

Trench's Realities of Irish Life 17

7>rtr/i'<j';/'.f Life of Fox i

Trollope's Warden and Barchester Towers 18

Twiss's Law of Nations 5

2"7«a'a//'5 (Professor) Scientific Works ... 10

Unawares 19

Unwin's Machine Design 10

Ures Arts, Manufactures, and Mines 14

Villc on Artificial Manures 14

Walker QVi Whist 20

Walpoles History of England X

Warburton' s Edward the Third 3

Watson s Geometery 10

Watts's Dictionary of Chemistry 12

Webb's Celestial Objects 8

IFi:/rf'^ Sacred Palnilands 17

Wellington s Life, by Glcig 4

Whately s English Synonymes 7

' Logic and Rhetoric 6

White's Four Gospels in Greek 16

and Riddle's Latin Dictionaries ... 3

Wilcocks' s ^ca.-¥\shenn!in 19

W^////(7Wj'j Aristotle's Ethics 5

I F////(//s" Popular Tables 21

Wilson's Resources of Modern Countries... 21

, Studies of Modern Mind 6

Wood's Works on Natural History... 10 & 11

Woodward's Geology 11

Yonge's English-Greek Lexicons 8

Youatt on the Dog and Horse 19

Zeller's Greek Philosophy ■...» 3

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