EALTH 
 
 &WELFAR 
 
 ^ 
 
 a > * f^Ti M f* e* RFTwn f^t 1 
 
 HASTINGS BERKLLtT
 
 OUR NATIONAL TRADE POLICY
 
 PRINTED BY 
 
 SI'OTTISWOODE AND CO., NEW-STREliT SQUARE 
 LONDON
 
 -7 uJ > 
 
 WEALTH AND WELFARE 
 
 Ok 
 
 01; R NATIONAL TRADE POLICY 
 AND ITS COST 
 
 BV 
 
 COMMANDER HASTINGS BERKELEY, R.N. 
 
 w 
 
 yfij " 
 
 LONDON 
 JOHN MURRAY, ALB EM A RLE STREET 
 
 1887 
 
 Alt rights reserved
 
 PREFACE. 
 
 THE scope of this work and the object with which 
 it is written are explained at length in the Intro- 
 ductory Chapter. Nevertheless, a few words on the 
 matter will not be out of place here. 
 
 The conduct of our national trade policy is 
 rapidly becoming a burning question. Day by 
 day this subject looms more large and threatening 
 through the fog of contentious verbiage which sur- 
 rounds it, day by day calls louder for impartial 
 investigation and solution. Meanwhile we are 
 assured, by those who speak with authority, that 
 the principles of orthodox English political economy 
 are immutable, and free trade is raised by its advo- 
 cates to the dignity of a ' great doctrine.' 
 
 I do not altogether believe in the immutability 
 of these principles, nor in the greatness of this 
 doctrine, but rather in the application of common 
 honesty to our commercial methods, and of com- 
 mon sense to our reasonings concerning them. 
 The policy advocated in the following pages is
 
 [6] WEALTH AND WELFARE 
 
 based on the evidence submitted to the Royal 
 Commission of 1885 on the Depression of Trade 
 and Industry ; it will be termed by many a retro- 
 grade policy ; perhaps it is, but do we not some- 
 times step back in order the better to leap forward? 
 
 It has been said by one who was not only a 
 very great man of letters, but also a very great 
 man, that we English are pedants. But when 
 Goethe said this of ys he had in his mind, not 
 the pedant who overvalues book-learning for the 
 typical Englishman could not well be reproached 
 with that kind of pedantry, especially by a German 
 but the pedant who is so hide-bound in custom 
 and theory as to have lost that delicate sensitive- 
 ness to fresh facts, that quick apprehension of 
 change in circumstances, without which we become 
 incapable of seeing, or intuitively feeling, the very 
 ' form and pressure ' of the time. 
 
 To the reader who thinks there may perhaps 
 be some truth in this saying of Goethe's, and who 
 further chances to make some slight study of the 
 following pages, I would put the question not 
 without keen appreciation of the retort to which it 
 exposes me whether a better title for this book 
 were not ' Pedantry and Political Economy ' ? 
 
 I take this opportunity of acknowledging the 
 friendly and valuable assistance I received, in the 
 correction of the proof-sheets, from Dr. Eugene 
 Oswald, M.A., President of the Carlyle Society.
 
 CONTENTS. 
 
 CHAPTER PAGE 
 
 I. INTRODUCTORY ....... I 
 
 II. OF THE PRESENT ECONOMICAL CONDITION OF 
 THE UNITED KINGDOM AS REGARDS PRODUC- 
 TION H 
 
 III. PRESENT ECONOMICAL CONDITION OF THE 
 
 UNITED KINGDOM (continued) .... 37 
 
 IV. OF RECENT CHANGES IN THE DISTRIBUTION OF 
 
 WEALTH 5<S 
 
 V. FREE TRADE AND PROTECTION . . . 8 1 
 
 VI. RECOMMENDATIONS OF THE ROYAL COMMIS- 
 SION ON INDUSTRIAL DEPRESSION . . . 112 
 
 VII. WHAT IS THE NATION'S WELFARE? . . .142 
 VIII. PRESENT CONDITION OF THE WORKING CLASSES I 56 
 
 IX. OF GOVERNMENT INTERFERENCE IN OTHER 
 
 PEOPLE'S CONCERNS 168
 
 [8] WEALTH AND WELFARE 
 
 CHAPTER PAGE 
 
 X. OK INDIVIDUAL INTERFERENCE IN OTHER 
 
 PEOPLE'S CONCERNS 187 
 
 XI. CONCERNING DRONES 196 
 
 XII. INTERNAL COMPETITION 2 IJ 
 
 xin. OTHER PEOPLE'S POCKETS 227 
 
 XIV. RECAPITULATION AND CONCLUSION . . . 242 
 
 XV. REMARKS ON MR. MEDLEY'S PAMPHLET ' FAIR 
 
 TRADE UNMASKED ! 262 
 
 INDEX 271
 
 WEALTH AND WELFARE. 
 
 CHAPTER I. 
 
 INTRODUCTORY. 
 
 Orthodox political economy Its unhelpfulness in certain straits and 
 danger in others Morality and political economy Character of 
 Mr. Ruskin's work in this relation The Royal Commission of 
 1885 on Trade Depression Kind of evidence submitted to it. 
 
 THE writer of this little book has no more ambi- 
 tious aim than that of drawing the attention of 
 thinking persons to one of the most important 
 problems which can occupy their thoughts, a pro- 
 blem of which we have as yet no very satisfac- 
 tory solution : the relation of a nation's wealth 
 to its welfare ; or, more accurately perhaps, the 
 relation to a nation's welfare of the manner of 
 making this wealth. And the persons whom he 
 has more particularly in view are those who are 
 not quite prepared to apply to its solution the 
 ' vigorous and rigorous ' theories (as Mr. Matthew 
 
 K
 
 2 WEALTH AND WELFARE CH. I. 
 
 Arnold, in his happy manner, \vould put it) of our 
 orthodox political economists. It is strange that 
 although, in times long past, text-books on this 
 subject were unknown, while to-day their name is 
 legion, it is nevertheless quite a maintainable thesis 
 that in certain of these now distant epochs the 
 relation of these two things to each other was 
 better understood than it is at present. But let 
 the thesis go, maintainable or not. For the 
 moment, it is not that with which we are concerned 
 though the consideration of it might prove not 
 unhelpful to us. What we arc concerned with is 
 the way in which our problem is now being treated, 
 and whether that way is a right way. 
 
 \Ve may say, of the text-books alluded to, that 
 their name is legion ; because notwithstanding that 
 most of them do not professedly deal with the 
 elucidation of the problem to which it seems so 
 desirable to invite people's earnest attention, yet 
 from the moment their authors embark upon any 
 matter of political economy the}- are, in truth, con- 
 cerned with that problem. Our orthodox political 
 economists, it is true, speak of their own science 
 or art, as some prefer to call it as one which is 
 concerned with the exposition of the laws that 
 govern the production and distribution of wealth ; 
 and, implicitly rather than explicitly, they separate 
 these laws from others which may be supposed to 
 relate more particularly to welfare, while acknow-
 
 CH. I. ORTHODOX POLITICAL ECONOMY 3 
 
 ledging their general interdependence. Only, hav- 
 ing once acknowledged this interdependence, they 
 seem to think it unnecessary, or perhaps impossible, 
 to pay any further attention to it ; and, dismissing 
 it from their own and their readers' minds, proceed 
 at once to build up on the underlying principle 
 that the sole motive of action in matters relating 
 to the production of wealth is furnished by self- 
 interest of the most ignoble kind such as may be 
 expressed by the formula ' Every one for himself, 
 and devil take the hindmost.' This motive of action, 
 correctly enough ascribed to individuals, is then 
 tacitly assumed to be the motive which governs 
 the majority, and finally hardens into a general law 
 from which no escape is possible. 
 
 There comes a moment, however, when we find 
 ourselves driven to ask, ' But what is to happen if 
 we find that this law, the unfettered action of which 
 appears necessary to the fullest production and 
 accumulation of national wealth, turns out to be at 
 variance with, or even in actual opposition to, those 
 which govern national welfare ? ' Here the poli- 
 tical economists do not help us much. Most of 
 them clo not answer the question at all do not 
 seem to be aware that there is such a question ; 
 while others again implicitly rather than expli- 
 citly deny the possibility of the contingency : 
 from the character of their work, it is plain that for 
 them this is not a question which can be ask^d 
 
 B 2
 
 4 WEALTH AND WELFARE CH. i. 
 
 with any seriousness. And yet, surely, our instincts, 
 our personal experience, to which we cannot but 
 listen, very plainly tell us that there is such a 
 question. 
 
 From this underlying principle of the orthodox 
 school there grows up, in logical sequence, a system 
 of political economy which, but for the good sense 
 and good feeling of the generality of men, would 
 issue in the most revolting applications. The rigid 
 laws of competition, of wages, of supply and 
 demand, of non-interference, are found to be rigid 
 only in books, while they adapt themselves with 
 what plasticity they may to changing circumstances 
 and to the pressure of humane feeling and the moral 
 law. Nevertheless, if you persist, with never such 
 excellent intentions, in appealing to the selfishness 
 and cupidity of men, and in trying to persuade 
 them that these are the prime movers to the suc- 
 cessful production of wealth, and that unfettered 
 action of them is beneficial thereto, your persistence 
 will take effect, with what result let every one in- 
 quire for himself. So that with most of our books 
 of political economy it comes to this, that we indi- 
 vidually either allow our moral sense to be dis- 
 torted by their false maxims, or else we pitch them 
 out of window, them and the valuable information 
 which they undoubtedly contain. This is, no 
 doubt, an illogical proceeding, but the writer on 
 political economy would show more wisdom if he
 
 CH. I. MORAL CONSIDERATIONS 5 
 
 were to recognise our difficulty and try in some 
 measure to remove it ; if, in fact, he did not, as it 
 were, say to us, ' Am I my brother's keeper ? ' 
 
 In truth, it is impossible rightly to elucidate the 
 laws under which the production and distribution 
 of wealth take place without at the same time 
 subjecting what is known of them to, or at least 
 comparing what is known of them with, the moral 
 law. Divorce moral from economical considera- 
 tions, and you end by divorcing welfare from 
 wealth. If increase of wealth or change in its dis- 
 tribution carries with it perversion of our better 
 instincts (and of our instincts it may be said, as 
 Cardinal Newman has said of all our faculties, that 
 we do not so much trust them as use them to guide 
 us), degradation of our standard of happiness, then 
 such an increase or change should be condemned 
 by us and grow hateful to us. It would be com- 
 forting to believe that increase of wealth and the 
 expansion of our higher nature go hand in hand ; 
 indeed, we may with some security believe that 
 ultimately, if we well understand the matter, they 
 do. But things are not always what it would be 
 most pleasant that they should be. At any given 
 moment it may be that increase of national wealth 
 shall follow from disregard of moral considerations ; 
 just as a tradesman, for instance, before retiring 
 from business, may add considerably to his wealth 
 by trading on his good name and reputation for
 
 6 WEALTH AXD WELFARE CH. i. 
 
 fair dealing ; or as a quack, relying on the latent 
 credulity and foolishness of the general public, may 
 make a large fortune before his quackery is un- 
 masked. But nations cannot retire from business ; 
 and as time inevitably exposes, and fate inexorably 
 punishes, deceit and fraud, whether practised on self 
 or others, there comes finally a day ot reckoning, 
 when nations who disregard these things find them- 
 selves bankrupt in health and wealth. 
 
 The subsequent pages contain but imperfect 
 and fragmentary work ; thus it has appeared to 
 its author more necessary to write a somewhat 
 disproportionately long introduction than it might 
 have been in the case of more complete work, in 
 order to save the reader from unnecessary con- 
 fusion, by letting him at once and plainly sec the 
 leading motive which may be said to string the 
 fragments together. But some one will say, ' Why 
 do you give us fragmentary and imperfect work ? ' 
 To which I answer, first, that people give accord- 
 ing to the measure of their capacity; and that, pro- 
 vided they do not unwittingly tender a stone for 
 bread, half a loaf is better than none. Secondly, 
 because I do not think we have as yet sufficient 
 information, either general or statistical, to enable 
 us to deduce from it an}' complete or even fairly 
 accurate set of rules concerning the production, 
 and especially the distribution of wealth, and the 
 relation of these to a people's welfare. All the
 
 CH. I. MR. RU SKIN'S WORK 7 
 
 systems of political economy with which I am 
 acquainted arc built up on principles which are 
 assumed to be of general, whereas they really are 
 only of partial application, and not only with regard 
 to place, but with regard to time. Do we not see 
 that the conditions of production and distribution 
 change continually with changing ideas, and that 
 of these ideas by far the most effective are those 
 which owe their power to the changing moral 
 sensitiveness of nations ? Else how explain some 
 of the most remarkable changes in the conditions 
 of production and distribution which have taken 
 place in England during the last fifty years 
 changes illustrated, for instance, by the general 
 reduction in the working hours, and by the legis- 
 lative interference with the work of children, of 
 women, and in some few cases even of men ? 
 
 If a man of Mr. Ruskin's patience and power 
 has thought about producing a work on Political 
 Economy worthy of the name, and then has thought 
 better of it, 1 comparatively insignificant people 
 may be excused for doing fragmentary work, pro- 
 vided the work done is done honestly and pains- 
 takingly. It is perhaps as well that Mr. Ruskin 
 found himself compelled to give up his expressed 
 resolve. The best which a teacher of political 
 
 1 ' I resolved to make it the central work of my life to write 
 an exhaustive treatise on political economy.' Preface to ' JMunera 
 PulverisS
 
 8 WEALTH AND WELFARE CH. i. 
 
 economy could do for us now would be to give us 
 an exhaustive and accurate account of past produc- 
 tion and distribution ; but as history is mostly con- 
 cerned in telling us about the destruction of wealth, 
 when not otherwise occupied in registering the 
 political activities of kings, priests, and statesmen, 
 it would apparently not yield much grist to our 
 mill. Something is being done at present, how- 
 ever, in that direction, though not very much. As 
 to principles, Mr. Ruskin 'if I may be permitted to 
 judge) has done a lasting piece of work in 'Munera 
 Pulvcris ' and ' Unto this Last.' That is to say, he 
 has rent the veil of sophistry asunder in this matter 
 and called things by their right names. The things 
 themselves may have to endure, let us hope in 
 less pronounced forms, but our practice of white- 
 washing had better stop with past historical cha- 
 racters and events. Orthodox political economists 
 may call solid argument (such as is contained in 
 'Munera Pulveris ') sentiment if they please, but 
 solid argument will prevail in the end by whatever 
 name you choose to call it, or else those who do 
 not listen to it will be swept away to make room 
 for those who will. Indeed, there arc signs that 
 already one or two of our cherished illusions are 
 returning, at the light touch of Ithuricl's spear, ' of 
 force to tJicir own likeness.' 
 
 Led, but I hope not mastered by the influence 
 of this idea of the danger to our national welfare
 
 CH. i. ROYAL COMMISSION OF 1885 9 
 
 of too easy and careless an acceptance of all the 
 doctrines of orthodox political economy, I have 
 carefully examined the reports and recommenda- 
 tions of the Royal Commission on the depression 
 of trade and industry. The recent publication of 
 these reports, and the probability of the whole of 
 our commercial policy being shortly passed in 
 review in one of or both the Houses of Parliament, 
 make the present moment a fit one for such an 
 examination. Men's eyes are still anxiously turned 
 towards our troublesome sister isle, but we cannot 
 afford to let Ireland 'block the way' for ever. 
 
 The several reports of the Royal Commission, 
 together with the minutes of the evidence sub- 
 mitted to it and the numerous appendices, alto- 
 gether make up five blue-books. It is not to be 
 expected that even persons interested in the subject- 
 matter which they contain will do more than 
 merely glance through them. As to the general 
 ' reading public,' their knowledge of them is for the 
 most part confined to the fact that they have been 
 presented to both Houses of Parliament by com- 
 mand of her Majesty. Of the unnumbered thousands 
 who read their daily newspaper, but few will have 
 read the resume given them of the final report of 
 the Commissioners ; and of these few, again, not a 
 very large proportion will have made a serious 
 effort to understand it. Yet, after all, the matter is 
 one of real, very real importance, and involves
 
 io WEALTH AND WELFARE CH. i. 
 
 collateral issues of perhaps greater importance 
 still. 
 
 The Commission, presided over by the late Earl 
 of Iddesleigh, consisted of twenty-three members, 
 who were occupied with the subject of their inquiry 
 for over a year. Upwards of 100 witnesses were 
 examined, the number of questions addressed to 
 them reaching to above 15,000, the answers vary- 
 ing in length from a monosyllable to the number 
 of words which might be contained in a tolerably 
 closely printed page of foolscap size. Many of the 
 witnesses handed in papers, varying in importance, 
 explanatory of, or otherwise connected with, their 
 evidence. Air. Robert Giffen furnished a number 
 of instructive tables compiled from the ' Board of 
 Trade Returns.' In general, the evidence of those 
 who may be classed as ' official ' witnesses implies 
 a more rosy view of the existing condition than 
 docs that of the non-official witnesses. This is not 
 altogether to be wondered at. It is easier to dis- 
 course about tight shoes than to walk in them. 
 
 Circulars and questions were addressed to all the 
 Chambers of Commerce and principal commercial 
 associations, as well as to other associations specially 
 representing the interests of the working classes. 
 A circular despatch, enclosing a paper of questions 
 on the condition of trade in foreign countries, was 
 transmitted to her Majesty's representatives abroad. 
 
 The I'ird roce evidence (supplemented by the
 
 CH. I. CHARACTER OF EVIDENCE n 
 
 papers and the statistical tables directly bearing 
 upon it) is, to my mind, very much more instructive 
 than that contained in the papers sent in by the 
 numerous bodies in answer to the circulars ad- 
 dressed to them. It is more instructive because 
 you \vatch it in process of being, in the familiar 
 phrase, ' turned inside out,' pretty well exhibited 
 for what it is really worth. It is well known that 
 there existed between the members of the Commis- 
 sion considerable difference of opinion, not only as 
 to the extent and causes of the depression, but also 
 with respect to the relative efficacy of remedial 
 measures. This, although unsatisfactory from one 
 point of view, proved singularly advantageous in 
 the inquiry, in that it caused the evidence of wit- 
 nesses to be subjected to a very searching cross- 
 examination. Cross-examination of this kind, when 
 its object is not to confuse the witness but to lead 
 him rigorously to separate matters of fact from 
 matters of opinion, and to expose the grounds upon 
 which opinion rests, is in the highest degree valu- 
 able. Written reports may be more explicit, but 
 on the whole they arc less satisfactory than verbal 
 ones subject to the probe at every sentence. 
 
 From the description I have given of it, then, 
 the general reader will gather that this voluminous 
 publication (the five blue-books) contains pretty well 
 all the information available, up to the present 
 time, for arriving at a tolerably accurate notion of
 
 12 WEALTH AND WELFARE CH. I. 
 
 the general condition of our trade and industries. 
 Before passing on to more debatable matter, and 
 in fact with the object of clearing the ground as a 
 champ clos for argument, 1 have in the first three 
 chapters endeavoured to give a short and succinct 
 summary of the main points of England's econo- 
 mical position, as these appear in the reports. The 
 examination of the Commissioners' recommenda- 
 tions for the alleviation of the burden of depression 
 necessitated, de force majeure, a previous discussion 
 of the respective merits and demerits of free trade 
 and protection ; for some of these recommendations 
 those contained in the minority or ' fair trade ' 
 report would involve the adoption of protective 
 measures on the part of Government. This, in its 
 turn, led me to devote a chapter to a brief inquiry 
 into what ma}- perhaps be called the common-sense, 
 as distinct from the purely philosophical, grounds 
 of Government interference with people's private 
 affairs germane, I hope, to the general subject of 
 the inquiry. 
 
 In the course of this general examination I 
 became more and more convinced that, in the 
 near future, we shall have to attempt to widen 
 the narrow grounds which our orthodox political 
 economists have chosen whereon to uprcar the 
 fabric of our national trade policy, both internal 
 and external grounds very narrow for a great 
 nation to base itself on, as a deep thinker told us
 
 CH. I. INFLUENCE OF CARLYLE' S TEACHING 13 
 
 three decades ago. Time begins to show us the 
 penetration of Carlylc's insight. Five-and-twenty 
 years ago perhaps a very considerable number 
 of Englishmen shared M. Taine's estimate of 
 Carlyle : ' Un mastodonte cgare dans un monde 
 qui riest point fait pour lui ' ' a mastodon astray 
 in a world not made for him. Is it indeed so ? 
 Well, if I may be allowed a somewhat extravagant 
 hyperbole, Isaiah, also, was to the Hebrews of his 
 day a ' stray mastodon,' and it turned out an un- 
 fortunate thing for them that their world could not 
 be made his world. Be this as it may, our mas- 
 todon's back is broad enough to carry without 
 inconvenience a large bulk of such criticisms. 
 Convinced then, as no doubt many of us are, of the 
 narrowness of this ground, it appeared a not un- 
 profitable task to see if some light might not be 
 thrown on its dark edges to seek patiently a pos- 
 sible broadening of it. A farthing candle's glimmer 
 will not, I am afraid, do more than make the dark- 
 ness visible ; but if it should be the means of attract- 
 ing the possessors of brighter and steadier search- 
 lights, the farthing candle will not have glimmered 
 in vain. 
 
 1 ' On se hate de prendre les vingt volumes de Carlyle. . . . 
 On decouvre enfm qu'on ust clevant un animal extraordinaire, 
 debris d'une race perdue, sorte de mastodonte egare dans un monde 
 qui n'est point fait pour lui.' Taint, ' L?Idcalisine anglais.'
 
 14 WEALTH AND WELFARE CH. n. 
 
 CHAPTER II. 
 
 OF THE PRESENT ECONOMICAL CONDITION OF 
 THE UNITED KINGDOM AS REGARDS PRO- 
 DUCTION. 
 
 Report of the Royal Commission General increase of production 
 Direct evidence (statistics of production ; of consumption of raw 
 material) Indirect evidence (increase of foreign trade, railway 
 traffic, shipping, food consumption, bankruptcies, paupuri>m;-- 
 Remarks on this evidence Diminution of agricultural produce. 
 
 THE final report of the Royal Commission ap- 
 pointed in 1885 to inquire into the depression of 
 trade and industry is composed of two principal 
 reports ; one of these is signed by eighteen of the 
 twenty-three members forming the Commission, 
 the other by four of them. The former of these 
 we shall call the majority, the latter the minority 
 report. A third report is sent in by the twenty- 
 third member, Mr. Arthur O'Connor, who finds 
 himself unable to subscribe to either of the two 
 principal ones. In addition to these three reports 
 there are a number of detached passages embody- 
 ing the several reservations and remarks, subject to 
 which eleven of the majority sign their report. Of
 
 CH. il. THE DEPRESSION 15 
 
 the members who sign the minority report, there is 
 one also who appends a paper containing remarks 
 and reservations. 
 
 From what has just been said it will be apparent 
 that the inquirer in this matter treads a somewhat 
 thorny path, as, indeed, is generally the case with 
 him when, in any matter whatever, men's minds 
 are unsettled ; endeavouring, with more or less 
 sincerity and ability, to reconcile apparently irre- 
 concilable facts or principles. It is because in the 
 matter before us there is at present such an incerti- 
 tude and confusion that we find a report of the 
 kind described. There is now, and for some years 
 past there has been, a growing feeling of disquiet 
 and dissatisfaction arising from the non-fulfilment 
 of some of the prophecies and promises of the 
 apostles of free trade. And this feeling of dis- 
 quiet and dissatisfaction has been rather intensified 
 than tempered by the fact that in general it was 
 found that the arguments in favour of free trade 
 were unassailable, and that, moreover, the best in- 
 tellect of the country that is, if we call a succes- 
 sion of able men of business and politicians the 
 best intellect of the country appeared so convinced 
 of the validity of those arguments, that it treated 
 all attacks upon them with an almost contemptu- 
 ous silence. Thus, affairs being in a bad way, and 
 it being in general believed and understood that 
 our commercial policy was not at fault, it is natural
 
 1 6 WEALTH AND WELFARE CH. n. 
 
 that the sense of disquiet and depression should 
 have been intensified rather than relieved. 
 
 Even now the best intellect in the same sense 
 of the country is still persuaded of the unassail- 
 able virtues of free trade ; but the controversy has 
 passed out of the stage of somewhat acrimonious 
 assault on the one side, and morgue of indifference 
 on the other : there is now real argument used by 
 both parties, and the acrimony has become more 
 general, if we may judge by the tone of the articles 
 on the matter in dispute which have appeared 
 during the last two or three years in our leading 
 monthly publications. 
 
 It is, therefore, easy enough to understand why 
 we have a report like this final report of the Com- 
 mission. The opposition to the unqualified appli- 
 cation of free trade principles to our commerce 
 has found expression in the cry for ' fair trade,' 
 which, when we come to look into it, means no- 
 thing more or less than a cry for a return to a 
 modified form of protection ; only, protection 
 being a word which, as regards commerce, has 
 had a stigma affixed to it, and is in bad odour 
 with us, and not only Englishmen, but people in 
 general, having been greatly governed by words 
 from Homer's day to this, the dissentients from 
 the principle of free trade have preferred to mask 
 their proposals for a return to protection by using 
 another name for it.
 
 CH. ii. INCREASE OF PRODUCTION 17 
 
 The fair-traders have found themselves repre- 
 sented among the members of the Royal Commis- 
 sion by the four who have signed the minority 
 report, and we may suppose that the views therein 
 expressed are those of the most enlightened of the 
 fair-traders in general. They are at all events, if 
 I may permit myself to say so, very reasonable and 
 unexaggerated views ; but, as we shall examine 
 them in detail presently, we will not now enter into 
 the question of their merits and demerits, but pro- 
 ceed with the more immediate matter with which 
 this chapter is concerned. 
 
 In paragraph 34 of the majority report the Com- 
 missioners who subscribe to it express the opinion 
 that ' in recent years, and more particularly in the 
 years during which the depression of trade has pre- 
 vailed, the production of commodities generally and 
 the accumulation of capital in this country has been 
 proceeding at a rate more rapid than the increase 
 of population ; and in support of the view that our 
 material prosperity is increasing, we might refer 
 to such statistics as those of pauperism, education, 
 crime, savings banks, &c. These, however, supply 
 us only with indirect evidence on the subject ; and 
 though their united testimony is valuable, they can 
 apply only to the condition of particular classes or 
 sections of the community.' 
 
 This opinion is founded principally on the evi- 
 dence given by Mr. R. Giffen, the assistant secretary 
 
 C
 
 i8 
 
 WEALTH AND WELFARE 
 
 CH. II. 
 
 of the Board of Trade. Let us see, as rapidly as 
 possible, what this evidence is. 
 
 We have, first, the direct evidence afforded by 
 the Board of Trade returns, and by the tables 
 handed in by Mr. Giffen for the information of the 
 Commission. From these returns and tables the 
 one which here follows has been compiled and 
 inserted in the report. As the reader will see, it 
 affords evidence, from the increase of output and 
 of consumption of raw material, of increased pro- 
 duction. 
 
 Coal 
 
 Pig iron 
 
 Raw cotton 
 
 Raw wool 
 
 Period Average 
 quantity 
 raised 
 
 Per 
 head 
 of popu- 
 lation 
 
 Average 
 
 quantity 
 pro- 
 duced 
 
 Per 
 
 head 
 of popu- 
 lation 
 
 Net im- 
 ports 
 (annual 
 average) 
 
 Per 
 head 
 of popu- 
 lation 
 
 Net im- 
 ports 
 (annual 
 average] 
 
 Per 
 head 
 of popu- 
 lation 
 
 Million 
 
 
 Million 
 
 
 Million 
 
 
 Million 
 
 
 tons 
 
 Tons 
 
 tons 
 
 Tons 
 
 CW't. 
 
 Lbs. 
 
 Ibs. 
 
 Lbs. 
 
 1865-9 1 103 
 
 3'29 
 
 4" 
 
 'M 
 
 8'j 
 
 29-8 
 
 144-0 
 
 4'o 
 
 1870-4 ' 120 
 
 3'79 
 
 4'9 
 
 16 
 
 tl'2 
 
 39'3 
 
 180-5 
 
 5'6 
 
 iS75-9 ! 33 
 
 3'97 
 
 6' 4 
 
 '19 
 
 i I'D 36-6 
 
 1 97 '4 
 
 5'8 
 
 1880-4. T 5 6 
 
 4'43 
 
 8T 
 
 
 13-2 
 
 41-8 
 
 217-1 
 
 61 
 
 This table is at first sight of a reassuring ten- 
 dency in that it affords direct evidence of the increase 
 of output of coal and iron in more rapid ratio than 
 the increase of population of the United Kingdom, 
 and in so far as we may infer from it that an in- 
 creased consumption of raw cotton and wool has 
 been followed by an increased production of cotton 
 and wool articles of manufacture. By-and-by we 
 shall go into this matter more in detail ; for the
 
 CH. II. THE TEXTILE INDUSTRIES 19 
 
 moment I will confine myself to the following 
 general remarks. 
 
 Turning to the population tables in the appen- 
 dix to the first blue-book, we find that in the last 
 ten years the population of Ireland has diminished 
 by half a million. Now, there is nothing to show 
 that the textile industries in Ireland have not kept 
 pace during the same period of time with those in 
 the sister isle ; the answers received from the Irish 
 Chambers of Commerce and trade associations 
 are much of the same character as those received 
 from English and Scotch ones, as the reader may 
 see for himself by looking at pages 47 and 48. 
 Hence it follows that the figures given in the above 
 table tell, with -respect to the textile industries in 
 Great Britain, too flattering a tale. If we wish to 
 see how the case stands for Great Britain alone 
 as regards increase of production and population, 
 we must deduct from the total net import, in the 
 case of cotton and wool, the amount consumed 
 in Ireland. This, however, the information at 
 command does not enable us to do ; but although 
 we cannot get the exact figures representing the 
 increase per head of population for Great Britain, 
 we can obtain a tolerably fair notion of the relative 
 increase by comparing the increase of population in 
 Great Britain alone with the total increase of net 
 import ; and this I find by calculation to give us, 
 in the last ten years, for cotton, an increase of
 
 20 WEALTH AND WELFARE CH. n. 
 
 net import per head measured by the ratio of 42 to 
 43 ; and for wool measured by the ratio of 68 to 7 1 
 a less satisfactory view, then, as regards Great 
 Britain, than that afforded in the above table. The 
 reader will presently see that a more detailed 
 examination of these two industries confirms this 
 less satisfactory view of textile industries. 
 
 The tables from which the above table has 
 been constructed cover a period of thirty years ; 
 in many cases the figures are given separately for 
 each year, in addition to those denoting the mean 
 of quinquennial periods. In elucidation of the 
 tables, and for the clearing up of any doubtful 
 points, the reader who wishes to look into things 
 in detail for himself is referred to questions 25 to 
 70 addressed to Mr. Giffen. These and the tables 
 referred to constitute all the direct evidence of a 
 general character with regard to increase of indus- 
 trial production. 
 
 Meanwhile let us glance at the general indirect 
 evidence to which paragraph 34 calls attention. 
 This evidence is contained in the appendix to the 
 first blue-book, tables 42 to 46. 
 
 First, table 42 gives us the numbers of bank- 
 ruptcies, liquidations, and compositions in each 
 year, for England and Wales, from 1861 to 1884, 
 together with the averages for quinquennial periods. 
 It establishes a general increase in the number of 
 bankruptcies from 1861 to 1870. In this latter year
 
 CH. II. BANKRUPTCIES AND PAUPERISM 21 
 
 the number falls suddenly to 1,351, from 10,396 in 
 1869. From 1 870 there is a gradual decrease to 915 
 in 1 8/4, and then again a gradual but very slight 
 increase to 1,046 in 1883. The year 1884 shows a 
 sudden increase to 2,998. 
 
 A noticeable feature of the table is that where 
 the bankruptcies are less numerous than usual the 
 liquidations and compositions are more numerous, 
 and vice versa. Thus the totals of bankruptcies, 
 liquidations, and compositions for the several 
 years vary much less with regard to one another 
 than do the bankruptcy totals. On the whole, it 
 appears that little or no reliance can be placed 
 on this evidence in connection with the increase 
 or decrease of commercial prosperity ; for owing to 
 the effect of panics, bankruptcy legislation, private 
 compositions, &c., we find that the aggregate liabili- 
 ties for each year bear the most fantastic propor- 
 tions to the corresponding totals of bankruptcies, 
 liquidations, and compositions. Here is an extreme 
 instance : 
 
 The total number of bankruptcies, liquidations, 
 and compositions for 1878 amounts to 11,450, 
 representing an aggregate of liabilities of thirty 
 millions sterling. For the year 1880 the total is 
 10,298, the aggregate of liabilities amounting to 
 sixteen millions sterling. 
 
 Table 44 relates to the indirect evidence afforded 
 by pauperism. It gives us the average numbers
 
 22 WEALTH AND WELFARE CH. n. 
 
 of paupers in receipt of relief from 1854 to 1884. 
 From this table I will extract only the per-cent- 
 age ratio to estimated population (England and 
 Wales). 
 
 Annual average, 1855-59 . 4'7 per cent, of population in receipt 
 
 of relief. 
 
 ,, ,, 1860-64 . 47 ,, ,, ,, 
 
 ,, ,, 1865-69 . 4-5 ,, ,, ,, 
 
 1870-74 . 4-2 ,, 
 1875-79 3'i ,, 
 
 ,, ,, 1880-84 3' ;> ,, 
 
 The total amount expended on pauper relief, 
 however, shows a steady increase from 5,846,0547. 
 (average of 1855-59) to 8,221,0937. (average of 1 880- 
 84) ; the amount expended per pauper rising from 
 61. i os. %d. (average of 1855-59) to IO /- $ s - II( ^- 
 (average of 1880-84). The expenditure per head 
 of population shows a slight tendency to in- 
 crease. 
 
 Tables 43, 45, and 46 refer to Scotland and 
 Ireland (bankruptcies, &c., and pauperism). 
 
 Having briefly examined the evidence to which 
 paragraph 34 refers us, we will let the report speak 
 on with regard to the evidence afforded by the 
 statistics of foreign trade. 
 
 (35) 'The statistics of our internal trade are 
 very imperfect, and it is therefore not easy to 
 measure the growth of our actual production ; but 
 some useful evidence is afforded by the return 
 of our foreign trade, and by the statistics of the
 
 CH. ii. GROWTH OF FOREIGN TRADE 23 
 
 consumption of raw material. The information 
 obtained from both of these sources appears to 
 point to the conclusion that our production has 
 increased at a rate which, if not quite so rapid as 
 at some previous periods of our history, is still in 
 advance of the rate of increase of population.' 
 
 (36) ' It is true that the statistics of our foreign 
 trade show an apparent falling off in some respects, 
 but this is almost entirely due to the continuous 
 fall in prices which has been in progress since 1873, 
 and more particularly to the fall in the prices of 
 raw materials. A fall of prices may involve a re- 
 duction in the profits of those immediately engaged 
 in producing or dealing in the commodities affected, 
 but it is not necessarily injurious to the community 
 at large.' 
 
 ' When due allowance is made for the fall of 
 prices, and especially for the fall in price of the 
 raw material of our manufactures, we think it will 
 be found that the actual products of British labour 
 and capital have largely increased.' 
 
 (37) ' The real growth of our foreign trade and 
 of our producing power will be readily seen from 
 the following figures extracted from Mr. Giffen's 
 report to the Board of Trade " on recent changes 
 in the amount of the foreign trade of the united 
 kingdom : "
 
 WEALTH AND WELFARE 
 
 CH. II. 
 
 IMPORTS. 
 
 
 Declared 
 
 Values com- 
 
 values 
 
 Million , 
 sterling 
 
 puted at prices 
 of 1873 
 Million 
 sterling 
 
 371 
 
 371 
 
 363 
 
 438 
 
 . 427 
 
 512 
 
 EXPORTS. 
 
 
 255 
 
 255 
 
 191 1 
 
 273 
 
 . 240 
 
 349 
 
 Declared Value of Imports and Exports in 1873, 1879, atid 1883, 
 compared 'with the computed Values, on the assumption that the 
 values of the whole trade are affected by differences in prices^ as 
 are the values of enumerated articles. 
 
 1873 . 
 1879 . 
 
 1883 . 
 
 1873 . 
 1879 . 
 
 1883 . 
 
 The report points out that for the years 1883-85 
 there has probably been a slight diminution ; then 
 proceeds : 
 
 (38) 'The assertion is so constantly made that 
 the value of our foreign trade is declining, that it 
 may not be out of place here to call attention to 
 the fact that the average annual value of the aggre- 
 gate imports and exports during the years 1880-84 
 (which was the latest period for which the figures 
 were available when we commenced our inquiry) is 
 greater, both absolutely and relatively to popula- 
 tion, than in any previous quinquennial period.' 
 
 Period 
 
 Average annual value 
 of our foreign trade 
 
 Amount per head of 
 population 
 
 
 Million jC 
 
 L *. <! 
 
 1865 69 
 
 516 
 
 16 19 i 
 
 1870 74 
 
 636 
 
 iQ 19 3 
 
 i< s 75-79 
 
 6 3 2 
 
 i S 1 6 6 
 
 1880-84 
 
 706 
 
 20 J
 
 CH. ii. CONSUMPTION OF FOOD 25 
 
 Other and indirect evidence is further adduced 
 in support of the view that our foreign trade is in- 
 creasing in more rapid ratio than that of the increase 
 of population ; evidence such as that of the growth 
 of traffic on railways and of the tonnage employed 
 in the shipping trade, and of the increased consump- 
 tion of the necessaries and common luxuries of life, 
 especially of food. 
 
 I will first briefly discuss what appears to 
 me to be the value of the evidence of alleged 
 increase in food consumption in its bearing on 
 the increase of our foreign trade, and then 
 direct the reader's attention to the bearing of 
 foreign trade statistics on the main question of 
 production. 
 
 I notice that with regard to the alleged increase 
 in the consumption of food there is no reference 
 made to data. Looking, however, to the tabulated 
 statement of imports (vol. i., appendix No. 6), 
 we see that there has been a gradual and rapid 
 increase in the importation of articles of food, 
 principally grain. For instance, the average annual 
 import for 1870-74 was 139 millions sterling; for 
 1880-84 it rose to 183 millions sterling. Prices 
 having greatly fallen during the interval between 
 these average periods, we shall get a clearer view 
 of what this means by the help of the following 
 table, extracted from Board of Trade Returns 
 (vol. i. of Report, appendix No. 7) :
 
 26 
 
 WEALTH AND WELFARE 
 
 CH. II. 
 
 
 Quantity imported 
 
 Values imported 
 
 
 1870-74 1880-84 
 
 1870-74 1880-84 
 
 
 Million cwt. 
 
 Million cwt. 
 
 Million 
 
 Million 
 
 Corn (wheat) 
 
 39-56 
 
 57-62 
 
 23-91 
 
 2 9-55 
 
 Corn (maize) 
 
 18-93 
 
 29-10 
 
 7'O2 
 
 9-I5 
 
 Sugar (unrefined) . 
 
 I3'4I 
 
 ig-IO 
 
 16-12 
 
 19-07 
 
 Bacon . 
 
 171 
 
 3-29 
 
 3-81 
 
 7-78 
 
 
 Million Ibs. 
 
 Million Ibs. 
 
 
 
 Tea 
 
 164-48 
 
 2I2-72 
 
 11-51 
 
 II'lS 
 
 This table serves as a guide to a correct estimate 
 of the nature of the increase in food importation. 
 We gather from it naturally that the import of food 
 has increased at a very much higher rate than the 
 increase of population. But to infer from this that 
 the consumption of food has increased per head of 
 population is a very doubtful proceeding, for we 
 must first take into account the very considerable 
 decrease in British agricultural produce during the 
 period embraced in the table. The reader will see 
 by referring to p. 35 that such an inference would 
 be an erroneous one. 
 
 We may readily admit, however, that up to the 
 period 1880-84 our foreign trade shows a tolerably 
 steady increase per head of population ; the direct 
 statistical evidence is, on this point, pretty well 
 conclusive. But we must not too hastily infer from 
 this that the total production of the country has 
 increased in the like proportion. It must be 
 remembered that that portion of our national pro- 
 duction which is exported abroad, large as it is,
 
 CH. II. SHIPPING 27 
 
 does not exceed one-third of the total national 
 production. Had \ve any trustworthy statistics of 
 our home trade the question of the progress of 
 production would be far more easily cleared up 
 than is possible under present conditions. It is 
 not difficult to understand that our foreign trade 
 might very largely increase independently of any 
 increase of home production. Increase in our 
 foreign trade implies increase in the industries con- 
 nected with it, but these are precisely the ones 
 concerning which we already have direct statistical 
 evidence coal, iron, cotton, and wool. Mean- 
 while, our minor industries ma}- not be in anything 
 like so flourishing a condition (I mean with refer- 
 ence to quantity of production, for in other respects 
 all, or almost all, our industries are anything but 
 flourishing) ; and, indeed, this seems to be to some 
 extent admitted, for it is borne out by the chang- 
 ing character of our imports, of which a far larger 
 proportion than formerly consists of manufactured 
 articles. 
 
 The increase in the amount of goods conveyed 
 by railway would probably be wholly accounted for 
 by the extension of the import and export trade. 
 In support of this view I may adduce the fact that 
 the increase of tonnage entered and cleared with 
 cargoes in the home ports has been much more 
 rapid in the foreign than in the coasting trade, as 
 the following figures will show :
 
 23 WEALTH AND WELFARE CH. n. 
 
 Foreign Coa ting 
 
 trade trade 
 
 Average of Tons Tons 
 Tonnage entered and cleared with 
 
 cargo per head of population . . 1865-69 -92 1'ig 
 
 ,, ,, . . 1880-84 1-48 1-42 
 
 Nevertheless, we cannot lay much stress on these 
 figures, for of this increase in tonnage entered and 
 cleared in foreign trade Mr. Pearce (one of the 
 Commissioners) remarks very truly that it is in all 
 probability in a great measure due to the frequent 
 entry and clearance of large passenger steamers 
 carrying little or no cargo. 
 
 The only other great branch of production, 
 besides those of coal, iron, cotton, and wool, concern- 
 ing which we possess tolerably accurate statistical in- 
 formation, is that of agriculture. Considering the 
 very great importance of the matter, there is, in the 
 report of the majority, singularly little information 
 about it. It is true that not many years ago a 
 Royal Commission reported specially on the agricul- 
 tural condition of the country ; and the present 
 report is explicitly stated to be less voluminous in 
 this department of its inquiry for that reason. 
 
 (16) 'The number of agricultural witnesses 
 whom we examined may appear to be small in 
 proportion to the importance which we attach to 
 that industry, but we may observe that a very 
 influential Commission conducted an exhaustive 
 inquiry into this subject, and reported only five 
 years ago ; and further, that in this branch of
 
 CH II. AGRICULTURAL DEPRESSION 29 
 
 inquiry we were fortunate in hearing the opinion 
 of Sir James Caird, to whose evidence, covering as 
 it does the whole field of this branch of our inquiry, 
 we desire to call special attention.' 
 
 The following paragraphs and fragments of 
 paragraphs from the majority report summarise the 
 agricultural condition : 
 
 (21) 'We received from Sir James Caird, and 
 other witnessess, ample corroboration of the serious 
 effect which the great depression in the agricultural 
 industry has produced upon the home trade of the 
 country. There is but little divergence of opinion 
 as to the cause of that depression. The extreme 
 lowering of prices brought about by the extension 
 of American farming appears to be the main factor 
 of the present agricultural depression ; one witness, 
 Mr. Druce, expressing the opinion that the cultiva- 
 tion of much of the inferior land in the country 
 could not be remunerative, even if it were to be 
 had for nothing.' 
 
 ' There also seemed a general acquiescence in 
 the view expressed by Mr. Druce, that although the 
 depression in agriculture at first arose mainly from 
 bad seasons, yet that the low prices realised by 
 agricultural produce must now be regarded as the 
 cause of the distress.' 
 
 (43) ' There can be little doubt that the quantity 
 of agricultural produce raised in the country during 
 the last few years has materially decreased, and
 
 30 WEALTH AND WELFARE CH. n. 
 
 that even the fairly good seasons of the last three 
 years have scarcely compensated for the diminished 
 production of the eight years which preceded them ; 
 while the steady fall in prices has, of course, affected 
 the agriculturist even more seriously than the di- 
 minished yield of the soil.' 
 
 ' This fact, as we shall show later on when we 
 proceed to discuss the causes of the depression, has 
 had a very important influence upon the situation.' 
 
 (51) 'We may therefore sum up the chief fea- 
 tures of the commercial situation as being (a] A 
 very serious falling off in the exchangeable value 
 of the produce of the soil. ($)... (r) . . . &c. 
 
 (73)' . . . Sir James Caird estimates the loss 
 in the purchasing power of the classes engaged in 
 or connected with agriculture at 42,800,0007. during 
 the year 1885, and the loss in several of the pre- 
 ceding years must, no doubt, have been equal or 
 even greater than this.' 
 
 This certainly seems to be a bad state of affairs, 
 calling for a more marked description than the one 
 given in the summary of the chief features of the 
 situation, par. 51- It seems inconsistent to describe 
 the chief feature in the agricultural situation as ' a 
 very serious falling off in the exchangeable value 
 of the soil,' when in 43 we have, ' There can 
 be little doubt that the quantity of agricultural 
 produce raised in the country during the last few 
 years has materially decreased.' If not incon-
 
 CH. ii. LOSSES OF AGRICULTURAL CLASSES 31 
 
 sistent, such a description seems to point at least 
 to an inability or unwillingness to dwell upon the 
 really alarming feature of the case, which most un- 
 doubtedly is not the fall in price for, at all events, 
 if the agriculturist loses by that circumstance, 
 the whole population, in their character of con- 
 sumers of food, gain by it but the decrease of 
 production, the country as a whole being a loser 
 by an absolute extinction of wealth in this in- 
 dustry. 
 
 The last paragraph (73) does not throw any 
 light on this vital matter, the actual extinction of 
 a proportion of our agricultural produce. The loss 
 in purchasing power sustained by the agricultural 
 classes, or, as Sir James Caird puts it, the diminu- 
 tion in spendable income, is plainly due to two 
 causes (i) diminution of produce, and (2) reduced 
 exchangeable value of produce. There seems to 
 reign some confusion on this point. Sir James 
 Caird's estimate is formed by a comparison of the 
 present spendable income of the agricultural classes 
 with that of the same classes ten years ago. Now, 
 Mr. W. J. Harris, one of the most important wit- 
 nesses in the matter of agriculture examined by 
 the Commissioners, and who appears to have given 
 a great deal of attention to the subject, estimates the 
 decrease of production for England and Wales alone 
 at 4O,OOO,ooo/. as compared with production twelve 
 to fifteen years ago. Mr. Harris adds, ' I happen
 
 32 WEALTH AND WELFARE CH. n. 
 
 to have read Sir James Caird's evidence, and I see 
 he puts the decrease at 42,8oo,OOO/. compared with 
 ten years ago. His valuation is really of the 
 United Kingdom ; in my valuation the difference 
 would be rather more than Sir James Caird's.' 
 
 Mr. Harris completely mistakes the bearing 
 of Sir James Caird's evidence and figures. If 
 Mr. Harris's calculations are correct with reference 
 to the decrease of production, then the diminu- 
 tion of spendable income would amount to over 
 7O,ooo,ooo/. for England and Wales alone com- 
 pared with twelve to fifteen years ago, as the 
 reader will presently see. I can only partially 
 account for Mr. Harris's figures by supposing that 
 he has calculated the decrease of production at the 
 prices of twelve to fifteen years ago obviously an 
 erroneous proceeding, for if we are to compare the 
 present losses and gains of the several classes we 
 can do so correctly only by using present prices. 
 Were we all to agree in comparing gains and losses 
 by the prices which obtained ten, fifteen, or twenty 
 years ago, our comparisons would, as comparisons, 
 be correct, but no one dreams of doing so in ordi- 
 nary circumstances. If a cotton merchant loses a 
 hundred bales of cotton, he puts the loss to his 
 debit account at the price which they would actu- 
 ally have realised, and not at the price they would 
 have realised ten, fifteen, or twenty years ago. 
 
 The following calculation will give a very fair
 
 CH. ii. MADE UP OF TWO DISTINCT PARTS 33 
 
 notion of the two factors which together make up 
 the total loss of spendable income. It is taken 
 from the paper of reservations and remarks of Mr. 
 Jamicson, one of the Commissioners. 
 
 From the agricultural statistics, 1886, p. 114, it 
 appears that, as contrasted with the average of 
 1871-75, the acreage in the United Kingdom 
 under the several crops in 1883 was as follows : 
 
 Acreage in wheat, barley, rye, beans, peas, turnips, 
 and vetches was diminished by 1,524,600, which at 
 
 per acre represents . 
 
 . .12,196,800' 
 
 Acreage in mangold and cabbages was diminished by 
 43,000 acres, which at 10 per acre represents 
 
 Acreage in potatoes and carrots was diminished by 
 
 151,000 acres, which at 15 per acre represents . 
 
 Decrease .... 
 
 But the acreage in oats was increased by 
 137,000 acres, representing at 8 an 
 
 . 1,096,000 
 
 And the acreage in grass was increased 
 by 2,133,000 acres, representing at 5^. 
 an acre ...... 
 
 Net decrease . 
 
 533,250 
 
 There was a falling off in the number of 
 sheep of 4,845,000, which at 35^. each 
 represents ...... 8,478,75 
 
 But an increase in horses, 78,000 at 30, 
 cattle, 165,000 at 16, pigs, 198,000 at 
 2, representing .... 5> 2II ,oo 
 
 Diminution of produce . 
 
 430,000 
 
 2,265,000 
 14,891,800 
 
 13,262,551 
 
 3,267,75 
 
 16,530,000 
 
 1 The rates per acre are taken on the basis of calculations given 
 in the Scottish Agricultural Gazette of December 3, 1 886, p. 454. 
 
 D
 
 34 WEALTH AND WELFARE en. n. 
 
 The total acreage under crop in 1883 was 15,034,000, 
 and the reduction of the value of the produce of these 
 acres between 1873 and 1883 was, on an average, say 
 2 per acre, or 30,068,000 
 
 And the acreage in grass was 31,660,000, on which a 
 
 reduction of even is. an acre represents . . . 1,583,000 
 Reduction of value of produce . 31,651,000 
 
 Now if we add these two losses together we get 
 the total of 48,181,0007. as the loss of spendable 
 income, and this total agrees tolerably with that 
 given by Sir James Caird, which in all probability 
 has been very much more minutely and carefully 
 worked out than this one. 
 
 Important as this loss of spendable income is 
 to the classes specially concerned, I must again 
 insist on the fact that the matter of the greatest 
 concern to us lies in this absolute and increasing 
 extinction of wealth, estimated roughly now at 
 sixteen and a half millions, in the face of a 
 rapidly increasing population. It may be, as the 
 Commissioners say, that the steady fall in prices 
 has had a very important influence upon the 
 situation ; but it is difficult to see how, had there 
 been no diminution of agricultural produce, the 
 nation at large could have incurred loss from the 
 fall in its price. If the price of this produce falls 
 relatively to other prices, or, in other words, if there- 
 is a fall in its exchangeable value, the effect of 
 such a fall is not to impoverish the country, but, 
 almost literally, to transfer a portion of its wealth
 
 CH. II. CONSUMPTION OF WHEAT 35 
 
 from the agricultural to the other classes. This must 
 become clear to any one if, instead of saying that 
 the exchangeable value of agricultural produce has 
 fallen, we say, what comes to the same thing, that 
 the exchangeable value of currency and other pro- 
 duce has risen. 
 
 I will take this opportunity to refer the reader 
 back to the question of the alleged increased con- 
 sumption of food per head of population. Taking 
 the whole of the evidence, there cannot be much 
 doubt but that the consumption of food has at 
 least kept pace with the increase of population. 
 But especially with regard to grain and meat we 
 must not draw hasty inferences from the great 
 increase in importation. By way of illustration I 
 will take wheat, for which the statistics of produc- 
 tion and importation are easily obtained : 
 
 Gross value of wheat grown in Great Britain, average 
 
 of 1876-85 ^21,960,000- 
 
 Average import ....... 29,300,000'* 
 
 Gross value of average consumption . 51,260,000 
 
 Gross value of wheat grown in Great Britain, average 
 
 of 1866-75 ;33, 530,oco< 
 
 Average import ....... 20,600,000'' 
 
 Gross value of average consumption . 54,130,000 
 
 Now, to get a comparison of quantities we must 
 reduce this latter total in the ratio of 1876-85 to 
 
 " From the Fanner' 's Almanac, 1887. 
 
 3 Calculated from the Board of Trade Returns, 
 
 J From the Farmer's Altnauac, 1887. 
 
 5 Calculated from Board of Trade Returns, 
 
 o s
 
 3 6 WEALTH AND WELFARE CH. 11. 
 
 1866-75 average wheat prices. The fall in the 
 average price of British wheat for the ten years 
 is from 54^. ^d. to 455. a quarter, so that our 
 33,53O,ooo/. comes to be represented by 27,8oo,ooo/. 
 The average value of the 186675 import calcu- 
 lated at 1876-85 prices becomes i8,4OO,OOO/. To- 
 gether we get 46,200,000?. as the right figure for 
 comparison with the 5 i,ooo,ooo/. of the later period. 
 This, we find, gives us a per-centage increase of 
 10 ; but in the same space of time the population 
 has increased in the ratio of nearly 1 1 per cent. 
 Thus it would appear that in one important com- 
 modity population has increased at a more rapid 
 rate than consumption. I do not place much 
 confidence in this kind of proof, for statistics are 
 notoriously imperfect, but it is valuable as a check 
 to too hasty generalisations.
 
 CH. in. COMPARISON OF TWO PERIODS 37 
 
 CHAPTER III. 
 
 PRESENT ECONOMICAL CONDITION OF THE 
 UNITED KINGDOM (continued}. 
 
 Comparison of the average annual production of Coal, Iron, Cotton, 
 and Woollen industries in ihe quinquennial periods 1870-74, 
 1880-84 State of the Linen, Shipbuilding, Silk, Paper, and 
 minor trades Dissident remarks on the part of signatories of 
 the Majority Report Minority Report as regards production 
 General conclusions. 
 
 WITH the help of the statistics and general in- 
 formation at our command in the blue-books, I 
 propose in this chapter to examine more in detail 
 the increase of production in the four great indus- 
 tries of coal-mining, iron, cotton, and wool ; then, 
 looking to the evidence relating to the minor in- 
 dustries, to see how far we may go with the 
 majority report in the opinion therein expressed, 
 that ' with some unimportant exceptions this in- 
 crease (shown by table relating to principal indus- 
 tries, page 1 8) will be found in all the industries of 
 the country ' (paragraph 40). 
 
 Having already made the agricultural com- 
 parisons for 1870-74 and 1883, I shall keep to the
 
 38 WEALTH AND WELFARE CH. in. 
 
 same periods for comparison in the great industries, 
 or rather to the two quinquennial periods 1 870-74, 
 1880-84. The increase of production will be esti- 
 mated at the average prices of 1880-84, both be- 
 cause this period is the nearest one to us for which 
 the statistics are complete, and also because the 
 value of the extinction of agricultural produce has 
 already been calculated at those prices. 
 First, as regards coal and pig iron : 
 
 Million tons 
 
 (1) Yearly average output of coal (1870-74) . . 120 
 
 (1880-84) 156 
 Increase in ten years . . 36 
 
 The average (1880-84) price of coal per ton at 
 the pit's mouth was qs., making the value of the 
 increase i6,2OO,ooo/. 
 
 Million tons 
 
 (2) Yearly average outturn of pig iron 1 (1870-74) . 4-9 
 
 ,, ., ,, (1880-84) 8 - i 
 
 Increase in ten years . . 3-2 
 
 The average (i 880-84) price of pig iron was 495. 
 per ton, making the value of increase 7,840,0007. 
 With respect to the cotton and wool industries the 
 statistics of production arc much less simple and 
 complete. The most reliable statistics are those 
 furnished by the Board of Trade Returns. It is 
 estimated by the witnesses examined before the 
 Commission, and it is also stated in the report of
 
 CH. in. COTTOA AND WOOL INDUSTRIES 39 
 
 the Oldham Master Cotton Spinners' Association 
 (vol. ii. of report, App. C, p. 423), that about 
 85 per cent, of cotton manufactures is for exporta- 
 tion. I will therefore base my calculation on the 
 export returns. 
 
 (3) Increase between 1870-74 and 1880-84 in 
 the export of 
 
 Cotton yarn, 43-37 million Ibs., at an s . d. f, 
 
 average (1880-84) price of l O'6 per Ib. =2,276,925 
 
 Cotton piece goods, plain, 713 million 
 
 yards, at an average (1880-84) price of 2'6 per yard = 7,724, 1 66 
 
 Cotton piece goods, printed, 334 million 
 
 yards, at an average (1880-84) price of 37 per yard = 5, 149, 1 66 
 Increase in ten years . . 15,150,257 
 
 Estimating this amount as 85 per cent, of the 
 total increase of production, we get as that total 
 I7,8oo,ooo/. in round numbers. From this we have- 
 to deduct the 1880-84 value of the increased net 
 import of raw material in the ten years, that is, 
 2,000,000 cwt. at $Ss. per cwt., or 5,8oo,ooo/., which 
 leaves the total increase of production, valued at 
 1880-84 prices, equal to i2,ooo,OOO/. 
 
 (4) The increase in the net import of wool 
 adduced in the majority report as evidence of the 
 increased production of woollen manufacture is 
 grossly misleading. It is astonishing that, on this 
 point, the Commissioners should not have drawn 
 attention to the evidence of Sir Jacob Bchrcns, 
 which very plainly shows that the increase in the 
 net import of wool is almost altogether due to the
 
 40 WEALTH AND WELFARE CH. in. 
 
 decrease in the quantity of home-grown wool re- 
 tained for purposes of manufacture. The case 
 could scarcely be otherwise when we remember 
 that between the quinquennial periods under con- 
 sideration the number of sheep in the United King- 
 dom has diminished by nearly 5,000,000. 
 
 From Sir Jacob Behrens' evidence it appears 
 that the amount of home-grown wool consumed 
 has diminished in the ten years from an annual 
 average of 147,000,000 Ibs. to one of 119,000,000 
 Ibs. The corresponding imports show, from the 
 Board of Trade Returns, a net increase from 
 180,000,000 to 217,000,000 Ibs. The totals of im- 
 ported and home-grown wool consumed in manu- 
 facture, therefore, are respectively 327,000,000 and 
 336,000,000 Ibs., and this is equivalent to an 
 increase of 3 per cent, in the ten years, during 
 which period the population has increased nearly 
 eleven per cent. So that in this instance the in- 
 ference to be drawn from the report is quite at 
 variance with the facts. 
 
 But the closer we look into the evidence con- 
 nected with this industry, the more reason we have 
 for supposing that there has been no increase what- 
 ever in the value of production independently of 
 the fall of price. It appears certain that of late 
 years a very marked change has been taking place 
 in the character of our woollen exports. In answer 
 to question 3,793, Mr. Henry Mitchell states that
 
 CH. in. TOTAL GAIN 41 
 
 ' probably the exports of manufactured goods are 
 a smaller proportion than they were some years 
 ago ; but, on the other hand, the exports of some 
 manufactured goods are very much larger.' The 
 ' probably ' in this sentence should be ' certainly '- 
 that is, if we can rely on the official returns of ex- 
 port ; for, by referring to the tables, we see that the 
 export of woollen and worsted stuffs completely 
 manufactured goods has diminished by one-third 
 in quantity between the quinquennial periods, and 
 by one-half in money value (from 15 '6 to 7 - 8 
 millions sterling, this total fall being due to the 
 decrease in quantity and fall in price). This 
 change in the character of our woollen exports 
 means that the value of British industry ' put into ' 
 the raw material is, for a given amount of raw 
 material, a diminishing quantity. Irrespectively of 
 a general fall of prices, the intrinsic value of our 
 woollen industry appears to have decreased, and 
 materially decreased, so that it is not an extra- 
 vagant assumption to make that the three per cent, 
 increase in volume of production is counterbalanced 
 by its diminution of intrinsic value. 
 
 Casting up our accounts, then, we stand as 
 follows : 
 
 Gain in coal industry represented by ^"16,200,000 
 
 ,, pig iron ,, ,, 7-800,000 
 
 ,, cotton ,, ,, 12,000,000 
 
 Total gain on the four great industries ^36,000,000
 
 42 WEALTH AND WELFARE CH. in. 
 
 In order to^jet a clear idea of the meaning of 
 these figures, we will now make a rough estimate 
 of the total value of these industries in the earlier 
 of the two quinquennial periods, always, of course, 
 reducing in detail to the prices ruling in the second 
 of the periods. 
 
 Average yearly produce (18/0-74) at average 
 (1880-84) prices : 
 
 (1) Coal . . 120 million tons at 9^. per ton = , 54,000,000 
 
 (2) Pig iron . 4 '9 ,, 49.?. ,, = 12,000,000 
 
 Total value of coal and iron at 1880-84 prices 66,000,000 
 
 (3) Cotton average yearly export (18/0-74) 
 at average (1880-84) prices : 
 
 (a) Cotton yarn, 205*5 million ^ 3S - a ' ls - P er ^ D - =,10,200.000 
 (l>} Cotton piece goods plain, 2,409 million yds. at 
 
 2-6i/. per yd. = 26,100,000 
 (c) Cotton piece goods printed, 1,037 million yds. 
 
 at 37 per yd. = 16,000,000 
 
 Total export at 1880-84 prices = 52,300,000 
 
 This calculation is confirmed from two inde- 
 pendent sources. 
 
 From the table of the yearly value of exports 
 given in the report of the Master Cotton Spinners' 
 Association, I find the average for the 1870-74 
 period to be about 76,ooo,ooo/. sterling. 
 
 According to the report furnished by Mr. G. 
 Lord (vol. iii. of report, App. C) this average 
 would be 7i.ooo.ooo/. sterling. Leaning slightly 
 towards the former estimate, as being probably the 
 more accurate, I will take 74,000, OOO/. as the nearest 
 approach to the right figure. Now, in the interval
 
 CH. in. COTTON AND WOOL TRADES 43 
 
 between the two quinquennial periods the prices 
 of cotton goods have experienced a general fall 
 I go upon the prices as returned by the Board of 
 Trade, taking a mean of the several reductions of 
 price in the ratio of importance of the articles ex- 
 ported of about 26 per cent. Thus at the prices 
 ruling in 1880-84 this 74,ooo,OOO/. sterling would be 
 represented by 54,/oo,ooo/. I take a fresh mean 
 between this result and mine that is, between 
 54,/oo,ooo/. and 52,3OO,OOO/., and this gives us 
 53'5 millions as the average annual value of the 
 export of the earlier quinquennial period, estimated 
 at 1880-84 prices. The cotton exports, as we 
 have already seen, are reckoned to be about 85 per 
 cent, of the total manufacture, which would thus 
 amount to 63,ooo,OOO/. From this latter sum we 
 deduct the value of raw material I r2 million 
 cwt. at 58^. per cwt, which leaves us, as the value 
 of British industry, 3i,5OO,OOO/. 
 
 (4) We now come to the wool trade. The 
 official statistics for this industry being much less 
 complete, we must take the best general estimates 
 available. Sir Jacob Behrens estimates the total 
 value of the wool trade for 1884 at 6o,4OO,OOO/. 
 Allowing about 4 per cent, for the fall in prices 
 from the average of 1880-84, we may roughly take 
 63,000,0007. as the average value for that period. 
 We have seen that the consumption of raw material 
 has increased at the rate of 3 per cent, in the ten
 
 44 WEALTH AND WELFARE CH. in. 
 
 years, and have already set against this increase 
 the decrease of intrinsic value of the outturn. We 
 may therefore fairly take this sum of 63,ooo,ooo/. 
 as representing the value of the average yearly 
 1870-74 outturn at 1880-84 prices. From this sum 
 we deduct the value of the average amount of raw 
 material used in the earlier period 327,000,000 Ibs. 
 at is. per lb., or :6,3OO,ooo/., and we get, as the 
 average annual value of British industry in the 
 earlier period, 46,700,0007. 
 
 Summing up the total average value of the four 
 great industries for 1870-74, at 1880-84 prices : 
 
 (1) Coal and pig iron ...... ^66,000,000 
 
 (2) Cotton ........ 31,500,000 
 
 (3) Wool ........ 46.700,000 
 
 Total . ^144,200,000 
 
 Thus we find an increase of production in these 
 four industries, and during ten years, of 36,ooo,ooo/. 
 on 144,200,0007., or of 25 per cent. 
 
 Here, now, is a rough estimate of the annual 
 value of agricultural produce in 1870-74 at 1883 
 prices : 
 
 Total acreage under crop in 1870-74, say 16,500,000 
 
 acres, which, at 8 an acre makes . . . ^132,000,000 
 Crass, 31,500,000, at 4.9. per acre . . . 6,300,000 
 
 Sheep, horses, cattle, pigs, dairy produce, &c.' 2 . 100,000,000 
 
 Total . /"23-S, 000,000
 
 en. in. LINEN AND SHIPBUILDING 45 
 
 The extinction of agricultural produce in the ten 
 years is estimated, as we have seen, at i6,5oo,ooo/. 
 Thus, so far as we have as yet gone, we may 
 sum up the situation as follows : 
 
 During the ten years between the quinquennial 
 periods selected for comparison there has been : 
 
 (1) A decrease of 6 "4 per cent, on an amount 
 of production estimated at 238 millions sterling. 
 
 (2) An increase of 25 per cent, on an amount of 
 production estimated at 144 millions sterling. 
 
 Of the other branches of British industry exa- 
 mined into by the Commission I will give the 
 following brief summary of the evidence. 
 
 Linen. In this trade there has been an absolute 
 decrease of production in the period of ten years. 
 This view is supported by the following facts, as 
 deposed by witnesses : 
 
 (1) There has been a decrease of 15 per cent, in 
 the number of spindles at work. 
 
 (2) A fall in the export of piece goods from 
 205*5 to 1567 million yards. 
 
 (3) A fall in the total value of exports from 7-5 
 to 4'9 millions sterling, the fall in price in the in- 
 terval not being more than 1 5 per cent. 
 
 The linen exports amount to about half the 
 total trade. 
 
 Shipbuilding. The report contains a statement, 
 put in by Mr. John Scott, shipbuilder on the Clyde, 
 I think, of the number, tonnage, and description of
 
 46 WEALTH AND WELFARE CH. in. 
 
 vessels building in the United Kingdom for classi- 
 fication in Lloyd's Register, from 1876 to 1885. 
 From this statement it appears that the total gross 
 tonnage building- 
 Increased from 331,831 tons in 1876 to 1,097,098 in 1882 
 Decreased ,, 1,097,098 ,, 1882 ,, 325,236 ,, 1885 
 
 The increase was of a quite abnormal cha- 
 racter, the figures rising in iSSi to nearly double 
 those of the previous year. The decrease since 
 1882 has been rapid and continuous. 
 
 Silk. The volume of production has steadily 
 decreased (except for a short period of revival subse- 
 quent to the Franco-German war) during the last 
 twenty years. Mr. Brocklehurst, M.P., states in his 
 evidence that in 1859 there were in Macclcsfield 
 55 silk factories, whereas there are now only 30, 
 and that the number of silk operatives has decreased 
 to one-fourth of the original figure. In Manchester, 
 during the same period, the number of factories 
 has decreased from 30 to 5. 
 
 Paper. Of this branch of production there are 
 no general statistics, but the evidence, taken in its 
 ensemble, goes to show that, although the trade is 
 in a state of considerable depression, the increase 
 in manufacture is very considerable. 
 
 We have still to consider the question of the 
 increase or decrease of production in the numerous 
 minor industries not made the object of special 
 examination by the Commissioners. On this
 
 CH. HI. GENERAL VOLUME OF TRADE 47 
 
 matter the answers received from the Chambers of 
 Commerce and trade associations addressed will 
 throw light. I append an analysis of these answers, 
 premising that I have omitted those which bear 
 upon the industries which have already been exa- 
 mined in detail. 
 
 The questions addressed to the Chambers of 
 Commerce and trade associations were drafted in 
 the form of a circular. The question which specially 
 concerns our present subject of inquiry ran as 
 follows : 
 
 ' No. 4. How has the trade and industry of your 
 district been affected in the last five years, as com- 
 pared with the periods 1865-70, 1870-75, 1875-80, 
 as regards 
 
 ' (a) Its volume ? ' 
 
 For convenience of comparison I group the 
 answers under the headings ' Volume increased,' 
 ' Volume decreased,' ' Volume maintained.' 
 
 Volume increased. 
 
 Birmingham ....... general trade 
 
 Bristol ........ general trade 
 
 Cleckheaton ....... seed crushing 
 
 Coventry ......... bicycle 
 
 Edinburgh ....... general trade 
 
 Hull ......... seed crushing 
 
 London ...... chemicals and sugar refining 
 
 Newark ...... agricultural implements 
 
 Newcastle .... chemicals and marine engineering 
 
 Sunderland (till 1883) .... marine engineering 
 
 Wakefield and Worcester ..... general trade
 
 48 WEALTH AND WELFARE CH. in. 
 
 Volume decreased, 
 
 Belfast flour milling 
 
 Coventry ....... watches and ribbons 
 
 Dundee .......... jute 
 
 Hartlepool ....... engine building 
 
 Luton ......... straw plait 
 
 Newcastle. ......... lead 
 
 Sunderland . . glass trade, and, since 1883, engine building 
 Townships in county of Worcester . . . salt manufacture 
 Wolverhampton . . . general trade in last five years 
 Walsall ........ general trade 
 
 Volume maintained. 
 
 Belfast ..... ironwork and machine making 
 
 Birstal ........ general trade 
 
 Leeds . . . . . . ... general trade 
 
 London ....... leather and metals 
 
 Sheffield ......... cutlery 
 
 Now it must be remarked that, with an increasing 
 population, the maintenance of the same volume of 
 any trade amounts to a relative decrease of it ; and 
 it may even be that a positive increase of volume 
 should mean, with respect to increase of population, 
 a relative decrease of volume. If we suppose that 
 those trades whose volume has increased have kept 
 pace with the increase of population, we have evi- 
 dently to face a tremendous deficit due to the 
 absolute decrease of one set and the relative 
 decrease of the other. It is not difficult to see that, 
 in order to counterbalance the positive decrease of 
 production of the watches and ribbons of Coventry, 
 the jute of Dundee, the engine building of Hartle- 
 pool and Sunderland, the lead of Newcastle, the
 
 CH. in. GENERAL VOLUME OF TRADE 
 
 49 
 
 straw plait of Luton, the salt of the Worcester 
 townships, the glass trade of Sundcrland, and the 
 relative decrease of the Belfast ironwork and 
 machine making, the London leather and metals, the 
 Sheffield cutler}-, we must have a very marked, very 
 rapid increase in the trades coming under the other 
 heading seed crushing, bicycle, chemicals, sugar 
 refining, and the marine engineering of Newcastle. 
 
 We get additional light from the trade associa- 
 tions' answers. I give all of these, for they en- 
 lighten us as to recent tendencies in our larger 
 industries. 
 
 Question 3. ' How have they (that is, the branches 
 of trade or industry in which the association is 
 specially interested) been affected in the last five 
 years, compared with the periods 1865-70, 1870-75, 
 1875-80, in respect to 
 
 () Volume?' 
 
 Volume increased. 
 British Sugar Refining Assoctn. 
 
 Cleveland Ironmasters' ,, 
 
 Needle Manufacturers' ,, 
 
 Paper Makers' ,, 
 
 Tin Plate Manufacturers' ,, 
 
 Wire Trade ,, 
 Oldham Master Cotton 
 
 Spinners' ,, 
 
 Scottish Paper Makers' ,, 
 
 Agricultural Engineers' 
 
 (I865-75)- 
 
 Institute of Builders. 
 Mining Association of Great 
 
 Britain. 
 
 Volume decreased. 
 
 Cleveland Ironmasters' Assoctn. 
 
 (since 1883). 
 
 Linen Merchants' ,, 
 
 North of England Iron 
 
 Manufacturing ,, 
 
 Wire Trade (since 1882) ,, 
 Flax Supply }J 
 
 Agricultural Engineers' ,, 
 
 (since 1 880). 
 National Association of Master 
 
 Builders. 
 
 Volume maintained. 
 Leather Trades Association. 
 South Wales Chemical 
 
 Manufacturers' Association. 
 Rye District Commercial
 
 50 WEALTH AND WELFARE CH. in. 
 
 We gather from these answers that several of 
 our most important trades are, temporarily at least, 
 in a declining condition, the most significant and 
 disquieting symptom being the decline since 1883 
 of the iron trade. It is, further, a well-known fact 
 that since these answers were received in 1885 the 
 coal trade has shown unmistakable signs of weak- 
 ening. 
 
 If, notwithstanding these facts, figures, and con- 
 siderations of all kinds, we found the members of 
 the Commission unanimous in the opinion that the 
 volume of production in the United Kingdom has 
 largely increased increased in even more rapid ratio 
 than that of the increase of population we might 
 veiy naturally suppose that inaccuracies of various 
 kinds lay hidden in these chapters. But the mem- 
 bers of the Commission are by no means unanimous 
 on this or on many other points. Of the eighteen 
 gentlemen who sign the main report, eleven sign 
 it subject to various reservations, some of which 
 bear upon the question we have been trying. 
 
 Messrs. Sclater-Booth, Cohen, Gibbs, Jamieson, 
 and Palgrave take exception to the tone of the 
 majority report as being too optimistic. In their 
 opinion it minimises the depression which the evi- 
 dence submitted to them proves to exist in almost 
 every branch of the trade and industry of the 
 country. 
 
 Mr. Charles Palmer, on this point, dissents in
 
 CH. in. RECENT DECREASE OF PRODUCTION 51 
 
 the following words from the majority report : ' I 
 believe that the report signed by Lord Dunraven, 
 Mr. Ecroyd, Mr. Lubbock, and Mr. Muntz more 
 accurately describes the extent and the severity 
 of the depression in trade and industry, and the 
 consequent insufficiency of employment of labour, 
 than does the report of the majority of the Com- 
 missioners. The statement made in the report that 
 " the actual products of British labour and capital 
 have largely increased " is one I cannot subscribe 
 to as referring to some of our most important 
 industries in the years 1884 to 1886. No doubt 
 such a conclusion would be correct if we depended 
 solely on evidence such as that of the assistant 
 secretary of the Board of Trade, that of the 
 chairman of the Board of Inland Revenue, and 
 others, which evidence is based on statistics for 
 a period of twenty years up to 1884, during which 
 the volume of trade naturally shows a large in- 
 crease. But it is admitted that these statistics are 
 imperfect, and they do not come down to the period 
 in which the depression in trade w r as most marked. 
 ' As examples of the diminished products of 
 British capital and labour I may refer to the 
 facts That the production of pig iron has fallen 
 since 1882, when it was 8,493,287 tons, to 1885, 
 when it was 7,250,647 tons ; and this fall has taken 
 place while the proportion of iron smelted from 
 foreign ores has increased, thereby throwing out of 
 
 E 2
 
 52 WEALTH AND WELFARE CH. in. 
 
 employment those engaged in working our own 
 minerals. 
 
 ' The production of manufactured iron and of 
 Bessemer steel have decreased since 1882, and 
 also that of coal since 1885. The serious falling 
 off in shipbuilding since the last-named year is 
 remarkable. 
 
 ' Measured thus by the most recent years, the 
 value and volume of trade in these great iron, steel 
 coal, and shipbuilding industries have very largely 
 diminished.' 
 
 The separate report presented by the minority, 
 and signed by Lord Dunraven, Messrs. Ecroyd, 
 Muntz, and Lubbock, gives us a very different 
 account of the depression of trade. With reference 
 to the special question of production the summary 
 of evidence in this report contains the following 
 paragraph : 
 
 ' (27) Taking the written and oral evidence as 
 a whole, there appears to be a general agreement 
 
 ' (</) That the volume of trade, though it has not 
 materially fallen off, has in some important branches 
 ceased to exhibit its wonted healthy growth.' 
 
 This is a very different statement from that 
 which implies an increase of production in equal 
 or greater proportion to the growth of population. 
 
 Paragraph 39 of this (minority) report adds : 
 
 ' The relative decline of some of our greatest 
 national industries during the past ten or twelve
 
 CH. ill. MINORITY REPORT 53 
 
 years, in proportion to the population of the country, 
 is shown in many ways in the figures which have 
 been placed before us, and in the evidence we have 
 received : 
 
 '(i) In the progressive decline of agricultural 
 employment, and of the condition and production 
 of the soil. 
 
 '(2) In the marked cessation, during the same 
 period, of the wonted increase in the proportion of 
 our population employed in the textile manufac- 
 tures. 
 
 '(3) In the diminishing proportion of the 
 world's production of cotton, wool, flax, and silk, 
 which is manufactured in this country. 
 
 ' (4) In the increased value of our imports of 
 finished manufactures during a period in which (a) 
 prices have fallen very gently ; ($) the value of our 
 exports of the like articles has seriously declined ; 
 (c] a large amount of labour and machinery in this 
 country suited to their production has remained 
 unemployed or only partially employed. 
 
 '(5) In the increasing proportion of our ex- 
 ports which consists of coal, steam engines, and 
 machinery ; and the diminishing proportion which 
 consists of finished manufactures, which not only 
 require coal, steam engines, and machinery for 
 their production, but much valuable skilled labour 
 besides.' 
 
 These statements are all amply borne out by
 
 54 WEALTH AND WELFARE CH. in. 
 
 the evidence of the statistical tables compiled, and 
 which are printed in the body of this report. 3 But 
 although the statements are correct enough, they 
 are not altogether what they profess to be con- 
 clusive proofs of the relative decline of our industries. 
 There is no question whatever about the decline of 
 agricultural prosperity ; that is admitted on all sides. 
 But with regard to the cessation of the increase 
 of population employed in textile manufactures 
 there is the double explanation afforded by the un- 
 doubted and rapid extension of the use of labour- 
 saving machinery, and the alleged greater effec- 
 tiveness and skill of manual labour. Then, with 
 reference to (3), however conclusive the evidence 
 may be that we no longer supply so large a pro- 
 portion of the world's demand of goods manufac- 
 tured from cotton, wool, flax, and silk, it is inad- 
 missible as a proof that our textile industries have 
 declined with respect to production as compared 
 to population. It would be, moreover, too sanguine 
 to hope that, as the means and populations of the 
 globe develop, we should, from our little corner of it, 
 continue to supply a corresponding proportion of 
 their wants. (4) and (5) arc both of them consider- 
 ations to which weight must be attached ; and 
 although (5) shows rather a substitution of one kind 
 of industry for another, it is to the point, inasmuch 
 as the substitution of less for more highly finished 
 5 See pages xlvi to xlviii of minority report.
 
 CH. III. M1JMU1U1 Y RETORT 55 
 
 work implies a reduction in the intrinsic value of 
 industry. We have already seen that this is the 
 case with our woollen produce. 
 
 The minority report then proceeds to show that 
 the proportion of imported raw cotton and of im- 
 ported and home-grown wool retained in the United 
 Kingdom for purposes of manufacture has de- 
 clined to a considerable extent ; in the case of 
 wool, for instance, the fall being from 74*3 per cent. 
 (1865-69) to 54-5 (1880-84). It has just been 
 pointed out, however, that this cannot be accepted 
 as evidence of the relative decline of production to 
 population in the United Kingdom, but rather of 
 the stride which production is making in countries 
 whose industries were in a much less developed 
 condition than ours. A further justifiable inference 
 to be drawn is that we are maintaining our hold of 
 the carrying trade of the world, our re-export of 
 wool rising from 25 to 45 per cent, of the total 
 supply. Lest the reader should not quite grasp 
 the relative significance of these figures, here is 
 the absolute increase of re-exported wool in the fif- 
 teen years : Annual average, 1865-69, 102,000,000 
 Ibs. ; annual average, 1880-84, 280,000,000 Ibs. 
 
 The reader who has thus far followed and veri- 
 fied this exposition of the facts and opinions 
 relating to the production of wealth in the United 
 Kingdom can scarcely escape from the conclusion 
 that on this point the minority, and the dissentients
 
 56 WEALTH AND WELFARE CH. in. 
 
 whom we have quoted, are much more near the 
 truth than the majority. It is true that Lord 
 Dunraven and Messrs. Ecroyd, Muntz, and Lubbock 
 spoil their case a little, not so much by over-state- 
 ment of it as by bringing to bear a battery of 
 arguments which do not all hit the mark at which 
 they are levelled. Convinced as they are, however, 
 of the present extremely unsatisfactory phase of our 
 trade and industry, of the necessity of a change in 
 our commercial policy, and of the desirability of 
 making out as strong a case as possible, this was 
 perhaps an inevitable proceeding on their part. 
 
 Summing up finally the result of this investiga- 
 tion, it appears that during the interval elapsed 
 between the quinquennial periods 1870-74 and 
 1880-84, i n which the population of the United 
 Kingdom increased by nearly 1 1 per cent, there has 
 been (i) a decrease of 6*4 per cent, on an industry 
 (agriculture) valued in the earlier period at nearly 
 238,ooo,OOO/. sterling per annum ; (2) an increase of 
 25 per cent, on four industries (coal, pig iron, cotton, 
 wool) valued in the earlier period at 144,000,0007. 
 per annum ; (3) a problematical increase on a 
 number of industries of unknown value. 
 
 We must remember that there are a large 
 number of minor trades and industries practically 
 unrepresented by Chambers of Commerce and 
 trade associations ; but, as we have no other evi- 
 dence respecting these trades and industries than
 
 CH. in. GENERAL CONCLUSION 57 
 
 what may be inferred from the general state of 
 production according to the reports of these bodies, 
 we must suppose if we suppose at all that in the 
 aggregate they do not differ in condition from that 
 of the others which are thus represented. 
 
 If we assume that those industries respect- 
 ing which there are no good general statistics 
 available have increased at the same general rate 
 as the population has done an assumption which 
 the evidence we have does not warrant we have 
 even then no reason to congratulate ourselves on 
 our economical condition, for a decrease of 6'4 per 
 cent, on 238,ooo,ooo/. set off against an increase of 
 25 per cent, on 144,000,0007. is equivalent to a mean 
 increase of 5 per cent, on 382,ooo,ooo/., that is, to 
 an increase less than half that of the increase of 
 population. If we do not permit ourselves to make 
 this assumption with respect to the uninvestigated 
 industries, our condition, in so far as production is 
 concerned, will be deemed still more unsatisfactory.
 
 58 WEALTH AND WELFARE CH. IV. 
 
 CHAPTER IV. 
 
 OF RECENT CHANGES IN THE DISTRIBUTION 
 OF WEALTH. 
 
 Diminution of Profits and Interest Losses of Landowners and 
 Tenants Wages and Labour Relative Decrease of Employ- 
 ment Effect of the Appreciation of Gold on Distribution 
 Opinion of the Commissioners on Changes in Distribution 
 Effect of the Abolition of the Corn-laws on Changes in Dis- 
 tribution. 
 
 IT is convenient, for the purpose of analysis in the 
 matter of the distribution of wealth, to consider 
 the population as divided into four great classes : 
 (i) the professional class, (2) the capitalist class, 
 (3) the manufacturer or employer of labour, (4) 
 the operatives ; and, corresponding to these last 
 three, (2) the landlord, (3) the tenant, (4) the 
 labourer. Unless we use these terms with a cer- 
 tain degree of elasticity, however, we are apt to 
 get into a hard-and-fast manner of looking at the 
 phenomena of distribution which leads into error. 
 For there are professional men who are at the 
 same time capitalists, or landlords, or both ; the 
 manufacturer is sometimes an employer of labour
 
 CH. iv. PROFITS AND INTEREST 59 
 
 with borrowed capital, and sometimes with his 
 own capital ; or, again, sometimes partly with his 
 own and partly with others' capital ; and so, too, 
 with the other terms. Where not otherwise spe- 
 cially stated, then, the reader is requested not to 
 affix to these terms too rigid an interpretation, 
 but to accept that which the context and general 
 sense indicates. 
 
 From the evidence submitted on this part of 
 the inquiry to the Royal Commission the following 
 facts stand out in sufficiently clear relief: 
 
 (a) There has been of late years a very con- 
 siderable diminution in the profits of trade, and in 
 the return on invested capital. 
 
 (b] Both landlord and tenant have suffered a 
 serious diminution in their incomes. 
 
 (r) There has been no serious reduction in the 
 rate of wages, but the employment of labour has 
 not increased with the increase of population. 
 
 (a] On this point the evidence is so unanimous 
 that I will do no more than merely quote the 
 paragraphs in the two reports which relate to it. 
 
 Majority report (44) : ' It is indisputable that, 
 among the classes more immediately connected 
 with the production of the large amount of wealth 
 above alluded to (the principal industries), the com- 
 plaints of diminished profits and restricted markets 
 are widespread and persistent ; and it is impossible 
 to doubt that, whatever may be the condition of
 
 60 WEALTH AND WELFARE CH. iv. 
 
 the community as a whole, certain sections of it 
 are suffering, or are at any rate in less prosperous 
 circumstances than they were a few years back.' 
 
 ' The complaints which are made are by no 
 means of a uniform character ; but, so far as we 
 are able to judge, there is a general agreement on 
 all hands that business, though not absolutely less 
 in quantity, is carried on with the smallest possible 
 margin of profit, and in very many cases with no 
 profit at all.' 
 
 (45) ' While, however, we find this opinion too 
 generally expressed to admit of much doubt as to 
 its being substantially accurate, we may point out 
 that the only statistics on the subject which are 
 available do not altogether support it.' 
 
 The statistics to which this paragraph refers 
 are those of the income tax. A large proportion 
 of commercial profits are assessed under schedule 
 D. The gross amount assessed under that schedule 
 in the year 1885 was 293,000,0007., and in the year 
 1884, 291,000,0007., both of these figures being 
 the highest recorded. Comparing these figures 
 with the growth of population, we find that the 
 amount per head was 8'i7. in 1885, 8'27. in 1884; 
 and to meet with figures exceeding these amounts 
 we must go back to the years 18/5 and 1876, 
 when the amounts were 8'27. and 8'37. respec- 
 tively. 
 
 (47; 'Too much stress however, should not be
 
 CH. iv. PROFITS AND INTEREST 6r 
 
 laid upon these figures, as it is well known that 
 the growth of the income tax assessment is largely 
 attributable to the increased efficiency of collection 
 in late years. There is, moreover, reason to believe 
 that in some cases the tax is paid on profits which 
 have not been earned, owing to the unwillingness 
 of traders to make known the fact that they have 
 sustained losses, and notwithstanding the option 
 given them by law to be assessed by the special 
 Commissioners of Income Tax at Somerset House. 
 Due weight should also be given to the fact that 
 the assessment is made on an average of years, 
 and a diminution of profit may, therefore, not be 
 immediately apparent in the returns.' 
 
 (50) 'There is also, in consequence of the un- 
 remunerative character of the trade of the country, 
 less inducement to the capitalist to embark his 
 capital in productive enterprise. This has resulted 
 in a diminution of the current rate of both profits 
 and interest, which has tended to create amon^ 
 
 o 
 
 the capitalist class a sense of depression corre- 
 sponding to that which we have noticed as pre- 
 vailing among the employers of labour.' 
 
 Minority report : 
 
 (35) 'The complaints proceed chiefly from the 
 classes interested in production : 
 
 ' ( i ) From .... 
 
 ' (2) From those who conduct productive indus- 
 tries, such as farmers, manufacturers, and those
 
 62 WEALTH AND WELFARE CH. iv. 
 
 engaged in the mining and building trades. These 
 all complain of the restriction or total absence of 
 profit, and, in many cases, of a contraction of 
 demand which enforces upon them a reduced and 
 therefore more costly production.' 
 
 (36) ' The losses, both in the shape of reduced 
 income and diminished value of principal, which 
 have been suffered by the owners of property are 
 so completely a consequence of the unprofitable- 
 ness of the industries for which their property 
 serves as a basis, that it would be useless to con- 
 sider them separately. Their amount is, however, 
 as distinct and disastrous a diminution of the 
 wealth and wages fund of the nation as the like 
 loss suffered by any other class would be.' 
 
 (38) 'Thus far, however, those who conduct 
 and superintend productive industries, and those 
 who own the property and capital employed in 
 connection with them, have borne the chief burden 
 of difficulty and loss. When a man has embarked 
 his capital in, and devoted his ability and experi- 
 ence to, some industrial enterprise, whether farm- 
 ing, mining, or manufacturing, he is compelled to 
 carry it on through adverse times at whatever loss 
 may be less than that of a realisation at the worst 
 possible moment, coupled with the breaking up 
 of a specially trained and organised body of 
 workers. . . .' 
 
 ' The position of the employers of labour is,
 
 CH. IV. LOSSES OF LANDLORD AND TENANT 63 
 
 therefore, of the deepest interest, since upon it 
 depends in the long run both that of the owners of 
 property and that of the artisans and labourers.' 
 
 (U] On this head the principal evidence is that 
 of the senior Land Commissioner, Sir James Caird, 
 to which the report of the majority invites atten- 
 tion. 
 
 According to Sir James's calculations, the 
 owners of agricultural land have undergone a loss 
 of income, as compared with ten years ago, of 
 2O,OOO,ooo/., equivalent to a reduction of 30 per 
 cent. The tenants on their side have lost an equal 
 amount, equivalent in their case to a reduction of 
 60 per cent. Another witness, Mr. W. J. Harris, 
 estimates the total annual loss of production for 
 England and Wales, as we have already seen, at 
 4O,OOO,ooo/. compared with twelve to fifteen years 
 ago. If this difference in the value of food pro- 
 duced has been calculated at the average prices of 
 agricultural produce twelve to fifteen years ago, it 
 corroborates Sir James Caird's figures up to a cer- 
 tain point ; for this sum of 4O,OOO,ooo/. would then 
 represent, not the yearly loss of production (which 
 should be estimated at present prices), but the 
 yearly loss of income of the landlords, tenants, and 
 agricultural labourers of England and Wales com- 
 pared with twelve to fifteen years ago. 
 
 (c] W 7 ith respect to the question of wages and 
 employment the Commission addressed the labour
 
 64 WEALTH AND WELFARE CH. iv. 
 
 associations of the kingdom. From these associa- 
 tions about 280 replies were received. 
 
 Majority report (26) : ' Owing to the varying 
 circumstances of the different districts it is difficult to 
 give an accurate summary of the views expressed. 
 
 ' With very few exceptions trade is reported to 
 be depressed, and in many cases it is considered to 
 be more depressed than at any previous period 
 The number of workmen out of employment at 
 the time when the answers were drawn up showed 
 considerable variations, according to the districts 
 and trades to which they belonged ; but there 
 appears to have been a greater want of employment 
 among the unskilled than among the skilled work- 
 men.' 
 
 ' The rate of wages for time-work appears on 
 the whole to be slightly higher than the average of 
 the last twenty years, but it is not now at its highest 
 .point. The rate for piece-work has diminished in 
 nearly all cases. A reduction is reported in the 
 hours of work of from three to four hours a week 
 during the last fifteen years.' 
 
 (53) ' ^ c must point out that the displacement 
 of labour which is always proceeding owing to the 
 increased use of machinery, or other changes in the 
 methods of production, cannot fail to create a 
 certain amount of distress of a more or less tempo- 
 rary character among the working classes, who are 
 naturally less able to adapt themselves to sudden
 
 CH. iv. DECLINE OF EMPLOYMENT 65 
 
 changes than those whose capital is in a more 
 movable form. This distress, which is to some 
 extent at all times inevitable, was aggravated 
 during the last winter by the exceptional severity 
 of the weather.' 
 
 ' The demand for labour must of necessity be 
 always fluctuating and uncertain, and within the 
 last year or two this irregularity has been more 
 marked than usual ; but, notwithstanding the 
 occurrence of periods of temporary distress, we 
 think that the statistics of pauperism and the in- 
 creasing consumption of the commodities most in 
 demand by the working classes prove that their 
 thrift has increased, and that their general pro- 
 sperity has not materially diminished in recent 
 years.' 
 
 The relative decline of the employment of 
 labour in late years is shown by a set of tables con- 
 tained in the minority report. These tab'es are 
 extracted from a paper on the occupations of the 
 people of the United Kingdom, by Charles Booth, 
 Esq., read before the Statistical Society on May 18, 
 1886. From these tables I take the following 
 figures : 
 
 Per-centage of the whole population employed 
 in agriculture : 
 
 1871 iSSi 
 
 England and Wales . . . 14-2 11-5 
 
 Scotland 17-3 14-2 
 
 Ireland 407 41-1 
 
 F
 
 66 WEALTH AND WELFARE CH. iv. 
 
 Per-centage of the whole population employed 
 in metal-working : 
 
 1871 1881 
 
 England and Wales . . . 4'i 4-1 
 
 Scotland ..... 47 4-4 
 
 Ireland . . . . . I - o i -o 
 
 Per-centagc of whole population employed in 
 mining : 
 
 1871 1881 
 
 England and Wales . . . 4-5 4-8 
 
 Scotland . . . . . 5-1 5-0 
 
 Ireland ..... 0-3 O'4 
 
 Per-centage of whole population employed in 
 shipbuilding : 
 
 1871 1881 
 
 England and Wales . . . 0-4 o'5 
 
 Scotland I -o I 'I 
 
 Ireland . . . . . O'l o-i 
 
 Per-centage of whole population employed in 
 
 textile industries : 
 
 is 74 1885 
 
 I Cotton manufacture . . I -475 I -338 
 
 United Worsted and wool manufacture 0-851 0764 
 
 Kingdom 1 Flax, hemp, and jute ,, O'528 0-452 
 
 (Silk ,, 0-161 0-127 
 
 Total 3'OI5 2-731 
 
 Speaking generally, the tables from which these 
 figures are taken show a gradual but slight increase 
 in the pcr-ccntage of the population employed in 
 the principal industries up to the year 1868, but 
 the decrease in agricultural employment has been 
 continuous since the earliest date (185 1) from which 
 the comparisons are instituted. 
 
 These tables, if correctly compiled and there is
 
 CH. iv. AGRICULTURAL WAGES 67 
 
 tao reason to suppose they are not correct supply 
 us with conclusive evidence that the decline in 
 agricultural employment following on the abolition 
 of the corn laws has not, as frequently alleged, 
 been counterbalanced by increased employment in 
 the textile and other great industries. 
 
 It is remarked in the minority report (par. 56) 
 that ' the insufficiency of employment is the most 
 serious feature of the existing depression ; and 
 it is an important, indeed an anxious question, 
 whether, in the face of the ever-increasing restric- 
 tions of our home market by foreign production 
 admitted duty free, we shall be able to command 
 a sufficiency of employment for our rapidly grow- 
 ing population.' 
 
 We have seen that, according to the majority 
 report, the rate of wages in the manufacturing 
 districts has remained tolerably steady, but this 
 does not appear to be the case with agriculture. 
 Sir James Caird estimates that the agricultural 
 labourer's wages have undergone an average reduc- 
 tion of ten per cent, compared with those current 
 ten years ago. From the detailed statement of 
 the average reductions in the several agricultural 
 zones, it certainly does not appear that this average 
 general reduction of ten per cent, is by any means 
 an over-estimate (see vol. ii. of report, pp. 293-295). 
 The conclusion to which all this evidence leads is 
 that the total amount of wages earned by the 
 
 F 2
 
 68 WEALTH AND WELFARE CH. iv. 
 
 working classes has been proportionately reduced : 
 firstly, owing to the diminished proportion of the 
 numbers employed ; secondly, to the decreased 
 number of the hours of labour (which affects the 
 amount earned by time wages) ; thirdly, to the 
 reduction of the rate of payment for piece-work ; 
 and fourthly, to an actual reduction of ten per cent, 
 of the wages of a class which, in England and 
 Wales, forms about one-eighth of its entire working 
 population. The cumulative action of these four 
 reductions is probably very considerable. 
 
 So much for the evidence in support of the 
 three facts which, at the commencement of this 
 chapter, were set down as standing out in tolerably 
 clear relief. But now what is the bearing of the 
 facts themselves on the principal question of pro- 
 duction ? There has been, as we see, a consider- 
 able reduction in the amount of the wage fund, a 
 considerable reduction in the employer's profits, a 
 reduction in the return on invested capital. The 
 case stated in these bare terms, we should at first 
 sight infer a considerable decrease in the total pro- 
 duction of the country ; for, as the elements of 
 political economy teach us, the price of commodi- 
 ties is made up of the wages of labour, the profits 
 of the manufacturer and middle man, and interest 
 or the return on capital invested in manufacture. 
 But such an inference must be modified by the 
 complication introduced into the question through
 
 CH. iv. THE APPRECIATION OP GOLD 69 
 
 the fall in prices, or, which is the same thing, the 
 appreciation of gold, the effect of which, since we 
 generally estimate production in terms of currency, 
 is to falsify comparisons of present with past amounts 
 of production. We cannot, therefore, judge safely 
 of the progress or retrogression of production by 
 means of such considerations. But as regards 
 changes in the distribution of wealth, the apprecia- 
 tion of gold will certainly prove of help to us in 
 tracing some of these changes. It is true that 
 since wages, profits, and interest, as well as pro- 
 duction, are estimated in terms of gold currency, 
 it follows that an appreciation or depreciation 
 of the currency does not vitiate any conclusions 
 drawn from the figures which may represent the 
 total sums of wages fund, profits, and interest, 
 which totals, whether decreasing or increasing, must 
 represent the same proportion of national wealth 
 obtained by the three estates of production. Never- 
 theless, although the fluctuation of the currency does 
 not vitiate comparisons instituted between indi- 
 viduals or classes at the same moment, it induces 
 changes in distribution. For the appreciation or 
 depreciation of gold is determined by its scarcity 
 or abundance compared with that of the principal 
 commodities of the world's commerce, 'of what are 
 commonly understood and included in the expression 
 ' the necessaries of life.' The value of those things 
 which are usually termed ' articles of luxury ' enters
 
 70 WEALTH AND WELFARE CH. iv. 
 
 very much less into the determination of the value 
 of gold. I do not mean that the value of ordinary 
 articles of luxury (works of art are of course ex- 
 cluded) is not determined by the same general laws 
 as that of necessaries, but the causes which bring 
 about an appreciation or depreciation of the value 
 of necessaries in relation to gold do not necessarily 
 affect that of luxuries in the same ratio ; from which 
 it is not difficult to see that different classes of 
 society are differently affected by the movements 
 in what is miscalled the standard of value. We can 
 perceive, too, that a continual appreciation of gold 
 must be detrimental to the employer of labour and 
 advantageous to the capitalist ; for the former, 
 when he is working with borrowed capital, although 
 repaying the same nominal sum, does in truth repay 
 more than he borrowed. The gradual reduction of 
 interest is, in part, an effect of these transactions, 
 the employer being unable or unwilling to borrow 
 under the same onerous conditions. It is usual in 
 works on political economy to attribute the rise or 
 fall of interest to the less or greater amount of 
 capital competing for investment. Xo doubt this 
 competition of capital is the general cause of the 
 rise or fall of interest ; but when there has been 
 a continuous and rapid movement in the so-called 
 standard of value, there can be no doubt that this 
 also exerts a very considerable influence on the 
 rate of interest.
 
 CH. IV. THE APPRECIA T1ON OF GOLD 7 1 ' 
 
 Without doubt the working classes have pro- 
 fited more than any other by the appreciation of 
 gold. We may safely assume that the reduction 
 in the total amount of wages earned has been quite 
 counterbalanced by the considerable fall in the 
 price of the common necessaries of life. 4 This, in 
 fact, is to admit that the proportion of the national 
 production which falls to the share of labour has 
 not diminished. And here the evidence afforded 
 by the increase of deposits in savings banks and 
 by the decrease of pauperism, evidence which we 
 rejected as not bearing on the subject of production, 
 becomes of greater value. 
 
 It is accepted without question that the classes 
 which, from various causes, have suffered most 
 severely are those of the manufacturers, the owners 
 of agricultural lands, and the agricultural tenants 
 The appreciation of value of profits and rents is far 
 from counterbalancing losses of 20 and 60 per cent, 
 of income, or diminution of profits to an irreducible 
 minimum. As regards the capitalist pure and 
 simple, it is probable that, although the appreciation 
 of gold has enhanced the value of his capital, yet 
 in so far as his share of the yearly production of 
 wealth is concerned he has not greatly if at all 
 benefited, for the appreciation of gold has been 
 
 4 The average prices of commodities in the period 1865^75 nix- 
 to those in 1876-86 as 101 to 82. A. SAUERBECK, ' Prices of Com- 
 modities,' Proceedings of Statistical Society, 1886.
 
 72 WEALTH AND WELFARE CH. iv. 
 
 met by a serious reduction in the rate of interest. 
 \Ve can measure the general fall of interest suf- 
 ficiently accurately by the rise in value of 3 per 
 Cent. Consols from 92^ (average of 1870-74) to 
 loof./y (average of 1880-84). This is equivalent to 
 a fall of interest from 3 to 2~'-^ per cent., or to a 
 reduction of income of 10 per cent. 5 
 
 But if the production of wealth has advanced 
 in the same or nearly the same ratio as that of 
 population, it is plain that, under the above supposi- 
 tions, there is a portion of this production which 
 is not accounted for. If the working classes and 
 the capitalists obtain the same proportionate share 
 of yearly production as formerly, and the manu- 
 facturers, landlords, and tenants who have suffered 
 severe loss, obtain a far smaller proportionate share 
 than formerly, who is it that has benefited ? Is it 
 the class of middle men, those who stand between 
 producer and consumer and conduct the retail 
 trade of the country ? That is scarcely possible, 
 for of late years there has been a very marked 
 tendency to exclude the middle man, to place pro- 
 ducer and consumer in more immediate relation, 
 as witnessed by the establishment of so many dis- 
 
 In an article entitled ' The Vampire Gold,' contributed to the 
 [une (1887) number of the Fortnightly Review, the Duke of Marl- 
 borough very clearly shows how the appreciation of gold unduly 
 favours the capitalist, but the deductions which his Grace makes 
 are vitiated from his not apparently seeing with distinctness that 
 the evil complained of does, in some measure, carry with it its own 
 remedy in the general fall of the rate of interest.
 
 CH. iv. INCREASE OF CERTAIN CLASSES 73 
 
 tributive co-operative societies. What, then, arc we 
 to suppose ? That production has indeed dimin- 
 ished to a large extent, and that the diminution is 
 to be measured by the losses of manufacturers, 
 landlords, and tenants ? I do not think the evi- 
 dence we have had warrants such an inference in 
 its entirety ; moreover, the income tax returns and 
 other considerations to which I shall presently ad- 
 vert do not bear out such a view. The conclusion 
 to which I find myself driven is that the great 
 and, in some cases, cruel losses suffered by the 
 classes just named are due partly to a comparative 
 decrease of production, partly to changes in the 
 distribution of wealth which, as we shall see, mani- 
 fest themselves in the increase of the numbers of 
 the professional classes, and of that class which, 
 known in France by the name of petits rentiers, is ill- 
 translated in English by the term 'small capitalists.' 
 
 The majority report of the Commissioners points 
 out that a change is probably taking place in the 
 distribution of wealth, but they do not in any way 
 enlighten us as to the reasons for this change. 
 
 ' The view we are disposed to adopt is that the 
 aggregate wealth of the country is being distributed 
 differently, and that a large part of the prevailing 
 complaints and the general sense of depression 
 may be accounted for by the changes which have 
 taken place in recent years in the apportionment 
 and distribution of profits.'
 
 74 WEALTH AND WELFARE CH. iv. 
 
 ' The reward of capital and management has 
 become less ; and the employment of labour is, for 
 the time at least, not so full and continuous ; so 
 that even where the rate of wages has not dimin- 
 ished the total amount earned by the labourers has 
 been less, owing to irregular or partial employment.' 
 
 In support of this alleged change in distribu- 
 tion the Commissioners append the following table, 
 compiled from the reports of the Commissioners of 
 Inland Revenue : 
 
 SCHEDULE D TRADES AND PROFESSIONS ONLY. 
 
 Number of Persons assessed to Income Tax HI the years 1874-75, 
 1879-80, and 1884-85 in the undermentioned Classes: 
 
 i Increase ,-, 
 
 ! n r ,po, p. Kate per 
 
 Incomes from 1874-75 1879-80 i 1884-85 ^. D cent, of 
 
 1874-75 
 
 
 
 
 X 
 
 o. Xo. 
 
 Xo. 
 
 Xo. 
 
 
 
 
 200 to 1,000 
 
 162, 
 
 435 
 
 197 
 
 ,775 
 
 2I 5 
 
 ,790 
 
 53,355 
 
 3 2 
 
 85 
 
 I 
 
 ,000 
 
 2,000 
 
 1 1, 
 
 944 
 
 12 
 
 ,OI I 
 
 13 
 
 ,403 
 
 i,459 
 
 12 
 
 21 
 
 2 
 
 ,000 
 
 3.000 
 
 3' 
 
 797 
 
 3 
 
 .604 
 
 4 
 
 ,038 
 
 241 
 
 6 
 
 34 
 
 .3 
 
 ,000 
 
 4,000 
 
 i, 
 
 857 
 
 i 
 
 ,664 
 
 i 
 
 ,914 
 
 57 
 
 3 
 
 07 
 
 4 
 
 ,000 
 
 5,000 
 
 i, 
 
 003 
 
 
 898 
 
 i 
 
 ,074 
 
 7i 
 
 7 
 
 o/ 
 
 5 
 
 ,000 
 
 10,000 
 
 2, 
 
 035 
 
 i 
 
 ,671 
 
 i 
 
 ,928 
 
 107* 
 
 5 
 
 i r * 
 2 1 
 
 10,000 and up- 
 
 I, 
 
 283 
 
 i 
 
 ,020 
 
 i 
 
 ,220 
 
 63* 
 
 4 
 
 91* 
 
 
 wards. 
 
 
 
 
 
 
 
 
 
 
 
 Total 
 
 184 
 
 354 
 
 218 
 
 ,643 
 
 239 
 
 367 
 
 55-013 
 
 29-84 
 
 * Decrease. 
 
 (57) 'From this table it would appear that the 
 number of persons with incomes of less than 2,ooo/. 
 a year has increased at a more rapid rate than 
 the population ('which in the period in question
 
 CH. iv. INCOME TAX RETURNS 75 
 
 increased about ten per cent.), while the number of 
 persons with incomes above 2,ooo/. has increased 
 at a less rapid rate, and the number with incomes 
 above 5,ooo/. has actually diminished ; and further, 
 that the lower the income the more rapid the rate 
 of increase.' 
 
 (58) 'We think, therefore, that, whether the 
 aggregate amount of profits is increasing or not, 
 there is distinct evidence that profits are becoming 
 more widely distributed among the classes engaged 
 in trade and industry ; and that while the larger 
 capitalists may be receiving a lower return than 
 that to which they have been accustomed, the 
 number of those who are making a profit, though 
 possibly a small one, has largely increased.' 
 
 ' This view is further confirmed by the figures 
 given in the above table for the year 18/9-80, 
 which was undoubtedly a year of very general 
 depression ; it will be seen that there was a de- 
 crease in the number of assessments in all classes 
 above the limit of 2,ooo/. a year, while in the classes 
 below that limit there was in all cases a consider- 
 able increase.' 
 
 Mr. Jamieson expressly dissents from the views 
 expressed in par. 56 by his fellow-Commissioners: 
 
 ' I dissent from the inference drawn in par. 56 
 from the figures there quoted. It is probably the 
 fact that the income tax payers in the lower sec- 
 tions have increased more rapidly than the large
 
 76 WEALTH AND WELFARE CH. iv. 
 
 capitalists, but the figures quoted do not convince 
 me of this. It will be observed that the tendency 
 referred to characterised only the former of the 
 two periods which are contrasted with 1874-75. 
 Thus the decrease of 170 in the case of incomes 
 over 5,ooo/. is really the result of a decrease of 627 
 between 1875 and 1880, modified by an increase 
 of 457 between 1880 and 1885. The inference from 
 these figures would be that the tendency referred 
 to did operate during the earlier period, but ceased 
 to operate in the later ; and it will be observed 
 that the difference in incomes of 2OO/. to i,ooo/., 
 which is the main feature of the table, and results 
 in the large pcr-centage of 32'85, is due mainly to 
 the increase between the two former periods. The 
 rate of increase between 1880 and 1885 hardly, 
 if at all, exceeds the general rate of increase 
 common to all the divisions in the tables.' 
 
 No one can examine the above table without 
 acknowledging the validity of Mr. Jamieson's pro- 
 test against the inference drawn from it. Indeed, 
 had the comparison been made between 1879-80 
 and 1884-85 instead of between 1874-75 and 
 1884-85, the deduction would have been almost 
 exactly the reverse of that actually made. For we 
 should see from it that while incomes between 
 2OO/. and i,ooo/. a year had increased by about 
 nine per cent., those over 5,ooo/. had increased by 
 sixteen per cent.
 
 CH. iv. INCOME TAX RETURNS 77 
 
 The important points which this table estab- 
 lishes are (i) A tolerably steady increase in the 
 number of persons in trades and professions assessed 
 to income tax during the ten years. (2) A still 
 steadier increase in the amount of income assessed. 
 But the expression ' trades and professions ' is an 
 elastic one. It includes a number of persons who 
 are nominally in trades and professions ; but in 
 real truth, for the most part, live on small incomes 
 indirectly derived from trade investments, pen- 
 sions, &c. small capitalists, in fact, living on the 
 proceeds of their investments. The evidence does 
 not at all convince one that the people actually 
 engaged in trades and professions are better off as 
 a whole than they were. 6 It must be remembered 
 that the income tax is now much more effectively 
 levied than formerly, and that consequently many 
 nondescript persons who formerly escaped its im- 
 position are now included in this schedule. 
 
 The evidence of the table as it stands tends 
 rather to a general refutation of the theory that 
 the poor are getting poorer, and the rich richer. The 
 present tendency of distribution rather seems to be, 
 if not to diminish the numbers of the poor, at least 
 to add to the number of the well-to-do. But in 
 what way this tendency is at work, and whether it 
 is altogether as satisfactory as we might at first 
 
 6 The reader will find further reasons for this opinion in the 
 chapter ' Concerning Drones.'
 
 78 WEALTH AND WELFARE CH. iv. 
 
 sight suppose it to be, is a matter which purely 
 economical considerations will not help us much to 
 decide. 
 
 Meanwhile, I will draw attention to the charac- 
 ter in the change of distribution initiated by the 
 abolition of the corn laws, and continued through 
 the enormous extension of agricultural enterprise 
 in the New World. In the United Kingdom the 
 effect has been, manifestly, to transfer wealth in 
 the long run from the agricultural classes to the 
 rest of the community. Compared with their in- 
 come ten years ago, the present spendable income 
 of the agricultural classes is diminished, as com- 
 puted by competent authorities, by 42,ooo,ooo/. 
 What is the meaning of this ? The meaning is 
 that if the total production of the United King- 
 dom is the same per head of population now as it 
 was ten years ago, then a portion of this production 
 equivalent to 42,000,0007. would have been made 
 over from the producers to the consumers of 
 agricultural produce. But this would be the case 
 only under the supposition that the general prices 
 of other than agricultural commodities had not 
 fallen during the interval. Or, to put it in another 
 way (for the fluctuation of currency tends to ob- 
 scure these matters), the effect has been to alter 
 the value of agricultural produce in relation to 
 that of other commodities. 
 
 Bearing in mind, however, that the prices of
 
 CH. iv. GENERAL CONCLUSION 79 
 
 nearly all commodities have fallen of late years, 
 the transfer of wealth cannot be properly measured 
 by saying that 42,ooo,ooo/. has been made over to 
 the food consumers. The food consumer now gives 
 a smaller proportion of his particular produce in 
 exchange for his food, and the food producer gives 
 a larger proportion of his produce in exchange for 
 any particular commodity which he may require or 
 desire. It must be clearly understood that the loss 
 of the agricultural classes in purchasing power is not 
 to be measured (as the Commissioners in par. 73 
 perhaps inadvertently do so measure it) by their 
 loss of spendable income. The real loss in pur- 
 chasing po\ver of the agricultural classes must be 
 measured, first, by the actual diminution of agri- 
 cultural produce ; secondly, by the difference between 
 the fall in the price of that produce and the genera] 
 fall of prices. For instance, let us take the case 
 as it actually stands. We estimate the loss due 
 to absolute extinction of agricultural produce at 
 i6,ooo,ooo/. This leaves, as the loss due to fall in 
 price, 28,ooo,ooo/. Now if, in the same period of 
 time, general prices have fallen say ten per cent., and 
 prices of agricultural produce twenty per cent., the 
 loss in purchasing power due to the difference be- 
 tween these falls would be i4,ooo,OOO/., and the 
 total loss in purchasing power of the agricultural 
 classes would be, not 42,ooo,ooo/., but 3o,ooo,ooo/. 
 This, then, is the general conclusion to which it
 
 So WEALTH AND WELFARE CH. iv. 
 
 seems we are led on the subject of the present dis- 
 tribution of wealth : that the working population 
 as a whole obtain now about the same proportion 
 of the yearly production of wealth as they did 
 ten to fifteen years ago ; that the manufacturers, 
 employers of labour, landlords, and tenants obtain 
 a considerably reduced share of this yearly wealth ; 
 that the loss sustained by these classes is attribut- 
 able partly to the relative decrease of production, 
 partly to causes not very clearly understood, but 
 which are favourable to the increase in the number 
 of small capitalists (by which term I understand 
 the lower stratum of the leisured classes, not either 
 landlords or actively engaged in the business of 
 production) ; that the proportion of yearly wealth 
 obtained by the capitalist class is thus larger than 
 it was that is, simply because of the increase in the 
 number of capitalists, for the reduction in the per- 
 centage return on capital is counterbalanced by the 
 appreciation of gold. It is to be borne in mind, 
 however, with regard to the wealthier classes, that 
 the advantages due to this appreciation may be 
 more apparent than real, according as the ordinary 
 luxuries, which (to be fairly latitudinarian in our 
 ideas) are practically their necessaries, have or have 
 not shared in the general depreciation of the value 
 of commodities compared with that of gold.
 
 CH. v. FREE TRADE AND PROTECTION Si 
 
 CHAPTER V. 
 
 FREE TRADE AND PROTECTION. 
 
 Depression at home and abroad Prince Bismarck's commercial 
 policy and that of foreign nations generally Foreign tariffs 
 and British production The orthodox free trade arguments 
 Their strength and weakness Government contracts with 
 foreign firms Export bounties- Meaning of ' protection.' 
 
 THE trade policy which, taking its initiatory step 
 in 1845 with Sir Robert Peel's partial abolition of 
 customs duties, obtained final and complete recog- 
 nition in 1860 with the total repeal of all purely 
 protective duties, is now, or shortly shall be, on its 
 trial. In the last-mentioned year we cast off the 
 last rag of protection and fared forth, confidently 
 exposing ourselves to the keen breeze of unlimited 
 foreign competition. From 1846 until within a 
 very few years ago the production and general 
 wealth of the country increased continuously and 
 swiftly ; but now, apparently, we have reached the 
 summit of the wave of prosperity, and, to the 
 general consternation, appear to be slowly sliding 
 down the other side of it. Is this the case ? And 
 if so, why so ? 
 
 G
 
 82 WEALTH AND WELFARE en. v. 
 
 It has been customary to ascribe our progress 
 in industry to the action of free trade, and to ex- 
 plain our present depressed condition as the effect 
 of the depressed condition of trade abroad, and the 
 succession of bad home harvests from 1877 to 1882. 
 This may possibly be a correct explanation, but it 
 is worth while to remark that it is precisely since 
 1882 that the depression is described as having 
 been most severe, and yet since that year the 
 home harvests have been quite up to the average. 
 Further, although it is quite true there has been a 
 corresponding depression of trade abroad, it has 
 not been cither so pronounced or so uniform as 
 with us. Paragraph 25 of the majority report 
 enlightens us on this point : ' The answers we 
 received from your Majesty's representatives abroad 
 lead to the conclusion that the condition of trade 
 in the various countries of the civilised world differs 
 very materially, and that commercial depression has 
 not been so widespread or so uniformly manifested 
 as has sometimes been supposed.' 
 
 There can be no doubt that our prosperous career 
 since 1846 was, in a great measure, due to the 
 abolition of the corn laws. That measure brought 
 our working classes cheap food, and cheap instead 
 of dear food meant cither cheaper production or 
 better production. Its effect was, as it were, 
 magical. We stormed and took the markets of 
 the world. Presently, however, with rising wages
 
 CH. v. GERMANY'S COMMERCIAL POLICY 83 
 
 and enormous profits at home, the insidious 
 foreigner, satisfied with smaller profits and employ- 
 ing cheaper, or nominally cheaper, labour, began 
 to compete with us to some slight extent. But 
 possession is nine points of the law, with markets 
 as with most other things ; and possibly, had other 
 nations adopted free trade, we should have main- 
 tained our lead, principally because of the excellent 
 condition of our working classes, well supplied with 
 the necessaries of life and working with the elasti- 
 city insured them by their freedom from the crush- 
 ing weight of excessive hours of labour. But the 
 race is not ahvays to the swift. The foreigner, with 
 highly reprehensible and low cunning, finding he 
 could not compete with us in the general market, 
 has determined to shut us out of his own. With a 
 continual extension of this policy on the part of 
 foreign nations, tending more and more to narrow 
 the markets available for the sale of our produce, 
 it is not strange that we begin to find our situation 
 well-nigh intolerable. 
 
 But it is strange that the advocates of free trade 
 have, as a mass, never understood in the past, and 
 do not appear to understand in the present, that 
 how admirable soever such a commercial policy 
 may be for a country rich in natural products, or 
 in the combined commercial aptitude and dexterity 
 of handiwork of its people, it must necessarily be 
 rejected, in the present political organisation of the
 
 S4 WEALTH AND WELFARE CH. v. 
 
 world, by those nations not in any way industrially 
 gifted. How, for instance, could it be expected that 
 a country such as Germany should adopt free trade ? 
 Were the German Empire to uproot its hedge of 
 protective tariffs a number of its fostered industries 
 must inevitably perish ; and it possesses none en- 
 dowed with sufficiently pronounced local advantages 
 to absorb the resulting unemployed capital and 
 labour with reasonable hope of successful competi- 
 tion against the better favoured industries of other 
 countries. It would certainly be advantageous to 
 the German consumer to obtain his manufactured 
 goods cheaper than he docs at present, but the im- 
 portant matter for him is, first, to obtain them. If 
 lie has not sufficient means wherewith to pay 
 for foreign commodities, however cheap these may 
 be, it follows that if he desires the commodities 
 he had better set to work to make them himself. 
 Bearing in mind that the present political develop- 
 ment of the world necessitates a regard not only 
 to the relative well-being of the individuals of 
 nations, but to the positive extent of the power 
 and riches of each race engaged in the struggle of 
 nationalities bearing this in mind, the more we 
 reflect, the more inevitable becomes the conclusion 
 that every civilised nation whose territory is not 
 naturally and exceptionally favoured must, with an 
 expanding population, be driven to manufacture 
 for itself a very great proportion of the commodities
 
 CH. v. GERMANY'S COMMERCIAL POLICY 85 
 
 it requires the extension of production being 
 limited only by the conditions which time and 
 place impose. 
 
 Do the advocates of unconditional free trade 
 imagine that Prince Bismarck, who certainly pos- 
 sesses in a remarkable degree the faculty of seeing 
 things as they really are, and not merely as they 
 may seem, is incapable of fathoming its principles, 
 and of applying them to the trade policy of his 
 country if he thought it would derive benefit by 
 reason of the change ? Germany is naturally a 
 poor country, and, moreover, imminently exposed 
 to the dangers of war a situation which, as we 
 know, necessitates the spending of enormous sums 
 of money in order to keep up a state of preparedness 
 for action. To the heavy burden of military ex- 
 penses, borne by the consumer, Prince Bismarck, 
 with what must to some of us appear the infatua- 
 tion of folly, not only adds that due to protective 
 tariffs, but actually subsidises the German carrying 
 trade, and in other indirect ways spends the con- 
 sumer's money in furthering and establishing his 
 country's trade in distant quarters of the globe ! 
 The German trader, as we well know, is beginning 
 to supplant us in markets which until quite recently 
 were ours. If some of our political economists had 
 eyes for anything beyond their books, they would 
 see that the efforts of German traders are especially 
 directed to obtaining the command of those markets
 
 86 WEALTH AND WELFARE CH. v- 
 
 in which we have hitherto been predominant. Does 
 the reader infer therefrom that this action is due to 
 any specially hostile feeling of the great Chancellor 
 towards this country ? Surely that is not the way 
 of a great and successful statesman ! But the 
 way of great statesmen is to derive benefit for 
 their country from whatever sources hidden to 
 less keen vision the circumstances of the time 
 may discover. Prince Bismarck has not been blind 
 to the fact that public opinion in England is slow 
 of change, that it has been, and still is, strongly in 
 favour of free trade, and that it governs the action 
 of English statesmen. The right way for the 
 advance of Germany's foreign trade, therefore, was 
 clear enough : to help and push forward German 
 traders into competition with practically the only 
 unsubsidised traders in the world the only traders 
 at all events who will look in vain to their own 
 Government for support : to do this at a slight 
 present sacrifice in order to reap a future benefit. 
 When a market is once won, and has been well 
 chosen, the subsidies which helped to win it need 
 no longer be continued. 
 
 But the question of immediate importance to 
 us is not what policy Prince Bismarck may think 
 best adapted to the commercial development of 
 Germany, nor what measures French and American 
 statesmen may advocate in this matter for the 
 commercial welfare of their respective nations.
 
 CH. v. FOREIGN KA TIOXS UNCONVERTED S; 
 
 The question of paramount interest to us is that of 
 the development and welfare of our own country ; 
 and the commercial policy of foreign nations is 
 germane to this matter only in so far as it may 
 serve to show us in what respects our own has been 
 mistaken. Clearly in one important point our 
 reasoning has been fallacious. Free trade, by the 
 irresistible logic of facts, was to have converted 
 the world to its views, but the world remains ob- 
 stinately unconverted. The recalcitrant nations, 
 which were threatened with the certainty of in- 
 dustrial atrophy, are comparatively in a more 
 prosperous condition than the only nation that 
 accepted the principles of free trade in their 
 uncompromising entirety. 
 
 It is unfortunate that in a question of so great 
 moment to us we should be able to do little 
 more than appeal to theoretical reasons in support 
 of either view. Because the most protectionist 
 nation in Europe has made the greatest strides in 
 the course of the last ten or fifteen years, and the 
 only free trade nation has made comparatively the 
 least, it does not therefore necessarily follow that 
 the free trade nation must be wrong as to the fit- 
 ness of its policy to accomplish its own ends in the 
 peculiar circumstances of the age ; but the fact of 
 our seeing a result which is in diametrical opposi- 
 tion to the confident prognostics of the initiators 
 of our commercial policy certainly begins to tell
 
 WEALTH AND WELFARE CH. v. 
 
 heavily against our once firm faith in their system. 
 It is not difficult to imagine an ideal state of 
 society in which such a system \vould be universally 
 applicable, but our concern is to get a system 
 which shall stand the rubs and general ill-usage of 
 this work-a-day world. 
 
 We have to deal with certain plain facts. 
 Whether we like it or not, we must face the fact 
 that the great trading nations of the Continent, and 
 incomparably the greatest trading nation in the 
 two Americas, refuse to buy all their manufactured 
 goods in the cheapest market. They insist on 
 making their own, or at all events a continually 
 increasing proportion of those which they consume. 
 
 For Great Britain, as yet the greatest manu- 
 facturing nation in the world, this general deter- 
 mination of the foreigner is unfortunate, for its 
 inevitable effect is to restrict the productive 
 capacity of the English people in those fields which 
 are, or have been supposed to be, peculiarly their 
 own. This effect we sec to be actually taking 
 place through the evidence afforded by the in- 
 creased amount of our imports of finished manu- 
 factures during a period in which the amount of our 
 exports of the like articles has seriously declined. 
 So that not only has the market for our manu- 
 factured goods abroad gradually narrowed, but the 
 home market has been supplied by the foreigner 
 in growing proportions (allowing 1 5 per cent, for
 
 CH. v. EFFECT OF FOREIGN TARIFFS 89 
 
 the fall of prices, the increase of the import of 
 foreign manufactured goods between 1870-74 and 
 1880-84 amounts to 70 per cent.) It would seem, 
 then, that the foreign system of protective tariffs 
 exerts two injurious influences on British produc- 
 tion : the one, direct in its effect, closing foreign 
 markets to our manufactured goods ; the other, in- 
 direct, flooding our home market with manufactured 
 goods at a lower price than the home manufac- 
 turer can supply them with any profit to himself. 
 This, at least, is the contention of the fair traders, 
 protectionists, or whatever they may please to call 
 themselves. We shall see, when we come to con- 
 sider the recommendations contained in the minority 
 report, how far they justify their assertion that, in 
 practice, foreign hostile tariffs produce an effect 
 analogous to that of foreign bounties on exports. 
 
 The main difficulty under which we labour is 
 to estimate correctly how much of the tendency to 
 reduce production is due to foreign protective 
 tariffs, and how much to other causes. If we admit 
 that the fair traders are right in imputing to the 
 action of hostile tariffs the principal share in 
 bringing about the present sense of commercial 
 depression in the United Kingdom, we need not 
 find much difficulty in accounting for the slight 
 effect they have as yet exerted on the total volume 
 of British production. When capital and labour 
 have been long engaged in prosecuting any parti-
 
 90 WEALTH AND WELFARE CH. v. 
 
 cular industry, it takes a very great pressure to 
 drive them away from it. The persons whose fami- 
 liar line of life it has become will submit to great 
 losses and inconveniences rather than abandon the 
 occupation in every turn and detail of which they 
 are at home, whether as head or hand workers. 
 And, as we know, heavy losses have been incurred ; 
 the great reduction in profits is evidence of them. 
 With the exception of two or three unimportant 
 industries this complaint comes to us from every 
 part of the country. It may be said, and indeed is 
 said, that the consumer has gained what the manu- 
 facturer and employer of labour have lost. Perhaps 
 the consumer has thus gained, but how much longer 
 will the manufacturer apply his skill and what 
 capital he may have to production, when, as is 
 admitted by the most optimistic, profits have 
 already in general dwindled to the lowest margin 
 compatible with a continuance of production, and 
 in many cases have altogether ceased to be made? 
 A certain weight, however, must be conceded to 
 the argument that British manufacturers are not, 
 as a class, satisfied to work for a modest scale of 
 profits such as that which in general prevails on 
 the Continent. On the other hand, we must acknow- 
 ledge that they arc usually more ready to run risks 
 of loss than their Continental brethren, risks from 
 which, if we think of it, the consumer on the whole- 
 derives advantage.
 
 CH. v. ONE-SIDED FREE TRADE 91 
 
 That the nations of the world should severally 
 apply their commercial activity and ability to the 
 production of those commodities which, owing to 
 advantages of soil or climate, or to the natural 
 aptitudes of population, should afford the best re- 
 turn for the labour expended, and that these com- 
 modities should be freely exchanged this was the 
 sheet-anchor of the free trade system. But the 
 anchor was let go without taking careful soundings, 
 and now our ship of Free Trade, the ruthless gale 
 of adversity upon her, seems like enough to drag 
 in among rocks and shallows, and perhaps go to 
 pieces on an inhospitable shore. To drop meta- 
 phor, we overlooked the manifold difficulties which 
 the aims and ends of different races and nationali- 
 ties were to oppose to the realisation of our own 
 aim and end. 
 
 The predictions made by the men of our earlier 
 school of free trade having been falsified by actual 
 events, its later advocates lean somewhat more 
 heavily on what was formerly a less frequently 
 urged justification. The assertion now constantly 
 made is that the nation as a whole benefits by one- 
 sided free trade because, although its action is from 
 time to time harmful to the interests of now this 
 section, and now that section, of producers, it is 
 always beneficial to the consumer, and thus the 
 balance is clearly on the side of gain. This is 
 logical so far as it goes, but it does not go far
 
 92 WEALTH AND WELFARE CH. v. 
 
 enough. We have to consider the intensity as well 
 as the area of interests. The whole population of 
 Great Britain are bread and meat eaters, and to 
 the working classes the relative cheapness of bread 
 and meat is a matter of very great importance ; of 
 so great an importance that we may think it right 
 partly to sacrifice to it the interests of the corn- 
 growers and cattle-breeders of the country. Nay, 
 when we consider the advantages which accrue to 
 the country as a whole from the increased energy 
 and well-being of its hand-workers, and when we 
 further consider that the sacrifice must for the most 
 part be made by a class which can bear loss with- 
 out undergoing any very great hardship, we may 
 safely affirm, and not merely opine. In any change 
 of commercial policy the principal consideration 
 is twofold. Does what one set of persons lose 
 amount to more or less than what the others gain ? 
 and does the loss fall sufficiently easily not to cause 
 real distress to the losers ? We must not look 
 solely to the ' how much ' of gain here and loss 
 there, but, if I may so express it, to the 'how 
 borne ' of it. You may strike a thousand different 
 men with a feather and not do one of them an 
 injury, but if you strike one man with the accumu- 
 lated force of the thousand blows you will kill 
 him. 
 
 It cannot be said that the protectionists or fair 
 traders have completely made out their case against
 
 CH. v. ORTHODOX FREE TRADE VIEWS 93 
 
 free trade, but they have made out a sufficiently 
 strong'' case to make it certain that sooner or later 
 
 o 
 
 the question of our trade policy must be threshed 
 out again, and the policy itself, if necessary, revised. 
 As soon as we shall be in the possession of the 
 statistics and detailed information needed in order 
 accurately to map out our position we shall have 
 to decide ; and in order to decide rightly it would 
 be as well for us to begin by trying to find out why, 
 if our system is indeed a good one, it is apparently 
 so unfruitful in present good results and so ignored 
 by all others but ourselves. If a system is right in 
 theory, but yields bad results in the application of 
 it, then it must be in the application that there is 
 something faulty. Certainly, judging by the light 
 of present experience, an unprejudiced person can 
 scarcely be satisfied that there is no discrepancy 
 between the actual results flowing from our appli- 
 cation of free-trade principles and the results which 
 were expected to flow from it. 
 
 There are certain positions, too, taken up by the 
 advocates of this system, which, to a plain man, do 
 not appear to be so impregnable to argument as 
 they would have him suppose them to be. If you 
 tell a political economist of the fixed free trade and 
 unlimited competition type that you do not clearly 
 see why the community as a whole should neces- 
 sarily suffer by reason of the imposition of a pro- 
 tective duty on, for instance, articles of foreign
 
 94 WEALTH AND WELFARE CH. v. 
 
 manufacture, he will say to you, with perhaps just 
 a very slight smile of superior wisdom, something 
 like this : ' My good sir, with regard to the general 
 theory of free trade, it is quite plain that everybody 
 being a consumer, the interests of the nation as a 
 whole are best served by a commercial policy which 
 takes the interest of the consumer as its paramount 
 concern. Now, in this special matter of an import 
 duty on any particular article of foreign manufac- 
 ture which competes with the home make of it, the 
 right way to look at it is this : if the manufactured 
 article in question is one to the manufacture of 
 which the natural aptitude of our artisans, the 
 advantages of our soil or climate, or what not lend 
 a favourable hand, it will defy the effects of foreign 
 competition ; indeed, submitted to the bracing in- 
 fluence of such competition, it will thrive the better. 
 If, on the contrary, it is the product of an industry 
 which has been artificially nursed into growth, or 
 which can be more efficiently and cheaply con- 
 ducted in some other country, the effect of open 
 competition is to supply the home consumer with 
 as good an article as the one of home make, or 
 even perhaps with a better one, and at a lower cost. 
 The country in the meanwhile avoids loss through 
 the readjustment of labour and capital which is 
 brought about ; the labour and capital employed in 
 this industry will be withdrawn from it and applied 
 elsewhere. We can extend the reasoning still
 
 CH. v. ' MIGRATION' OF LABOUR & CAPITAL 95 
 
 further, and apply it perfectly logically to the ques- 
 tion of the export bounties of foreign nations. In 
 the case of bounties the effect may very possibly 
 be to drive away capital and labour from an 
 industry which, but for the effect of the foreign 
 bounty, would be remunerative to those engaged in 
 it ; but there is really no harm in this, for, again, this 
 capital and labour, freed from its present employ- 
 ment, will migrate to other industries, while the 
 consumers will benefit to the full by the cheap- 
 ness of the bounty-propped article. It is almost 
 as if the foreign Government put the bounty into 
 the pockets of the English consumer.' 
 
 This, or something like this, is what the tho- 
 roughly orthodox free trader of the rigid school 
 would answer, and at the first blush it reads well 
 enough. But if we look closely into the argument 
 there are two or three points which appear to re- 
 quire elucidation. In the first place, when the 
 free trader speaks of taking as his paramount con- 
 sideration the interest of the consumer, we see that 
 in practice, at least, he really means to look only to 
 the consumer's, and not at all to the producer's 
 interest. Then there is a difficulty hidden in the 
 glib expression about the readjustment or ' migra- 
 tion ' of labour and capital ' freed ' from any par- 
 ticular industry. How, as a matter of fact, do 
 capital and labour ' migrate ' ? They do not, that 
 we arc aware of, take to themselves wings and fly
 
 96 WEALTH AND WELFARE CH. v. 
 
 off to happier climes, as the swallows at the 
 approach of winter. How, for instance, is capital 
 sunk in the plant and machinery used in some 
 particular industry such, let us say, as that of silk 
 weaving, which is at present and has been for years 
 past in a most unsatisfactory condition, to accom- 
 plish this migration ? And how is labour, especially 
 the skilled labour of an artisan, who from his boy- 
 hood has been carefully trained to some particular 
 kind of work, to migrate to some other employ- 
 merit ? The necessary versatility is not in man. 
 In a question of this kind what we have to 
 calculate is the total gain enjoyed or loss incurred 
 by the country through the policy we adopt. If 
 we do not protect our silk operatives, the silk-con- 
 suming public reaps the advantage of a cheaper 
 article. As a set-off to this, however, during the 
 decline of the silk trade (I take an actual case, and 
 the evidence on it as laid before the Royal Com- 
 mission) at home a large proportion of the opera- 
 tives are thrown altogether out of work, and the 
 remainder of them less regularly employed, and 
 in general less well paid. One silk factory after 
 another closes or fails. People are apt to look at 
 such losses as unfortunate for these individuals 
 overtaken by them, but rarely stop to consider that 
 they are also a misfortune for the country, whose 
 yearly production of wealth is reduced by just 
 that amount of produce which the unemployed
 
 CH. v. INSTABILITY OF INDUSTRIES 97 
 
 machinery and hands fail to turn out. After a 
 good many years our silk industry is finally reduced 
 to something like one-third of its original volume. 
 How are \vc to estimate the loss of wealth incurred 
 by the nation during this tedious process of migra- 
 tion of labour and capital ? Doubtless the con- 
 sumers of silk have in the meanwhile benefited by 
 some slight reduction in the price of that com- 
 modity, but this gain will have to be continued 
 during many years before it can counterbalance 
 the loss we have just been considering. Now were 
 these the sole considerations involved, were it im- 
 mutably fixed that the foreign industry which has 
 supplanted ours should continue in all circum- 
 stances to remain flourishing, we should in course of 
 time reap the benefit of our policy ; but many in- 
 dustries, especially those which do not depend for 
 their success on any natural advantage of soil or 
 climate, arc born and grow, dwindle and disappear, 
 in an almost unaccountable manner ; wars, the 
 growth or decadence of national enterprise or skill, 
 a thousand accidents, interfere with, hamper, or 
 forward them. Thus, we may find ourselves 
 obliged, in the case of any particular industry, to 
 revert, at great inconvenience and loss, to our 
 former condition. 
 
 \Ye should, if possible, judge each case by itself. 
 When we see any industry of ours seriously 
 hampered by foreign competition or foreign ex- 
 
 H
 
 98 WEALTH AND WELFARE CH. v. 
 
 port bounties, the first question we should ask our- 
 selves is whether there is anything in the nature 
 of the circumstances connected with the industry 
 which points it out as one unlikely to flourish in 
 Great Britain. If this be not the case, if we can 
 see no good reason why it should finally disappear 
 from among us, we may confidently expect that it 
 is merely subjected to a partial eclipse the sun of 
 prosperity will once more shine undimmed on it ; 
 but, in the meanwhile, it may be necessary to put 
 our hands in our pockets in order to avert its total 
 disorganisation. The condition of trade in these 
 times is very peculiar and very significant. It was 
 stated by many witnesses examined before the 
 Royal Commission that the hostile tariffs of foreign 
 nations produce on some of our minor industries 
 the same disastrous kind of effect as that due to 
 foreign export bounties. Although such a thing 
 as a general and pro rata over-production is an im- 
 possibility almost a contradiction in terms yet 
 it frequently happens that there is over-production 
 in some one or more branches of commerce. Of 
 the silk trade, and, in a less degree, of the paper 
 trade, it was affirmed by several witnesses that, 
 our ports being free, while those of other nations 
 arc not, whenever there takes place a production of 
 silk or paper in excess of the demand abroad, our 
 markets are flooded with the surplus produce at 
 cost price, and sometimes at less than cost price.
 
 CH. v. GOVERNMENT CONTRACTS 99 
 
 Now, although this is advantageous to the British 
 consumer, \vc have to consider whether the threat- 
 ened industries can bear the strain to which this 
 state of things exposes them. Almost all the 
 witnesses from Macclesfield and Manchester, who 
 expressed themselves on this matter, gave it as 
 their distinct opinion that a few more years of 
 exposure to these conditions would drive the silk 
 industry completely out of the United Kingdom. 
 During the last five-and-twenty years a continuous 
 stream of operatives in silk manufacture has flowed 
 out from England to the United States energetic, 
 hard-working, enterprising men, who are doing 
 very well in their new homes, so we are told. Are 
 we wise to drive men like these out of the country ? 
 When an industry is going to pieces, those who 
 remain behind are the idlers and loafers, unless 
 their passage is paid for them ; even when this is 
 offered to them, many prefer to remain and be a 
 burden on their ratepaying brethren. This is a 
 very serious aspect of the question. 
 
 We derive a fresh illustration of the question- 
 able wisdom of our present system of untempered 
 competition in the practice, to which our Govern- 
 ment obstinately adheres, of contracting with 
 foreign firms for the supply of goods when the 
 offered terms of contract are more advantageous 
 than those to be obtained from home firms. The 
 opponents of this practice ground their objection
 
 ioo WEALTH AND WELFARE CH. v. 
 
 to it on the pica that its effect is to withdraw 
 capital from the support of British labour, and 
 cause it to be employed in supporting foreign 
 labour. This is, in truth, a very sensible objection, 
 but it has the demerit of not carrying with it a 
 clear exposition of the real features of the trans- 
 action, nor of explaining its ultimate effects. \Ve 
 have, on the one hand, a clear gain to the tax- 
 payer ; on the other a loss, the amount of which 
 entirely depends on the tendency of the Govern- 
 ment action to diminish home production. This 
 loss is most difficult to estimate, and must vary in 
 every case and for every different set of circum- 
 stances. I will discuss a specific case by way of 
 illustration. It has been the custom of late years 
 for the Government to contract with a German firm 
 for a large amount of paper used in the manu- 
 facture of postal cards. Let us suppose the 
 amount paid by Government to be ioo,ooo/., and 
 the saving effected 3 per cent., or 3,ooo/. This is a 
 small, yet a perfectly definite gain. Previously to 
 the acceptance of a foreign tender the contract for 
 the supply of this paper must have been held by 
 some British firm of paper-makers, and therefore 
 the labour, the machinery, the skilled supervision 
 involved in the making of the commodity must 
 have been at that time existent. Xow the ques- 
 tion is, to what use will this productive capacity be 
 turned ? The astute defender of the Government
 
 CH. v. GOVERNMENT CONTRACTS 101 
 
 policy will opine perhaps that the firm will con- 
 tinue to turn out the same quantity of paper of one 
 sort or another as it did before ; that thus an in- 
 creased quantity of paper will be thrown on the 
 market, reducing the average price of paper in 
 consequence ; from which it follows that, while those 
 engaged in paper-making may lose a little by the 
 transaction, the consumer will gain, because he will 
 obtain a cheaper article, and thus there remains 
 the clear gain of 3,ooo/. to the taxpayer. But if it 
 so happens that paper is already sold so cheap, 
 that to sell it any cheaper will not pay those who 
 make it, then the only thing left for the firm to do 
 is to run their mill and their hands ' short time.' 
 We have, in fact, only to look closely enough into 
 the matter to see that, in any circumstances what- 
 ever, there must be a loss inflicted on a certain 
 class whenever the Government transfer a con- 
 tract from a home firm to a foreign one. The 
 loss will be more or less severe according to the 
 conditions of the industry, will be more or less 
 justifiably inflicted according to these conditions, 
 and to the relative saving of the taxpayer's 
 money which is effected, and will spread itself 
 out over numberless channels in such a manner 
 as to make a correct apportionment of it an 
 impossibility. 
 
 This point is one of such extreme importance, 
 owing to the principle involved, that I will ask the
 
 102 WEALTH AND WELFARE CH. v. 
 
 reader to bear patiently with me while we look at 
 it in a different light. How does this policy of the 
 Government affect, not production, but consump- 
 tion? Let us suppose, first, that there follows 
 no diminution of paper production in the United 
 Kingdom as a consequence of the change of contract. 
 We have, then, ioo,ooo/. worth of paper in excess 
 of the anticipated demand. Now, this excess will 
 either be consumed or will rot in the storehouses. 
 Let us further suppose that it will be consumed. 
 Only, if it be consumed at the usual average price, 
 the consumer, other things remaining equal, will 
 have to decrease his consumption of other commo- 
 dities ; and if at less than the usual price, the paper 
 producer will have to decrease his general con- 
 sumption. The latter alternative is pretty well 
 sure to be the usual one, so that we come to this : 
 Increase of consumption valued at ioo,ooo/. of a 
 commodity already so cheap as to be wastefully 
 used ; decrease of consumption valued at ioo,OOO/. 
 of luxuries purchased with profits and of necessaries 
 bought with wages ; saving of 3,ooo/. or increase 
 of general consumption valued at that sum to the 
 British taxpayer. We have taken one extreme, 
 let us. now take the other the case in which paper 
 production is reduced by the whole amount pre- 
 viously supplied to Government ; then we have a 
 general increase of consumption valued at 3,ooo/. 
 on the part of the taxpayer, and a decrease of con-
 
 CH. v. GOVERNMENT CONTRACTS 103 
 
 sumption valued at ioo,OOO/. on the part of the 
 paper producer. In either case the English paper 
 producer's consumption is reduced by the amount 
 handed over to the German paper producer. Truly 
 this is, to a plain person's understanding, a very 
 extraordinary proceeding. It is said that the loss 
 of production will soon be put a stop to by the ' re- 
 adjustment ' of capital and labour, whereas the gain 
 to the taxpayer, though small, is a constant one. 
 On this point we have already expended time and 
 trouble, and have found that the wisdom or un- 
 wisdom of the present Government policy depends 
 precisely on a fair comparison, in every separate 
 case, of the relative gains and of the time which 
 each is likely to last ; but it may be added that the 
 present seems an ill-chosen moment wherein to 
 deprive labour, even temporarily, of any accustomed 
 support, seeing that, far from any ' migration ' of it 
 being at all possible in these isles, there is not 
 enough work to be found even for those employed 
 in our principal industries. It certainly seems, also, 
 that this practice of transferring your custom from 
 the home to the foreign producer or purveyor, the 
 instant the latter can supply you a trifle more 
 cheaply, must tend to the disorganisation and dis- 
 location of the internal trade of the country. With 
 a home market which constantly fluctuates in its 
 demand for commodities of home manufacture 
 there can be no truly economical production, there
 
 104 WEALTH AND WELFARE CH. v. 
 
 must constantly be over-production of some articles 
 and under-production of others. 
 
 But, no doubt, some one will long ere this have 
 objected to the argument about Government con- 
 tracts, that, in the case we have discussed, the 
 withdrawal of the contract from a British firm will 
 not in truth have done any harm to the paper trade 
 of the United Kingdom, for the requirements of an 
 increasing population will enable the firm which 
 has lost the contract to set about meeting the grow- 
 ing demand. This is a foolish objection, perhaps 
 idly coined by the imagination of the present writer, 
 an ' air-drawn dagger ' held at the argument's 
 
 oo o 
 
 heart. It seems scarcely necessary to remark that 
 the paper trade, in its ensemble, will have already 
 made provision for the expected increase of demand, 
 and that consequently that provision, in the shape 
 of capital sunk and labour trained, will be wasted 
 to the extent determined by the amount of the 
 withdrawn contract. From a mere economical 
 point of view it appears at least highly desirable 
 that if the Government contracts with foreign firms, 
 it should do so only when the saving of money to be 
 effected is considerable and continuous enough to 
 make up for any probable loss from the restriction 
 of production which must follow. 
 
 \Vhcn we come to consider the question of 
 foreign bounties on export, it seems incredible that 
 any one, not irrevocably wedded to and blinded
 
 cil. v. EXPORT BOUNTIES 105 
 
 by a mere theory, can possibly welcome them as 
 contributing to the welfare of this country when 
 they act as do the sugar bounties. Let us admit 
 in the completcst manner the benefit which the 
 consumer reaps by obtaining his sugar at a farthing 
 a pound cheaper than he otherwise might. Mean- 
 while what has been going on these thirty or forty 
 years with regard to the sugar industry ? During 
 this period of time sugar made from the beet has 
 been steadily driving cane sugar out of the world's 
 market. From a proportion of seventeen per cent, 
 of the total production, beet sugar has increased to 
 fifty-seven per cent. This has been in the main 
 accomplished through the action of foreign bounties 
 on export. Year by year the value and amount 
 of the production of our West Indian possessions 
 have decreased, and this in the face of an enormous 
 increase in the world-consumption of sugar. But 
 from our point of view the worst feature of this 
 bounty system is one which the near future will, 
 in all probability, disclose to our rueful gaze. When 
 for the sake of the consumer our West Indian 
 sugar shall have been driven quite out of the field, 
 and ruin brought on the planters and traders con- 
 nected with its production and distribution, when 
 beet sugar shall have undisturbed possession of 
 the markets, we shall see the Governments which 
 have thus fostered the development of its produc- 
 tion take off the export bounty. With our sugar
 
 106 WEALTH AND WELFARE CH. v. 
 
 industry ruined, and with imported beet sugar no 
 longer cheap as at present, we shall then be what 
 our witty neighbours would describe as le dindon 
 de la farce. 
 
 And throughout this chapter, I beg the reader 
 to remark, there has been no advocacy of unqualified 
 protection. We deceive ourselves if by the term 
 ' natural laws ' of production and distribution we 
 understand ' unchangeable laws.' With changing 
 needs and, above all, changing ideas and aims, 
 these so-called laws are bound to change too ; but, 
 no doubt, within certain limits, fairly defined, they 
 may be said to remain constant. Protection will 
 be right or wrong, wise or unwise, according to the 
 special circumstances of the case. For instance, 
 in a country whose industries and commerce are 
 the growth already of centuries, there would appear 
 on the face of it to be a very great difference 
 between initiating, dry-nursing, and protecting an 
 industry which may or may not turn out to be 
 a success, and protecting one already established, 
 which, from circumstances of a temporary nature, 
 is threatened with ruin. In the first case you take 
 away capital and labour, which in all probability 
 are already effectively employed in some depart- 
 ment of production, in order to apply them to 
 something untried which, in the end, may prove to 
 be a failure. In the second case your capital and 
 labour are already sunk, so to speak, in an industry
 
 CH. v. MEANING OF < PROTECTION* 107 
 
 which has hitherto given signs of healthy vitality ; 
 the ruin or distress of it means a waste of wealth- 
 producing capacity during a period of time more 
 or less definite, a waste which it may, in certain 
 circumstances, be wise to permit, but with which 
 it is folly on our part not to reckon. 
 
 It seems that there is considerable confusion 
 existing as to the real meaning of ' protecting ' an 
 industry. Many of the witnesses examined before 
 the Commission, though engaged in depressed 
 trades, would not definitely recommend protec- 
 tion ; but a great number of these recommended 
 the establishment of technical schools; among them 
 a few who were thoroughly opposed to protection. 
 Yet, at bottom, what intrinsic difference is there 
 (save in the incentive to smuggling) between 
 taking money out of the consumer's pocket by 
 imposing an import duty on certain articles, and 
 taking it from him in order to establish and keep 
 up technical schools? In either case you 'protect' 
 the trade, you abandon the gospel of ' competition, 
 and devil take the hindmost.' The conviction is 
 gradually being forced on us that in one way or 
 another we must help our industries, or some of 
 them at least, in their struggle against the foreigner ; 
 but we do not like to call it protection. ' Wide is 
 the empire of words ! ' If technical schools will do 
 for us what we want, let it be by all means that 
 kind of protection rather than the other a more
 
 io8 WEALTH AND WELFARE CH. v. 
 
 noble kind of protection, certainly, that which puts 
 people in the way of helping themselves only do 
 not let us try to hide from ourselves the nature of 
 what we are about to do. But, indeed, the imme- 
 diate prospect in trade matters does not give wide 
 ground for hope that technical schools will do much 
 towards brightening it. 
 
 As to the general question of free trade and 
 protection, it is the opinion of many men well 
 qualified to judge that the only alternative to a 
 return to a modified protective policy in this country 
 lies in a more general adoption of free trade abroad. 
 On this alternative it seems vain at present to 
 speculate. We might as well hope to arrest the 
 course of the sun in mid-heaven as to bring round 
 the rest of the world to free trade. The tendency 
 is exactly in the opposite direction. America is 
 resolutely protectionist, so are our self-governing 
 colonies. In Europe, Germany has developed yet 
 more a policy irreconcilably hostile to free trade ; 
 and, heresy awful to think of, the French Govern- 
 ment has just increased the light import duty on 
 wheat (April 1887). The counsels of every com- 
 mercial community, old or young, developed or 
 undeveloped, are as far removed as ever from the 
 influence of free-trade doctrines. In a word, the 
 most favourable view of the effect of our present 
 system may be presented in the guise of a question 
 addressed by the chairman of the Commission to
 
 CH. v. RP2DUCTION OF WAGES 109 
 
 the principal witness on the state of the Sheffield 
 trade, Mr. J. D. Ellis (chairman of the firm of 
 John Brown & Co., and of the South Yorkshire 
 Coal Association). 
 
 Q. 3,191. It comes to this [that is, the burden 
 of Mr. Ellis's evidence], that a change takes place 
 which may [italics mine] in the end be for the 
 national benefit, but which in process of taking 
 place injures and perhaps ruins a great many 
 individuals ? ' 
 
 Answer : Yes ; also removes trade from the 
 district. 
 
 There is, in short, temporary decrease of pro- 
 duction throughout the country, dislocation and 
 loss of local trade, issuing presently in local distress 
 and its unfailing concomitants, crime and drunken- 
 ness. And all this capital and labour migrating 
 (somewhat aimlessly at this time, it must be owned) 
 to fresh fields and pastures new may in the end 
 be for the national benefit. 
 
 But, say some, the real and effectual remedy for 
 our present misfortunes is in cheapening production 
 by reducing wages to the level of those earned on 
 the Continent, or by increasing the amount of work 
 done for the present wages. No doubt this would 
 solve the problem ; only our object is to solve it 
 with due consideration of justice, and it seems that, 
 weighing wages against work done, our artisans 
 are not overpaid in comparison with their Con-
 
 i io WEALTH AND WELFARE CH. v. 
 
 tinental brethren. Be this as it may, there is a 
 very general and honourable disinclination on the 
 part of nearly all concerned to proceed in any 
 direction which should lead to a darkening and 
 narrowing of the already sufficiently dull lot of 
 the working classes. We seem, nevertheless, in the 
 present stage of world-commerce to be approach- 
 ing a limit in the decrease of the number of hours 
 of work, beyond which it would not be prudent 
 to step. We cannot shake ourselves altogether 
 free from our common bondage with other nations. 
 The status to which we can possibly raise 
 labour at home must in a great measure depend 
 upon that status abroad with free trade it must 
 almost entirely so depend. Nor is there any con- 
 tradiction of what has gone before involved in 
 admitting that the present comparatively high status 
 of labour in England is very possibly due to the 
 past beneficial action of free trade, and that we owe 
 to this high status our comparative immunity from 
 the fever of Socialism. Better food, and a more fit 
 proportion of recreation to labour than obtains on 
 the Continent, have certainly helped to keep Social- 
 istic troubles away from us. These are considera- 
 tions of the weightiest kind. If it is true that 
 idleness is the root of all evil, there is no less 
 wisdom and truth contained in the homely saying 
 that ' all work and no play makes Jack a dull 
 boy.' The word ' dull ' is exquisitely and fitly
 
 CH. v. RESULT OF INCESSANT TOIL in 
 
 chosen : incessant toil, especially under its modern 
 conditions, consisting often of a thousandfold 
 repetition of the same act, dulls the feelings, 
 dulls the intellect, and dulls the finer physical 
 capabilities.
 
 112 WEALTH AXD WELFARE CH. vi. 
 
 CHAPTER VI. 
 
 RECOMMENDATIONS OF THE ROYAL COMMISSION. 
 
 Recommendations contained in the report of the majority Of the 
 minority Examination of the alleged effects of foreign tariffs - 
 The proposal to impose an ad valorem duty on the import of 
 manufactured goods The ' preferential ' treatment of the food 
 products of our colonies. 
 
 IT is probable that an extreme sense of their re- 
 sponsibility, and of the difficulty and complexity 
 of the matters they were called on to investigate, 
 rendered the greater number of the Royal Commis- 
 sioners timid in recommending trenchant measures 
 for the improvement of our commercial position. 
 No doubt the wish to avoid controversy, especially 
 of the kind which might lead to reopening the 
 question of the fitness of our commercial policy a 
 question which they were not overtly invited to 
 examine also acted in limitation of the range of 
 recommendations. Naturally, where laissez fairc is 
 the reputed ' open sesame ' to success, laisscrj fa ire 
 absoliiuicnt becomes the only possible emendation 
 of the text, and, accordingly, that emendation we
 
 CH. vi. MINOR RECOMMENDATIONS 113 
 
 get from the main body of the Commission. But 
 if the state of our trade is in general such as we 
 must suppose it to be from an overwhelming pro- 
 portion of the evidence, then the recommendations 
 contained in the majority report are quite inade- 
 quate to bring about the much-desired improve- 
 ment. For what do they amount to ? In brief, 
 to these : Cheapen production ; search for new 
 markets ; improve technical education ; amend 
 the legislation connected with the internal trans- 
 port of commodities. 
 
 It would be too lengthy, and too tedious for 
 the general reader, to enter into a detailed exam- 
 ination of the value of all save the first of these 
 suggestions. Those interested in them will find 
 
 oo 
 
 plenty of information about them scattered through- 
 out the five blue-books which contain the evidence 
 and reports ; but it will soon become evident to 
 them that, however excellent these recommenda- 
 tions may in themselves be, they can exercise at 
 best but a very inconsiderable influence on our 
 commercial prosperity. New markets are not sud- 
 denly discovered like hidden treasure, nor, when 
 found, do they open out their arms to us with a 
 warmth of welcome sufficient to make us forget 
 the cold shoulder of others of longer standing and 
 of far greater importance. To improve technical 
 education is an excellent plan, but it is weighted 
 with the disadvantage that, by present arrange- 
 
 I
 
 ii4 WEALTH AND WELFARE CH. vi. 
 
 ments, the foreign manufacturer frequently reaps 
 the advantage of the improvements which we bring 
 to our industrial processes, while we ourselves have 
 to remain contented with the credit of them. How 
 this often comes about, whoever is curious to know 
 need only study the evidence given as to the con- 
 dition of the silk trade. The better regulation of 
 our internal transport, and the facilities which may 
 be afforded in this respect by Government interven- 
 tion, form a more promising field of endeavour. 
 No doubt all these recommendations are worthy of 
 earnest attention, but they are surely not of the 
 kind likely to go to the root of the matter. The 
 suggestion to cheapen production, however, con- 
 sistently with maintaining good quality and sound 
 workmanship, is indeed an admirable if perhaps 
 somewhat obvious one, and, could it be carried 
 out, would go far towards relieving us of our present 
 embarrassments. Only, as we already incessantly 
 strive to cheapen production, and as we cannot do 
 so beyond the point to which our inventiveness and 
 skill (admittedly equal, even superior, to those of 
 most nations) have brought us, the recommenda- 
 tion loses a good deal of its force. There is but 
 one effective means of cheapening production : by 
 a general reduction of wages, or by increasing the 
 amount of work done for the same wages. But 
 all the Commissioners, with the doubtful exception 
 of one of them, agree in repudiating this method,
 
 CH. VI. REDUCTION OF PROFITS 115 
 
 involving' as it does merely a possible immediate 
 increase of the wealth, at the expense of the future 
 welfare of the nation. 
 
 Up to a certain point it is satisfactory to find 
 the Commissioners generally of the opinion that 
 the volume of trade and production has increased 
 with the increase of population, or even faster, to 
 within two or three years ago, and that in these 
 last two or three years it has not suffered any very 
 material diminution. But this increase is going 
 
 o o 
 
 forward in the face of difficulties which seem likely 
 in the end to prove incompatible with a continu- 
 ance of it. The danger which, commercially, gives 
 the greatest cause for uneasiness lies in the 
 extreme reduction of the manufacturer's profits. 
 There is a vast quantity of capital and skill bound 
 up in our industries, and, good times or bad times, 
 there is nothing for their owners but to persevere 
 in their business to the bitter end. The very fact 
 that the profits of manufacturers have been so pared 
 down will have acted as a spur to increased pro- 
 duction as the only means of making both ends 
 meet, by realising profits at a low rate over as wide 
 a field as possible. The habits and interests of the 
 present generation of employers of labour and 
 manufacturers, the pride of power born of their 
 consciousness of long-tried and approved skill, will 
 bind them to their work so long as life and capital 
 last and after ? This state of affairs may be very
 
 H6 WEALTH AND WELFARE CH. vi. 
 
 favourable to the consumer at present, but how long 
 will it last ? Do \ve then take our stand here and 
 survey the situation from the elevated platform of 
 apres moi le deluge ? 
 
 I do not affect to misunderstand the Com- 
 missioners' recommendations. When they say, in 
 effect, though not in the very words, ' Cheapen pro- 
 duction, this being the principal means of better- 
 ing the position in which we find ourselves,' they 
 desire us to understand that they do not believe 
 in, or approve of, coddling any industries or trades 
 whatsoever ; they do not approve of ' sacrificing ' 
 the consumer's interests to those of the producer. 
 Therefore they say : cheapen production ! But 
 in the same breath they exclaim, ' Keep firm 
 hold of your high wages and your hard-won hours 
 of recreation, artisans and labourers of England.' 
 All of which is equivalent to saying to the nation, 
 Eat your cake and have it ! If we are of a 
 mind that our working classes shall retain their 
 present physical and dare we say it truly as 
 well as unvauntingly ? moral superiority to that 
 of foreign working classes, we must be prepared, 
 if necessary, to make a sacrifice for it. The pro- 
 tectionist or fair-trade minority of the Commis- 
 sioners believe, rightly or wrongly, that we can 
 carry this out without making any sacrifice what- 
 ever, as we shall presently see. The free-trade 
 majority really evade the question. If I may say
 
 CH. vi. 'FAIR TRADED VIEWS 117 
 
 it without risk, as I say it without intention of 
 offence, the majority of the Commissioners appear 
 to be still much of the opinion that 'God is 
 great, and Plug-son of Undershot is His prophet. 
 Thus saith the Lord, Buy in the cheapest market, 
 sell in the dearest ! ' This is the only mode of 
 salvation. 
 
 The Commissioners who sign the report of the 
 minority have, in a considerable measure, lost faith 
 in this programme ; chiefly, I regret to believe, 
 because the gospel according to Plugson is at 
 present impossible to carry out, foreign tariffs 
 having put it out of our power to buy and sell, or 
 at least to sell, as directed. 
 
 The most important and drastic of the recom- 
 mendations contained in this report (minority) are 
 the following : 
 
 (128) 'We have already described (pars. 60, 
 62, 64, 76) the way in which the high protective 
 duties levied by foreign nations whose industries 
 are almost, or quite, on a par with our own as 
 regards cheapness of production, constitute in 
 effect a bounty upon their exports of the protected 
 articles. 1 
 
 ' So far as this affects their competition with our 
 products in neutral markets we have, of course, no 
 direct remedy in our hands. Of the possibility of 
 
 1 See pp. 121-126, in which these paragraphs 60, 62, 64, 76 
 are reviewed.
 
 ii8 WEALTH AND WELFARE CH. vi. 
 
 applying an effectual though indirect remedy we 
 shall have hereafter to speak.' 
 
 (129) 'But as regards their practically subsid- 
 ised competition in our home market, which is 
 doing so much to destroy the fair profits of producers 
 and to diminish the employment of labour, we have 
 at command an effectual remedy. The imposition 
 of duties equal to 10 or 15 per cent., ad valorem, 
 upon all manufactures imported from foreign 
 countries, would, we believe, sufficiently countervail 
 both the bounty-creating effect of their protective 
 tariffs and the unenviable economy of production 
 obtained through longer hours of labour and less 
 effective inspection and regulation of its conditions. 
 For our aim ought not to be to countervail any 
 natural and legitimate advantage which foreign 
 manufacturers may possess, but simply to prevent 
 our own industries being placed at an artificial 
 disadvantage by the interference of cither home or 
 foreign legislation ; and to replace them, as nearly 
 as may be, in the position in which they would have 
 found themselves but for such interference.' 
 
 (130) 'Such duties would, undoubtedly, to a 
 considerable extent keep foreign manufactures out 
 of our home market, and thereby give increased 
 employment to our home industries. lUit in this 
 country, so insufficient is the present employment 
 of the available labour and agencies of production, 
 and so great is the pressure of capital seeking
 
 CH. vi. 'FAIR TRADED VIEWS 119 
 
 investment and labour seeking employ, that in our 
 opinion neither prices, profits, nor wages could pos- 
 sibly be raised by the operation of such duties 
 above the lowest remunerative level.' 
 
 (131) ' It by no means follows, however, that 
 great advantage would not accrue to the producer 
 and those employed by him. On the contrary, 
 the fuller and more regular output upon a given 
 basis of investments and fixed expenses secured 
 by the exclusion of that surplus production of pro- 
 tected foreign industries which periodically floods 
 this, the only duty-free market, would reduce the 
 cost of our manufactures in the most healthful 
 manner, by the distribution of fixed charges over 
 a larger annual production. Our producers would 
 thus be strengthened for competition in neutral mar- 
 kets, not by a reduction of the wages and com- 
 forts of their workpeople which must inevitably 
 further depress the home trade but by the sound 
 economical method of full and steady production, 
 which is beneficial alike to employer and employed.' 
 
 (132) 'For it must be remembered that the 
 adoption of the system of protection by all foreign 
 countries has not merely left our producers, alone 
 amongst all others, destitute of an artificial stimulus 
 that they might well have endured without com- 
 plaint ; but it has at last brought upon them an 
 unnatural and practically subsidised competition. 
 From this they have none the less right to be
 
 I2o WEALTH AND WELFARE CH. vi. 
 
 defended because, in the presence of general or even 
 partially prevailing free trade, they would be the last 
 to desire protection of any kind.' 
 
 (133) 'The measures we have indicated would 
 counterwork the effects of protection, and strength- 
 en the position of our producers, directly in the 
 home market, and indirectly, though substantially, 
 in neutral markets. It is, of course, out of our 
 power to obtain more free access to the protected 
 markets of countries like the United States, France, 
 and Germany themselves. In past years we had 
 little occasion to regret this, or to trouble ourselves 
 about it. Their course of action did not harm us 
 so long as we were able, in spite of it, to obtain full 
 employment for all our available labour. To buy 
 everything in the cheapest market though not 
 permitted to sell in the dearest may be the best 
 policy, so long as we can find other full and 
 equally remunerative employment for the home en- 
 terprise and industry which we displace in so doing. 
 But no longer, for, from the moment in which 
 the combined effect of protective tariffs abroad and 
 foreign competition at home limits our market so 
 as to cramp the free and full exercise of our in- 
 dustries, it begins to choke the living fountain of 
 our wealth, our social well-being, and our national 
 strength. We think the evidence is conclusive that 
 during the past ten or twelve years this point has 
 been reached, and that the adoption of a national
 
 CH. vi. 'FAIR TRADE'- VIEWS DISCUSSED 121 
 
 policy suited to the changed conditions is impera- 
 tively demanded.' 
 
 These are in the main, I think, true words. But 
 the opposition to a return to a protectionist policy 
 of however mild a character will be a most strenu- 
 ous one, and the cause of protection suffers slightly 
 here from overstatement of the benefits which may 
 be expected to follow from its adoption, and per- 
 haps from an apparent exaggeration of the evils 
 inflicted on our industries by the action of foreign 
 tariffs. If we turn to paragraphs 60, 62, 64, 76, in 
 which is described how the high protective duties 
 levied by foreign nations constitute in effect a 
 bounty on the export of the protected articles, the 
 description fails of being quite so convincing as we 
 might have expected it to be. Will the reader 
 have the patience to read them attentively ? 
 
 Par. 60. ' Over-production of the commodities to 
 which they apply is again an inevitable result of 
 high protective tariffs. They artificially create in 
 the protected country a duplicate production of 
 articles which, under the natural laws of supply 
 and demand, were already produced in sufficient 
 quantity in those places where they could be best 
 and most cheaply produced. The effect is a uni- 
 versal glut of those particular articles (i) in the 
 natural seats of production, which are violently 
 deprived of all or part of their wonted employ- 
 ment ; (2) in the neutral markets, upon which they
 
 122 WEALTH AND WELFARE CH. vi. 
 
 are now driven to force their accumulating produc- 
 tions ; and (3) in the protected market itself, which, 
 oppressed by an artificially stimulated production, 
 pours its surplus upon the markets it finds most 
 freely open.' 
 
 There is in this paragraph evidence of a mis- 
 conception of cause and effect, or else some inad- 
 vertence of expression. How protection is to create, 
 even temporarily, in the protected country, ' a dupli- 
 cate production of articles which, under the natural 
 laws of supply and demand, were already produced 
 in sufficient quantity in those places where they 
 could be best and most cheaply produced,' seems 
 hard to understand. There is not a duplication, 
 but a transfer of production from one country to 
 another. This transfer of production is accom- 
 panied by a plethora of the taxed commodity in 
 the country which had hitherto had the practical 
 monopoly of its manufacture, but this plethora can- 
 not be of long duration for any one commodity. 
 In the United Kingdom, as one after another of 
 our industries is attacked by the development, 
 under the aegis of protection, of foreign rivals, 
 attacked both by the narrowing of foreign markets 
 and the competition of the product of these in our 
 own market, there is naturally a feeling of more or 
 less continual over-production, now in this industry 
 and now in that. 
 
 When, therefore, there is an universal glut of
 
 CH. vi. 'FAIR TRADE* VIEWS DISCUSSED 123 
 
 particular articles, this can be attributed only in 
 part to the action of high tariffs. It seems far more 
 probable that such gluts are in the main attributable 
 to speculative productive enterprise which is found 
 not to have been justified by the demand ; and when 
 the unsuccessful speculative enterprise has been un- 
 dertaken by foreign producers, then comes the mo- 
 ment when the absence of a protective tariff with 
 us, rather than the adoption of it by others, pro- 
 duces an effect analogous to that of the foreign 
 export bounties ; for the particular commodity 
 which has been the object of speculative produc- 
 tion being in excess of the demand, and the other 
 protected markets being closed to this excess, it 
 overflows in the line of least resistance in other 
 words, deluges the only free market, and is there 
 disposed of at a forcedly low range of prices, which 
 makes the competition of home producers for the 
 time being a hopeless matter. It must be plain, 
 however, that high tariffs cannot possibly be the 
 direct cause of over-production in the protected 
 market itself; for although the protected manu- 
 facturer may be glad enough to find means of 
 disposing of his surplus stock at unremunerative 
 prices when not otherwise saleable, he cannot pos- 
 sibly wish to supply us with goods below cost price. 
 The combination of speculative enterprise and 
 high foreign tariffs brings about a state of things 
 advantageous enough to us as consumers of manu-
 
 124 WEALTH AND WELFARE CH. vi. 
 
 factured articles; within certain limits, then, advan- 
 tageous to the nation as a whole : but it is evident 
 that we eventually reach a point, determinable only 
 by experience, at which national advantage dis- 
 appears and national loss sets in. For in order to 
 obtain at however cheap a rate the commodities 
 we require, it is absolutely necessary, as has already 
 been remarked, that we, since we must pay for 
 them, shall produce on our own side. But if one 
 after another of our industries is attacked, hampered, 
 and partially or wholly ruined, we shall find our 
 production, and hence our purchasing power, more 
 and more reduced. 
 
 It must be remembered that the rock of defence 
 of free trade, the point about which its adherents' 
 arguments all cluster (with respect to this particular 
 question), is that the labour and capital displaced 
 by the action of foreign competition ' migrates ' to 
 other and fitter home industries. We have already 
 inquired into the manner in which this migration 
 takes place, the conclusion at which we arrived 
 being that in very many cases it must be attended 
 with loss to the wage-earner, the employer, and 
 the capitalist more considerable than, in the chang- 
 ing circumstances of trade and production, can be 
 counterbalanced by gain to the consumer. But 
 even were this migration attended with no loss 
 whatever, the case for English free trade 7'. the 
 world's protected trade would not be materially
 
 CH. vi. 'FAIR TRADE* VIEWS DISCUSSED 125 
 
 altered ; for as protection gains ground abroad 
 more and more, so will more and yet more of our 
 industries become handicapped, until \vc shall have 
 to ask ourselves where our displaced labour and 
 capital is to migrate. We cannot well become all 
 coalheavers, iron-puddlers, cotton-spinners, and 
 merchant sailors. The more rigorous becomes the 
 protective system abroad, the more circumscribed 
 will be the area of our activities ; and, with a nation 
 as with an individual, the fewer the activities, the 
 poorer and more incomplete the nature. 
 
 Paragraph 62 explains why the producer in the 
 protected country can afford to sell more cheaply 
 in the English market and in the neutral market. 
 
 (62) ' The producer in the protected country, 
 placed in secure possession of a great and steady 
 home trade, enters with confidence and spirit upon 
 an enlarged scale of operations, and in doing so 
 brings into play every invention or improvement 
 that can contribute to the perfection and economy 
 of his work. He thus becomes far stronger than 
 before for competition in neutral markets, and can 
 well afford to dispose of his surplus production 
 and to clear his stock at the end of each season in 
 the English, the only duty-free market, whilst the 
 tariff of his own country shields him from reprisals.' 
 
 How far this reasoning may be correct as regards 
 the advantageous position of the protected pro- 
 ducer in relation to ordinary circumstances of sale
 
 126 WEALTH AND WELFARE CH. vi. 
 
 with profit in neutral markets seems a matter of 
 great uncertainty. The protective tariff naturally 
 extends the demand for the home-made commodity, 
 and no doubt acts in some measure as described in 
 the above paragraph, but it does not appear that 
 the production of any particular commodity can in 
 this manner be always cheapened so considerably 
 as to compete successfully in neutral markets with 
 the same commodity produced in the unprotected 
 country, where its manufacture is naturally cheap. 
 
 Throughout paragraphs 64 and 76 there runs the 
 same thread of what seems the fallacy of ascribing 
 over-production to the action of high protective 
 tariffs alone. Our own industries being naturally 
 most unwilling to ' throw up the sponge,' there 
 certainly exists on that account a tendency to over- 
 production ; but, on the other hand, the protected 
 producer, satisfactory as he may occasionally find 
 it to make a not too ruinous riddance of surplus 
 stock, cannot but try to keep within the margin of 
 profitable production a matter in which he will be 
 influenced far more by the conflict of greed of gain 
 on the one side, foresight and prudence on the 
 other, than by any system of protection. Be this 
 as it may, the opinion we entertain of the complete 
 validity of the reasons on which the dissenting 
 minority base their recommendations does not 
 necessarily deprive these of their value. If the 
 majority of the Commissioners do not positively
 
 CH. vi. UNCOMPROMISING FREE TRADE 127 
 
 give us a stone when asked for bread, they never- 
 theless afford us but cold comfort. The dissentients 
 have grappled with the problem of depression, and 
 do at least show a determination to deal effectively 
 with it could they be allowed their way. The 
 reading of the majority report leaves us with an 
 undefined sense that things are in a bad way not 
 perhaps so bad as it has been made out, but that, 
 whether things mend or get worse, there is really 
 little else for us to do but cross our hands and 
 let our fate overtake us. 
 
 The calm foresight which discerns, and the 
 patient courage which endures an unavoidable evil, 
 are very different indeed from this kind of Oriental 
 resignation, new to the English mind, which would 
 prompt us to sit down before our difficulties in the 
 hope that they will take themselves away of their 
 own accord. Free traders must make up their 
 minds to a complete resifting of all the arguments 
 for and against so uncompromising an application 
 of free-trade doctrines as obtains with us at the 
 present time. To men who long years ago made 
 up their minds on this subject, it is no doubt dis- 
 agreeable to find themselves obliged to reopen a 
 controversy which, it was hoped, was happily ended ; 
 to have perhaps to admit that if their theory is 
 right, it must nevertheless be modified or abandoned 
 on account of the practices of a foolish world, 
 practices which have interfered with the proper
 
 128 WEALTH AND WELFARE CH. vi. 
 
 application of the theory. Our foolish world has 
 gone quite wrong, quite hopelessly astray, so it 
 seems, in this matter ; yet we are so tied, so bound 
 to it, that it is impossible for us to pursue our own 
 path in sublime indifference to its proceedings. 
 The little leaven which was to leaven the whole 
 mass of the world of commerce has failed of its 
 effect ; perhaps it was put in somewhat too redo- 
 lent of Pharisaical hands. 
 
 It might have been imagined that remedial 
 measures suggested by men who have given to the 
 subject of our industrial depression the greatest 
 care and attention would have met with something 
 better than the contemptuous dismissal accorded 
 to them in influential organs of public opinion. 
 Perhaps it would be wiser as well as more courteous 
 to consider carefully and in an unprejudiced manner 
 the recommendations contained in the report of the 
 minority. For although it is signed by four mem- 
 bers only of the Commission, and the main report 
 by eighteen, yet of these eighteen there arc eleven, 
 as we have seen, who sign subject to various reser- 
 vations, the most important of which refer to the 
 too optimistic tone of the main report, and to the 
 inadequacy of the recommendations contained in 
 it. If we read between the lines of the several 
 reservations (not a single one of which is more 
 optimistic in tone than the main report), it certainly 
 appears as if several of the Commissioners were
 
 CH. VI. FALTERING FREE TRADERS 129 
 
 shaken in their belief of the wisdom of an unquali- 
 fied and uncompromising application of free-trade 
 principles in the actual circumstances of home and 
 foreign production. There is, in fact, but one 
 thoroughgoing free trader of 1846 principles among 
 the twenty-three Commissioners, and as such he- 
 dissents from paragraph 87 of the main report 
 because it implies a distinct repudiation of the 
 'great doctrine' of free trade. This dissent will 
 be more properly discussed in the chapter entitled 
 ' What is the Nation's Welfare ? ' than it could be 
 here. Meanwhile, the main difference which exists 
 between the so-called fair traders and some of their 
 colleagues who sign the main report subject to 
 reservations, is that these deem the evidence on 
 the whole subject not yet sufficiently complete tt) 
 advocate a decided departure from our present 
 commercial policy ; whereas those do consider the 
 evidence as so complete that the risk of further 
 experimenting with present methods is not worth 
 running. 
 
 Having so far cleared the ground before us, let 
 us resume the consideration of our paragraphs 
 (minority report). 
 
 Par. (128) We have already seen that there 
 appears to be no good reason for supposing that 
 commodities produced in the unprotected country 
 compete at a disadvantage in mtitral markets with 
 the same commodities produced under the a_>gis of 
 
 K
 
 130 WEALTH AND WELFARE CH. vi. 
 
 protection. But it must be added to this that 
 where the foreign trade of the protected country 
 is either directly or indirectly subsidised for the 
 purpose of wresting from competitors the command 
 of a market, the result, though due to other causes 
 than those assumed by the minority of the Com- 
 missioners, is practically the same as that described 
 in this paragraph (128). Thus the great strides 
 of Germany's foreign trade is noticed in par. 75 
 of the majority report, but this success is there 
 entirely ascribed to the German trader's perse- 
 verance and enterprise, his intelligent appreciation 
 of the wants of his customers, his knowledge of 
 the markets of the world, &c. There is doubtless 
 much that is true in this view of the case, but 
 how much of this superiority of the German trader 
 is due to the spirited commercial and general 
 foreign policy of the German Empire? The Com- 
 missioners ' then proceed to remark : 
 
 (76) ' We cannot avoid stating here the impres- 
 sion which has been made upon us during the 
 course of our inquiry, that in these respects there is 
 some falling off among the trading classes of this 
 country from the more energetic practice of former 
 periods.' To which I cannot avoid adding, as a 
 rider, that it is not altogether strange that the 
 Hritish manufacturer's courage and energy should 
 be impaired in some slight degree, labouring as he 
 
 1 Report of the majority.
 
 CH. vi. * FAIR TRADE* VIEWS DISCUSSED 131 
 
 does under great disadvantages. Not only at home 
 are matters made hard for him, but as regards 
 foreign trade, while the German Government, for 
 instance, does all in its power to help and push 
 forward its merchants and traders, ours in England 
 looks on coldly at the efforts of our own men, 
 ignores their difficulties and losses, and when their 
 legitimate interests are in any way threatened, looks 
 not to the justice or injustice of their cause or 
 claim but to the way in which the ' cat will jump ' 
 at home, for inspiration as to how to act. 
 
 Par. (129)' Should the 10 to 15 per cent. 
 ad valorem duty here recommended be imposed 
 on all imported manufactures, or rather, since the 
 object is to protect from unfair competition, only 
 on those of foreign industries whose surplus pro- 
 duct is now periodically thrown on our market 
 and disposed of at forced low sales ? Such a 
 duty levied on all imported manufactures without 
 distinction seems unnecessary. In the case of 
 industries not suffering from unfair competition 
 it would tend to their enervation, while inflicting 
 a totally unnecessary loss on the consumer. It 
 may be, however, that the difficulties in the way 
 of bringing selective action to bear in the imposition 
 of the duty are, or would be, too great. It is worth 
 while to consider whether our present Board of 
 Trade, invested with greater powers, might not, in 
 
 1 Report of the minority. 
 
 K 2
 
 132 WEALTH AND WELFARE CH. VI. 
 
 conjunction with the Chancellor of the Exchequer, 
 exercise such a selective action, guided in it accord- 
 ing to the changing conditions of production of our 
 own and foreign industries. 
 
 Par. ( 1 30) ' There is this point to consider : the 
 imposition of the duty, although it must tend to 
 keep foreign manufactures out of the home market, 
 must likewise tend to raise the price of the corre- 
 sponding home-made ones, and thus, to some extent, 
 diminish the demand for them. The contention is, 
 however, though not explicitly set forth in the 
 paragraph, that the rise in prices would induce 
 the application, in British industries, of capital now 
 lying idle, invested in foreign securities, or wasted 
 in unsound speculations. This increase of capital 
 applied to home industries would carry along with 
 it a general increase in their production, a more 
 complete utilisation of the available labour and 
 agencies of production, and a fall of prices to some- 
 thing like their former level. It must be borne in 
 mind (in case the recommendation were adopted) 
 that the decrease in demand (at first due to rise of 
 prices) for home-manufactured goods could only be 
 a relative decrease ; the positive demand must grow 
 larger by the deflection to the home market of that 
 part of it hitherto addressed to the foreign manu- 
 facturer. It may be asked, and indeed it is asked, 
 with a certain dull pertinacity, what relief these 
 
 1 Report of the minority.
 
 CH. vi. PROTECTION AND EMPLOYMENT 133 
 
 measures arc to bring to the producing classes, if, 
 as it is made out, prices will not be raised by them ? 
 Why, surely, by employing the labour which is now 
 unemployed, by increasing production. But there 
 is already over-production ! Yes, but only of a few 
 commodities at a time, and due just to that very 
 instability of the market which, it is hoped, these 
 measures, if adopted, would put an end to. There 
 can be no such thing, it seems necessary to repeat 
 ad nauseam, as a general over-production ; and there 
 may very easily be over-production of certain com- 
 modities while there is a general dearth of the mass 
 of commodities. Moreover, there is nothing what- 
 ever in the nature of the proposed measures which 
 should cause a diminution of the foreign demand 
 for our products, therefore we cannot suppose that 
 we should merely be employing one section of the 
 working classes at the expense of another. 1 The 
 contention is thus narrowed again to its old battle- 
 ground, it is all a matter of whether or no the con- 
 sumer would suffer ; and, certainly, if prices are not 
 raised he will not suffer. 
 
 We should be too sanguine, however, were we 
 to suppose that, on the adoption of the measures 
 indicated, there would follow no rise of prices 
 
 1 Were there even a diminution of the foreign demand for our 
 products, the case would scarcely he altered. If A is producing at 
 home and exchanging with C abroad, and C is doing nothing at 
 home, it is clearly advantageous to the country as a whole that C 
 should be enabled to produce and exchange with A.
 
 134 WEALTH AND WELFARE CH. vi. 
 
 whatever ; nor, be it remarked, do the minority 
 Commissioners assert any such thing. What they 
 say is that, internal competition being so keen 
 owing to the pressure of capital seeking investment 
 and labour seeking employment, prices would not 
 rise beyond the lowest level consistent with a 
 continuation of profitable production. And, in 
 common justice, we should not wish it to be 
 otherwise ; for is it not acknowledged on every 
 side that profits are generally at a minimum, 
 and in many cases have altogether ceased to be 
 made? 
 
 (131, 132, 133) These paragraphs we need not 
 dissect too curiously ; they contain a restatement 
 and amplification of the case for protection. But 
 it is important to notice that beyond mere mer- 
 cantile considerations a regular output, implicating 
 greater continuity and regularity of employment, 
 must exercise a beneficial influence on the habits 
 and character of the working classes. We now 
 come to the consideration of the measures advo- 
 cated with the object of bringing about an expan- 
 sion of the foreign market for our manufactures. 
 
 (134) ' Though we may be unable to alter the 
 protectionist policy of other nations, we can do 
 much to free ourselves from its injurious effects. 
 The more we can draw our supplies of imported 
 food from countries which will largely, and under 
 moderate tariff rates, accept the products of our
 
 CH. VI. ^ PREFERENTIAL* TREATMENT OF 135 
 
 industries in exchange, the fuller and the steadier 
 will be the employment of our population.' 
 
 ( J 35) 'Our command of the fiscal arrange- 
 ments of India has saved the industry of Lanca- 
 shire from the calamity which must have over- 
 whelmed it had that great empire come under the 
 control of a commercial policy like that of Russia 
 or the United States. And the growth of our 
 colonies, with their very large consumption per 
 head of British manufactures, has helped all our 
 industries to endure with less suffering the stifling 
 pressure of foreign tariffs.' 
 
 (136) 'But these aids, though welcome, are 
 insufficient. It is a striking fact that during the 
 past twenty years sixty-seven per cent, of our 
 emigrants have gone to the United States, and 
 only twenty-seven and a half per cent, to our own 
 colonies. The more extreme protectionist policy 
 of the United States, so far from repelling immi- 
 grants, has operated as an effectual bribe to capital 
 and labour, by holding out the inducement of higher 
 prices and higher wages.' 
 
 (137) ' It would be an act of suicidal folly on our 
 part to attempt to counterwork these influences by a 
 like system of enormous import duties, designed to 
 raise the price of commodities for the advantage of 
 home producers. We have a far better and more 
 effectual remedy at command. A slightly pre- 
 ferential treatment of the food products of India
 
 136 WEALTH AND WELFARE CH. vi. 
 
 and the colonies over those of foreign nations would, 
 if adopted as a permanent system, gradually but 
 certainly direct the flow 'of food-growing capital 
 and labour more towards our own dependencies 
 and less towards the United States than heretofore.' 
 
 (138) 'When it is noted that in the year 1884 
 the Australian colonies, with only 3,100,000 inhabi- 
 tants, purchased 23,895,8587. worth of our manu- 
 factures, whilst the United States, with about 
 55,000,000 inhabitants, purchased only 24,424,6 $(:>/. 
 worth, it will be apparent how great would be the 
 effect of a policy which should lead to the more 
 rapid peopling of the Australian colonies in giving 
 fuller employment to our working classes at home, 
 and thus increasing the healthful activity of the 
 home trade, as well as the import of raw materials 
 for our various industries to operate upon. On 
 the other hand, it must be pointed out that the 
 growth of our colonies in population, wealth, and 
 the other requisites of successful manufacturing 
 enterprise, and the necessity felt by them of counter- 
 bidding to some extent the bribe which the high 
 tariff of the United States offers to capital and 
 labour, must operate to convert gradually the 
 revenue duties of the colonies, which now permit 
 so large an import of British manufactures, into 
 protective duties which will seriously restrict that 
 import. 
 
 ' This has already happened in the case of the
 
 CH. vi. COLONIAL FOOD PRODUCTS 137 
 
 Dominion of Canada, and it is an influence which 
 may act with increasing and disastrous force upon 
 the most valuable portion of our export trade, 
 unless a fiscal policy be adopted which will enable 
 the various portions of the empire to co-operate 
 more effectually for mutual aid and defence in 
 commercial matters.' 
 
 (139) 'We believe that specific duties, equal 
 to about ten per cent, on a low range of values, 
 imposed upon the import from foreign countries of 
 those articles of food which India and the colonies 
 are well able to produce, would sufficiently effect 
 this purpose. Their adoption would, of course, 
 involve the abolition of the heavy duties on tea, 
 coffee, cocoa, and dried fruits, which are now levied 
 on Indian and colonial equally with foreign pro- 
 duce. It would widen the basis of our revenue, 
 and render us less dependent upon the sustained 
 productiveness of the income tax and the duties 
 upon intoxicating liquors. And, what is even 
 more important, it could not fail to draw closer 
 all portions of the empire in the bond of mutual 
 interests, and thus pave the way towards a more 
 effective union for great common objects.' 
 
 It is a question how far this preferential treat- 
 ment of the food products of our colonies would 
 bring about the wishcd-for result. With, regard to 
 India, whose fiscal policy we control, the measures 
 advocated would no doubt work well if we could
 
 138 WEALTH AND WELFARE CH. vi. 
 
 depend on India to supply our necessary food 
 imports ; but we cannot depend upon this sole 
 resource : and as for our self-governing colonies, 
 what is to shield us from the danger of their pro- 
 fiting by our preferential treatment of their food 
 products, while at the same time following the 
 example of the United States in attracting Euro- 
 pean capital and labour for the development of 
 their manufactures by the adoption of a system of 
 prohibitive tariffs? l It is true that from the mo- 
 ment we increase the amount of our food imports 
 from the colonies we thereby endow them with a 
 greater purchasing power, which in the present 
 state of their industrial development must for the 
 most part be utilised in the purchase of our manu- 
 factures. But unless we can get from the colonies 
 some concession or promise in return for this pre- 
 ferential treatment of their agricultural produce, it 
 seems doubtful whether we should obtain more 
 than a very temporary expansion of the market 
 for our commodities. For if our self-governing 
 dependencies are determined to develop their in- 
 dustries even at the expense of their agricultural 
 population, it is plain that a proportion of this 
 additional purchasing power, which by our action 
 we should transfer to them from our present pur- 
 veyors of food, would, by the operation of a pro- 
 tective tariff directed against our manufactures, be 
 
 1 As South Australia has just done (August 1887).
 
 CH. vi. DIFFICULTIES IN THE 139 
 
 diverted to the purchase of the machinery and im- 
 plements necessary to the development of colonial 
 internal industry. If we can prevail on our colonies 
 to continue levying duties on our exports only to 
 the extent necessary for the purpose of raising 
 revenue, the measures recommended in the minority 
 report would doubtless prove beneficial both to us 
 and to them. In due course of time their industries 
 would attain to greater power and importance ; but, 
 under the condition of free competition with ours, 
 it must be long before we should lose our command 
 of the colonial market. 
 
 The difficulty of obtaining from the colonies 
 en masse any such promise or concession is the 
 main objection to the preferential treatment. But 
 it is not necessary that we should enter into a 
 compact with all our colonies that we Should 
 necessarily form with them an English imperial 
 Zollverein, or customs union. What we require is a 
 commercial compact which shall take in as few or 
 as many of our colonies as may be necessary to 
 insure in the course of a few years a sufficient 
 export of food-stuff to the United Kingdom. Let 
 those of our colonies who please to remain unfet- 
 tered with this bond remain thus unfettered ; their 
 exports will always be admitted on terms at least 
 as advantageous as those accorded to the produce 
 of foreign countries. \Ye must remember, also, 
 that with a vastly increased exportation of food
 
 140 WEALTH AND WELFARE CH. vi. 
 
 products our dependencies would think very seri- 
 ously before they ventured on any course of action 
 which would imperil their retention of our custom. 
 Were they to exclude our goods by the imposition 
 of prohibitive duties on them, we could then only 
 gain by repudiating the preferential treatment, and 
 our present food purveyors would regain their 
 command of our market. It may be suitable for an 
 independent and great nation of some fifty or 
 sixty millions of inhabitants to insist on the de- 
 velopment of its industries even at considerable 
 sacrifice to the consumer, but the case is very 
 different with our colonies in their present state of 
 development, and so long as they remain dependent 
 in some measure on the mother country. Looking 
 at the matter by the light most disadvantageous to 
 it, there yet seem to be good grounds for believing 
 that the measure recommended would operate to a 
 great extent as described in this report. It would 
 at all events be well worth our while to consider 
 what practical drawbacks and legislative difficul- 
 ties stand in the way of its adoption. One of 
 these drawbacks would be found in the dislocation 
 of our present carrying trade. We have a very 
 large number of rather undersized steamers em- 
 ployed in the grain trade with Russia, and it is a 
 question how far they would be available for the 
 new work which would of necessity be thrust on 
 them in the course of time. Our great Transatlantic
 
 CH. vi. APPLICATION OF IT 141 
 
 steamship companies, too, or at least those engaged 
 in the transport of British manufactures and 
 American corn and cattle, would suffer considerable 
 inconvenience and loss from the altered conditions 
 of trade. But these conditions would necessarily 
 not alter too rapidly for possible accommodation to 
 them. As to any legislative difficulties, their dis- 
 cussion is beyond the scope of this work and the 
 ability of its author. There is one fact, however, 
 to which we should be foolish to shut our eyes : 
 the adoption of the measures discussed must, for a 
 time at least, entail on the consumer a slight but 
 none the less certain sacrifice ; he will be ' con- 
 demned ' to pay a somewhat higher price for the 
 staple articles of food, and will continue to do so 
 other things remaining equal until the develop- 
 ment of colonial agriculture shall have rendered the 
 importation of taxed food no longer necessary.
 
 WEALTH AND WELFARE CH. vn. 
 
 CHAPTER VII. 
 
 WHAT IS THE NATION'S WELFARE? 
 
 True political economy The average Englishman's idea of national 
 welfare Confusion of means with ends Dissent of Professor 
 Bonamy Price from the views of his colleagues A word from 
 ' Past and Present.' 
 
 PERHAPS the reason that political economy is so 
 unsatisfactory and unsatisfying a study, and con- 
 tinues to be par excellence the ' dismal science,' as 
 Carlyle terms it, lies in the sorry but inevitable 
 confusion which ensues from attempting to eluci- 
 date the laws of the growth and distribution of 
 wealth apart from any real consideration of those 
 other and circumscribing laws which govern men's 
 welfare. We make between wealth and welfare 
 either a violent and unnatural severance, or else, 
 what is yet more dangerous and misleading, a tacit 
 assumption that the same laws govern both. 
 Already are we not somewhat too apt to forget 
 that ' the life is more than the food, and the body 
 than the raiment ' ? So that political economists do 
 us but a sorry service in presenting us with the ele-
 
 CH. vii. TRUE POLITICAL ECOXOMY 143 
 
 mcnts of a pseudo-science, which is to its changeling 
 brother mysteriously disappeared from their eyes 
 as the dingy sordidness of some grotesque satyr 
 to the gracious splendour of the Apollo Belvedere. 
 
 Nor is this a sentimental or <7//tf.yz-poetical way 
 of looking at the matter. It is, on the contrary, an 
 entirely practical and reasonable way of looking at 
 it, and by no means a new way. The more we 
 make accumulation of wealth subservient to men's 
 welfare, the more precious such accumulation be- 
 comes, the more fraught with possibilities of future 
 happiness ; but the more we make it reckless of 
 the manner of making, and of the ends to which 
 it is applied, the more we heap up obstruction 
 along the path of progress which we all admit- 
 tedly, though with \vide-straying steps, endeavour 
 to follow. 
 
 No single sentence, however pithy, however full 
 of meaning it may be, can do more than illustrate 
 one aspect of a great central truth. As we arc- 
 told that ' the life is more than the food, and the 
 body than the raiment,' so, from the same source 
 of wisdom, there comes to us the warning, ' If any 
 will not work, neither let him eat.' Upon the basis 
 afforded by these two gnomic sayings might be up- 
 reared a system of political economy worthy of a 
 great and noble nation. Such a system, in its 
 inception at least, has been already traced by a 
 master hand. In ' Unto this Last' and ' Munera
 
 144 WEALTH AXD WELFARE CH. vil. 
 
 Pulveris ' Mr. Ruskin has sketched the outline of a 
 noble structure of political economy. It has been 
 objected to his doctrines that they are sentimental 
 and unpractical ; but the melancholy truth is not 
 that they are unpractical, but (if by practical \ve 
 understand not merely what is generally practised) 
 too practical too practical for a world which the 
 ignes fatui of its imagination occasionally lead 
 to the most distressingly illimitable quagmires, for 
 a world which in the main is a visionary rather 
 than a practical world. And this is not said for 
 the poor pleasure of airing a would-be smart 
 paradox. I desire to be neither paradoxical nor 
 smart, but, on the contrary, very matter-of-fact ; 
 and for that reason I sorrowfully reject Mr. Ruskin's 
 political economy, which is not sufficiently vision- 
 ary for present application. 
 
 A certain philosopher, walking with his head 
 among the stars in search of truth, tumbled into a 
 well, at the bottom of which he found, not the 
 truth, but a truth, from which he learnt that truth 
 is sometimes relative. But I will not inveigle the 
 unwary reader into a metaphysical train of thought ; 
 indeed, like a certain famous bard, 
 
 I don't pretend that I quite understand 
 
 My own meaning when I would be very fine. 
 
 So, if you please, we will quickly get back into the 
 safe region of the commonplace, and complacently 
 pronounce, with a pompous appearance of solid sense
 
 CH. vii. WHAT IS THE NATION'S WELFARE? 145 
 
 and worldly wisdom, that the best political economy 
 is that which is best adapted to our present state 
 of social development, to the realisation of dreams 
 of wealth accumulation, throughout which runs a 
 perpetual pale thought of moral improvement in 
 fact, to a happy compromise of the service of God 
 with the service of Mammon. 
 
 I would ask the average Englishman what he 
 understands by the nation's welfare ; because if we 
 can get from him an answer to this question, we 
 may reasonably expect him to accept a system of 
 political economy, or, not to be too ambitious, a 
 commercial policy, expressly devised to further the 
 attainment of his ideal, supposing always that it is 
 fitly and truly devised for the stated purpose. But 
 the average Englishman is a figment of the imagi- 
 nation, the qnidam /wiiio, the individuum vaguni of 
 the logician, as Cardinal Newman has it in that 
 admirably subtle work, the ' Grammar of Assent.' 
 We have each of us our own notion of the average 
 Englishman excogitated from the numberless im- 
 pressions of the individual Englishmen we have 
 met, conversed with, or otherwise noticed. I can 
 do no more than let my average Englishman speak 
 out with what distinct articulatory power there may 
 be in him. If I interpret him aright, he is much 
 readier to tell me what the nation's welfare is not 
 than what it is. I ask him, is it to be measured 
 solely by the accumulation of wealth ? Certainly 
 
 L
 
 146 WEALTH AND WELFARE CH. vii. 
 
 not. By the equitable distribution of wealth ? Not 
 altogether. Is it dependent on the accumulation 
 of wealth ? The more wealth the nation possesses 
 the more solid the foundation of its welfare is 
 likely to be, other things remaining equal. What 
 other things ? The other elements which contri- 
 bute to welfare. What are they? Health bodily, 
 mental, and moral ; nay, this triple health is wel- 
 fare itself, and comprises all for which we struggle. 
 Then the accumulation and equitable distribution 
 of wealth are means to an end only ? Certainly. 
 So that it is conceivable that, carried on under 
 certain conditions, this accumulation and distribu- 
 tion, though increasing, might be positively detri- 
 mental to national welfare? I suppose so. 
 
 And so do I, and so, probably, does the reader. 
 If we may sum up what my average Englishman 
 thinks of this matter having been driven to thought 
 of it, the want of which is after all the principal hin- 
 drance to a tolerably sound conclusion we should 
 not be far out in saying that by the increase of a 
 nation's welfare he understands the increase of its 
 endowment of healthy and happy human beings ; 
 and that to this end the accumulation, equitable 
 distribution, and right use of wealth contributes in 
 a marked degree. Only, when we come to the 
 application of principles derived from a general 
 proposition such as the one just set down and 
 accepted merely in its theoretical sense, \vc are over-
 
 CH. vil. CONFUSION OF MEANS WITH ENDS 147 
 
 whelmed by a very sea of difficulties; rather would 
 it appear as if, far from the beneficent principles 
 we supposed them to be, they bore analogy to the 
 dragon's teeth of the beautiful old fable, so sur- 
 rounded, confronted, and confuted we seem by a 
 host of armed objections. But, in truth, we are 
 not far wrong in supposing the general and abstract 
 sense of the community to be fairly just, nay, even 
 charitable ; only the good seed of its sowing falls 
 in among the thorns of individual and class cupidi- 
 ties, stupidities, and ignorances. 
 
 What should we say of a man whom we saw 
 sacrificing comfort, health, life itself, in the attempt 
 to amass a fortune with the object of ministering 
 to that very comfort, health and life? What, as a 
 matter of fact, do we say of such a man when our 
 personal interests are not in any way involved- 
 but that he is foolish and ill-advised ? And then 
 we incontinently proceed to moralise on the subject, 
 just as I am permitting myself to do here, and 
 probably with much the same result. Yet what 
 perversion of the commonest of common-sense, 
 what insane confusion of means with ends, is in- 
 volved in such a line of conduct ! That we should 
 freely give ourselves careless of comforts and com- 
 mon pleasure sacrifice ourselves, in order to attain 
 some great object which we prize above such things 
 is, for that very reason, reasonable ; and, according 
 as we more or less approve the object, we call such
 
 I '8 WEALTH AND WELFARE CH. vn. 
 
 conduct more or less noble and meritorious. But 
 the foolish man is he who proceeds in the way we 
 have seen, who, in the slaving, sacrifices that for 
 which he slaves, who lets slip the substance to 
 grasp at the shadow. What, then, should we say 
 of a nation which, in a similar manner, was en- 
 gaged in accumulating wealth, careless of the wane 
 of vitality, of the secret sapping of its virile virtues? 
 I do not assert that this is the case with us in 
 England now. Toil, hard almost to the verge of 
 degradation, may be necessary for us in the present 
 condition, and at this stage of the world's develop- 
 ment ; but, though from the dun chrysalis breaks 
 forth the butterfly, and with daedal wings beats the 
 sunlit summer air, this cannot come to pass save 
 under the inexorable condition that the chrysalis 
 state shall have been sound. But what I do assert 
 is that, dropping metaphor, there lies at the root 
 of our trade policy the tacit assumption that the 
 matter of greatest importance to us is the rapid 
 accumulation of wealth, with too great a disregard 
 of whether it be or be not at the cost of the true 
 welfare of the nation. 
 
 All this, you will say, is trite enough ; but it is 
 not, on that account, any the less true. Nor, again, 
 is it as common!}' accepted as we might suppose 
 and hope it to be. For, lo ! in the very midst of 
 our assembled Royal Commissioners, dreaming of, 
 and wishing for, better things, rises up the ghost of
 
 CH. vii. PLUGSON AGAIN 149 
 
 our old friend Plugson of Undershot, in the highly 
 respectable form of Mr. Bonamy Price, professor of 
 political economy at Oxford. 
 
 Ghost of Plugson loquitur, with sepulchral but 
 severely clear articulation : ' I beg to express my 
 dissent from paragraph 82 (of the majority re- 
 port). It contains a specific repudiation of the 
 great doctrine of free trade. Shorter hours of labour 
 do not, and cannot, compensate to a nation for 
 increased cost of production or diminished output. 
 They tax the community with dearer goods in 
 order to confer special advantages on the working- 
 man. They protect him, and that is a direct re- 
 pudiation of free trade. The country is sentenced 
 to dearer and fewer goods.' 
 
 We may make light of Plugson's ghost, but his 
 teaching while in the flesh got a very firm hold of 
 us ; the expression of opinion just quoted would 
 be endorsed and supported by a class of thinkers 
 still large and influential in England. To such as 
 
 o o 
 
 these, what I have said above, trite as it would be 
 proclaimed from a purely speculative standpoint, 
 becomes, the moment it would lead to practical 
 application, mere windy foolishness. 
 
 But what is it which this paragraph 82 contains, 
 calling forth dissent so emphatic ? It runs as 
 follows with a portion of that which immediately 
 precedes it, here inserted to make the matter more 
 intelligible :
 
 150 WEALTH AND WELFARE CH. vn. 
 
 ' (81) Whatever may be the comparative advan- 
 tage of the longer hours which are worked abroad, 
 we cannot recommend, and we feel satisfied that 
 public opinion in this country would not accept, any 
 legislative measure tending to an increase in the 
 present number of hours of labour. . . . ' 
 
 ' (82) As regards the future, should any sym- 
 ptoms present themselves that foreign competition 
 is becoming more effective in this respect, it must 
 be for the country and the workman himself to 
 decide whether the advantages of the shorter hours 
 compensate for the increased cost of production or 
 diminished output. We believe that they do, and 
 on social as well as economical grounds we should 
 regret to see any curtailment of the leisure and 
 freedom which the workman now enjoys. No 
 advantages which could be expected to accrue to 
 the commerce of the country would in our opinion 
 compensate for such a change.' 
 
 In sober earnest, this expression of dissent on 
 the part of Professor Bonamy Price is nothing but 
 an indirect, though possibly unconscious, justifica- 
 tion of the worship of the Golden Calf, expressed 
 with apparent indifference to the pestilence which 
 an avenging Providence may have in store for us. 
 ]>ut let us compare the two views bit by bit. 
 There is a despotism in logic and detail which 
 cannot well be shaken off. 
 
 The minor point at issue between the professor
 
 CH. vii. FREE TRADE A ' GREAT DOCTRINE' 151 
 
 and his colleagues regards the limit to which the 
 number of hours of labour may be reduced without 
 prejudice to the cost of production, the amount of 
 output being necessarily involved in this question 
 of cost. But this point is one which no cogency of 
 purely theoretical argument can decide, it can be 
 settled only by experience ; and it is just upon the 
 basis of such experience as we as yet have in the 
 matter that the Commissioners found the opinion 
 to which they give collective expression. Granting 
 that the number of hours of labour is not carried 
 beyond the limit at which healthy recuperation of 
 bodily strength and mental elasticity ceases to be 
 sufficiently active, there can be no doubt that Pro- 
 fessor Bonamy Price is right in his contention ; but it 
 is precisely on this question of limit that the right or 
 wrong of the whole matter hinges, and the evidence 
 taken before the Commission leads very plainly 
 and directly to the conclusion which both the ma- 
 jority and minority have adopted in their reports. 
 
 Far more radical and important is the main 
 divergence of opinion, for it amounts to this : The 
 Commissioners tacitly admit that the welfare of our 
 working population is a matter of greater moment 
 to us than is the material wealth of the nation, 
 whereas to the professor 'shorter hours of labour 
 do not, and cannot, compensate to a nation for in- 
 creased cost of production or diminished output ; ' 
 in other words so it seems at least shorter hours
 
 152 WEALTH AND WELFARE CH. vii. 
 
 of labour cannot carry with them advantages, be 
 they health-giving, joy-giving, life-giving, which 
 can make up to the nation at large for increased 
 cost of production. But, indeed, what appears most 
 to vex the professor's soul is a possible repudiation 
 of the ' great doctrine ' of free trade. Is it then 
 with political economy as with some religious creeds, 
 that salvation is attached, not to right practice, but 
 to dogmatic belief? 
 
 What the Commissioners clearly see is this : 
 Granting that, in the endeavour to cheapen pro- 
 duction and thus undersell the foreigner, we push 
 the hours of labour beyond the limit indicated 
 to us as safe by practical experience, and further 
 granting that this course of action would issue in 
 an immediate increase of the nation's wealth (a 
 disputed and disputable point, because of the pro- 
 bable inferiority of production from labour thus 
 overtaxed), the ultimate result would be disad- 
 vantageous and perhaps ruinous to the nation, by 
 leading to the mental and physical deterioration of 
 the race. This, it seems to me at least, is what the 
 Commissioners mean when they draw our attention 
 to the choice of alternatives which the nation and 
 the workman himself will have to make. 
 
 It may well be doubted whether, thirty years 
 ago, a Royal Commission on this subject of inquiry 
 would have given expression to the sentiments and 
 opinions contained in paragraphs 8 ] and 82. Its
 
 CH. vir. ' PAST AND PRESENT' 153 
 
 members would probably have repudiated as a 
 body what Plugson's ghost now repudiates in the 
 person of Professor Bonamy Price to wit, the side 
 thrust which is delivered in these paragraphs at the 
 ' great doctrine of free trade.' 
 
 This happy change in the manner of looking at 
 the principles which govern our commercial policy 
 we owe in a great measure to change of circum- 
 stances, but not a little also, I imagine, to the 
 gradually broadening influence of Carlyle's writings. 
 It is now some forty years since he penned in ' Past 
 and Present ' these memorable words already 
 quoted by Mr. Ruskin in ' Munera Pulveris ' : 
 
 ' The Continental people, it would seem, are im- 
 porting our machinery, beginning to spin cotton, 
 and manufacture for themselves, to cut us out of 
 this market, and then out of that. Sad news, 
 indeed, but irremediable. By no means the saddest 
 news the saddest news is that we should find our 
 national existence, as I sometimes hear it said, 
 depend on selling manufactured cotton at a farthing 
 an ell cheaper than any other people. A most 
 narrow stand for a great nation to base itself on ! 
 A stand which, with all the corn-law abrogations 
 conceivable, I do not think will be capable of 
 enduring. My friends, suppose we quitted that 
 stand ; suppose' we came honestly down from it and 
 said, " This is our minimum of cotton prices ; we 
 care not for the present to make cotton any
 
 154 WEALTH AND WELFARE CH. vn. 
 
 cheaper. Do you, if it seem so blessed to you, 
 make cotton cheaper. Fill your lungs with cotton 
 fur, your heart with copperas fumes, with rage and 
 mutiny ; become ye the general gnomes of Europe, 
 slaves of the lamp ! " I admire a nation which 
 fancies it will die if it do not undersell all other 
 nations to the end of the world. Brothers, we will 
 cease to undersell them ; we will be content to equal 
 sell them, to be happy selling equally with them ! I 
 do not see the use of underselling them : cotton- 
 cloth is already twopence a yard or lower, and yet 
 bare backs were never more numerous among us. 
 Let inventive men cease to spend their existence 
 incessantly contriving how cotton can be made 
 cheaper ; and try to invent a little how cotton at 
 its present cheapness could be somewhat justlier 
 divided among us.' 
 
 ' Let inventive men consider \vhethcr the secret 
 of this universe docs after all consist in making 
 money. With a hell which means " failing to make 
 money," I do not think there is any heaven possible 
 that would suit one well. In brief, all this mammon 
 gospel of supply and demand, competition, laissez- 
 Jairc, and devil take the hindmost, begins to be one 
 of the shabbiest gospels ever preached.' 
 
 Comment on such a passage is, at this time of 
 day, superfluous. A wise man wifl know how to 
 read it and between the lines of it, now no very 
 difficult matter. We have no doubt improved a
 
 CH. vii. l PAST AND PRESENT* 155 
 
 little since those days in the matter of bare backs ; 
 these do not appear to be quite as numerous as 
 they were ; but this leads us to the consideration of 
 the general condition of the working classes, and to 
 the next chapter.
 
 156 WEALTH AND WELFARE CH. vm. 
 
 CHAPTER VIII. 
 
 PRESENT CONDITION OF THE WORKING 
 
 CLASSES. 
 
 Dependence of England's welfare on the general condition of the 
 working classes Necessity of a basis of physical well-being 
 The Commissioners on the condition of our working popula- 
 tion Indirect evidence afforded by the increase of deposits 
 in savings banks Intrinsic value of necessaries of life. 
 
 IT may be said without exaggeration that on the 
 condition of its working classes depends in a 
 great measure the health, wealth, and stability of 
 a nation. This is so, to a marked degree, in Eng- 
 land, where class touches class and class acts and 
 reacts on class in a manner more complex perhaps 
 than in any other community on the face of the 
 globe. In no country, I believe, do the landowners, 
 as a class, so thoroughly comprehend the character 
 and capacities of their tenants and agricultural 
 labourers, or take a more intimate personal and 
 perennial interest in their welfare. In no country 
 does the manufacturer so well understand and enter 
 into the peculiarities and temperament of the arti-
 
 CH. vin, SOLIDARITY OF CLASSES 157 
 
 san. In no country do we sec fewer and less 
 savage outbursts of class hatred, mistrust, and 
 rancour. Whether this as yet happy state of things 
 is due partly to our system of aristocratical descent 
 and primogeniture, which not only tends continu- 
 ally to bind class with class by the practical class 
 degradation of younger sons, but, by heaping into 
 few hands the ownership of lands, makes possible 
 a princely magnificence and generosity of return to 
 the land itself ; partly to the traditional sentiment 
 awakened and fostered by the circumstances in our 
 history which have caused peer and peasant, priest 
 and king, artisan and yeoman to band themselves 
 in turn against kingly, spiritual, or class oppression ; 
 or, again, partly to the total absence of militarism 
 (soon developing a marked class feeling) from 
 which every European country has in turn more 
 than once suffered from what cause or causes 
 soever, there can be little doubt that this feeling 
 of solidarity, weakened though it appears to be 
 throughout the old world, is yet fairly strong in 
 England. 
 
 It would be idle to discuss once more the ques- 
 tion, already so often and aimlessly discussed, 
 whether the progress or retrogression of a people 
 depends upon the ability of its leaders or the 
 morality of its masses, whether the good and the 
 evil in it percolate from the upper classes down- 
 ward or well from the masses upward. In such
 
 158 WEALTH AND WELFARE CH. vm. 
 
 matters there is manifestly action and reaction, as 
 plain in their general effect as they are indistin- 
 guishable in their particular features. The courage, 
 resolution, and patriotism of an oligarchy controlled 
 and long saved from ruin the fortunes of the Queen 
 of the Adriatic. The simple faith, resignation, and 
 valour of its working population has retarded in 
 a marked degree the dissolution of the Turkish 
 Empire, rendered apparently inevitable by the 
 sloth, corruption, and inefficiency of its governing 
 classes. Stability and continued prosperity, marked 
 here and there of course with the ups and downs 
 inevitable in all communities, belong only to those 
 nations in which every class does its appointed 
 work and duty, or where, at least, a betrayal of trust 
 is but the effect of temporary weakness, not a sign 
 of moral degeneration. 
 
 The gradual and seemingly inevitable extension 
 of the franchise, carrying with it a government 
 of the country more and more ' broad based upon 
 the people's will ' (or whim is it, perhaps, my lord ?), 
 makes this question of the well-being and soundness 
 of our working population one of the most import- 
 ant which statesmen can be called on to consider. 
 For the moment the tide is making, sublimely in- 
 different to any man's efforts, in the direction of 
 popular government. If it be true that of our forty 
 million of inhabitants the correct definition is that 
 they are ' mostly fools,' it is plain enough that, in-
 
 CH. viii. GENERAL CONDITION OF 1 59 
 
 stead of lamenting what we may perhaps consider 
 to be a false or inadequate notion of the right con- 
 trol of a nation's affairs, our wisest endeavours will 
 be directed to establishing grounds for a modifica- 
 tion of this severity of definition, to raising the 
 electorate to a finer comprehension of their welfare. 
 But every one will readily admit that in order to 
 the ultimate welfare of a nation the triple wreath 
 of beauty, grace, and intelligence which should 
 crown its eventual perfection there must be, as a 
 condition of the possibility of its luxuriance, a 
 basis of physical well-being ; a mighty tree-trunk 
 of national health and vigour, that we may pre- 
 sently have also the flower and the fruit. 
 
 What, then, is the truth about the condition of 
 our working classes ? In the chapter on the dis- 
 tribution of wealth, its subject-matter obliged me 
 to some extent to anticipate the question of wages 
 and employment. In this chapter, I will endeavour 
 not to repeat myself more than may be absolutely 
 necessary to bring before the reader, in as small a 
 space as possible, a fairly comprehensive survey of 
 this matter. We have already seen that, although 
 probably the total proportion of yearly production 
 appropriated to the use of the working classes has 
 of late years not proportionately diminished, there 
 is nevertheless a real and very considerable amount 
 of distress, the immediate cause being the contrac- 
 tion of the demand for labour, and the contraction
 
 160 WEALTH AND WELFARE CH. vm. 
 
 itself being due probably in a great measure to the 
 continual improvements which take place in the 
 various processes of production, and the increasing 
 use of machinery. 1 The evidence also goes to show 
 that the irregularity, as well as the contraction, of 
 the demand for labour is the cause of much dis- 
 tress. On this point I will quote further from the 
 reports : 
 
 Main report. ' (29) The actual condition of the 
 working classes was also a point on which very 
 conflicting opinions were expressed. On the one 
 hand it was contended that their position had 
 materially improved during the last ten or fifteen 
 years, wages not having fallen to any very great 
 extent, the hours of labour being shorter, and most 
 of the necessaries of life cheaper. On the other 
 hand it was pointed out that, though this view might 
 fairly represent the case of those who were able to 
 find regular and constant work, the actual earnings 
 of a large proportion of the labouring classes were 
 greatly reduced owing to insufficiency and irregu- 
 larity of employment.' 
 
 Minority report (already quoted). '(56) \Vc 
 think the insufficiency of employment is the most 
 serious feature of the existing depression, and it is 
 an important, indeed an anxious, question whether,
 
 CH. viii. THE WORKING CLASSES 161 
 
 in the face of the ever-increasing restrictions placed 
 upon our industry by foreign tariffs, and the ever- 
 increasing invasion of our home market by foreign 
 productions admitted duty free, we shall be able 
 to command a sufficiency of employment for our 
 rapidly growing population.' 
 
 This is the reverse of the medal. Now for the 
 obverse : 
 
 Majority report. ' There is no feature in the 
 situation which we have been called upon to 
 examine so satisfactory as the immense improve- 
 ment which has taken place in the condition of the 
 working classes during the last twenty years. At 
 the present moment there is, as we have already 
 pointed out, a good deal of distress owing to the 
 want of regular work, but there can be no ques- 
 tion that the workman in this country is, when 
 fully employed, in almost every respect in a better 
 position than his competitors in foreign countries, 
 and we think that no diminution in our productive 
 capacity has resulted from this improvement in his 
 position.' 
 
 The reader who has followed thus far will not, 
 I think, find any difficulty now in understanding 
 why, although until recently production has in- 
 creased more rapidly than population, there should 
 nevertheless exist among the producing classes a 
 sense of commercial and industrial depression as 
 intense as the great weight of evidence declares it 
 
 M
 
 162 WEALTH AND WELFARE CH. vm. 
 
 to be. The sense of depression comes, on the one 
 hand, from the reduction of profits, due in a great 
 measure to the action of hostile tariffs and foreign 
 bounties, but especially aggravated of late years 
 by the rapid appreciation of gold, which has told 
 heavily on those who work with borrowed capital. 
 On the other hand it is due to this shrinkage of 
 the demand for labour, a shrinkage \vhich cannot 
 be avoided so long as there is a continual extension 
 of the employment of labour-saving apparatus, 
 unless production increase much more rapidly than 
 the number of workers. Until recently this latter 
 condition has been fulfilled, but now it is no longer 
 so. Consequently a fluctuating, but on the whole 
 steadily increasing, proportion of labourers and 
 artisans remain out of work. In the meanwhile 
 the wages of those actually employed have not 
 much diminished, and concurrently there has been 
 a heavy fall in the price of the principal necessaries 
 of life. Very naturally, therefore, we get conflicting 
 accounts of the condition of the working classes. 
 Those individuals who are employed with tolerable 
 regularity are better off in almost every respect 
 than they would have been twenty years ago ; but, 
 the number of the unemployed steadily increasing, 
 we observe signs of an ever-increasing intensity of 
 depression very disagreeable signs some of them, 
 as our London shopkeepers experienced last year. 1 
 1 1886.
 
 CH. vin. DIFFICULTIES OF THE SUBJECT 163 
 
 During the earlier years of the period which 
 has elapsed since our present commercial policy was 
 inaugurated, the years in which trade advanced by 
 leaps and bounds, as Mr. Gladstone phrased it, the 
 enormous expansion of our productive capacity 
 carried off, counterbalanced the disadvantages to 
 our working classes inherent to growth of popula- 
 tion accompanied by extension in the use of ap- 
 pliances for saving labour. \Yc are now face to 
 face with a problem, satisfactorily to solve which 
 will tax our most strenuous endeavours. If we do 
 not attempt to solve it, the socialists will ; and the 
 more narrowly we examine the possible socialist 
 solution, the less satisfactory it appears. 
 
 It is doubtful whether in this particular matter 
 we can gain a better understanding of it by entering 
 at length into detail. On the contrary, I am inclined 
 to think that, where details are not very clear and 
 precise in their bearing on the main points of a 
 complicated question, they are more apt to confuse 
 than to enlighten, if for no other reason than that 
 of the difficulty I may say the impossibility of 
 attaching to each detail its due weight in comparison 
 to the mass of unknown details which make up the 
 whole. And this impossibility is, I presume, the 
 main reason for the frequency with which people 
 come to diametrically opposed conclusions as to 
 matters of fact. For instance, in this subject of the 
 well-being of the working classes, what are we to 
 
 M 2
 
 1 64 WEALTH AND WELFARE CH. vm. 
 
 think of the increase of investments in post office 
 savings banks? It is really impossible to say, with- 
 out we have an intimate personal knowledge of 
 these classes, of those whom they trust and those 
 whom they do not trust. How can we separate the 
 increase or decrease of deposits in local (private) 
 banks from the general banking movement of the 
 kingdom ? And, first of all, does not this increase 
 point perhaps simply to the supposition that old 
 stockings, teapots, private hoards of all kinds, have 
 become a thing of the past ? Does it not also 
 point, especially at the present time, to a probable 
 diminution of investment of working class savings 
 in industries found to be unrcmunerativc? Similarly, 
 when we are told that there has been a decrease of 
 the number of paupers in receipt of relief, we remain 
 doubtful as to the exact bearing of this fact on the 
 matter in debate, because we do not know to what 
 extent it may be an effect of the greater amount of 
 private benevolence and the increased means and 
 efficiency of private charity organisations. 
 
 There is one point, however, which, though not 
 more clear, is probably of greater relative import- 
 ance than any of those which have gone before ; 
 and yet it docs not appear to have engaged the 
 attention of the Commissioners in their endeavour 
 to form a just estimate of the relative well-being of 
 the working population. It is, whether the present 
 intrinsic value (value in use, or goodness) of many of
 
 CH. vin. SHODDY MATERIALS 165 
 
 the necessaries of life is as high as it was, say, twenty 
 years ago. There is a very general impression 
 whether founded on fact I have not the knowledge 
 or experience necessary to judge that the present 
 age is to some extent an age of shoddy, of cheap 
 and nasty manufacture. Now if I, as a working- 
 man, receive the same wages as did my father 
 twenty years ago, and if I pay lower prices than he 
 did for the necessaries of life, it is only if these neces- 
 saries arc not reduced in intrinsic value propor- 
 tionally to the reduction of price that I can be said 
 to be better off than he was. Bread and meat are 
 no doubt cheaper than formerly, and as good in 
 quality ; but if my boots are made of ill-tanned 
 leather, and badly or hurriedly put together, and 
 if my coat is made of shoddy material, so that 
 where my father bought one pair of boots and one 
 coat I have to buy two, I do not see that in the 
 matter of boots and coats I am any better off than 
 he was. 
 
 It is true that, as regards manufactured articles, 
 the Commissioners seem to be generally of opinion 
 that British labour shows no sign of deterioration 
 in the quality of the manufactures it turns out ; but 
 as a vastly increased proportion of our cheaper 
 necessaries are imported from abroad than was 
 formerly the case, and as these imports are pretty 
 universally characterised as of the cheap and nasty 
 order, this opinion is by no means conclusive of the
 
 166 WEALTH AND WELFARE CH. vm. 
 
 point at issue. Further, a number of witnesses 
 deposed that there is now, and has been for some 
 time past, a strong temptation and tendency to 
 manufacture inferior and cheaper articles in order 
 to make head against the very serious competition 
 to which sounder and better-class goods are ex- 
 posed by the free import of these foreign articles. 
 Perhaps in course of time our workmen, or those 
 who buy the inferior imports, may find that real 
 economy consists in obtaining and using good 
 and durable articles and for that matter there is 
 a certain amount of unconscious action in this 
 respect, for it appears that customers rarely inquire 
 into the origin of the goods they purchase but 
 the fact that cheap and inferior articles are in the 
 market in large quantities, and arc bought and sold 
 there, must be taken into account in estimating 
 the real position of the workman in relation to his 
 command of the necessaries of life. That position 
 is further affected by the ceaseless extension of our 
 large towns, and the centralising tendency of the 
 great industries, which impose upon our artisans 
 additional expense of locomotion to and from 
 homes and workshops. According to the degree 
 of importance which we attach to the presumed 
 relative inferiority of manufactured goods of the 
 common kind, we shall modify our impression of 
 the justness of the conclusion at which the Com- 
 missioners arrive.
 
 en. vni. GENERAL IMPRESSIONS 167 
 
 Thus, we sec, this question of the actual condi- 
 tion of the working classes is an extremely com- 
 plicated one, and not easy to answer by the help 
 of mere statistics, which, according to this able 
 manipulator, go to prove one thing, according to 
 that able manipulator, diametrically the opposite. 
 Better than all this kind of evidence are the general 
 impressions of honest and single-minded men be- 
 longing to the classes in question, or of individuals 
 outside the classes themselves who are brought not 
 only into official but private contact with them. A 
 certain number of both these kinds of persons 
 honest and single-minded, we will hope gave evi- 
 dence of this valuable kind. The burden of it is 
 to the effect that there has been perhaps a falling- 
 off in comfort, but that in the direction of sobriety, 
 cleanliness, and general sanitary state there has 
 been a forward stride.
 
 168 WEALTH AND WELFARE CH. ix. 
 
 CHAPTER IX. 
 
 OF GOVERNMENT INTERFERENCE IN OTHER 
 PEOPLE'S CONCERNS. 
 
 Protection a weapon in the hands of the State State interference 
 The argument from history The sociological theory of 
 Mr. Herbert Spencer Its one-sidedness Public profession 
 and individual performance. 
 
 WHATEVER may be the reader's opinion of the 
 efficiency of some degree of protection as a reme- 
 dial measure for the depression of our trade and 
 industries, whatever he may think of the advan- 
 tages or disadvantages which might accrue to the 
 nation as a whole by the adoption of changes in 
 our commercial policy such as those recommended 
 in the minority report of the Royal Commission, 
 he cannot but sec that to place in the hands of 
 government the power of applying protection to all 
 our industries, or, at its good will and pleasure, to 
 some industries and not to others, is to arm it with 
 a weapon which may be used or misused to carve 
 the fortunes of classes and individuals is, in fact, 
 t<> give the government some control over the dis-
 
 CH. ix. PROTECTION AND THE STATE 169 
 
 tribution of wealth. I have already discussed the 
 relative effects of free trade and protection, in pre- 
 sent circumstances, on the production of wealth ; 
 and although it may be considered an open ques- 
 tion whether the imposition of an ad valorem duty 
 on imported articles of manufacture would benefit 
 the country or injure it, there cannot be any reason- 
 able doubt but that it must proceed by way of 
 benefiting one class at the expense of another, or, 
 more correctly, one set of individuals at the ex- 
 pense of another set. 
 
 The mere fact that any proposed line of policy 
 would invest the government with greater powers, 
 or in any way enlarge its sphere of action, would 
 be sufficient to condemn it in the eyes of a certain 
 school of political doctrinaires. Merely theoretical 
 politicians, of whatever colour, do not, indeed, ex- 
 ercise any very direct influence on the conduct of 
 public affairs in England, but to some extent, of 
 course, they help to form the principles and mould 
 the ideas of the younger generation. Distinguished 
 rather by the brilliancy of their speculations than 
 by the solidity of their judgment or the keenness 
 of their spiritual vision, the advocates of the system 
 of restricting government intervention to its nar- 
 rowest possible limits nevertheless exercise a very 
 considerable indirect pressure on the somewhat 
 flexible principles of English statesmanship. The 
 extremists of this school would, as we know, re-
 
 170 WEALTH AND WELFARE CH. ix. 
 
 strict the sphere of government action to the care 
 of national defence, the security of personal pro- 
 perty, and the enforcement of contract. Evidently, 
 for persons who hold these views, a proposal to 
 place in government hands a more direct con- 
 trol of our commercial policy would stand self- 
 condemned ; and, generally, with many estimable 
 and sensible persons, an allied sentiment finds ex- 
 pression in the milder protest against a too paternal, 
 a too ' grandmotherly ' legislation. 
 
 Notwithstanding many learned and ingenious 
 arguments to the contrary, it seems to me that 
 government control is good or bad not so much 
 with regard to the thing controlled as to the 
 manner of controlling. In other words, an honest 
 and capable government may, with advantage to 
 the community, be entrusted with the direction of 
 affairs which would be better kept out of the hands 
 of a dishonest or incapable one. You may say that 
 this is merely to beg the question, that the advo- 
 cates of non-interference ground their conviction 
 of its inexpediency on the teaching of experience, 
 which, according to their reading of it, goes to 
 prove that even the most trustworthy governments 
 are incapable of dealing in a satisfactory manner 
 with other matters than those set out above. The 
 study of history, they say, bears out this view of 
 theirs. But history may be written and read, and, 
 in fact, is written and read, so as to support almost
 
 CH. ix. THE LAW OF DEVELOPMENT 171 
 
 any preconceived theory. Mr. Herbert Spencer 
 lends the authority of his great name and all the 
 weight of his phenomenal learning to the school of 
 laissez-faire. We are told that in the system of 
 universal evolution of which our poor political 
 and social development has claimed some small 
 share of Mr. Spencer's attention everything pro- 
 ceeds by way of differentiation and specialisation 
 of parts. This law, it appears, is universal, runs 
 through not only all organic creation from the 
 humble protoplasm to ' our noble selves,' but is 
 again recognised as reigning supreme in the evolu- 
 tion of the social body, proceeding on the same 
 lines as in the human organism. The discovery 
 of this great law and the consummate skill with 
 which its workings are traced out and illustrated 
 are embodied in a great many stout volumes, which 
 it is well known some persons have read through 
 from beginning to end. I myself can only lay 
 claim to the merit of having studied some of these 
 volumes, with a degree of care, and at an expen- 
 diture of time, which I have not regretted. Mr. 
 Spencer's work is certainly a noble monument of 
 human learning and ingenuity, but, probably owing 
 to his dealing generally with all things in heaven 
 and earth, which, as we have been told, include 
 many things undreamed of in the philosophy of 
 common people, it is possible that in his treatment 
 of purely human affairs, under their social and
 
 172 WEALTH AND WELFARE CH. ix. 
 
 political aspect, he has overlooked certain matters 
 which are very pertinent to this subject of inquiry. 
 The truth is Mr. Herbert Spencer has im- 
 molated himself on the altar dedicated to the 
 luminous splendour of his great theory. The 
 passionate love of truth which is characteristic 
 of great minds, and which lights up into clear- 
 obscure the realms of thought and speculation in 
 which they live and move, is too often we cannot 
 but recognise it as being the case in many powerful 
 intellects accompanied and vitiated by an equally 
 passionate desire to fathom the ' secret of the 
 universe,' to reduce the action of all phenomena 
 to that of one single great law. Vitiated, I say, 
 because in such a search, and spurred by such a 
 desire, there is a constant disregard of minor facts 
 and truths which may be found to modify the 
 action of the most persistent and important fact or 
 truth. But even were we to take it for granted 
 that the analogy which Mr. Spencer seeks to 
 establish between the animal and the social body 
 docs in very truth hold good throughout, that 
 differentiation and specialisation of parts is the law 
 of social as well as of bodily development, I cannot 
 sec that there follows from this a necessary decen- 
 tralisation of authority and power. On the con- 
 trary, the more differentiated and specialised 
 become the parts of a complex body, the more, on 
 Mr. Spencer's own showing, do they depend for
 
 CH. ix. CENTRAL AND LOCAL AUTHORITY 173 
 
 their existence and well-being on one another, and 
 the more necessary becomes an all-controlling and 
 powerful co-ordinating authority. The will which 
 controls and co-ordinates the conscious actions of 
 the highly specialised organs of the human body 
 may perhaps be relatively less in power and in- 
 tensity than that which performs the same office 
 for other beings lower down in the scale of physical 
 organisation, but, absolutely, is it not much greater? 
 
 We have a complicated social organisation, the 
 parts of which are becoming more and more dif- 
 ferentiated in form and specialised in function. The 
 parts, however, exist not merely for themselves, 
 but also for the whole which they constitute. 
 Here, rightly considered, we have an analogy which 
 should help us to a true solution of the problem 
 of local and central government ; neither of them 
 should grow at the expense of the other, but each, 
 with the greater need, grow greater ; not forgetting 
 that local implies sub-local and individual self- 
 government. Nor does it necessarily follow that 
 these powers, wherever vested, need harden the 
 social fabric so that it will not yield to the de- 
 velopment of the social body, for under modern 
 conditions, although the power given or acquired 
 may be very great, it is necessarily plastic. The 
 divine right of kings, and the conquered right of 
 classes, 1 to govern nations are fast disappearing. 
 
 1 That is, the divine and conquered right as generally under-
 
 174 WEALTH AND WELFARE CH. ix. 
 
 In their place, history for ever repeating itself, we 
 have as yet established only the right (?) of the 
 popular man to govern. God send it may soon be 
 that the popular man shall be also the able man. 
 When we shall have invented a method by which 
 always to place an able man at the head of affairs, 
 and not merely an inflated windbag, upborne for a 
 moment on the rank breath of popular applause, 
 I care not with how much power we entrust him. 
 Somehow, I cannot think we are seeking for this 
 method quite in the right direction. Meanwhile 
 we cannot help giving, though with a miser's hand, 
 the increased power imperatively required for the 
 settlement of our growingly complex national 
 affairs. With us, the complaint at present is, that 
 the government has already more than it can 
 do. Putting aside the momentary deadlock in the 
 legislative machine, is this not perhaps because 
 government is overburdened with local, at the 
 expense of national, concerns ? What we require 
 is decentralisation with regard to local, centralisa- 
 tion with respect to national, business ; but by no 
 means curtailment of either local or central power. 
 How docs the reader suppose it would answer to 
 curtail the authority of the captain of one of our 
 modern line-of-battlc ships, on the ground that the
 
 CH. IX. INDOLENCE AND INTOLERANCE 175 
 
 services to be performed by the several parts of the 
 whole arc now more difficult and complicated than 
 they were in Nelson's day ? The analogy is toler- 
 ably accurate. It would be difficult to instance 
 a case in which differentiation and specialisa- 
 tion have taken place to a greater extent. Even 
 a highly gifted commander could scarcely be ex- 
 pected to be at the same time a first-rate seaman, 
 engineer, electrician, gunner, torpedoist, tactician, 
 and navigator ; yet it is none the less necessary 
 that he should be invested with the power to 
 co-ordinate in a common service and guide to a 
 common end the parts of the complex machine of 
 which he is, or should be, the moving spirit. 
 
 It does not appear, therefore, that, however 
 much we may deprecate the extension of govern- 
 ment interference in local affairs, we should seek to 
 dwarf its powers with respect to national ends. 
 The free development of the individual is quite 
 compatible with the continued action of a high 
 executive and legislative authority. Other and 
 perhaps as profound students of history and human 
 nature as Mr. Spencer deduce from their studies 
 that the affairs of nations are as liable to go wrong 
 when their rulers are indolent, apathetic, and of the 
 laissez-faire persuasion as when they are animated 
 by a spirit of intolerant meddlesomeness. There 
 is no doubt that nations do suffer from the kind of 
 legislative imbecility which issues in a tactless and
 
 176 WEALTH AND WELFARE CH. ix. 
 
 fussy interference with matters far better left to 
 individual energy and resource. Somewhere in 
 Mr. Spencer's ' Study of Sociology ' there is a pas- 
 sage in which he adduces, in support of his theory 
 of the general perniciousness of government inter- 
 ference, the fact that a very considerable propor- 
 tion of the bills passed in Parliament during a 
 recent period of years have either been repealed 
 or allowed to become inoperative. But what does 
 this prove ? Not that law-making is a useless or 
 wrong thing, but that the persons entrusted with 
 the framing and criticism of these laws may have 
 been incompetent. Indeed Mr. Spencer himself 
 elsewhere points out with his accustomed force and 
 clearness that, whereas it is deemed incumbent on 
 every man about to adopt a profession specially to 
 qualify himself for its exercise, men nevertheless 
 enter into the profession of law-making, the most 
 difficult of any, without, as a rule, in any way pre- 
 paring themselves for it. As to these particular 
 repealed laws, however, we need not be even so 
 severe as this in our judgment, for is it not just 
 possible, probable, that a considerable number of 
 the bills repealed or lapsed into desuetude were 
 thus repealed or allowed to become inoperative 
 because they had fulfilled the several objects for 
 which they had been passed ? Doubtless, in some 
 cases, the enactments were injudicious, and in 
 quietly repealing them or allowing them to become
 
 CH. ix. TRUE OPPORTUNISM 177 
 
 a dead letter we have an earnest of the good sense 
 and capacity for governing and being governed of 
 the English people. 
 
 Is it not, after all, that the very fin mot of legis- 
 lation is neither Conservatism nor Radicalism, 
 Benthamism nor Socialism, but Opportunism in its 
 best sense ? which does not mean that you are to 
 have no principles of government, but that you 
 must look to the expediency of their application, 
 and to the natural growth of the principles them- 
 selves. Indeed, this is, to a very great extent, what 
 we are coming to in England now, for notwith- 
 standing, and in the very midst of, the delirium of 
 the Irish question do we not see each political 
 party in turn adopt with admirable good sense, 
 though it might be with a little more candour a 
 part, sometimes the whole, of its opponent's mea- 
 sures ? Men who set themselves to govern and 
 make laws in accordance with some immutable 
 political theory either come to grief themselves or 
 else bring to grief those whom it is their especial 
 object to shield from it. And this holds pretty 
 universally of all laws which men make for others 
 and for themselves ; hence, perhaps, the saying that 
 none but a fool is thoroughly consistent consistent, 
 it may sometimes mean, in his own folly, or the 
 continual misapplication of means to ends. To 
 govern men well it is at all times requisite to pos- 
 sess at once strength and flexibility, and an intimate 
 
 N
 
 178 WEALTH AND WELFARE CH. ix. 
 
 knowledge of human nature, not in its finer and 
 more secret traits, which lie rather within the 
 province of the poet and the artist, but in its broad 
 and social aspects. No mere bookman or theorist 
 ever has made or ever will make an able legislator 
 or governor. There is no abstract science of govern- 
 mentas of mathematics which can dispense us 
 from the necessity of studying, of feeling, the inti- 
 mate and peculiar requirements, the ' form and 
 pressure,' of the day, which, in the natural course 
 of things, do not and cannot remain the same. 
 It may be advantageous to all concerned that the 
 government should undertake now the control of 
 affairs which it had better not have undertaken a 
 hundred years ago, and which it may better not 
 undertake a hundred years hence. Human nature, 
 indeed, does not change within such short periods, 
 but the circumstances of a nation's life change, more 
 rapidly than it is itself aware of. Our institutions 
 arc our clothes, and government is our tailor. I 
 would a little more attention were paid to season 
 than to fashion. 
 
 Every one will admit, for instance, that the 
 postal service is at once more efficiently and cheaply 
 managed by government than it would be if left to 
 the initiative of private enterprise. Again, in the 
 case of telegraphs, it is generally allowed that the 
 advantages of government control outweigh its 
 di-.advantagcs. Then why not ' extend the prin-
 
 CH. ix. STATE CONTROL OF RAILWA YS ETC. 179 
 
 ciplc ' to the state ownership and management of 
 railways ? This is the usual line of argument with 
 persons who pin their faith to the notion that social 
 development must perforce advance along some 
 narrow lane of their own imagining. If they happen 
 to be imbued with the socialistic idea, then govern- 
 ment must be called on to undertake the direction 
 of cverbody's affairs ; if they adopt the principle 
 of government non-intervention, they will push it 
 to the extreme logical conclusion. Somehow what 
 seems good logic is very often not good common- 
 sense ; the premiss is usually not broad enough. 
 There may be little or no difference of principle 
 between state ownership and management of rail- 
 ways and that of telegraphs, but there is a great 
 difference in the qualities and the amount of know- 
 ledge involved in the successful management of 
 one and the other. No scheme of state railways 
 yet elaborated has satisfied persons, competent to 
 judge, of the advisability, desirability, or even pos- 
 sibility, of the change. It is of very little moment 
 to us that in Germany and France state manage- 
 ment of railways meets with tolerable success, 
 because there arc in these two countries certain 
 valid reasons for this state action which do not 
 exist in England, reasons which might make this 
 state control necessary to them, even at a con- 
 siderably greater cost than that now entailed. But, 
 just as it seems inexpedient for us now to follow
 
 i8o WEALTH AND WELFARE CH. ix. 
 
 the example set us in this matter by foreign 
 nations, so in the course of twenty, fifty, a 
 hundred years it may become expedient for us 
 to do so. 
 
 If the conditions under which the production 
 and distribution of wealth at present take place in 
 Great Britain are such that now one class, now 
 another class, now this set of individuals and now 
 that, benefit unduly at the expense of others, or 
 suffer unduly for the benefit of others, \vould it not 
 be wise to entrust to a government, representative 
 of all kinds and classes of these individuals, the 
 power of curtailing that undue benefit and of miti- 
 gating that undue severity of loss, over neither of 
 which the individual can exercise a personal con- 
 trol ? What, in fact, was the abolition of the 
 corn laws but a curtailment of undue gain and a 
 mitigation of undeserved loss ? And if, from what 
 cause soever, certain classes now gain unduly and 
 others suffer undeservedly, why should not the 
 government to some extent endeavour to recover 
 the lost balance between them, even let us make 
 the dreadful supposition at some small cost to 
 the country at large ? The nation which gave its 
 money, and was ready to shed its blood, for the 
 abolition of the slave trade must stand above the 
 desire to profit by the misfortunes of any section 
 of its own people a desire opposed to the better 
 instincts of men in general, especially opposed to
 
 CH. IX. FREEDOM OR LICENCE? 181 
 
 our national love of fairplay, that fine jewel set in 
 an Englishman's crown of good qualities. 
 
 But, say some, we do not think the government 
 should exercise an Englishman's good qualities for 
 him ; let him exercise them himself, under no com- 
 pulsion whatsoever, save that of his own sense of 
 duty and of right. And thus we come to the cant 
 phrase : ' You cannot make people virtuous by act 
 of parliament,' and to the Bishop of Peterborough's : 
 1 I would rather see the people free than sober.' 
 No, indeed, you cannot make people cither virtuous 
 or happy by act of parliament, but what 3-011 can 
 sometimes do, and should always try, is to remove 
 obstructions in the path of virtue, and see if you 
 cannot protect a little from wanton injury the 
 flowers of happiness which grow on either side of 
 it. It docs not seem to me that the last word on 
 progress is to be found in the ' free and unfettered 
 development of the individual,' nor that all which 
 we desire and deserve is to be compassed through 
 the agency of limited liability companies. I won- 
 der, should we have ' formed a company ' for the 
 abolition of the slave trade? Who is free and 
 unfettered to develop ? Who ever has been or 
 will be free from the influences, political or other, 
 which surround him ? It can never be aught 
 but the substitution of one influence for another, 
 and if we exercise any sort of control over our 
 development, knowing how to ' refuse the evil
 
 1 82 WEALTH AND WELFARE CH. ix. 
 
 and choose the good,' it is madness on our part 
 not to attempt to substitute a good influence 
 for a bad or, at the very least, to remove 
 the bad, by what means soever, be they govern- 
 mental, corporate, individual, or of any other 
 description. The capital error which lies at the 
 root of the Spencerean social philosophy is in 
 the assumption that society is what the individual 
 makes it, with total disregard of the converse : that 
 the individual is also what society makes him. 
 Those who have not made any study of Mr. 
 Spencer's works might suppose this to be an ex- 
 aggeration. Here, then, is a neat illustration of 
 his theory, taken from ' The Study of Sociology ' 
 (International Scientific Series, p. 48 et scq^) : 
 
 ' Out of bricks, well burnt, hard, and sharp 
 angled, lying in heaps by his side, the bricklayer 
 builds, even without mortar, a wall of some height 
 that has considerable stability. With bricks made 
 of bad materials, irregularly burnt, warped, cracked, 
 and many of them broken, he cannot build a dry 
 wall of the same height and stability. The dock- 
 yard labourer, piling cannon-shot, is totally unable 
 to make these spherical masses stand at all as the 
 bricks stand. There are, indeed, certain definite 
 shapes into which they may be piled that of a tetra- 
 hedron, or that of a pyramid having a square base, 
 or that of an elongated wedge allied to the pyramid, 
 In any of these forms they may be put symmetri-
 
 CH. ix. SPENCEREAN SOCIOLOGY 183 
 
 caily and stably ; but not in forms with vertical 
 sides or highly inclined sides. Once more, if, 
 instead of equal spherical shot, the masses to be 
 piled are boulders, partially but irregularly rounded, 
 and of various sizes, no definite stable form is pos- 
 sible. A loose heap, indefinite in its surface and 
 angles, is all the labourer can make of them. Put- 
 ting which several facts together, and asking what 
 is the most general truth they imply, we see it to 
 be this that the character of the aggregate is de- 
 termined by the characters of the units.' 
 
 ' If we pass from units of these visible, tangible 
 kinds to the units contemplated by chemists and 
 physicists as making up masses of matter, the same 
 truth meets us. ... In brief, it may be unhesi- 
 tatingly affirmed, as an outcome of physics and 
 chemistry, that throughout all phenomena pre- 
 sented by dead matter the natures of the units 
 necessitate certain traits in the aggregate.' 
 
 ' This truth is again exemplified by aggregations 
 of living matter. . Those who have been brought 
 
 o o 
 
 up in the belief that there is one law for the rest 
 of the universe and another law for mankind will 
 doubtless be astonished by the proposal to include 
 aggregates of men in this generalisation. And yet 
 that the properties of the units determine the pro- 
 perties of the whole they make up evidently holds 
 of societies as of other things.' 
 
 The passages marked by dotted lines as
 
 1 84 WEALTH AND WELFARE CH. IX. 
 
 omitted do not alter the general sense of the rest ; 
 they are merely amplifications and illustrations. I 
 would wish to quote the passages in extenso, be- 
 cause of the aptness and clearness of the illustra- 
 tions, but must consider space. What of the 
 excerpt as it stands ? The analogy between an 
 aggregate of human beings and one of units of 
 matter, organic or inorganic, is plain up to a 
 certain point, but at that point it vanishes. The 
 properties of the social unit, says Mr. Spencer, 
 determine the properties of the social aggregate. 
 True enough ; but what determines the properties 
 of the social unit ? Why, In a great measure, surely 
 the properties of the aggregate. We now begin to 
 perceive where the analogy is misleading. The 
 character of the heap of cannon-balls is determined 
 by the character of its constituent units. And 
 what are the characteristics of a cannon-ball ? 
 Well, these are some of them : hardness, roundness, 
 smoothness. But a cannon-ball is endowed with 
 these and every other of its qualities quite inde- 
 pendently of other cannon-balls. If there were 
 only one cannon-ball in the world it would still be 
 hard, round, and smooth ; moreover, it would under- 
 go neither increase nor decrease of its qualities 
 owing to the absence of its kindred. But how is it 
 with a human being? Considered under his social 
 aspect, a man is a mere bundle of qualities, which 
 cannot even be enumerated without instantly impli-
 
 CH. ix. SPENCEREAN SOCIOLOGY 185 
 
 eating the existence of other men. You can con- 
 sider the properties of a brick apart from other 
 bricks, but you cannot consider the properties of a 
 man, save the purely physical ones, which have no 
 bearing on the present argument, except in relation 
 to other men, because outside that relation most of 
 them have no existence. Mr. Spencer would have 
 us infer from his analogy that social reform is 
 determined by individual reform ; an inference also 
 to be drawn from the doctrine which was taught in 
 the fulness of its beauty, purity, and loving-kind- 
 ness nineteen centuries ago. But then again we 
 ask, What does individual reform depend on ? Solely 
 on the individual ? Or partly on his surroundings, 
 on the influences to which he is exposed, and from 
 which he cannot altogether withdraw himself? It 
 is plain that there is action and reaction between 
 the social unit and the social aggregate, and no one, 
 I should imagine, ever before doubted it. We may 
 say of Mr. Spencer, in this instance, what Mr. 
 Matthew Arnold said with great justice of Pascal : 
 Did ever a great reasoner reason so madly ? (pre- 
 face to ' God and the Bible '). And we may say this 
 without flippancy or ingratitude. The world has 
 learnt much from Pascal and much from Mr. 
 Spencer. 
 
 Be this as it may, if Mr. Spencer knows him- 
 self to be right, he will at all events not be the first 
 to discover that no man is a prophet in his own
 
 1 86 WEALTH AND WELFARE CH. ix. 
 
 country, for, in England at least, the Zeitgeist is 
 leading men fast away from the laissez-faire theory 
 the legislation of the last five-and-twenty or thirty 
 years shows which way the tide is running. For 
 my part, I trust the tide has turned into a steady 
 and equable current, notwithstanding the many 
 swirls, rips, and backwaters which we see on its 
 surface. 
 
 Surely it is good that we should expect, nay, 
 insist, that government should give effect to the 
 better instincts and desires of the population, and 
 steadfastly resist giving effect to its bad ones, tak- 
 ing as its guide the professed public morality which, 
 in the healthy state, is generally higher than that 
 practised by the average individual (for our ideal 
 self is ever before and above us). \Yhcrc govern- 
 ment fails in its efforts, it will be because the public 
 profession is insincere, when we shall at least profit 
 by the unmasking of national hypocrisy, and, re- 
 cognising ourselves for what we really arc, be in a 
 fair way towards realising that ' giftie ' which others 
 besides the poet have vainly desired.
 
 CH. x. LA IV OF NATURAL SELECTION 187 
 
 CHAPTER X. 
 
 INDIVIDUAL INTERFERENCE IN OTHER PEOPLE'S 
 CONCERNS. 
 
 Selection : natural and arbitrary Compromise between contend- 
 ing principles Charity and patriotism The individual and 
 the state, or versus the state ? 
 
 TlIERE is something very convincing, though in- 
 expressibly mournful, in the contemplation of the 
 ruthless, and yet to all appearance beneficent, 
 operation of the law of natural selection, bringing 
 about, so it seems, the survival of the fittest through- 
 out this little sand-grain on the shores of Infinity. 
 As \vc toil through the endless complexity of detail 
 which fills the pages of the ' Origin of Species,' this 
 general law goes ever before us, like the pillar and 
 the cloud, to guide us, with Mr. Darwin's help, to a 
 correct understanding of the phenomena of evolu- 
 tion in the organic world. The untiring industry, 
 the acutcncss of perception, of analysis, of synthesis, 
 and the breadth of view displayed by the author, 
 are matched only by the true modesty and single- 
 ness of mind which are apparent in every page of 
 his great work.
 
 1 88 WEALTH AND WELFARE CH. x. 
 
 But this somewhat trivial praise of the great 
 natural philosopher is inconsequent to the matter 
 in hand. I allude to the ' Origin of Species ' and 
 the action of natural selection, because this action 
 is made by many the subject of hasty generalisation, 
 and equally hasty application to the conduct of 
 social affairs ; because it is advanced as an argument 
 in support of the wisdom of laissez-faire and unre- 
 stricted competition among men. 
 
 The ' Descent of Man ' was written by Mr. Dar- 
 win because he clearly perceived that, as regards 
 man, however true the law of natural selection 
 might be when applied to races, it requires consi- 
 derable modification when applied to the individual. 
 How far Mr. Darwin may be right in the import- 
 ance he has attached to the effect of sexual selec- 
 tion in descent, I am too ignorant to discuss, but it 
 must be tolerably plain to any thinking man that 
 what may be termed arbitrary, as distinct from 
 natural and sexual, selection must exercise a grow- 
 ing influence on the future of the human race. 
 Part passu with mental and moral development, 
 arbitrary selection expressing itself in self-imposed 
 customs and laws must play an ever-increasing 
 part in the affairs of men. In a very extended 
 sense of the word ' natural ' this arbitrary selection 
 may be said to be included in natural selection, but 
 certainly not in the Darwinian sense of the word. 
 
 It is a melancholy fact that intelligent persons
 
 CH. x. ARBITRARY SELECTION 189 
 
 will argue that it is useless to attempt to interfere 
 with the action of natural selection, because, since 
 among animals the competition for food and for 
 the conditions necessary or favourable to life 
 determines the survival of the fittest, so among 
 human beings the same competition determines 
 the survival of the fittest. Well, so it does, or 
 would do if given free play ; but the fittest for 
 what? For success at the game of grab. Just so, 
 only we have come to agree among ourselves that 
 this fitness, desirable as it may be, docs not con- 
 stitute the whole and sole fitness of man ; where- 
 upon comes in arbitrary selection to modify the 
 action of natural and sexual selection ; or, what 
 comes to the same thing, sexual selection and free 
 competition for the necessaries and creature com- 
 forts of this world, not entirely determining the 
 survival of what we arbitrarily consider the fittest 
 human being, we agree in some small measure to 
 hold our own and one another's hands at the afore- 
 said game, so arranging it that even some of us not 
 at all fitted for contention shall nevertheless survive. 
 I said, in a former chapter, that perhaps the 
 most important question a people can put to itself 
 with respect to political economy is this one : Into 
 whose hands does the accumulation of capital tend? 
 Because, according to the economical views (not 
 necessarily laws, as political economists make out) 
 held, the class of holders of saved wealth will to
 
 190 WEALTH AND WELFARE CH. x. 
 
 some extent vary. The followers of Mr. Herbert 
 Spencer and, generally, the old school of philoso- 
 phical Liberals say, in effect : It should fall into 
 the hands of those most adroit at our world-wide 
 game. The extremists of the opposite school cry 
 out, on the contrary : Trim us clown the too ex- 
 uberant growth of these vulpine claws ; let us all 
 have claws of equal length and strength ! Of the 
 two views, the former is a thousand times the more 
 reasonable, because, had we a mind to try it in the 
 degree of completeness to which, thank God, we 
 do not yet quite attain, we should find it quite 
 feasible ; whereas the practice of the other is for 
 ever impossible. Thus the two extremes. Then 
 come those who take the via media, having long 
 arrived at the understanding that wise human 
 action comes of happy compromise between con- 
 tending principles those loyal servants, but most 
 tyrannical of taskmasters. And such persons I 
 would fain persuade that no abstract theory of 
 social evolution, but only plain considerations of 
 right and wrong, expediency and inexpediency, 
 such as we can most of us rightly decide without 
 need of philosophical disquisitions, should guide us 
 on our journey, and that we should avail ourselves 
 of every kind of help, be it individual, corporate, 
 or governmental, in seeking to direct the accumula- 
 tion of capital into hands which will make good 
 use of it.
 
 CH. x. WEALTH AND LABOUR 191 
 
 The utmost that can be done in this direction 
 is little enough, however, compared with what 
 might possibly be done, could it be brought home 
 to the minds of the present holders of the world's 
 accumulated wealth how colossal is the influence 
 which they bring to bear on its development. It 
 may in a sense be said that they are the world's 
 masters. On them and their desires or caprices 
 immediately depends the direction of labour not 
 employed in the production of the necessaries of 
 life. In respect to this, if we may so call it, surplus 
 labour, they stand as the centurion to the soldier, 
 and as the centurion to his servant : ' Do this, and 
 he doeth it.' What, my masters, shall it please 
 you that your servants do ? On you depends 
 whether the work upon which they are to be em- 
 ployed shall bring with it health, happiness, and 
 life, or carry in it the seeds of disease, misery, and 
 death. On you depends whether the work to which 
 they are to be set shall tend to raise or lower their 
 intellectual powers, distort or straighten their moral 
 sense, blunt or sharpen their sense of beauty and re- 
 finement. If your pleasure be to fare sumptuously 
 every day, rather than take your ease in broad plea- 
 sure grounds, the difference to your servants is that 
 involved between kitchen and garden work, between 
 idly waiting in fantastic garments and working 
 under the clear sky and among the flowers and 
 fruits of the earth. If it please you to feast your
 
 192 WEALTH AND WELFARE CH. x. 
 
 eyes on the half-indecent, half-ludicrous posturing 
 of ballet girls rather than on the fine work of fem- 
 inine fingers, the difference to your servants is that 
 involved between exposure to a life of ordinary 
 trials and temptations, and exposure to a life in 
 which temptation leads, and degradation and misery 
 dog, the footsteps of those engaged in its path. In 
 a hundred different ways which your own ingenuity 
 can track out, the mere choice between one idle 
 pleasure and another involves far-reaching conse- 
 quences to your ministrants, making or marring 
 lives, leading to true and honest or false and de- 
 grading service. And if we look a little farther, 
 the difference involved in the consequences which 
 arise from the choice between noble and idle plea- 
 sures is yet more startling. But of this I will not 
 speak. What there is to say has already been said 
 a hundred times better than I could hope to say it. 
 I should be curious to know, were it possible, 
 what the original inventor of the saying, ' Charity 
 begins at home,' would think of the meaning with 
 which it is now generally invested. I will, at all 
 events, not do him the injustice of supposing that 
 its present application was also his. I would rather 
 think he meant by his maxim that the first and 
 most important business of charity is to be found 
 immediately about us, is to deal with those whose 
 wants, misfortunes, merits, demerits, and general 
 circumstances we are intimately acquainted with ;
 
 CH. x. ' CHARITY BEGINS AT HOME* 193 
 
 that, however painful the process may be to us, we 
 should resolutely pass by cases of apparent want 
 and misery the histories of which we have not the 
 means of investigating, because, if charity begins, 
 as it should, at home, it is there also that the history 
 of the want may be truly learnt and its right relief 
 administered ; that, in fact, chanty is better employed 
 in caring for the ills of known dependants and 
 friends than in manufacturing flannel waistcoats 
 for the aged inhabitants of inter-tropical regions. 
 To which it may be added, for fear of being mis- 
 understood, that, as true charity begins at home, it 
 only ends very far abroad without being abroad. 
 If patriotism is not altogether an antiquated preju- 
 dice, being, indeed, nothing else than an unconscious 
 adaptation and extension of this saying concerning 
 charity, we may surely feel touched with admiration 
 for the charitable impulse which moves English- 
 women to associate themselves in order to aid local 
 industries by purchasing their dress materials, their 
 personal and home decorations, from them rather 
 than from the foreigner. A dreadful heresy from 
 the economical point of view, though very orthodox 
 from another and infinitely higher standpoint. 
 But, if justice is rightly symbolised as blind, chanty 
 is not, and associations such as those to which I 
 have alluded cannot be too careful to inquire into 
 the particular circumstances of the industries to 
 which they desire to come in aid, for, although 
 
 O
 
 194 WEALTH AND WELFARE CH. x. 
 
 orthodox political economy is indeed a very dismal 
 science when we wrap ourselves up completely in 
 its conclusions, it nevertheless has, on such matters, 
 a note of warning to which we should be unwise to 
 turn a deaf ear. The considerations involved in 
 the exercise of this kind of charity helping people 
 to help themselves are none else than those which, 
 in my opinion, should influence government in an 
 application of a measure of protection to suffering 
 industries, and these I have to the best of my ability 
 explained in the chapter on free trade and protec- 
 tion. Only, individual action, and, in a less degree, 
 corporate action, being more free and unfettered 
 than that of government, and better circumstanced 
 to inquire into minor and local details, it follows 
 that a more elastic interpretation of the conditions 
 of, and the application of means to, the relief of 
 industries may be adopted than could be possible 
 where government action is concerned. 
 
 And here I would once more urge on the fiery 
 advocates of this principle and of that principle, 
 that it is not in the application of one principle, but 
 in the amalgamation and application of many 
 principles, to human affairs that wisdom consists, 
 and success follows. That ' middle ' which has been 
 1 excluded ' from the realms of metaphysical thought 
 by Sir William Hamilton and other philosophers 
 has taken refuge with, and will bring comfort to, 
 the common of mortals. With a passing apology
 
 CH. x. THE INDIVIDUAL AND THE STATE 195 
 
 to our metaphysicians for this irreverent jesting, I 
 venture to assert that, in the language understanded 
 of the people, one principle does not necessarily 
 exclude its opposite, because the truth is that, when 
 we say principles are opposed, we often mean 
 nothing more than that they are distinct. So, as 
 this apparent opposition of individual and govern- 
 ment action keeps on surging up, verbal contention 
 is incessantly occupied obscuring the real issue of 
 things. In this very matter we have been con- 
 sidering, which is nothing else than a question 
 partly of charity, partly of mere justice, there is 
 no real opposition, no mutual exclusion of action 
 founded upon ' opposite ' principles distinction, 
 that is all. And if you have two horses to your 
 coach, and a stiff hill road before you, do you sit 
 down and discuss which of the two is the better 
 fitted and the stronger for the work to be done, or 
 do you not rather put them both in the traces and 
 make the best of your way sparing the weaker a 
 little at the expense of the stronger, but sparing 
 not the whip when it becomes necessary ? 
 
 o 2
 
 196 WEALTH AND WELFARE CH. xi. 
 
 CHAPTER XI. 
 
 CONCERNING DRONES. 
 
 Socialism and national character The poor-law Equivalent sacri- 
 fice the basis of just taxation Increase of population in health 
 and pleasure resorts Progressive income-tax Taxation of 
 luxuries ' Paper ' property and legacy dues. 
 
 OUR globe spins round on its axis once in every 
 twenty-four hours, and, in the same period of time, 
 rushes along one three hundred and sixty-fifth part 
 of the circle of the ecliptic ; but we, walking about 
 on the earth's surface, pay no attention to this 
 rapid and complicated movement should, in fact, 
 know nothing whatever of it had we not as children 
 been taught that these are the facts. So it is, in a 
 measure, with us and with the world of thought 
 and feeling about us, which also spins on in its 
 eternal round, or moves on to an end who can 
 say ? Each one of us pursues his daily round of 
 avocations, is brought day by day into contact 
 with the same people, reads the same newspapers, 
 is surrounded with the same local atmosphere of 
 ideas, seldom renewed by a fresh blast from the 
 outside world. How few men arc there those
 
 CH. XI. SOCIALISM, LABOUR, AND CAPITAL 197 
 
 with a large and varied circle of acquaintances 
 even can count them on the fingers of one hand 
 who usually, and as it were naturally, without 
 effort, consider events with regard to their effect 
 over a larger area than that occupied by their own 
 immediate class, or even their own immediate 
 circle ! Thus influences, which only seem, but are 
 not, evanescent, which, in their inception, are 
 scarcely discernible, but which, time after time, 
 give rise to symptoms adequate to warn us of 
 coming change, break strangely and abruptly upon 
 us as we quietly pursue our little round of life. Of 
 a sudden we arc brought face to face with some 
 question which urgently requires settlement, which 
 altogether refuses to remain longer in the unsettled 
 state. Then we gird up our loins, and after frantic 
 efforts finally blunder into some kind of ' arrange- 
 ment ' (in black and scarlet too often), and once 
 more turn to our series of familiar occupations, 
 persuaded that nothing more will ever require 
 settling, except quarterly bills. 
 
 A question which will soon insist imperiously 
 on being taken in hand is the one to which now 
 and again vibrates as forest leaves to the search- 
 ing sudden squall the soul of modern civilisation : 
 the question of socialism. Since many years we 
 have had recurring ebullitions of socialistic energy, 
 and with every manifestation of it we look up and 
 look round uneasily. The ebullition subsides, so
 
 198 WEALTH AND WELFARE CH. xi. 
 
 does the anxiety of our looks, and round we go 
 again in our circular rut : ' Surely this is the last we 
 shall hear of this absurd matter! plainly against 
 all laws of political economy and common-sense ! ' 
 Alas, yes, plainly against the laws of political 
 economy, against the laws of common-sense. But 
 there, whether we like it or not, looms the stub- 
 born figure of socialism ; there stand the socialists, 
 as obdurate and obstinate as ever, more obdurate, 
 more obstinate, and more numerous than ever. 
 Perhaps, after all, this is because there may be 
 something a little too dry in our political economy, 
 something a little too gross in our common-sense. 
 
 It is not altogether a matter of labour versus 
 capital, this question. It may even in the time to 
 come get to be a matter of labour and capital 
 versus the consumer (by which term I understand 
 all who are not directly engaged in production). 
 For the moment, especially in England, when the 
 artisan complains, the capitalist-employer exclaims, 
 ' My hands are clean enough in this business, as 
 clean as is my balance-sheet of profits ! ' At 
 bottom, the socialist rebellion is against the econo- 
 mical laws which control the distribution of wealth. 
 So the socialist says, ' Let us make the electorate 
 socialistic, for the electorate controls the govern- 
 ment ; the government will then amend the econo- 
 mical laws, which arc not at all natural laws, but 
 of selfish men's making.'
 
 CH. xi. OUR FREEDOM FROM SOCIALISM 199 
 
 As yet, certainly, socialism has got very little 
 hold on the English masses, and it will be a hard 
 task to persuade the average Englishman that our 
 freedom from it is not in great measure due to our 
 economical policy. All the surface evidence leads 
 to such a conclusion. Germany, the most pro- 
 tectionist country, Russia perhaps excepted, in 
 Europe, is also the country in which socialism has 
 found its widest acceptance and its greatest leaders. 
 England, the only free-trade nation in Europe, is 
 also the one in which socialism has met with the 
 least encouragement. In France, too, socialism 
 and protection appear to have advanced hand in 
 hand. But appearances are proverbially deceptive. 
 To what, then, can we ascribe our insular immunity 
 from what I cannot but stigmatise as a social 
 disease ? I answer : To the courage and self- 
 reliance of our working population. But the cour- 
 age and self-reliance of a whole people are things 
 of slow growth. Our policy of free trade and 
 unlimited competition is barely half a century old ; 
 for ages before it came into operation the legisla- 
 tion which prevailed in England was altogether 
 protective, and as anti-competitive as trade guilds, 
 merchant guilds, monopolies, and protection could 
 make it ; it was tinged even with the socialistic 
 principle, as witnessed by the poor-law which, 
 though amended, exists to this day. The charac- 
 teristic qualities of the several working populations
 
 200 WEALTH AND WELFARE CH. XL 
 
 of the present European countries are the outcome 
 of a complication of causes and of hereditary race- 
 tendencies which defy analysis, were anyone ven- 
 turesome enough to attempt it. The status of 
 labour is Great Britain is comparatively high ; our 
 working classes are at once unthrifty, hardworking, 
 and self-reliant. It is surely not his unthrift which 
 disinclines the British workman to lend his ear to 
 the teaching of socialism. His courage, capacity 
 for work, self-reliance, are what cause him to turn 
 a deaf ear to the siren strains of Mr. Henry George 
 e.t hoc genus oinne. So that it really seems, from 
 the study of past history, as if socialism and small- 
 pox were best treated by similar methods. 
 
 I do not think that free trade or protection, or, 
 in fact, any merely commercial policy, exercises 
 any but the most inconsiderable influence on the 
 formation of a people's character, but rather that a 
 people's character will strongly mark its policy, of 
 what kind soever. Self-reliance, if it testifies to 
 power, also leads to imprudence. The character 
 of a nation, together with the particular circum- 
 stances of the hour (such as labour-status, com- 
 mercial activity, &c.), determine the degree of ac- 
 ceptance found by such a theory as that of socialism. 
 But the tendency of modern industry and com- 
 merce is inevitably to weave about us a web of 
 difficulties, from which, if we have resolution and 
 knowledge, we ma}' victoriously rend ourselves,
 
 CM. xi. LABOUR AND ITS REWARD 201 
 
 but whose only free exit is through socialism, 
 genuine or otherwise. The feature which especially 
 marks the age is the enormous progress which is 
 continually being made in nearly all the processes 
 of production. This progress almost entirely con- 
 sists in the various devices and inventions for re- 
 ducing the quantity of human labour which enters 
 into the manufacture of different commodities. With 
 every reduction of the labour necessary for pro- 
 ducing a fixed quantity and quality of some staple 
 commodity there should be an outflow of benefit 
 to all concerned. With an increased quantity of 
 production for the same amount of labour there 
 should be an increased share to workman, employer, 
 and consumer ; for the inventor of any better or 
 cheaper mode of producing some particular article 
 of commerce does not make a present of his inven- 
 tion to this set or to that set of men, but, eventually 
 to all men ; his own reward being at all times a very 
 small affair compared to the benefit conferred. I 
 am persuaded that to a great extent the socialist 
 complaint arises from the fact that labour, although 
 eventually it always gets some share of the advan- 
 tages arising from improved or cheapened methods 
 of production, docs not usually get its due share, 
 or, if it docs, cannot do so until its bondsmen have 
 undergone much pain and tribulation. 
 
 Indeed, where the admitted rule of proceeding 
 is ' competition and devil take the hindmost,' what
 
 202 WEALTH AND WELFARE CH. XI. 
 
 else is to be expected ? This doctrine means that 
 the strong, the adroit, the unscrupulous shall take 
 advantage of the weak, the foolish, and the con- 
 scientious. The devil's doctrine this, and very 
 different from the divine doctrine that the strong 
 and skilful man shall govern his weak and foolish 
 brother. You think, perhaps, that education and 
 extension of the franchise will raise the weak man 
 to the level of his strong brother, that the doctrine 
 of competition and spoliation is ultimately true 
 because men shall compete on practically equal 
 terms ; and yet nothing learnt from the teachings 
 of the past or from the experience of the present is 
 so everlastingly true as this : that men are naturally 
 unequal, under all aspects, and that the strong man 
 makes his own terms. If the conditions of the 
 production of wealth in these times are such that 
 unlimited competition is found favourable to it, then, 
 in order to preserve this advantage and yet have 
 regard to just distribution, you should, in common 
 humanity, give back with one hand and with dis- 
 cerning judgment what you have extorted, not 
 justly gained, with the other. And if private 
 charity is a channel insufficiently broad, deep, and 
 equable in the current which it pours back on your 
 weak, foolish, and unfortunate brothers, why not 
 give to an upright and just central authority the 
 power of coming to your aid as, indeed, you 
 already have clone, in theory, by the establishment
 
 CH. xi. THE POOR-LA W 203 
 
 of the poor-law ? In theory only, for, either through 
 the short-sightedness of its framers or their inten- 
 tional sleight-of-hand, it had become, until some 
 twenty-five years ago, a tragi-comedy in which the 
 poor supported the poor, and the rich supported 
 a light burden apparently the ignominy of a false 
 position. 
 
 This seems a harsh thing to say, and to say 
 harsh things rarely serves a good purpose ; still, it is 
 better to be harsh than untrue. The reason com- 
 monly urged in justification of our poor-law in its 
 recent form is this : that by throwing on the poor 
 the burden of support that is, by levying the poor- 
 rate by parishes the poor themselves exercise a 
 repressive influence on the vices and the improvi- 
 dent conduct which lead to pauperism. Doubtless 
 this is so, but how about the riglit to lay the whole, 
 or nearly the whole, of the burden on the poor 
 man's shoulders ? If you hang for sheep-stealing 
 you without doubt exercise a repressive in- 
 fluence on the commision of that crime, but we no 
 longer hang for sheep-stealing, having come to the 
 conclusion that the punishment is too heavy for 
 the offence. Then, at least, there was the satisfac- 
 tion of hanging the thief, whereas until recently 
 you punished a man for not being his brother's 
 keeper a punishment which, it has generally been 
 understood, is best left to the award of a higher 
 than earthly authority. If we think it right that
 
 204 WEALTH AND WELFARE CH. xi. 
 
 the nation as a whole should bear the burden of 
 pauper relief, that burden should, in justice, in 
 common honesty, be borne by each individual ac- 
 cording to his width of shoulder. In this direction 
 we have advanced, but have not yet reached the 
 end. I know of one set of circumstances only 
 in which even our amended poor-law could find 
 justification. Were the incidence of taxation so 
 arranged that the poorer classes should on the 
 whole pay only their due share of it, then it might 
 be expedient that this due share, or a portion of 
 it, should be paid as a poor-rate and levied as 
 at present. That is, the poorer classes would pour 
 into the exchequer, through one channel, more in 
 proportion than the other classes ; and less, in 
 proportion to these classes, through other channels. 
 But what is this due share of taxation to be 
 paid by the working classes? Is it a proportionate 
 share ? proportionate to income, that is, from what- 
 ever source derived. So think many people, and 
 the idea seems a fairly good and obvious one ; but 
 to others it appears a better and essentially juster 
 proceeding to ground taxation on the principle of 
 requiring from every individual an equivalent sacri- 
 fice towards the exigencies of the state. It would 
 of course be impossible in practice to carry this idea 
 out to its logical conclusion, for even where A and 
 B have the same income they have different tem- 
 peraments ; what is a slight sacrifice to A may be a
 
 CH. xi. JUST TAXATION 205 
 
 much heavier one to B ; but then, as the reader 
 may have guessed, I rather deprecate carrying out 
 things all things to strict logical conclusions 
 mere seeming conclusions for the most part. 
 Between class and class it is not so very difficult 
 to arrive at a working notion of equivalent sacri- 
 fices. And this is a matter in which right feeling 
 will stand us in better stead than strict logic. I 
 cannot prove to you that it is a greater sacrifice to 
 a man who has five shillings a day to subscribe 
 one shilling than it is for another who has five 
 pounds a day to subscribe one pound, but you will 
 probably feel that this is the case. You have only 
 to make a reductio ad absurdum to feel it yet more 
 strongly. Suppose the state to require four-fifths 
 of income ; then the one man would be left on the 
 verge of starvation, while the other would still be 
 in possession of every reasonable comfort. We do, 
 as a fact, admit this principle in the assessment of 
 income-tax, but, on the total of taxation, do not 
 carry it out, for the poor, as it is, pay even more 
 than the rich in proportion to income. 
 
 The present moment may seem ill chosen in 
 which to advocate the claims of labour, seeing that 
 of late years the working classes in Great Britain 
 appear on the whole to have obtained a fair share 
 of the increase of national wealth. But they have 
 admittedly obtained this increase at the expense of 
 employers of labour and manufacturers, whose pro-
 
 2o6 WEALTH AND WELFARE CH. xi. 
 
 fits have been very unsparingly cut down, and this 
 is a process which cannot be continued beyond the 
 point at which we have now arrived, without 
 carrying with it serious loss to all parties. There 
 is no inference to which all the evidence we have 
 had more clearly leads than this : that the individual 
 who has obtained the greatest relative share of 
 the national increase of wealth is the consumer 
 pure and simple ; and further, that this tendency 
 manifests itself principally in the increase of num- 
 ber of these consumers, of I use the term with no 
 thought of implying censure the drones in our 
 social hive. 
 
 It is plain that, if this alleged increase is real, 
 we ought to find a greater proportionate increase 
 of population than the general increase in those 
 places to which the class in question resort. The 
 evidence on this point, though indirect, seems to 
 me to bear so strongly upon it, that I give it here as 
 a supplement to that which we had in the chapter 
 on distribution. 
 
 From a dictionary of watering-places I have 
 taken all the seaside and inland watering-places 
 which also find a place on the list of urban 
 sanitary districts contained in the census report 
 for 1 88 1, and I have compared their population 
 with that of 1871. By this means we take in 
 pleasure and health resorts unbiassed by any 
 leaning of our own, and also seal one source of
 
 CH. XI. INCREASE OF CERTAIN CLASSES 207 
 
 serious error : that of making our deduction from a 
 comparison of the population of places which may 
 have become fashionable, at the expense of others, 
 since 1871. 
 
 Watering Places 
 
 Population in 
 
 1871 I 1881 
 
 Percent- 
 age 
 Increase 
 
 Ashbourne 
 
 3,211 3,485 
 
 8'5 
 
 Bath 
 
 52,548 51,814 
 
 i '3' 
 
 Bournemouth 
 
 5,906 ; 16,858 
 
 1815-0 
 
 Buxton 
 
 3,717 6,025 
 
 62 'o 
 
 Brighton 
 
 92,469 107,546 
 
 l6'2 
 
 Cheltenham 
 
 41,923 43,972 ' 
 
 4'7 
 
 Eastbourne 
 
 10,499 22,014 
 
 i op's 
 
 Folkestone 
 
 12,698 18,816 
 
 48-0 
 
 Great Yarmouth 
 
 41,819 46,159 
 
 10-7 
 
 Harrogate 
 
 6,903 9,482 
 
 \6 -2 
 
 Harwich 
 Hastings 
 Isle of Wight (Cowes, Ryde, San- 
 down, Shanklin, Ventnor) . 
 Ilkley 
 
 6,097 7,842 
 29,291 42,258 
 
 28,244 32,058 
 2,511 : 4,7i6 
 
 28-0 
 44-0 
 
 i3-4 
 88-6 
 
 Lowestoft 
 Margate 
 Matlock 
 
 15,246 ' 19,696 
 11,995 r 6,o3o 
 1,386 1,698 
 
 29-0 
 33 '3 
 
 22 '^ 
 
 Malvern 
 
 Z.6QT. $.84.6 
 
 2-6 
 
 Ramsgate 
 
 19,640 22,683 
 
 I C--2 
 
 Scarborough 
 
 24,259 30,504 
 
 26 f o 
 
 South Shields 
 
 45,336 56,875 
 
 21 6^7 2A. 767 
 
 25-4 
 
 Tunbridge \Vells 
 
 IQ,4.IO 24,3O8 
 
 2C '2 
 
 Tynemouth 
 
 38,941 44, i 18 
 
 I T. 'A 
 
 \Yeston-super-Mare 
 
 10,568 j 12,884 
 
 21 'Q 
 
 \\ eymouth 
 
 i^,2<;9 i;,7i; 
 
 T. "7 
 
 Windermere 
 
 909 1,260 
 
 ^8'4. 
 
 
 
 
 Total 
 
 566,235 687,458 
 
 21-4 
 
 From this table we see that, while the total 
 population has increased in the ten years by a little 
 
 1 Decrease.
 
 208 WEALTH AND WELFARE CH. XL 
 
 more than 10 per cent, the population of places to 
 which the leisured classes resort has increased by 
 2 1 '4 per cent. This increase is probably, to some 
 extent, due to the general increase of urban popula- 
 tion at the expense of agricultural districts to a 
 very slight extent, however, for if we turn back to 
 the chapter on distribution, we see that the decrease 
 of the number of agricultural labourers between 
 1871 and 1 88 1 was but 27 per cent, in proportion 
 to population. 
 
 All schemes for the reckless confiscation of 
 property, legally, though never so immorally, ac- 
 quired, carry their own condemnation along with 
 them ' force from force must ever flow,' force or, 
 worse, fraud but it should be within the power and 
 competency of government to devise such legisla- 
 tion as it may deem fit to restrain any particular 
 class from unduly profiting at the expense of others. 
 Private charity restoring with one hand what 
 we have consciously or unconsciously extorted 
 with the other cannot cope with the matter, 
 and, what is more, will not, in the great mass of 
 cases. 
 
 In clue season, our community of real bees 
 removes its drones by the simple but somewhat 
 barbarous expedient of killing them. Evidently, 
 the humane sentiment, or its analogue in the bee 
 mind and heart, is not highly developed. In this 
 respect at least, if not in fertility of resource, we
 
 CH. xr. PROGRESSIVE INCOME-TAX 209 
 
 ma}- flatter ourselves that we are well ahead of bees. 
 An indignant humanitarian, whose zeal outruns his 
 discretion, makes the observation that to him the 
 human drones' action bears less resemblance to the 
 action of the real Simon Pure than to that of the 
 predator)^ biped who appropriates the proceeds of 
 the summer toil of our winged community, leaving 
 them only as much of it as will enable them to 
 exist, reproduce, and set to work again the follow- 
 ing spring an interesting application of a certain 
 golden rule of our political economists. Our friend 
 is more indignant than just, though it must be con- 
 ceded there is a spice of truth in his remark. 
 
 English radicals are for a drastic settlement of 
 this matter. They make such propositions as that 
 of imposing a progressive income-tax, which shall 
 rise finally to a confiscation of fifty per cent, of 
 incomes above a certain figure. We need not, I 
 think, attach very much weight to one of the prin- 
 cipal objections urged against this scheme, that the 
 imposition of such a tax would militate strongly 
 against the accumulation of capital, for a nation's 
 welfare is far more dependent on the wise spending 
 of capital than on its accumulation. A very great 
 portion of our accumulated capital now goes to 
 creating and satisfying a number of vain and foolish 
 desires which involve a lavish wastefulness of human 
 labour. A far stronger objection to the radical 
 proposition is that it would tend to hamper the 
 
 P
 
 210 WEALTH AND WELFARE CH. xi. 
 
 necessary industries of the nation. In these days 
 of gigantic industrial operations, when a great 
 reserve of capital (which is saved income), massed 
 in single hands, is necessary to ward off ruin during 
 unpropitious seasons, such a tax, levied on the 
 profits of trade, would so cripple those engaged in 
 it as to act in a manner most prejudicial to the 
 national interests. Speaking generally, the main 
 objection to a graduated income-tax rising to the 
 confiscatory stage comes to this, that you intercept 
 large masses of capital without any regard to the 
 way in which that capital would have been applied 
 a most serious consideration when the tax ceases 
 to be a few pence in the pound, and becomes a 
 matter of shillings. 
 
 Whichever way we look at commerce and trade 
 policies the all-important question repeats itself : 
 Into whose hands docs the accumulation of capital 
 tend, and how does commercial legislation affect 
 the disposal of it ? As those hands are clean or 
 unclean, busy or idle, so will the capital accumulated 
 in them be well or ill applied. As the commercial 
 legislation of a country tends to favour the man 
 \\ ho ' corners ' or the man who trades (in the modern 
 English, not the derivative, sense), so that legisla- 
 tion, other things equal, will be bad or good. This 
 is a matter much more worthy of study than arc the 
 u.>ual problems which occupy the political econo- 
 mist. The conclusion to which we come is that
 
 CH. xi. BEES AND DRONES 211 
 
 the present conditions of distribution arc unduly 
 favourable to those not directly engaged in produc- 
 tion. We naturally inquire, then, whether it is in 
 any way possible and expedient to alter those con- 
 ditions, or minimise their effect by taxing undue 
 benefit. 
 
 The direct method (change of conditions) is 
 none other than the application of protection. It 
 is needless to say more here concerning this remedy, 
 save to repeat that, if applied, it should be so applied 
 as to cause the least possible detriment to the 
 nation's total production of wealth. If it can be 
 so applied as to favour the increase of production 
 (which seems not impossible), we should obviously, 
 in the existing circumstances, accomplish two 
 desirable objects : increase of production and just 
 distribution of it. 
 
 The indirect method is much more difficult of 
 application. In the first place there is an almost 
 insuperable objection to the inquisitorial action it 
 would entail on the government, to say nothing of 
 the difficulty of separating drone from bee for 
 individuals run through a complete gamut from bee 
 to bee-drone, drone-bee, and drone pure and simple. 
 A scheme, to be theoretically perfect, should tax 
 not only the drone but the bee in its drone capacity 
 An extension of the principle of taxing luxuries 
 would go some way towards fulfilling this object, 
 and would be much less objectionable than any
 
 212 WEALTH AND WELFARE CH. xi. 
 
 increase of income-tax, for reasons already given. 
 As to the particular luxuries the consumption of 
 which, or the indulgence in which, might be made 
 productive of revenue, I hazard no suggestions. To 
 each proposition it would be easy to raise a score 
 of objections ; but the principle being already 
 admitted, its extension would not fail for lack of 
 ingenious applications. 
 
 Another plan of gentle confiscation (I have no 
 wish to sail these paper boats under false colours), 
 another resource lies in the imposition of a heavier 
 legacy duty on what I will call ' paper property,' 
 on what may be defined as ' orders on the property 
 or productive industry of others,' a definition which 
 excludes title-deeds and other documents certifying 
 the possession of lands, houses, &c., that is, certifying 
 real ownership and implying personal interest and 
 supervision, but which I mean to include currency, 
 bonds, shares, and scrip of all kinds as a rough 
 definition, say all shares, &c., quoted ' on 'Change.' 
 The objection to a heavy legacy duty on actual or 
 real property (I use the term ' real ' not in its legal 
 but in its ordinary sense), exclusive of paper, lies in 
 the excessive inconvenience and loss beyond that 
 due to the immediate operation of the tax which 
 it may entail on legatees by bringing about a ' wind- 
 ing-up ' of useful and profitable business, or in 
 causing forced sale of property, notwithstanding 
 facilities of payment afforded. The effect would
 
 CH. xi. ' PAPER' PROPERTY 213 
 
 be analogous to that sometimes brought about in 
 countries where the law obliges a man to leave 
 his property equally divided among his children. 
 Where the children cannot come to any satisfac- 
 tory private arrangement by which one of them 
 undertakes and continues the father's business, the 
 inevitable result is that the property, business, 
 engine of production, or what not has to be sold 
 frequently at great loss and the proceeds of sale 
 divided among them. Now, of course, there is no 
 real difference between scrip and other property, so 
 far as the individual who owns it is concerned he 
 can at any moment convert his paper into capital 
 but, in the measure in which he owns scrip, he is 
 clearly a drone, i.e. one who lives on the proceeds 
 of others' industry. He may be a drone also in 
 some other measure, but we have no means of 
 testing it. It is not necessarily more just to tax 
 this kind of property more heavily than any other. 
 A landlord who takes his rent, but takes no interest 
 in his tenants' welfare, nor occupies himself in any 
 way to increase the value and productiveness of his 
 property, is as completely a drone as the scripholder, 
 but there is no means of showing this landlord to 
 be a drone without making excessive use of inquisi- 
 torial powers, which all of us would resent. 
 
 Landlords, farmers, manufacturers, and others 
 occasionally ' lock up ' their capital in scrip for a 
 short time, preparatory to re-stocking in their
 
 214 WEALTH AND WELFARE CH. xi. 
 
 several businesses. A man dying while his capital 
 was thus temporarily locked up, considerable in- 
 justice would be done to his heirs by levying the 
 heavy duty on the whole of the scrip thus tempora- 
 rily held. Doubtless legal ingenuity could help 
 us out of that difficulty. ' But Avhy should not I, 
 towards the close of an industrious and well- 
 ordered life, retire from my business and live in 
 comfort on the proceeds of my savings, whether 
 invested in scrip or in any other kind of property ? 
 ' Why not, indeed, and, if it please you, so you 
 shall, without let or hindrance.' ' But there is my 
 son- why should he suffer because I prefer to invest 
 my savings in scrip rather than in land? Is this, 
 then, one of the sins which arc to be visited on the 
 children unto the third and fourth generation ? ' 
 ' Yes, your son must pay the succession dues of 
 inherited droneship.' ' But he may be an acute 
 lawyer, or a skilled physician, or an able soldier ! ' 
 ' Just so, and therefore I do not propose to tax him 
 in his character of lawyer, physician, soldier, or in 
 anything but his inherited character of drone, so 
 far as that may be measured by his inheritance of 
 scrip, and in that character only because the cir- 
 cumstances of the time make him an unduly 
 favoured individual.' ' Well, I consider your tax a 
 most iniquitous one, and I would do my best to 
 evade it.' 
 
 Yes, this is the practical difficulty. Such a
 
 CH. XL l PAPER^ PROPERTY 215 
 
 duty, involving an invidious selection, would be 
 evaded by a shuffling of property, pretended sales, 
 collusive action of various colours. These would 
 be resorted to more or less according to the general 
 sentiment of people touching the justice of such a 
 tax. But then, in England at least, it could not 
 well be imposed in the face of a general and en- 
 lightened opposition to it. So we get into a kind 
 of vicious circle of reasoning, from which there is 
 no escape but by asking people to be good enough 
 to consider the justice and expediency of increasing 
 taxation in this direction and lightening it in others, 
 and, if they think it worth while, to come to a con- 
 clusion on the matter. 
 
 But of the general effect of a legacy duty thus 
 increased ? This is a point which would naturally 
 influence people's judgment on the question of 
 justice and expediency. To impose a tax on any 
 kind of property is to bring about a depreciation of 
 its value, always with the proviso that the tax is 
 really borne by the holders of the property in ques- 
 tion. Were an additional legacy duty of, say, ten 
 per cent, (irrespective of the degree of relationship 
 between testator and legatee) imposed on scrip 
 to-morrow, the price of all these acknowledgments 
 of debt would fall each of them to a point at which 
 the new price would be held by buyers as compen- 
 satory for the loss entailed on their legatees by the 
 duty. But it is evident that this future loss to sue-
 
 216 WEALTH AND WELFARE CH. XL 
 
 cessors would in the vast majority of cases be dis- 
 counted by possessors at an extremely low rate. 
 This immediate loss would of course be borne by 
 present holders, but beyond this the tax would 
 really fall on the successive inheritors.
 
 CH. xii. UNRESTRICTED COMPETITION 217 
 
 CHAPTER XII. 
 
 INTERNAL COMPETITION. 
 
 Evils of unrestricted competition Rival companies The London 
 cabmen Local control of competition. 
 
 ON a grand scale the question of the relative 
 merits of free trade and protection is nothing else 
 than that of the relative merits of free and con- 
 strained international competition. If there were 
 the least probability of our arriving ' within a 
 measurable distance ' of the world's, or even of 
 European, acceptance of the former system, it 
 might not only be interesting but useful to specu- 
 late on its probable effect on the increase or de- 
 crease of general production. It docs not at all 
 follow, as many people seem to think it does, that 
 international free trade would lead to increased 
 production, for if what I have said in a former 
 chapter be true, it must tend to the depopulation 
 of naturally poor countries. What we may think 
 with regard to this point is not of much conse- 
 quence free international competition is a long way 
 off from us. But even from the economical stand-
 
 218 WEALTH AND WELFARE CH. xn. 
 
 point there are good reasons for us to modify our 
 conception of the blessedness of unrestricted in- 
 ternal competition. A method which leads to 
 wasteful expenditure or wanton destruction of 
 capital must, in the measure of this tendency, be 
 a bad method. Unrestricted competition does, in 
 certain circumstances, lead to this waste or destruc- 
 tion. So long as the burden of loss is borne by 
 those who owned the wasted capital, nothing can 
 well be done ; it is not easy, nor is it generally ex- 
 pedient, to interfere with an individual who foolishly 
 ruins himself. But the case is widely different when 
 such persons, driven by the insatiable desire to 
 amass wealth at all hazards, bring to ruin, or inflict 
 severe loss on, quite innocent persons. Reckless 
 competition opens a way to such people, of which 
 they are not slow to take advantage. I have in 
 my mind an actual case which will illustrate my 
 meaning, and which, from the nature of the con- 
 ditions under which competition is frequently ini- 
 tiated in these days, is fairly typical of others. 
 
 The conditions to which I refer arc peculiarly 
 characteristic of the age, of the highly developed 
 commercial activities of the principal European 
 nations : a great accumulation of capital and an 
 insufficiency of remunerative employment for it. 
 From such a state of things arise occasional and 
 destructive conflicts between holders of capital 
 for the sake of tfcttinir it invested in remunerative
 
 CH. xii. RIVAL COMPANIES 219 
 
 business, conflicts from which the direct advantage 
 sometimes derived by the local public is more than 
 counterbalanced by the indirect loss inflicted on the 
 nation. 
 
 In one of our principal seaports the conveyance 
 of passengers from one side of the harbour to the 
 other was done till some twenty years ago by 
 means of manual labour, by sail and oar. A com- 
 pany was formed to establish steam traffic with 
 launches between the two shores ; but in order to 
 save from loss the watermen whose living depended 
 on the conveyance of passengers, as many of the 
 former as possible were taken into the company's 
 service, and given facilities to sell their stock-in- 
 trade and invest the proceeds in the new concern. 
 The undertaking proved successful, was apparently 
 well managed, and paid good dividends. Recently, 
 however, a rival company has made its appearance 
 and brought its steam launches into competition 
 with those of the pre-established company ; it has 
 reduced the passage money to one half the ori- 
 ginal fare, a reduction which the old company was 
 forced to adopt in order to retain a share of the 
 traffic. Under the present conditions both com- 
 panies are doing a bad business, but the object of 
 the new one being evidently to oust its rival, it is 
 probable, having no doubt estimated the cost before- 
 hand, that it will be successful in its endeavours, 
 with the result that the pre-established company
 
 220 WEALTH AND WELFARE CH. xn. 
 
 will have to get rid of its stock-in-trade at a 
 ruinous loss, thus bringing to penury the boatmen 
 who invested (almost of necessity) their savings in 
 the undertaking. This, from the purely economical 
 point of view, does not seem to be a very admir- 
 able result of competition, and from any other 
 standpoint is nothing less than execrable, involving 
 as it docs a reckless disregard of the welfare of 
 others. 
 
 It is very probable indeed that the first company 
 of which we have been speaking was ' trading' on 
 its freedom from competition, was not doing its 
 work as well or as cheaply as it should ; but this 
 seems a very insufficient reason for permitting the 
 second one to set to work, and by virtue of greater 
 means to drive the first out of the field. To the 
 unsophisticated and perhaps ignorant outsider, it 
 docs seem desirable that the local authorities should 
 have had power to prevent this misapplication of 
 competition, excellent when kept within reasonable 
 bounds. The mere threat of permitting a rival 
 company to compete would probably have been 
 sufficient to bring the members of the old one to 
 amend their ways. Once warned, if they persisted 
 in their evil practices, let Nemesis in the shape of 
 a rival company overtake them. But to trust all 
 enterprise to a system of reckless competition, to 
 permit one set of men to outstarve another and less 
 well provided set in order that the public may
 
 CH. xii. THE LONDON CABMEN 221 
 
 derive some ofttimes insignificant advantage by 
 this internecine strife, and to justify such action on 
 the plea of this advantage, is more worthy of a 
 race of cannibals than of a great and civilised 
 nation. Competition in these cases is, after all, 
 really beneficial to the public only if it enforces a 
 permanently better service at the same or a less 
 cost. Where it does not do this, its effect is not 
 unlike that of the foreign export bounties. The 
 public reaps a temporary benefit at the cost of the 
 ruin of a section of it, and when the ruin is con- 
 summated the public finds itself temporarily again 
 at the merc\ r of its new purveyors. 
 
 We see the ill effects of another form of unre- 
 stricted competition in the present condition of the 
 London cab-drivers. There are now some 11,000 
 cabs in the metropolis, and nearly 15,000 licensed 
 cab-drivers. The competition of drivers for cabs 
 thus enables cab-owners to exact from the drivers 
 so high a cab-rent (averaging from 14^. to iSs. a 
 day) that these men have the greatest difficulty, as 
 a body, in making a living out of their occupation. 
 A deputation connected with the Amalgamated 
 Cab-drivers' Society waited upon the Home Secre- 
 tary (July 29, 1887) with a request that the issue 
 of drivers' licences might be suspended until such 
 time as the requirements of the public should render 
 necessary an issue of more. To this request the 
 Home Secretary answered that, in effect, what was
 
 222 WEALTH AND WELFARE CH. xn. 
 
 required of him was to put the screw on cab-owners 
 in order to oblige them to hire out their cabs at a. 
 lower rate, and that this would be detrimental to 
 the public. Inferentially, I suppose, w r e should get 
 a less good class of cabs. The Times, in a leading 
 article devoted to the consideration of this matter, 
 is at one with the Home Secretary, upholds his 
 thesis, and finds that to grant the request would be 
 to go against modern notions, and would be very 
 unfair to those who would wish to hire cabs on the 
 present conditions, hard though they may be. The 
 Times admits that the case of the London cabmen 
 is a hard case, that they are on the whole a deserv- 
 ing and well-behaved body of men, and points out 
 that their difficulties spring mainly from the fact 
 that their ranks are swelled by an influx of novices 
 of all kinds, artisans out of work, small tradesmen 
 whose affairs have gone to the bad, servants out of 
 employment, &c. We cannot, however, says the 
 Times, admit an oligarchy of cabmen to rule over 
 us in this matter ; there are four cab-drivers to 
 every three cabs, and they would like to be paid as 
 if there were three drivers to every four cabs. 
 
 No doubt this is what the cabmen would like, 
 but it is not what they ask for. They ask, not that 
 competition shall be abolished, but that it shall 
 be restricted within reasonable bounds. There is 
 surely some compromise possible between the two 
 courses, between the three-cab and four-driver
 
 CH. xii. UNRESTRAINED COMPETITION 223 
 
 system, and the four-cab and three-driver system, 
 between good cabs with lean drivers, and bad cabs 
 with fat ones. If the fact of there being 15,000 
 drivers to 1 1 ,000 cabs makes life to the cabmen a 
 very hard affair, as the Times acknowledges, and 
 if at the same time efficiency of public cab service 
 necessitates some degree of competition, might we 
 not arrive at a satisfactory solution of the difficulty 
 by having, say, 13,000 drivers to the 11,000 cabs? 
 The cabmen who know their business are hampered 
 by the amateur cabmen who do not know it, by 
 numbers of the unemployed who imagine that the 
 possession of a licence carries with it the qualifica- 
 tions necessary to drive a cab properly from any 
 one part of London to another. Perhaps the limi- 
 tation of issue might take the form of keeping out 
 these incompetent persons ; or is it beyond the 
 resources of modern civilisation to devise means 
 by which this might be accomplished ? 
 
 To anyone who w T ill look a little beneath the 
 surface of things, it will grow clearer and clearer 
 that unrestrained competition (which is not liberty, 
 but licence) is an evil, and one which, like a 
 hidden cancer, must increase in the gangrenous 
 malignity of its attack on the moral sense of the 
 nation. Men are naturally prone to carelessness 
 and idleness, and therefore emulation, competi- 
 tion, is found to be a necessary spur to action and 
 enterprise ; but then come our principle-mongers
 
 224 WEALTH AND WELFARE CH. xn. 
 
 who would persuade us that, because competition 
 is a good thing, we cannot have too much of it. 
 Conduct, of whatever description, which takes for 
 its basis and for its justification the selfishness and 
 cupidity which is implanted in men's hearts inevit- 
 ably carries moral degradation in its train. There 
 is no escape from such a conclusion, unless expe- 
 rience is a delusion, our better feelings a snare, and 
 the world-drama of ages a phantasmagoric dream 
 from which we are but just awakening. 
 
 It will be asked, To what limit are we to push 
 interference with open competition ? To the limit 
 which common-sense and honesty of purpose shall 
 in every case point out to us ! But are we endowed 
 with these qualities in the measure sufficient to 
 carry this out ? For my part, I cannot be brought 
 to believe that we are so morally plague-stricken 
 as a negative answer to this question, if a true 
 answer, would make us. I have a firm hope that, 
 if the great mass of Englishmen clearly realised 
 the meaning and the bearing of unrestricted com- 
 petition, the general moral sense would be offended 
 by it, just as the individual moral sense is now, in 
 many cases, so offended. And this because that 
 general sense has not so much been perverted 
 as lulled to sleep by false maxims of political 
 economy lulled in the lap of Sleep, not lying 
 corrupt in that of Sleep's brother, Death. 
 
 But how carry this out in practice? Why, here
 
 CH. xii. LOCAL GOVERNMENT 225 
 
 we may perhaps find help in that decentralisation 
 of affairs and delegation of authority which Mr. 
 Chamberlain and his friends are so anxious to bring 
 about extension of local government, that is, the 
 conduct of affairs by the persons best acquainted 
 with them, by those who have their right conduct 
 most at heart. It may be objected that to give 
 local bodies the power to prohibit competition is 
 to open a door to jobbery and corruption. Local 
 bodies, or some of the individuals constituting 
 them, it will be said, will to a certainty be 
 pecuniarily interested, or will have friends and 
 connections thus interested, in the concerns to be 
 adjudicated on ; local bodies are prejudiced, narrow- 
 minded, vestry-minded ; whereas members of par- 
 liament are free from local prejudices and are not 
 pecuniarily interested in local concerns. Yes, but 
 members of parliament are ignorant of local affairs, 
 they have no local knowledge, and their time 
 should be taken up with considerations of national, 
 not parochial, policy. Then again, if a mistake is 
 made by the parliament men, who cares very much 
 about it, save the immediate sufferers ? The 
 government will not go out on a question of steam- 
 launches or tramways ; but if the local authority 
 makes a mistake, the local population will promptly 
 turn out that local authority, and put in its place 
 some other, more careful, less venal authority, as 
 the case may require. In brief, may it not be with 
 
 Q
 
 226 WEALTH AND WELFARE CH. xn. 
 
 regard to this matter of competition that we have 
 fallen into error through attempting to decide it 
 by considerations of an apparent, rather than a 
 real, utilitarianism ? too forgetful, perhaps, that 
 morality is the groundwork of the finest and truest 
 kind of utilitarianism. Try what you will, you 
 cannot separate in you the trader from the man, 
 without injury first to the man, and then, inevitably, 
 to the trader. A nation, or its rulers, may play with 
 the easy catch-words of a shallow and sophistical 
 worldly wisdom, but the ' Eternal which makes for 
 righteousness,' steadily, changelessly, inevitably, 
 will in the end prove too much for it, or for them. 
 There was a certain custom among the Lacedae- 
 monians, so we learn from Mitford, 1 which is finely 
 illustrative of, and was highly ministrant to, the 
 survival of the fittest. We now look back upon 
 this custom and find it to be cruel, and not only 
 cruel, but carrying with it the seeds of a disease 
 fatal in the end to the development of the highest 
 attributes of man. 
 
 This also was a system of competition for the 
 right to live, but in some respects it was perhaps 
 less barbarous than the present one. 
 
 1 ' All children, presently after birth, were examined by public 
 officers appointed for the purpose ; the well-formed and vigorous 
 only were preserved ; those in whom any defect either of shape or 
 constitution appeared were exposed without mercy to perish in the 
 \\ilds of Mount Taygetus.' Mitford 's Greece, vol. i. p. 307.
 
 CH. xin. INLAND REVENUE 
 
 CHAPTER XIII. 
 
 OTHER PEOPLE'S POCKETS. 
 
 Morals and the Inland Revenue Taxation and individual freedom 
 Politics and morality War and the National Debt Cost of 
 the Seven Years' War to Prussia. 
 
 THERE is a certain humility of virtue, or virtuous 
 humility I cannot quite make out which in the 
 phraseology which our rulers in general, and our 
 Chancellors of the Exchequer in particular, adopt 
 when they speak of the principles by which they 
 are guided in the imposition of taxes wherewith 
 to furnish the national purse. Far be it from them 
 to set themselves up as judges of what is good or 
 bad, wholesome or unwholesome, right or wrong, 
 for people to spend their money on. What they 
 (our rulers) have to consider and decide is how to 
 replenish the purse with the least inconvenience to 
 the nation at large. 
 
 In March last (1887) Mr. Goschen delivered a 
 characteristic and amusing speech at the Mansion 
 House, in which he described the difficulties with 
 which an unfortunate Chancellor of the Exchequer 
 
 Q 2
 
 228 WEALTH AND WELFARE CH. xm. 
 
 is beset, the perpetual communications received 
 from amateur financiers who desire to swell the 
 national purse at the expense of those whose way 
 of living is not their way, who prefer cats to 
 dogs, or parrots to either, who consider it more 
 moral as well as more healthy to drink tea than 
 ale, and to listen to the inspiring strains of the 
 ambulatory German brass band than to the daily 
 roulade and faltering quaver of the street organ. 
 ' There is this curious fact to be learnt from my 
 correspondence, that social reformers wish to 
 utilise the Inland Revenue as a means of carrying 
 out their views. There arc, it appears, two classes 
 of opinion as to the imposition of taxes. Accord- 
 ing to the one, taxation ought to be imposed in 
 such a way as to produce the largest revenue in 
 the most convenient manner and with the least 
 frictio i. That, of course, is the orthodox view, 
 accepted in the established departments. Another 
 school, however, think that taxes ought to be 
 organised so as to produce social reform, and that 
 those whom the}- deem to be wicked ought to be 
 made to pay high taxes, while more virtuous men 
 ou<iht to be relieved. ... I admit that that is a 
 
 o 
 
 lofty and philanthropic view, but it is not the 
 traditional view of the matter, which is that the 
 revenue is to be the main point which the Chan- 
 cellor of the Exchequer has to take into con- 
 sideration.'
 
 CH. xin. TAXATION 229 
 
 This is very excellent sense. Indeed, the whole 
 speech is conceived in a vein of sound common- 
 sense and good-natured banter which is character- 
 istic of the speaker. But is it not after all likely 
 to lead people astray somewhat from the considera- 
 tion of forces which do, as a matter of fact, very 
 greatly modify from time to time the traditional 
 views of the established departments ? The busi- 
 ness of the Chancellor of the Exchequer is ' to 
 produce the largest revenue in the most convenient 
 manner, and with the least friction.' So we under- 
 stand why there is now a brewer's, but not a 
 baker's, licence not, in this case, because it is 
 more convenient, but because there is less friction 
 than there would be by the opposite arrangement. 
 But why is there less friction ? Because people 
 would not stand a tax on a prime necessary of 
 life as quietly as one on a necessary which occu- 
 pies quite a secondary position, because the former 
 tax would cause a feeling of irritation, a feeling 
 of rebellion at its injustice. So that at the root 
 of our notion of convenience and absence of fric- 
 tion we find a notion of justice, of equity. In 
 truth, then, governments and Chancellors of the 
 Exchequer do in a measure take upon themselves 
 to decide that it is more necessary, and, generally 
 speaking, more right, for people to spend their 
 money on some things than on others. The only 
 reason for making publicans (and sinners?) pay
 
 230 WEALTH AND WELFARE CH. Xlll. 
 
 for a licence, and not bakers, is that it is better 
 to hamper the manufacture and sale of a compar- 
 atively unnecessary commodity than that of a 
 necessary one. In much the same way and for 
 much the same reasons the Chancellor of the Ex- 
 chequer decides always with a becoming humility 
 of which I am deeply sensible that if I buy pug 
 dogs for pleasure I shall be taxed, but if I buy 
 sheep dogs for use I shall not be taxed ; and if I 
 purchase playing-cards or gold plate I shall be 
 taxed, but not if I purchase Christmas cards or 
 books. In the latter case I have to pay if my taste 
 lies in one direction rather than in the other ; it 
 cannot be urged that there is here any question of 
 convenience ; a very light tax on books would bring 
 in more than that on gold plate, and would be levied 
 with the greatest ease. The real reason, the real 
 motive of choice, is to be traced to the general and 
 natural feeling that a taste for playing-cards and 
 gold plate is of more doubtful public value than a 
 taste for Christmas cards and books. Cleanliness 
 being next unto godliness, the government raises 
 no revenue on the use of soap and water ; and god- 
 liness itself being of inexpressible value to us, 
 we are not merely left to seek it undeterred by 
 taxation, but, until quite recently, were actually 
 taxed ' in order that we might surely be provided 
 with it. Many people rebelled against this parti- 
 1 And, indirectly, are so even now.
 
 CH. xiii. PUBLIC SERVANTS 231 
 
 cuiar tax, but that was not so much because they 
 did not set store by godliness as because they did 
 not rejoice in the form in which it was supplied 
 to them. 
 
 All this is highly commendable, but it is a little 
 perplexing when considered in relation to the 
 modest disclaimers of our statesmen. The fact is 
 that in no branch of legislation can the government 
 quite divest itself of its paternal character. It is 
 in some measure the guardian of the nation's wel- 
 fare, and as the public morality is inextricably 
 bound up with its welfare, it follows that our rulers 
 must in some measure be the guardians of public 
 morality. Too great an assumption of humility on 
 the part of our public men in their relations with 
 the electorate seems to be very undesirable. We 
 hear too much of their being the nation's servants, 
 and not enough of their being its leaders. In the 
 best sense of the word they are servants of the 
 public ; but perhaps it would not be amiss if some 
 of them remembered that a servant gradates to a 
 menial, and that a menial sometimes becomes a 
 pander. The politician who, contrary to the best 
 traditions of English statesmanship, substitutes 
 delegation for representation, and blindly follows 
 instead of wisely leading, is in danger, consciously 
 or unconsciously, of becoming a pander. 
 
 We delude ourselves when we say that it is 
 not the business of government to look after the
 
 232 WEALTH AND WELFARE CH. xm. 
 
 people's morals. The great mass of the electorate 
 expect and require of the government that it shall 
 from time to time, as the occasion arises, embody 
 measures for the preservation of public morality ; 
 the real objection to such measures being, not that 
 they run counter to some imaginary principle, but 
 that it is often difficult to arrive at a wise prescience 
 of their effects. When we vote for a parliamentary 
 candidate, we do not merely satisfy ourselves that 
 he is a sensible man who will not dip his fingers into 
 the public money bag ; we are also a good deal con- 
 cerned as to his general moral \vorth, though we 
 may not say so in so many words. Our public 
 men are well aware of this, and of the importance 
 of at least keeping up the appearance of private 
 morality. The reader need scarcely be reminded 
 that only the other day one of them voluntarily 
 retired, for a time at least, from public life, because 
 his private moral reputation had in one particular 
 only suffered, whether justly or unjustly is not to 
 the point. 
 
 So, it seems, even with regard to taxation we 
 must take our statesmen's disclaimers aim grano 
 sails. A truly modest man is often not aware of 
 his own worth. These modest men have literally been 
 doing good by stealth, and may one day blush to 
 find it fame. Or would it perhaps be a truer 
 statement of the case to say that each in turn has 
 been le medecin malgre lui of the nation's moral
 
 CH. xin. THE NATIONAL DEBT 233 
 
 condition ? However this be, we may confidently 
 say that taxation, considered apart from its direct 
 and obvious function, constitutes a force which, tem- 
 perately and consistently wielded, in a genuinely 
 unpharisaical spirit, makes for the health and 
 happiness of the nation and can we dissociate 
 morality from health and happiness ? 
 
 On this subject of other people's pockets, and 
 what various individuals propose to do with their 
 contents, I would take the opportunity to call the 
 reader's attention to a few facts in connection with 
 the National Debt, and to invite him to reflect a 
 little on them. They are not new facts or recon- 
 dite, by any means ; anyone who will may glean 
 them for himself from the plentiful harvest in the 
 ' Citizen's Series,' the special field of inquiry being 
 'The National Budget ' the}- may even be gathered, 
 in a rough way, from the pages of that marvellous 
 publication, ' Whitaker's Almanac.' It is w r ith a 
 certain sense of sorrow and shame that I have to 
 acknowledge I have been quite unsuccessful in my 
 attempts to devise a satisfactory scheme for the 
 rapid extinction of the National Debt. It has, 
 however, occurred to me perhaps to others also 
 that this desirable object might be furthered by the 
 simple expedient of paying a larger yearly sum 
 towards amortisation. 
 
 On January 5, 1815, towards the close of 
 the Napoleonic wars, the total amount of the
 
 234 WEALTH AND WELFARE CH. xm. 
 
 National Debt \vas 900,436,0007. On April 5, 
 1885, the debt amounted to 742,282,41 1/. Thus 
 in a period of seventy years the nation has reduced 
 its debt by about I 5o,ooo,ooo7. In 1861, we paid 
 as cost of interest and management of the debt, 
 including the sinking fund, 26,328,2077. In 1885 
 \ve paid for the same purpose 28,883,6737 In the 
 period included between these two years the popu- 
 lation of Great Britain has increased nearly thirty 
 per cent., and her wealth probably more than fifty 
 per cent. The amount of money which has been 
 paid to the successive bondholders by the succes- 
 sive generations of Englishmen since the debt was 
 first established may be imagined when we are told 
 that in the period of twenty-five years which we 
 have been considering the sum thus paid amounts 
 to some 630,000,0007 
 
 Let us look at the principal items which have 
 gone to swelling our indebtedness : - 
 
 1. Period of the Seven Years' War (1756-63 ; 
 war expenditure continued till 1766). Total cost of 
 war, estimated by deducting the average military 
 peace establishment, 82,623,7387. 
 
 2. Period of the American War (1776-85). 
 Total cost (estimated in the same way), 97,599,4967. 
 
 3. Period of the Napoleonic wars (1793-181 5). 
 Total cost (estimated in the same way), 83 1 ,446,4497. 
 
 These are not the amounts by which our 
 .National Debt was increased during those periods.
 
 CH. xin. DERT AND POSTERITY 235 
 
 A portion of the necessary expenditure came out 
 of contemporary pockets. 
 
 The grand total of war cost since 1688 always 
 deducting the average peace establishment is 
 1,258,681,0007. Of this 864,260,82/7. has been fur- 
 nished by means of loans. 
 
 These things are generally known, at least to 
 the Englishman of average education and informa- 
 tion, but I question very much whether they are 
 generally thought about. Do the great majority 
 of Englishmen realise all the meaning that lies in 
 these facts and figures as well as they realise a 
 part of it ? Here, at all events, is one rather sad 
 meaning : The people of Great Britain, or rather 
 their rulers (for the great mass of the people, 
 including the educated classes, scarcely compre- 
 hending the exact nature of the transactions, can- 
 not be held morally answerable for their adoption), 
 in order that everyone during certain periods of 
 danger and disaster might take life a little more 
 easily by avoiding some of the hardships entailed 
 by wars not always just or necessary, condemned 
 the future generations to pay to the lenders and 
 their successors (for the most part non-producers 
 of wealth) a sum which, before complete discharge 
 of the debt, will amount to a figure which it baffles 
 us to estimate, and which we cannot well realise in 
 imagination. The English people, or rather their 
 foolish or knavish rulers, instead of stoically endur-
 
 236 WEALTH AND WELFARE CH. xm. 
 
 ing misfortune when the fitness or unfitness of 
 things brought it upon them, shifted the burden 
 of pain from off their own shoulders to those of 
 successive generations, heedless of adding to the 
 pain and trouble to which these generations were 
 to be born as the sparks fly upwards. 
 
 But, it may be urged, we could not have well 
 lost the American colonies for less than the ninety- 
 seven millions which that transaction cost us ; nor 
 could we have maintained our death-struggle against 
 Napoleon without borrowing the 600 millions which 
 had to be placed to our National Debt account in 
 the course of the twenty-four years which the 
 struggle lasted. The nation, some will explain, had 
 it not borrowed, would cither have succumbed to 
 the Corsican or so crippled itself, that the loss con- 
 sequent on its enfeebled state would have been 
 greater than that entailed on future generations by 
 saddling them with debt. This is a very obvious 
 objection, but is the supposition it involves a true 
 one ? Let us look at another national treatment of 
 a similar difficulty, the Prussian treatment of the 
 Seven Years' War, when that kingdom confronted 
 and kept at bay almost the whole of Europe 
 in arms. This was Prussia's death-struggle, the 
 struggle of a nation numbering some four and a 
 half millions (helped a little by England during the 
 latter part of it) against the armed forces of Aus- 
 tria, France, Russia, Sweden, and the chaotic con-
 
 CH. xiil. THE SEVEN YEARS' WAR 237 
 
 federation which went by the name of the Empire. 
 During these seven years Frederick the Great kept 
 in the field a force of some 200,000 men ; his yearly 
 war budget amounted to about three and a quarter 
 million sterling, of which during the last four years 
 England supplied about three-quarters of a million 
 yearly. When in 1763 came the Peace of Huberts- 
 burg, Prussia was in an almost desperate condition ; 
 the country was apparently quite ruined, fields un- 
 tilled, farms untenantcd, industries abandoned ; one 
 man in nine of the population gone from them. 
 Seven years, or at most ten years later, ruined Prus- 
 sia was completely repaired, once more in a pro- 
 sperous condition. All this was done w r ar and the 
 repair of the destruction of war without borrowing 
 any money save some insignificant sums from the 
 local Prussian Stande in the course of the war, 
 sums which were punctually repaid at jits close. 
 The Prussian nation did not borrow, it gave what 
 it had, to the last groschen, ate what it could, and 
 for the rest managed to live on hard fighting. The 
 royal plate went to the mint, the coinage sad 
 expedient was debased, and Frederick drove hard 
 bargains all round, but no one was robbed except 
 the contemporaries who were paid in debased coin, 
 and, in practice, these constituted the whole nation ; 
 merely, then, a bad system of taxation least of 
 all those who were to come after, and could not 
 defend themselves save dishonourably. In 1778,
 
 238 WEALTH AND WELFARE CH. xm. 
 
 when Austria made a bid for Bavaria, Frederick 
 put in the field a splendidly equipped army of 
 200,000 men, and the Bavarian affair was shortly 
 settled by compromise. One of the reasons why 
 Frederick could do these things was that he and 
 his father before him were always ready for war 
 not seeking war, but on the look-out for it, an 
 example which we might follow with profit to 
 ourselves. 
 
 During this very period of the Seven Years' War 
 (or, as we have seen, this period extended to eleven 
 years) England, partly for the conquest of Canada, 
 partly for the conquest of the Duke of Cumber- 
 land's laurels, expended the sum of 82,623,7387., of 
 which something like fifty or sixty millions (with 
 interest) was left for posterity to pay. 
 
 'Look here upon this picture and on this.'' 
 Which bears the nobler features, the finer colouring? 
 Which is the genuine and which the counterfeit 
 presentment of national honour, valour, and self- 
 sacrifice? 
 
 It is a mistake to think that even the most 
 lavish expenditure of a nation's amassed capital, 
 the most ruthless destruction of a nation's property, 
 the most complete temporary cessation of a nation's 
 commerce, can permanently cripple that nation's 
 resources or dwarf its real greatness. For a 
 people's riches, apart from the natural advantages 
 of soil and climate, depend upon its energy and
 
 CH. xnr. THE BURDEN OF WAR 239 
 
 capacity for work, and its greatness on the fine 
 temper of its endurance. The war of 1870-71 was, 
 for so short a war, a ruinous enough one to France ; 
 yet within three or four years of its cessation the 
 country was as rich and materially prosperous as 
 ever, save perhaps for the burden of the war in- 
 demnity ; and what difference would it have made 
 to this recovery had the necessary war funds been 
 directly raised instead of being borrowed ? But it 
 is not the borrowing of money that is immoral ; 
 it is the leaving it to be paid by others. Possibly 
 it may be more convenient and less immediately 
 costly to raise a loan for purposes of war than, as 
 in bygone days, to proceed by levying a tenth, 
 eighth, or even fourth, of men's goods and chattels. 
 Wars are too sharp and sudden nowadays to trust 
 to the more cumbersome method of old times. 
 But if it is necessary thus to obtain money it should 
 be honestly repaid by the actual borrowers ; for all 
 practical purposes it would probably be near enough 
 to the mark were the payment effected in the 
 course of one generation. The essential heartless- 
 ness of the present system as compared with the 
 old becomes evident when we consider how the 
 burden is borne in the two cases. In the old days 
 the cost of war was defrayed by each man in pro- 
 portion to his possessions ; thus, those whose only 
 possession was their capacity for labour felt the 
 pressure of taxation least ; whereas now war is a
 
 240 WEALTH A\D WELFARE CH. xm. 
 
 profitable source of investment for the capitalist, 
 and in order to secure this for him \ve mortgage 
 the labour of unborn generations. This is a dis- 
 honest and disloyal proceeding. And to pretend 
 that \ve engage in costly wars for the benefit of 
 distant generations is a piece of hypocritical cant 
 which can pass current only with those who are 
 accustomed to palm off on a blind, perverted judg- 
 ment the false coin of an undisciplined imagina- 
 tion. 
 
 Of late years we have made some praiseworthy 
 efforts to reduce our debt, because people and 
 politicians have begun to understand that, far from 
 being advantageous to the nation, as it was the 
 fashion to believe, it is a very heavy direct burden 
 on it, and indirectly tends to cripple industries and 
 restrict production ; but to the moral aspect of the 
 question, to the cowardice and folly of the nation's 
 past conduct, to the insidiousness of decay in the 
 national character brought about by seeking a too 
 easy refuge out of difficult}' and danger, we do not 
 appear to be alive ; and this must be, surely, more 
 because the matter is distasteful to think of than 
 hard to realise. Are we not somewhat too full of 
 commiseration for ourselves ? Does the shoe 
 pinch a little somewhere, does taxation bear a little 
 heavily on us, we at once tamper with the sinking 
 fund, as the Chancellor of the Exchequer has done 
 in this year's (1887) 'humdrum' budget. If the
 
 CH. Xlli. THE BURDEN OF WAR 241 
 
 income-tax presses hardly on a certain class of the 
 community, it would be more statesmanlike on the 
 part of the Chancellor of the Exchequer, more 
 honest on the part of the nation, to distribute the 
 burden on our own backs than to let it slide off 
 on to our children's. 
 
 Moderation in all things, certainly. No one 
 expects the nation to sacrifice itself to an ex- 
 aggerated ideal of duty ; but self-pity pleads with 
 so melodious a voice, our immediate interests loom 
 so large, that the sternest reading of this modera- 
 tion is the safest one to adopt.
 
 242 WEALTH AND WELFARE CH. xiv. 
 
 CHAPTER XIV. 
 RECAPITULATION AND CONCLUSION. 
 
 Recent statistical information respecting income tax and foreign 
 trade The agricultural question viewed by the light of recent 
 protective legislation in France Cobden's time and ours 
 Summary of the main points of our commercial condition. 
 
 I. 
 
 BEFORE asking the reader to arrive at a final con- 
 clusion on the subject of our commercial policy, I 
 will lay before him, in convenient juxtaposition, 
 the latest statistical information which may be 
 said to bear at all markedly on the question. 
 
 Income Tax. It has been a matter of surprise 
 that, notwithstanding the depression of trade, the 
 income tax returns have continued to show a 
 steady increase in the gross amount of trading 
 profits assessed. Various explanations of this have 
 been given (see pp. 60 and 61), and it seems not 
 improbable that they may on the whole have been 
 correct, for we find that the tide has begun to turn 
 here also. The gross assessments under Schedule D 
 (trades, professions, railways, &c.) for 1885-86 show
 
 CH. xiv. TURN OF THE TIDE 243 
 
 a decline of 3,ioi,ooo/. from the amount of the 
 previous year ; but even this figure docs not 
 measure the full extent of the decrease, for, as 
 the Economist of August 27, 1887, points out, the 
 returns under this schedule for 1885-86 are higher 
 than they would otherwise have been owing to the 
 measures adopted by Mr. Childers in his budget 
 for 1885-86, and designed to prevent the evasion of 
 the tax on coupons paid abroad. The Economist 
 estimates that the real decrease under this schedule 
 amounts to about 6,ooo,OOO/., a decrease of rather 
 more than two per cent. 
 
 A significant feature which these returns disclose 
 is that, while every important section of profits in 
 British industry shows diminution, the profits arising 
 from investments in foreign and colonial govern- 
 ment securities continue to increase ; an indirect, 
 though very convincing, proof that British capital 
 shows a decided tendency to abandon British in- 
 dustries for more remunerative foreign investments. 
 It would be interesting to know whether the same 
 tendency obtains in the directions of private 
 foreign and colonial enterprise. 
 
 Imports and Exports. A statement of the trade 
 of the United Kingdom with foreign countries and 
 British possessions in 1886 was issued on Sep- 
 tember 17, as a blue-book. 
 
 The following abstract is taken from the Times 
 of September 19 :
 
 244 WEALTH AND WELFARE en. xiv. 
 
 Value of the Total Imports and Exports of Merchandise, distin- 
 guishing British and foreign and colonial produce exported. 
 
 1885 
 
 \ 
 
 Imports . . . 413,019,608 426,891,579 390.018,569 370,967,955 349,863.472 
 
 Total 
 
 Total of imports and 
 
 exports . . . 719.680.322 732,328,649 685,986,152 642.371,649:618,530,489 
 
 This table establishes a fall of 14 per cent, in 
 the total value of imports and exports between 
 1882 and 1886, and of 12 per cent, in the value of 
 British produce exported during the same period. 
 But such comparisons are misleading without proper 
 corrections. The fall in prices between 1882 and 
 1886 is in proportion to the fall between the 
 numbers 84 and 70,' but on the other hand the 
 increase of population between these years is esti- 
 mated to be about 4 per cent. Taking the sum 
 of imports and exports for 1882 as in round 
 numbers 72O,OOO,OOO/., and increasing it in the ratio 
 of 100 to 104, and then decreasing it in the ratio 
 of 84 to 70, we get, as a correct figure for com- 
 parison with 1886, the sum of 624,ooo,ooo/. For 
 
 1 See Mr. Augustus Sauerbeck on the prices of commodities. 
 Proceedings of the Statistical Society for 1886.
 
 CH. xiv. FOREIGN TRADE 245 
 
 1886, the table gives us 6i8'5 millions, so that the 
 fall is not a great one, but it is highly significant 
 of the change which is coming over our foreign 
 trade. Between 1882 and 1886 there is a distinct 
 reduction of it per head of population, whereas, if 
 A r e make the same corrections for population and 
 prices between the periods 1865-69 and 1880-84, 
 we find the total of imports and exports to have 
 increased per head of population in the ratio of 
 17 to 24-4. 
 
 One word more on this subject. The statistical 
 evidence afforded by the returns of foreign trade 
 is very valuable up to a certain limit ; it affords 
 a fairly trustworthy though indirect record of 
 production, but it can never, in ordinary circum- 
 stances, be Conclusive with regard to total pro- 
 duction. It may, indeed, be entirely misleading 
 in this respect. Take the following imaginary 
 but quite possible case. Twenty years ago, in 
 a certain country whose inhabitants numbered 
 10,000,000, it was found that 1,000,000 of these 
 were employed in producing certain commodities 
 and exchanging them for commodities of foreign 
 growth ; the other 9,000,000 were engaged pro- 
 ducing and exchanging among themselves. At 
 the present time matters stand as follows : the 
 population has increased to 1 2,000,000 ; of these 
 there are now 3,000,000 occupied producing and 
 exchanging with the foreigner, and, as before,
 
 246 WEALTH AND WELFARE CH. xiv. 
 
 9,000,000 are producing and exchanging among 
 themselves. Certain economists of that country, 
 with their eyes fixed on the import and export 
 returns, declare that the country is in a most pro- 
 sperous condition, and are very indignant with some 
 9,000,000 grumblers who complain that, for reasons 
 unknown to them, the production and internal 
 exchange of the country are unsatisfactory. 
 
 Agriculture. The commercial reports of British 
 consuls residing in France having just been pub- 
 lished (September 1887), I take the opportunity to 
 discuss a little more confidently the question of 
 agricultural protection, for in these reports we have 
 valuable information regarding the effects of the 
 recent protective legislation of the French govern- 
 ment. 
 
 Before 1885 the duty on the import of corn 
 into France was merely nominal : equivalent to 
 \s. a quarter. In that year a duty of 5^. ^d. was 
 imposed on corn, as well as other duties affording 
 a moderate protection to meat and cattle. Last 
 year (1886) the duty on corn was raised to 8s. gd. 
 Of the effect of this last augmentation of the duty 
 we have as yet no information, but the consular 
 reports enlighten us with regard to the protective 
 legislation of 1885. In order that no suspicion may 
 attach to a summary of the information contained in 
 these reports, I will adopt that which appeared in 
 the Tunes the frankly outspoken advocate of our
 
 CH. xiv. FRENCH PROTECTIVE MEASURES 247 
 
 present commercial policy of September 19, 1887. 
 This summary runs as follows : 
 
 ' From what has been said here we may fairly 
 come to the following conclusions : The increase 
 of protective duties on agricultural produce in 
 France has caused not only a decrease in the 
 imports, but a considerable decrease in the exports 
 as well. (2) The increase, so far, has not been of 
 the smallest benefit to the farmer or to the con- 
 sumer ; on the contrary, in almost every case the 
 price of agricultural produce of all sorts is lower 
 now than it was before the duty was imposed. 
 (3) There is an ever-increasing demand among all 
 persons connected with land for stringent protec- 
 tion, which is likely to make itself powerfully felt 
 in future French governments. (4) The real enemy 
 of the French agriculturist are not foreign com- 
 petitors, but expensive intermediaries between 
 themselves and their customers (a complaint not 
 unknown elsewhere), heavy local dues, and the 
 wasteful and slovenly system of tillage incident to 
 peasant proprietorship.' 
 
 Now number (i) of these conclusions is simply 
 incorrect. There has been a decrease in the import 
 of cereals into France from 34,295,O4O/. in 18/9 to 
 9,28o,ooo/. in 1885 ; 2 that is, the decrease of import 
 took place before the imposition of the $s. ^d. 
 
 - These and the following figures are given on the authority of 
 the Times itself.
 
 248 WEALTH AND WELFARE CH. xiv. 
 
 duty ; and, since the imposition of that duty, 
 the import of cereals has increased (in 1886) to 
 9,76o,ooo/. 
 
 In 1877 the export of cereals was 7,6oo,ooo/. ; 
 in 1885 it was 5,3OO,ooo/. ; in 1886 it was 
 4,68o,ooo/. 
 
 In 1878 the cattle and sheep imported were 
 valued at 9,52O,ooo/. ; in 1885 at 5,3OO,ooo/. ; in 
 1886 at 4,68o,ooo/. 
 
 In 1877 the cattle and sheep exported were 
 valued at i,44O,ooo/. ; in 1885 at 1,040,0007. ; in 
 1886 at 92O,ooo/. 
 
 The only reasonable deduction to be made 
 from these figures is that there has been in general 
 a gradual decrease both of import and export of 
 agricultural produce irrespective of the duties laid 
 on import. 
 
 Conclusion (2). The farmers will either have 
 gained or not have gained according to the relative 
 fall in price of agricultural produce and general 
 commodities ; but even if it be admitted that the 
 farmers have gained nothing, and that the consumers 
 of agricultural commodities have not had to pay 
 dearer for them, the obvious conclusion is that the 
 country as a whole has gained by the amount of 
 money paid into the treasury as import duty, which 
 enables the government to remit taxation in some 
 shape or other. If it be asked who then has sus- 
 tained the loss, we can only suppose it to be the
 
 CH. xiv. PROTECTION OF AGRICULTURE 249 
 
 foreign exporter or merchant. Prices of foreign 
 agricultural produce imported into France must 
 have been reduced possibly by the whole amount 
 of the duty. This, indeed, appears to be the opinion 
 of the Consul-general at Havre, who says ' the 
 government received a considerable increase of 
 revenue without loss to anyone ; ' by which we 
 must understand, presumably, without loss to any- 
 one in France. 
 
 Conclusions (3) and (4) may very likely be 
 sound, but they do not concern us in the present 
 subject of inquiry. 
 
 Now, in considering the probable effects of 
 imposing duties on the import of agricultural pro- 
 duce into the United Kingdom, we must bear in 
 mind that our case is different from that of France 
 in many important particulars. In the first place 
 it does not follow as a matter of course that because 
 a duty of 5^. ^d. a quarter has not raised the price 
 of corn in France it would not do so in the United 
 Kingdom. When we consider that the excess of 
 import over export of cereals in the case of France 
 amounts to no more than some 5,ooo,ooo/. worth 
 annually not exceeding ^V of the total consump- 
 tion we can understand that even a very heavy 
 import duty would probably fail to raise the price 
 of this produce to any appreciable extent, for its 
 effect would be to exclude the foreign commodity 
 completely and to extend the home cultivation of
 
 250 WEALTH AND WELFARE CH. xiv. 
 
 cereals at the expense of other kinds of agricultural 
 produce ; or, again, it might lead to a slight altera- 
 tion in the character of food consumption ; in either 
 case, probably, to the detriment of the nation. But 
 we, in England, are in quite a different position. 
 In 1885 we imported 53,ooo,ooo/. worth of corn 
 and flour, or more than half the national consump- 
 tion. We cannot, without an extravagant outlay 
 of capital, add very largely to the present home 
 growth. Hence it would be a suicidal proceeding 
 on our part to impose a high tariff on the import 
 of foreign corn. But the case is different for a 
 moderate duty. It is very improbable that an 
 import duty of $s. a quarter would be followed by 
 the same effect as in France with respect to price ; 
 the foreign corn grower and merchant are well 
 aware that we are, and must to a great extent 
 remain, dependent on foreign food supply ; con- 
 sequently they will not reduce their prices so readily 
 as in the case of a market which can, at a pinch, 
 altogether dispense with their supplies. 
 
 It seems likely that of a moderate duty on corn 
 part would be borne by the foreign merchant or 
 grower, part by the British consumer ; that is 
 (taking a duty of 5.5-. for example), the foreign 
 merchant would reduce his price by, say, half-a- 
 crown a quarter, the British consumer would pay 
 half-a-crown a quarter more both for foreign and 
 home-grown corn, and the national exchequer
 
 CM. xiv. DECLINE OF AGRICULTURE 251 
 
 \vould profit by the amount paid in as duty. Ad- 
 mitting that the foreign grower or merchant bears 
 part of the burden of duty, it seems clear, so far, 
 that the nation as a whole would benefit from 
 its imposition, for although the British consumer 
 would pay half-a-crown more for the home-grown 
 corn, this would not constitute a national loss, but 
 a transfer of wealth from the nation to the agricul- 
 tural classes. 
 
 But there is another and very important point 
 of difference between France and the United 
 Kingdom. In the former country corn crops take 
 up all the land which can fairly be described as 
 good corn-growing country ; but in England the 
 case is notoriously different. In the course of the 
 last twelve years more than a million and a half 
 acres in the United Kingdom have ceased to gro\v 
 corn. 
 
 Here are a few facts worthy of notice, taken 
 from the agricultural returns of 1886 : 
 
 Average 
 
 of 1871-75. 1885. 
 
 Million Million 
 acres acres 
 
 Total acreage (crops, fallow, and grass) 47 - o 47 '9 
 
 ,, permanent pasture . . 23-2 25*6 
 
 ,, arable .... 23-7 22'2 
 
 ,, corn crops . . . 11*5 lO'O 
 
 ,, green crops . . . 5' 1 4 '7 
 
 This table shows us that nearly two million 
 acres of land which used to grow corn and green 
 crops have ceased to do so, and, further, that a
 
 252 WEALTH AND WELFARE CH. xiv. 
 
 million and a half of these acres have been turned 
 into pasture land. Now it is doubtless quite true 
 that, at present prices, farmers cannot grow corn and 
 wheat crops with profit on these particular acres 
 that is the reason of course why they have been 
 turned into pasture ; but the people who argue 
 from this that it is better so, since it does not pay 
 to grow corn, leave out of consideration a very im- 
 portant point. Better for whom ? For the farmers 
 of those particular acres, certainly, because although 
 they get a smaller return from the land their 
 outlay is reduced in yet greater proportion. But 
 better for the nation ? Xo, most emphatically ! 
 Class interests are here again at work to blind us 
 to our true national policy. These two million 
 acres and probably two or three million more are 
 capable of growing good corn and green crops, 
 they have in them a greater life-sustaining power 
 than they are no\v made to yield, and the differ- 
 ence between their present yield of life-support and 
 what they should yield is a clear loss to the country, 
 a clear loss of wealth which the land is capable of 
 yielding. 
 
 The matter is essentially one of compromise. 
 The question to be settled is : At what point must 
 we draw the line of conversion from pasture to 
 arable ? for up to a certain limit conversion will 
 enrich, and beyond this limit will impoverish, the 
 nation. i'ractical agriculturists and authorities
 
 CH. xiv. PROTECTION OF AGRICULTURE 253 
 
 such as Sir James Caird could doubtless draw that 
 line accurately enough for us, and, once drawn, we 
 should cautiously feel our way to the right degree 
 of protection which must be afforded in order to 
 bring about the required change in cultivation. 
 One of two things : the imposition of a duty on 
 the import of corn either will not raise the price of 
 it, will not make bread dearer, and will not benefit 
 the agricultural classes, in which case the nation 
 will benefit by the amount levied on import ; or 
 else it will raise the price of corn, will make bread 
 dearer, and will benefit the agricultural classes. In 
 the latter case, however, let us clearly understand 
 that what the consumer loses will be divided 
 between the exchequer and the home corn-grower, 
 so that the consumer will lose more than the 
 grower will gain, though the nation need lose 
 nothing more than the cost of collection of the 
 duty. Further, the rise in price will cause an ex- 
 tension of the home growth, a diminution of the 
 import, of corn, and the nation will be enriched by 
 the difference in the value of produce of average 
 corn land and pasture land the difference, that is, 
 due to the number of acres re-converted. 
 
 There is here no question of diverting capital 
 and labour from more profitable home industries ; 
 there is more labour in the market than can find 
 employment, and capital is yearly leaving England 
 in greater quantities in order to seek more profit-
 
 254 WEALTH AND WELFARE CH. xiv. 
 
 able investment abroad. Indeed, with regard to 
 the general question of protection, the right or 
 wrong of the policy hinges upon the amount of 
 unemployed labour and the extent to which the 
 available agencies of production, natural and in- 
 dustrial, are underworked ; from which it must be 
 plain that neither free trade nor protection are 
 right in the abstract, but are relatively right or 
 wrong according to the particular conditions of a 
 nation's industrial development in any period of 
 time. 
 
 II. 
 
 The adherents of the orthodox English school 
 of political economy maintain the conclusion that 
 all state interference with the ' free ' development 
 of industry and the ' national ' distribution of it- 
 products is not only harmful but, in the end, im- 
 possible to carry out. Until quite recently that 
 conclusion was accepted without question through- 
 out the length and breadth of the land. For many 
 reasons, which I have already set down and at- 
 tempted to make clear, I cannot but think that the 
 time has come for us very seriously to reconsider 
 this conclusion. The fact is that the conditions 
 under which the commercial policy of 1 846 was 
 initiated have passed away, and new conditions 
 have taken their place. The nations at large have 
 refused, with inaudible expressions of regret, to
 
 CH. XIV. INDUSTRIAL ENGLAND IN 1846 255 
 
 substitute the beneficent Cobden scheme of world- 
 development for that which lay in the lap of the 
 gods. Consider the essential change which has 
 come over the industrial and commercial position of 
 the United Kingdom in the course of the forty 
 years during which so much has been done to 
 build up the material prosperity of the nation. In 
 1846 the industries of foreign nations were, com- 
 paratively to their present stage of development, 
 in their infancy. England was already indus- 
 trially superior to the rest of the world, her artisans 
 were more skilful, hard-working, and independent 
 than those of any other race, her merchant fleets 
 brought to the world's mart the manufactured com- 
 modities and the raw produce of the four quarters 
 of the globe. With admirable but strictly limited 
 human foresight Cobden perceived that here was 
 a magnificent opportunity for the development of 
 industrial England. Quickened industry, sound 
 workmanship, production on a large scale : these 
 must lead to an outturn of manufactured produce 
 at a price which should conquer all markets for us. 
 But in order to attain this end two things were 
 necessary : cheap raw material, cheap food and 
 the other necessaries of life. Hence the repeal of 
 the corn laws and of the duties on imports. Popu- 
 lation was everywhere expanding ; foreign nations 
 might tax our products so much the worse for 
 them and for us but they would require them and
 
 256 WEALTH AND WELFARE CH. xiv. 
 
 buy them, having no others in sufficient quantity 
 or at all comparable to them for cheapness and 
 quality. 
 
 Cobden was a sober enthusiast, but he was the 
 victim of his enthusiasm, all sober as this was. 
 Circumstances appeared to be the sport of Cobden, 
 but, in reality, Cobden was the sport of circum- 
 stances. To him it seemed quite natural, inevit- 
 able, that England should make cotton nightcaps 
 for the rest of the world, and that in return for this 
 commodity the rest of the world should provide 
 Englishmen with cheap and plenteous food, cheap 
 and plenteous raw cotton ; so that, with advancing 
 civilisation, we might go on making more and 
 more cotton nightcaps until the crack of doom 
 should dispense generally with the laws of supply 
 and demand. 
 
 But it was not to be altogether so ; and we 
 who come after Cobden, can now see clearly 
 enough that it could not possibly be so. Some 
 who were of Cobden 's own time perhaps saw, quite 
 silently, that this cotton nightcap vision was a 
 nightmare, the sorry consequence of ill-digested 
 intellectual pabulum. When we reflect that the 
 history of the inhabitants of this planet has been 
 the history of race-struggles for supremacy, of in- 
 ternecine strife between sub-races and nations for 
 headship and mastery, it becomes at once clear 
 that for a long time to come until the time, in
 
 CH. xiv. A GOVERNING CONSIDERATION 257 
 
 fact, when the lion shall lie down with the lamb 
 the prime object of concern to these nations will 
 be to shape their general and commercial policy 
 not so that each may accumulate the greatest pos- 
 sible amount of wealth per head of population, but 
 so that each may be as rich as possible and at the 
 same time as populous as possible, so that each 
 may be as self-dependent as possible with the 
 least detriment to the well-being of its members. 
 
 Under universal free trade so far as one may 
 forecast the tendency of population and produc- 
 tion in Europe would be to diminish, population 
 diminishing faster than production, and nations 
 thus becoming less populous but richer in propor- 
 tion to population. In their character of homo- 
 geneous peoples, of fighting entities, however, they 
 would be less powerful than at present. The 
 essence of successful modern statesmanship is to 
 reconcile these conflicting claims of national sur- 
 vival and individual comfort, to adjudge to each 
 its due share of influence, varying the proportion 
 of each according to the peculiar character and 
 circumstances of every nation. 
 
 III. 
 
 If we would understand our present industrial 
 and agricultural condition, we must turn our most 
 earnest attention to the following special features 
 of it : 
 
 S
 
 258 WEALTH AND WELFARE CH. xiv. 
 
 (1) A population increasing at the present 
 rate of one per cent, per annum. 
 
 (2) A continual improvement in the processes 
 of industrial production and in the invention and 
 adoption of labour-saving machinery. 
 
 (3) A reduction in the cost of transit of goods 
 (especially by sea) already so great as practically 
 to annihilate what was once the natural protection 
 afforded by distance. 
 
 (4) A narrowing of the foreign markets for the 
 produce of our labour, accompanied by an increas- 
 ingly severe competition of foreign with home pro- 
 duce (both agricultural and industrial) in our own 
 market. 
 
 (5) The appreciation of the gold currency. 
 The reader will readily see that in an inquiry 
 
 into a possible amelioration of our circumstances, 
 and the part which each of these phenomena play 
 in our progress or retrogression, it is necessary to 
 make a radical separation of numbers (2) and (3) 
 from the others. We cannot desire to hinder the 
 operation of causes which are intrinsically bene- 
 ficent. But with respect to (i), (4), and (5) the 
 case is very different. A considerable number 
 of the preceding chapters are devoted to the ex- 
 amination of the state of things described under 
 (4), and of the remedial measures suggested in 
 connection with it. The discussion of the effects 
 of (i) and (5) increase of population and appre-
 
 CH. xiv. CHECKS TO POPULATION 259 
 
 ciation of the gold currency has also to some 
 extent been entered into, but it is better not to 
 speak of remedies where we have already many 
 doctors in the field. The question of the apprecia- 
 tion of gold has received very close attention and 
 very able treatment ; moreover, it is at the present 
 moment under the consideration of a Royal Com- 
 mission of inquiry. To this it must be added that, 
 if a bimetallic currency is the right remedy, it is 
 one which can only be undertaken in concert with 
 other nations ; it is not a matter which rests en- 
 tirely, like that of a change in our commercial 
 policy, upon England's decision. 
 
 One word with regard to the increase of popu- 
 lation, which, at bottom, is the most important of 
 all these difficulties, but which, alas ! is also im- 
 measurably the most difficult of solution. There 
 are apparently three courses open to us : Direct 
 legislative hindrances to increase. Emigration. 
 Progressive rise of the standard of living, of the 
 status (not political necessarily) of labour. The 
 first of these we are mostly agreed is quite im- 
 practicable. The second can never be anything 
 more than a temporary expedient, a temporary 
 relief from the pain of disease, not a cure of the 
 disease itself. The third course is that which most 
 recommends itself to thinking men. The Malthu- 
 sian theory is doubtless accurate in the general 
 application of it, but whether it is an evil that 
 
 S 2
 
 260 WEALTH AND WELFARE CH. xiv. 
 
 population presses on the limit of subsistence de- 
 pends relatively on what that limit is. The further 
 the line recedes from its final position where to 
 subsist is merely to keep body and soul together 
 and continue the species, the less the evil becomes. 
 
 IV. 
 
 To what final conclusion, then, do we find our- 
 selves led by the thread of reasoning which we 
 have followed through the somewhat bewildering 
 maze of evidence on the subject of our economical 
 condition ? I will not venture to assert that the 
 case for a return to protection is so strong as to 
 warrant our making a complete volte-face in our 
 trade policy, but it certainly does appear suffi- 
 ciently strong to justify us in proceeding tentatively 
 and cautiously in that direction. 
 
 But, in truth, what I may or may not venture 
 to assert is of very little moment to me, if only I 
 have succeeded in leading a thoughtful few to see 
 that it would be folly in us to pin our faith obsti- 
 nately to free trade and the principles of 1 846, in 
 the vague hope that by some means or other this 
 free trade and these principles will pull us through 
 our difficulties. It is indeed no longer possible for 
 an intelligent and unprejudiced man to maintain 
 that the argument for protection has not some- 
 thing to recommend it, even from the standpoint 
 of speculative political economy. To do so is
 
 CH. xiv. CONCLUSION 261 
 
 unconsciously to betray colour-blindness of the 
 intellect, absence of the faculty of seeing and 
 understanding what is taking place about us. Men 
 in general, and Englishmen in particular, to be 
 sure, arc not often converted to any view of a 
 matter by argument or reasoning. It seems to be 
 in the nature of things that we should first hurt 
 ourselves more or less by running against some- 
 thing undeniably hard and immovable, and then 
 make up our minds to reconsider our course. Judg- 
 ing from past events in our national history as 
 well as by the sturdy character of the inhabitants 
 of these islands, it seems likely that in this case 
 also we shall wait to see, or rather to feel, whether 
 or no we need alter our course. This method of 
 doing things has a good deal to recommend it, but 
 it is sometimes costly, even for the richest nation 
 in the world.
 
 262 WEALTH AND WELFARE 
 
 POSTSCRIPT. 
 
 REMARKS ON MR. MEDLEY'S PAMPHLET, 
 'FAIR TRADE UNMASKED.' 
 
 . GEORGE MEDLEY informs us that he was 
 requested by the Committee of the Cobden Club to 
 draw up, for the information of its members, some 
 notes on the ' Fair Trade ' report of the late Com- 
 mission on the depression of trade and industry. 
 Those notes are embodied in the above-named 
 pamphlet. 
 
 I have neither space, leisure, nor, to say the 
 truth, inclination to examine in detail all that Mr. 
 Medley, who deals largely in scolding epithets, 
 has to say on this matter, but will fasten at once 
 upon the backbone of the controversy : the imposi- 
 tion of an ad valorem duty of 10 to 15 per cent, on 
 imported manufactures. This recommendation is 
 the head and front of the offending of the Com- 
 missioners who sign the minority report. 
 
 Excerpt from Mr. Medley's pamphlet, pp. 48 
 and 49 : 
 
 ' I now ero on to comment on the doctrines
 
 *FAIR TRADE UNMASKED' 263 
 
 contained in the six paragraphs (128, 129, 130, 131, 
 J 3 2 > ! 33)- The " Four " ' (an exquisitely satirical 
 and playful manner of designating the members of 
 the Commission who sign the minority report, in 
 delicately veiled allusion to the four evangelists) 
 1 speak of two sorts of foreign competition to which 
 their producers are subjected that which takes 
 place in neutral markets, and that which meets 
 them at home. As regards the former, they see no 
 way of applying what they call a direct remedy, 
 but they see their way of applying an indirect one, 
 which, of course, is that differential treatment of 
 the food products of our colonies and dependencies 
 which forms No. 3 of their remedies, and which is 
 dealt with in the following section.' 
 
 ' With regard to competition in the home market, 
 which, according to them, is doing so much to destroy 
 the fair profits of their producers and to diminish 
 the employment of labour, they propose the impo- 
 sition of 10 to 15 per cent, ad valorem duties on all 
 foreign imported manufactures. But this is neither 
 more nor less than the re-establishment of protec- 
 tion, and it will now be my business to deal with 
 the arguments brought forward to induce us to 
 revert to this discarded policy.' 
 
 ' The first of these with which I shall deal is that 
 in (130): 
 
 ' " Such duties would, to a considerable extent, 
 undoubtedly keep foreign manufactures out of our
 
 264 WEALTH AND WELFARE 
 
 home market, and thereby give increased employ- 
 ment to our home industries." 
 
 ' How so ? How can a cessation of these 
 imports, or of foreign trade of any kind, increase 
 our home industries ? If foreign manufactures are 
 excluded, which is the aim and object of the 
 " Four," similar articles will have to be made at 
 home, it is true, but then other industries which 
 the foreign importations would have set going 
 would cease. Our artisans might possibly be 
 equally employed, but the reward of their labour 
 would be less, there would be less to be divided, 
 and the community would be injured.' 
 
 I think the answer to ' How so ? ' is very simple. 
 Mr. Medley admits that the exclusion of foreign 
 manufactures would be followed by the manufacture 
 of similar articles at home, but then he adds : 
 ' Other industries which the foreign importation 
 would have set going would cease.' Now this is 
 just where I think Mr. Medley is wrong. The other 
 industries would not cease, there would merely be 
 a different disposal of their produce, which, instead 
 of being sent abroad in payment of the foreign im- 
 ported manufactures, would, through the thousand 
 channels of distribution, be used at home to pay for 
 the ' similar articles ' of home manufacture. There 
 would thus be a fuller employment of labour, a 
 greater total expenditure on its support (roughly 
 by the amount of production retained at home
 
 ''FAIR TRADE UNMASKED* 265 
 
 instead of being sent abroad) ; there would be more, 
 not less, to be divided, and the community would 
 not be injured, but benefited. 
 
 Let us take quite a simple case : This year 
 I buy 5/. worth of foreign imported articles of 
 manufacture ; this means, in what roundabout way 
 soever it comes to pass, that I send out of the 
 country 5/. worth of home produce in payment of 
 the foreign import. Next year, however, I do not 
 buy any articles of foreign make, but similar articles 
 of home make, so that instead of sending 5/. worth 
 of home produce abroad in payment, I send it, in 
 some roundabout way again, to the home producers 
 of the ' similar articles.' This much is quite certain : 
 I have given to some hitherto unemployed or in- 
 sufficiently employed British artisans instead of to 
 some foreign ones a purchasing power of 5/. prac- 
 tically in the English market and it seems a 
 common-sense and just view to take of it that the 
 individuals who were supplying the foreign artisans 
 will now supply the English ones. Mr. Medley 
 and those who think with him are led into these 
 and similar errors because they concentrate their 
 attention on the growth of imports and exports. 
 Mr. Medley sees in Great Britain many millions of 
 men producing and exchanging with other millions 
 beyond sea, but perhaps he does not always re- 
 member the millions who arc occupied producing 
 and exchanefinii among' themselves. What the
 
 266 WEALTH AND WELFARE 
 
 fair-traders (unlucky name) see plainly enough, 
 but do not at all make clear as they should, is that 
 there are a number of persons in the United King- 
 dom who are doing nothing, would wish to do 
 something, and could do something, profitably to 
 all concerned (seeing that the agencies of produc- 
 tion are underworked) persons who wish, had they 
 the chance, also to produce and exchange with their 
 fellows. These latter fellows, however, are already 
 profitably engaged amongst themselves and with 
 the foreigner. Now the fair-traders desire to 
 bring it about that some of those who are taken 
 up producing and exchanging with the foreigner 
 should produce and exchange with their now un- 
 employed brethren. This, in truth, is what the 
 whole matter comes to. The real objection which 
 is struggling to emerge into the light from the 
 depths of Mr. Medley's inner consciousness is that 
 the people who are at present doing a good ex- 
 change business with the foreigner will probably 
 not do so good a business with their brethren who 
 are not at present engaged in producing anything 
 but trouble. This is a sound objection, and, as I 
 have already more than once urged, shows us that 
 what we have to fix our attention on is, (i) the 
 extent of loss incurred and gain enjoyed by the 
 several parties concerned, and (2) alas that it 
 should be the second, not the first, consideration 
 the ' how borne ' of the loss.
 
 'FAIR TRADE UNMASKED' 267 
 
 A word regarding Mr. Medley's treatment of 
 the sugar bounties question : 
 
 Page 43. ' The " Four " tell us that the posi- 
 tion of the British consumer would be the same ' 
 (through the effect of countervailing duties) ' as 
 if we had by negotiation obtained an equivalent 
 reduction of the bounties, whilst in his quality of 
 taxpayer he would be a gainer by the diversion 
 of foreign money into our exchequer. Both these 
 assertions are false. The position of the British 
 consumer would not be the same. The British 
 consumer not only eats and drinks sugar in simple 
 forms, but uses it as a component material in a 
 variety of industries which, if the present supply 
 were stopped, or the present price were raised, 
 would cease to be carried on. ... It is false, there- 
 fore, to say that the position of the British con- 
 sumer would be the same under a countervailing 
 duty.' 
 
 What is to be said of reasoning like this ? 
 One scarcely knows what to answer to it, whether 
 it were better not to answer it at all. The price 
 of sugar, admittedly, would be raised by the reduc- 
 tion or abolition of the bounties ; it would also, 
 admittedly, be raised by the imposition of counter- 
 vailing duties ; the sugar itself in either case might 
 or might not continue to be used in some manu- 
 factures, though it is hard to believe that a differ- 
 ence in price of a farthing a pound could be fol-
 
 268 
 
 lowed by the disastrous effects which Mr. Medley's 
 imagination forecasts ; but what difference it could 
 make to the consumer as a consumer, whether the 
 price is raised by this process or by that, remains a 
 profound mystery. Mr. Medley is extremely care- 
 less in his argument. A little further on he tells 
 us that the minority Commissioners ' speak of the 
 British consumer recouping as a taxpayer what 
 he loses as a consumer.' What the Commissioners 
 do say is, ' in his quality of taxpayer he would be 
 a gainer by the diversion of foreign money into our 
 exchequer,' and this does not in any way imply 
 that he would altogether recover in one direction 
 what he would lose in the other. 
 
 Our government, according to Mr. Medley, has 
 been unwise in trying to obtain from foreign 
 powers the abolition of the sugar bounty. Admit- 
 ting that government interference is advisable, it 
 should have been directed to obtaining an increase 
 of the bounty, so that we might be provided with 
 sugar for nothing, if possible. Well, to be sure, 
 although a somewhat brutal proceeding, involving 
 as it would the utter and speedy ruin of our West 
 Indian sugar trade, this would have the merit of 
 procuring us a very substantial advantage. The 
 question we have to ask ourselves, however, is 
 whether our obtaining sugar at the present price 
 at a farthing a pound cheaper than but for the 
 bounty is a sufficient inducement to lead us to
 
 *FAIR TRADE UNMASKED* 269 
 
 disregard the slow extinction of our West Indian 
 trade. Our government, true to right feeling, but 
 hand-tied by a vicious system of political economy, 
 has attempted in vain to bring about what common 
 justice requires, not to speak of humanity. 
 
 In paragraph 59, the four Commissioners, 
 alluding to foreign investments, have not made 
 their meaning very clear ; perhaps this is due to 
 some slight confusion of thought. But Mr. Medley, 
 instead of attempting to elicit their meaning, pro- 
 ceeds to make nonsense of it -not a very helpful 
 way of dealing with a difficult matter. I imagine 
 the Commissioners do not look upon the foreign 
 investment of British capital as objectionable in 
 itself, but only so when it is thus invested at the 
 sacrifice and to the prejudice of home labour ; and 
 this growing excess of investment in foreign securi- 
 ties they declare to be in some measure due to the 
 unprotected state of our industries.
 
 INDEX. 
 
 AGRICULTURAL 
 AGRICULTURAL Classes, losses 
 of landowners and tenants, 
 
 3. 6 3> 79 
 
 Agriculture, general condition 
 of, 28, 29, 30 ; diminution of 
 produce and loss of income, 
 31-34; average annual value 
 of produce in 1870-74 (at 
 prices ruling in 1883), 44; 
 recent protective legislation in 
 France, 246, 249, see also 
 ' Protection ' ; decrease of 
 cultivation in recent years, 
 251, see also ' Caird,' ' Druce,' 
 ' Harris ' 
 
 Appreciation (of gold), see Cur- 
 rency 
 
 Arnold (Matthew), mentioned, 
 I, 185 
 
 Associations (Commercial), evi- 
 dence on volume of trade, 49 
 
 BANKRUPTCIES (liquidations, 
 &c.) statistics of, 20, 21 
 
 Behrens (Sir Jacob), evidence 
 of, on wool trade, 39, 40, 43 
 
 COAL 
 
 Bismarck (Prince), and protec- 
 tion, 85, 86 
 
 Bounties (on export), 104, 105, 
 267, 268 
 
 CABMEN (the London), 221-3 
 
 Caird (Sir James), on agricul- 
 tural depression, 29 ; losses of 
 income of agricultural classes, 
 30, 31, 34, 63 ; wages of agri- 
 cultural labourers, 67 
 
 Capital, ' migration ' of, 95-7 ; 
 return on invested, 71, 72; 
 foreign investments and British 
 capital, 243, 269 
 
 Capitalists, increase in number 
 of small capitalists and other 
 classes, 73-77, 207, 208 
 
 Carlyle, Taine's estimate of, 13 ; 
 quotation from, 47, 48 
 
 Chambers (of Commerce), evi- 
 dence on general increase of 
 production, 47, 48 
 
 Charity, 192, 193 
 
 Coal, increase of output from 
 1865 to 1884, 18; increase in
 
 272 
 
 WEALTH AND WELFARE 
 
 COBDEN 
 
 decennial period, 1870-74 to 
 1880-84, 38; average annual 
 value of output in 1870-74 
 (at average prices ruling in 
 1880-84), 42 ; decrease of 
 output since 1885, 52 
 Cobden, England and, in 1846, 
 
 255, 256 
 
 Commercial associations. See 
 Associations 
 
 Commodities, intrinsic value of, 
 164-6 
 
 Companies (rival), 219-21 
 
 Competition, 202 ; evils of un- 
 restricted, 218-24, 226 
 
 Contracts (Government), with 
 foreign firms, 99-104 
 
 Corn laws, effect of abolition of, 
 on distribution, 78, 79 ; on 
 general production, 82 ; Cob- 
 den and the, 255 
 
 Cotton, increase of raw import 
 (1865-84), 18 ; increase of 
 manufacture in decennial pe- 
 riod 1870-74 to 1880-84, 38, 
 39 ; average annual value 
 of manufacture in 1870-74 
 (at average prices ruling in 
 1880-84), 42, 43, see also 
 
 55 
 
 Currency (appreciation of gold), 
 general effect of, 69, 70 ; 
 wages and, 71 ; capital and 
 interest in relation to, 71, 72 
 
 DARWIN (Charles), influence of 
 
 works of, 187, 1 88 
 Debt (National), 233-6 ; war 
 
 and the, 237-40 
 
 GOVERNMENT 
 
 Depression (industrial), abroad, 
 exaggerated, 82 
 
 Druce, on agricultural depres- 
 sion, 29 
 
 ECONOMIST (the), estimate of 
 decrease of amount assessed 
 to Income Tax in 1885-6, 
 243 
 
 Employment. See Labour 
 Exports. See Imports and Ex- 
 ports 
 
 FOOD, increased consumption 
 of, 25, 26, 35, 36; 'prefe- 
 rential ' treatment of Indian 
 and colonial food products, 
 135-141 ; import of corn and 
 flour in 1885, 250 
 
 Free trade, usual arguments in 
 support of, 94, 95 ; not un- 
 answerable, 95-99 ; protec- 
 tion and, neither of them right 
 in the abstract, 254 
 
 GERMANY, necessity of protec- 
 tion in, 84 ; foreign trade of, 
 85, 86, 130, 131 
 
 Giffen (Robert), LL.D., As- 
 sistant Secretary to Board of 
 Trade, evidence on general 
 condition of trade, 10, 17, 
 18, 23 
 
 Goschen (G.J. ), speech at the 
 Mansion House, March 1887, 
 227, 228 
 
 Government (local), 225
 
 INDEX 
 
 273 
 
 HARRIS 
 
 HARRIS (W. J.)i estimate of 
 decrease of agricultural pro- 
 duction, 31 ; mistakes the 
 bearing of Sir J. Caird's 
 figures, 32 
 
 Harvests, and industrial depres- 
 sion, 82 
 
 IMPORTS and Exports, general 
 increase of, 24 ; change in 
 character of, 53 ; indirect 
 evidence afforded by returns 
 of, as regards production, 
 245, 246 ; decrease of, since 
 1882, 244 ; decrease of (cattle 
 and cereals) in France, 247, 
 248 
 
 Income tax, increase of amount 
 assessed to, under Schedule D, 
 60 ; production and, 61 ; infer- 
 ences from returns of, 74-77 ; 
 decrease under Schedule D 
 (profits of trade) in 1885-86 ; 
 progressive, 209, 210; de- 
 crease in 1885-86 under Sche- 
 dule D, 242, 243 
 
 Industries. See under separate 
 headings 
 
 Industrial condition, main points 
 in connection with our, 257, 
 258 
 
 JAMIESON (G. A.), estimate of 
 decrease of agricultural pro- 
 duction, 33 ; dissents from 
 majority report respecting in- 
 ferences therein drawn, 75-77 
 
 LABOUR, displacement of, 64 ; 
 demand for, 65 ; decline of 
 
 PAUPERISM 
 
 employment in relation to 
 population, 65-67 ; reduction 
 of hours of, 64, HO; social- 
 ism and, J.IO, 201 ; 'migra- 
 tion ' of, 95, 96 ; insufficiency 
 of employment, 159, 160 
 
 Laissez-faire, the ' open sesame ' 
 to success, 112; doctrine of, 
 154, 188 
 
 Linen, decrease of linen trade, 
 45 
 
 MALTHUSIAN theory, 259, 260 
 
 Manufactured goods, great in- 
 crease of import of, 88, 89 
 
 Medley (George), author's re- 
 marks on pamphlet, ' Fair 
 Trade Unmasked,' 262-269 
 
 Mitchell (Henry), evidence on 
 wool trade, 40 
 
 Mitford, quotation from, 226 
 
 NEWMAN (Cardinal), mentioned, 
 5, 143 
 
 OPPORTUNISM, 174 
 Over-production, general and 
 
 partial, 98 ; protective tariffs 
 
 and, 121-23, J2 6 
 
 PALMER (Charles), dissents from 
 
 majority report, 51 
 Paper, state of paper trade, 46 
 ' Paper' property, 213 
 Pauperism, statistics of, 22 : 
 
 working classes and, 161
 
 274 
 
 WEALTH AND WELFARE 
 
 PIG-IRON 
 
 Pig-iron, increased outturn 
 (1869-84), 18 ; increase in 
 decennial period 1870-74 to 
 1880-84, 38 ; average annual 
 value of industry in 1870-74 
 (at average prices ruling in 
 1880-84), 42 
 Poor-law, 203 
 
 Price (Professor Bonamy) dis- 
 sents from report of Commis- 
 sion, 147-50 
 Prices. See Currency 
 Profits, diminution of, 59-62 
 Production, increase of (1869- 
 84), 1 8 ; summary of total 
 increase (1870-7410 1880-84), 
 56, 57 ; recommendation of 
 Commissioners to cheapen, 
 
 "3, "5 
 
 Protective tariffs, injurious effect 
 of high foreign tariffs, 89, 1 17, 
 121-23 ; recommendation of 
 countervailing duties, 117-20, 
 131 ; real object of, at present, 
 132, 133. See also 263-66 
 
 Protection, meaning of, 107 ; a 
 weapon in the hands of the 
 state, 168, 211 ; probable 
 effect of, on our agricultural 
 condition, 249-53 '> author's 
 conclusion with regard to, 260 
 
 ROYAL COMMISSION (on trade 
 depression), general informa- 
 tion concerning, 9-1 1, 14 
 
 Ruskin (John), character of 
 
 WELFARE 
 
 work on political economy, 
 7, 8, 143, 144 
 
 SAVINGS banks, increase of de- 
 posits in, and the working 
 classes, 164 
 
 Socialism, 197, 198 ; in England, 
 199, 200 ; labour and, 201 
 
 Spencer (Herbert), sociological 
 views, 171, 172, 182-85 
 
 Statesmanship, objectof modern, 
 257 
 
 Sugar, beet and cane, 105 
 
 'TIMES' (the), on the condition 
 of London cabmen, 221-23 ; 
 on protection of agriculture in 
 France, 247-49 
 
 Taxation, just basis of, 204, 205 ; 
 of luxuries, 211; of certain 
 kinds of property, 213-16. 
 See also 229, 230 
 
 WAGES, rate of, for time and 
 piece work, 64 ; of agricul- 
 tural Labourers, 67, 68 ; appa- 
 rent reduction of total earned, 
 68, 1 60 
 
 War, Prussia's treatment of, with 
 regard to debt (Seven Years' 
 War), 236-38 
 
 Wealth, progress and, 191 
 
 Welfare (national), definition of, 
 145, 146 
 
 Spottisiuoode &* Co., Printers, New-street Square, London.
 
 MR. MURRAY'S WORKS. 
 
 NEW PUBLICATIONS. 
 
 THE LIFE AND LETTERS OF CHARLES DARWIN, 
 
 F. R.S. With an Autobiographical Chapter. By his Son, 
 FRANCIS DARWIN, F.R.S. Portraits and Woodcuts. 3 vols. 
 8vo. 
 
 EARLY ADVENTURES IN PERSIA, SUSIANA, AND 
 BABYLONIA. Including a Residence among the Bakhtiyari 
 and other Wild Tribes. By SIR HENRY LAYARD, G.C.B. 
 Map and Illustrations. 2 vols. Crown 8vo. 
 
 THE VIKING AGE. The Early History, Manners, and 
 
 Customs of the Ancestors of the English-Speaking Nations. 
 Illustrated from the Antiquities discovered in Mounds, Cairns, 
 and Bogs, as well as from the Ancient Sagas and Eddas. By 
 PAUL B. Du CHAILLU, Author of ' The Land of the Midnight 
 Sun' &c. With 1,200 Illustrations. 2 vols. 8vo. 
 
 Mr. Du Chaillu has devoted seven years to the collection of materials from every 
 available source, and has written a book which bids fair to do for our ancestors what 
 Sir Gardiner Wilkinson did for the ancient Egyptians. 
 
 VIRGIL IN ENGLISH VERSE. Eclogues, and JEneid 
 Book* I. -VI. By Lord Justice SIR CHARLES BOWEN. Map 
 and Frontispiece. Crown 8vo. 
 
 LIFE AND LABOUR ; or, Characteristics of Men of 
 Culture and Genius. By SAMUEL SMILES, LL.D., Author of 
 ' Self-Help ' &c. Post 8vo. 
 
 ' Biography is by nature the most universally profitable, universally pleasant, of 
 all things ; especially biography of distinguished individuals.' CARLYLE. 
 
 TOO LATE FOR GORDON AND KHARTOUM. 
 
 The Testimony of an Independent Eye witness of the Heroic 
 Efforts for their Rescue and Relief. By ALEXANDER MAC- 
 DONALD. Map and Plans. Crown 8vo. 
 
 MAJOR LAWRENCE, F.L.S. A Novel. By the Hon. 
 EMILY LAWLESS, Author of ' Hurrish.' 3 vols. Crown 8vo. 
 
 DR. WM. SMITH'S DICTIONARY OF CHRISTIAN 
 BIOGRAPHY, LITERATURE, SECTS, AND DOC- 
 TRINES DURING THE FIRST EIGHT CENTURIES. 
 Edited by HENRY WAGE, D.D. VOL. IV. (completing the 
 Work). Medium 8vo. 
 
 JOHN MURRAY, Albemarle Street.
 
 2 Mr. Murray's Works New Publications continued. 
 
 GEOGRAPHICAL ETYMOLOGY: a Dictionary of 
 Place Names, giving'their Derivations. By C. BLACKIE. Revised 
 and Enlarged Edition. Crown 8vo. 
 
 A READABLE ENGLISH DICTIONARY. Giving the 
 
 Derivatives from Latin and Greek, arranged in the Order of 
 Classical Grammars, with an Alphabetical Index. By DAVID 
 MILNE, M.A. Crown 8vo. 
 
 LIFE OF DR. WILLIAM CAREY, Shoemaker and 
 
 Missionary. Professor at Fort William, Calcutta. 1761-1834. 
 By GEORGE SMITH, LL.D. Popidar Edition. Portrait and 
 Illustrations. Post 8vo. 
 
 SERMONS AND ADDRESSES TO CHILDREN- 
 
 Including the Beatitudes The Faithful Nurse, &c. &c. By 
 the late DEAN STANLEY. Post 8vo. , 
 
 THE STUDENT'S ENGLISH CHURCH HISTORY. 
 THIRD PERIOD. From the Accession of the House of 
 Hanover to the Present Time. 1717-1884. By G. G. PERRY, 
 M.A., Canon of Lincoln. Post 8vo. 
 
 BRAHMANISM AND VEDISM ; or, Religious Thought 
 
 and Life in India as based on the Veda. By Sir MoNlER 
 WILLIAMS, K.C.I.E., D.C.L. Third Edition. 8vo. 
 
 SAKOONTALA ; or, the Lost Ring. An Indian Drama, 
 
 Translated into English Prose and Verse from the Sanskrit of 
 Kalidasa. By Sir MoxiER WILLIAMS. Fifth Edition. With 
 a Portrait. 8vo. 
 
 STUDENTS COMMENTARY ON THE NEW TESTA- 
 
 MENT. Abridged from the ' Speaker's Commentary,' by Rev. 
 J. M. FULLER, M.A. Vol. II. - The Epistles and Revelation 
 (completing the Work). Crown Svo. "js. 6</. 
 
 THE ORIGIN OF SPECIES BY MEANS OF 
 NATURAL SELECTION, or the Preservation of Favoured 
 Races in the Struggle for Life. By CHARLES DARWIN. A 
 Neiv Large Type Edition. 2 vols. Crown Svo. 
 
 THE DESCENT OF MAN, AND SELECTION IN 
 RELATION TO SEX. By CHARLES DARWIN. A New 
 Large Type Edition. 2 vols. Crown Svo. 
 
 JOHN MURRAY, Albemarle Street.
 
 MR. MURRAY'S LIST. 
 
 DEAN HOOK'S CHURCH DICTIONARY : a Manual 
 
 of Reference for Clergymen and Students. A New Edition, 
 thoronglily revised, and in great part re-written. Edited by 
 WALTER HOOK, M.A., and W. R. W. STEPHENS, M.A. 
 Medium 8vo. 21 s. 
 
 WHY ENGLAND MAINTAINS THE UNION. Being 
 
 the substance of 'England's Case Against Home Rule.' By 
 Professor A. V. DICEY, prepared for popular use by C. E. S. 
 Fcp. 8vo. is. 
 
 ENGLAND'S CASE AGAINST HOME RULE. By 
 A. V. DICEY, M.A.,Vinerian Professor of Law in the University 
 of Oxford, Fellow of All Souls' College, Author of 'The Law 
 of the Constitution,' &c. Third Edition. Crown Svo. "js. 6d. 
 
 LETTERS FROM A MOURNING CITY. Naples 
 during the Autumn of 1884. By AXEL MUNTHE, translated 
 by MAUDE VALERIE WHITE. With a Frontispiece. Cr. Svo. 6s. 
 
 LORD BEACONSFIELD'S LETTERS, 1830-1852. A 
 
 New Edition of ' Home Letters ' and ' Correspondence with his 
 Sister,' with additional Letters and Notes. With Portrait. 
 Crown Svo. 2s. , cloth, 2s. 6d. 
 
 SIR HECTOR'S WATCH. By CHARLES GRANVILLE. 
 
 Post Svo. 2.s. 6d. 
 
 THE CRUISE OF THE MARCH ESA TO KAMS- 
 CHATKA AND NEW GUINEA. With Notices of Formosa 
 and Liu-kiu and various Islands of the Malay Archipelago. 
 By F. II. H. GUILLEMARD, M.D. With Maps and 150 
 Illustrations. 2 vols. Svo. 42^. 
 
 THE HANDBOOK OF PAINTING. The Italian 
 
 Schools. Based on the Handbook of Kugler. Originally edited 
 by the late Sir CHARLES L. EASTLAKE, R.A. A New Edition, 
 revised, enlarged, and in great part re-written, so as to incor- 
 porate the results of all the most recent discoveries. By Sir 
 A. HENRY LAYARD, G.C.B. With nearly 200 Illustrations. 
 2 vols. crown Svo. T.OS. 
 
 JOHN MURRAY, Albemarle Street.
 
 Mr. Murray's List continued. 
 
 SOME VERDICTS OF HISTORY REVIEWED. By 
 
 WILLIAM STEBBING, late Fellow of Worcester College, Oxford. 
 
 8VO. 125. 
 
 CONTENTS. I. Patriot or Adventurer, Anthony Ashley Cooper II. 
 Two Poet Politicians, Abraham Cowley and Matthew Prior III. 
 Two Leaders of Society and of Opposition, Henry St. John and 
 William Pulteney IV. A Plea for the Eighteenth Century V. 
 An American Revolutionist and an English Radical, Benjamin 
 Franklin and William Cobbett VI. Puritan and Cavalier England 
 Transplanted. New England Virginia. 
 
 THE HAYWARD LETTERS. Being a Selection from 
 the Correspondence of the late A. Hay ward, Q. C. 1834 to 1884. 
 With an Account of his Early Life. Edited by HENRY E. 
 CARLISLE. 2 vols. crown Svo. 24^. 
 
 INDUSTRIAL IRELAND. Suggestions for a Practical 
 Policy of ' Ireland for the Irish.' By ROBERT DENNIS. Crown 
 Svo. 6s. 
 
 CONTENTS. Depression and its Causes Corn and other Food Crops 
 Live and Dead Meat The Butter Trade The Fisheries 
 Plants used in Manufactures Mines and Quarries Timber and 
 Peat Textile and Leather Trades Pottery, Glass, Metal Work- 
 ing, &c. Paper and Flour Mills A Group of Minor Trades 
 Cottage Industries -Land Improvement, &c. 
 
 SELECTIONS FROM THE PAPERS OF THE 
 TWINING FAMILY. Being a Sequel to the ' Recreations 
 of a Country Clergyman of the i8th Century.' Edited by 
 RICHARD TWINING. Crown Svo. 9-r. 
 
 THE RISE OF THE BRITISH POWER IN THE 
 EAST. By the late Hon. MOUNTSTUART ELPHINSTONE. 
 Being a continuation of his History of India in the Hindoo and 
 Mahommedan Periods. Edited by Sir EDWARD COLEBROOKE, 
 Bart. With Maps. Svo. i6s. 
 
 THE GREAT SILVER RIVER : Notes of a Few 
 
 Months' Residence in Buenos Ayres. By Sir HORACE 
 RUM BOLD, Bart., K.C.M.G., British Minister at Athens. 
 With Illustrations. Svo. 12s. 
 
 JOHN MURRAY, Albemarle Street.
 
 Mr. Murray's List continued. 
 
 SAMUEL TAYLOR COLERIDGE, AND THE ENG- 
 LISH ROMANTIC SCHOOL. By ALOIS BRANDL, Professor 
 of English at the University of Prague. An English Edition 
 by Lady EASTLAKE, assisted by the Author. With Portrait, 
 Crown 8vo. 
 
 THE GROWTH OF FREEDOM IN THE BALKAN 
 
 PENINSULA. Notes of a Traveller in Montenegro, Bosnia, 
 Servia, Bulgaria, and Greece, with Historical and Descriptive 
 Sketches of the People. By JAMES GEORGE COTTON MINCHIN. 
 With a Map. Crown 8vo. los. 6d. 
 
 THE ETON HORACE. Part I. THE ODES AND EPODES, 
 With Notes by F. W. CORNISH, M.A., Assistant Master at 
 Eton College. In Two Parts. Crown 8vo. 35. 6d. 
 
 As it is considered desirable that the notes should be used only in 
 the preparation of the lesson, and not in the class, they are bound up 
 separate from the text. 
 
 PERSIA AND THE PERSIANS. By the Hon. S. G. W. 
 BENJAMIN, late Minister of the United States to the Court of 
 Persia. With 56 Illustrations. 8vo. 24^. 
 
 THE STRUGGLE OF THE BULGARIANS FOR 
 
 NATIONAL INDEPENDENCE: a Military and Political 
 History of the War between Bulgaria and Servia in 1885, under 
 Prince Alexander. Translated from the German of Major 
 A. VON HUHN. With Maps. Crown 8vo. 9.5-. 
 
 THE MINISTRY OF FINE ART TO THE HAPPI- 
 NESS OF LIFE. By T. GAMBIER PARRY, M.A. Revised 
 Edition, with Index. 8vo. 14^. 
 
 CONTENTS. Purpose and Practice of Fine Art Ministry of Fine Art 
 to Common Life and to Spiritual Life Ministry of Colour to Sculp- 
 ture and Architecture History of Mosaic, Ancient and Christian 
 Art and Artists of Glass Painting, Ancient and Mediaeval 
 Adornment of Sacred Buildings Art in Archaeology Builders 
 and Buildings of the Cathedral at Gloucester. 
 
 JOHN MURRAY, Albemarle Street.
 
 Mr. Murray's List continued. 
 
 THE WISDOM OF EDMUND BURKE. Being Selec- 
 
 tions from his Speeches and Writings, chiefly bearing upon 
 Political Questions. By EDWARD ALLOWAY PANKHURST. 
 Crown 8vo. 6s. 
 
 THE CONSULTING ARCHITECT. Practical Notes 
 on Administrative Difficulties. By ROBERT KERR, Author of 
 ' The English Gentleman's House ' &c. Crown 8vo. 95. 
 
 CONTENTS. Consultation and Evidence Arbitration Cases Question 
 of Structural Damage Easements Ancient Lights Questions 
 of Support-- Sanitary Cases - Leasehold Questions - Questions of 
 Valuation Building Questions The Building Act Architects' 
 Disputes and Etiquette. 
 
 THE WESTERN PACIFIC, AND NEW GUINEA. 
 
 With Notices of the Natives, Christian and Cannibal, and some 
 Account of the Old Labour Trade. By HUGH HASTINGS 
 ROMILLY. Second Edition. With an Additional Chapter on 
 the Ghost in Rotumah. Map. Crown Svo. Js. 6d. 
 
 ENGLAND'S CHRONICLE IN STONE : Derived 
 
 from Personal Observations of the Cathedrals, Churches, Abbeys, 
 Monasteries, Castles, and Palaces, made in Journeys through 
 the Imperial Island. By JAMES F. HUNNEWELL. With 60 
 Illustrations. Medium Svo. 24^. 
 
 THE EARLY MILITARY LIFE OF GENERAL 
 SIR GEORGE T. NAPIER. Written by himself for his 
 Children. Edited by his Son, General WM. C. E. NAPIER. 
 A New and Clieaper Edition. Portrait. Post Svo. "js. 6d. 
 
 OLD ENGLISH PLATE : Ecclesiastical, Decorative, 
 
 and Domestic; its Makers and Marks. By WII.KKED J. 
 CRIIM-S, M.A., E.S.A. Third and Revised Edition. With 
 104 Illustrations, and 2,000 Facsimiles of Plate Marks. Medium 
 
 Svo. 21 S. 
 
 JOHN MURRAY, Albemarle Street.
 
 
 DATE DUE 
 
 GAYLORD
 
 HC255 B42 
 
 Berkeley, Hastings George 
 
 Fi tzhardinge. 
 Wealth and welfare, 
 
 UC SOUTHERN REGIONAL LIBRARY FACILITY 
 
 A 001405416 7 
 
 3 1210 00347 8763