^,^;< 
 
 THE LIBRARY 
 
 OF 
 
 THE UNIVERSITY 
 
 OF CALIFORNIA 
 
 LOS ANGELES 
 

 
 
 ■" '^^^"^ 
 
 
 5ri)is IToIumc is 
 Presented by the Committee of the Cobden Club, 
 
 TO 
 
 Sir Joseph W. Pease, Bart., M.P., 
 
 IN ACKNOWLEDGMENT QF A HANDSOME DONATION 
 
 CONTRIBUTED BY HIM 
 
 TO -THE SI'ECIAL KREE TRADE PUBLICATION FUND. 
 
 THO^ B. POTTER 
 IBon. Set. 
 
 
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 iK-ysi
 
 REE TRADE TRACTS 
 
 SERIES OE ESSAYS 
 
 BUSHED UNDER THE SANCTION OF THE 
 COBDEN CLUB IN 1881-2. 
 
 SSELL, PeTTER, GaLPIN & CO. 
 
 LONDON, PARIS & NEW YORK. 
 
 [all rights rbserved.j
 
 ^uv.:^j
 
 CONTENTS. 
 
 
 AUGUSTUS MONGREDIEN, Esq. 
 
 Free Trade and English Commerck. 
 The Western Farmer of America. 
 Pleas for Protection Examined. 
 
 THE RIGHT HON. JOSEPH CHAMBERLAIN, M.P. 
 The French Treaty and Reciprocity. 
 
 J. K. CROSS, Esq., M.P. 
 
 Imports, Exports, and the French Treaty. 
 
 GEORGE W. MEDLEY, Esq. 
 
 The Reciprocity Craze. 
 England under Free Trade. 
 
 i< T. H. FARRER, Esq. 
 
 Free Trade versus Fair Trade. 
 
 EDWARD ROBERT PEARCE, Esq. 
 
 Popular Fallacies regarding Trade and Foreign 
 Duties. 
 
 SIR LOUIS MALLET, C.B. 
 
 Reciprocity: A Letter addressed to Mr. T. B. 
 Potter, M.P. 
 
 411910
 
 FREE TRADE 
 
 ENGLISH COMMERCE.
 
 FREE TRADE 
 
 ENGLISH COMMERCE. 
 
 BY 
 
 AUGUSTUS MONGREDIEN. 
 
 " If you vvibh to see this question of free trade and our trade well discussed, I 
 advise you to pay sixpence for the little book published by Messrs. Cassell, Petter, 
 Galpin & Co., of London, entitled ' Free Trade and English Commerce,' written by 
 Mr. Mongredien. I wish every elector in Preston could have it and read it, and I 
 may recommend it to Mr. Hermon as a book out of which he may begin to learn 
 something of correct facts and sound arguments on the question of free trade, and 
 on the results of our policy as adopted by Sir Robert Peel and Mr. Gladstone, since 
 the year 1841. I have not time to write to you at greater length. The little book I 
 have mentioned will tell you the truth on the facts and results of our free trade 
 policy." — Tlie Right Hon. John Bright, M.P., to an Elector 0/ Preston. 
 
 Cassell, Petter, Galpin cS: Co. 
 
 LONDON, PARIS &' NEW YORK
 
 PREFACE TO THE PRESENT EDITION. 
 
 This little work, which was written in 1879, has enjoyed a wide 
 circulation, owing chiefly, no doubt, to some -words of praise from a 
 great orator,* and to the powerful propagandism of the Cobden Club. 
 We are now in 1881, and I have little to add to, or to subtract from, 
 either the facts or the principles embodied in it. I have, however, 
 carefully revised the present edition, and made a few corrections in 
 trifling matters of detail. 
 
 The present position of our trade with the United States of America 
 curiously confirms the doctrines advanced in this little book. In August, 
 1879, Mr. James Howard, the present member for Bedfordshire, asked 
 me my opinion as to how the United States had been paid for their 
 large exports to us ; my reply was as follows : — 
 
 1. The Americans have been buying largely, from both England 
 and the Continent, of their own Bonds and Stocks, and have given 
 prices above the marketable value of them in Europe. 
 
 2. Normally the United States are exporters of gold, they being 
 producers of it. Latterly they have ceased sending gold to Europe, 
 and the flow has set in from Europe to America, — not to an extent 
 inconvenient to us, for we have a redundancy, but to an extent that 
 may become inconvenient to the United States if the influx should 
 continue ; for when it reaches a certain point, gold will diminisli in 
 value (in other words, prices will rise), and importation will be 
 encouraged and exportation checked ; and their protective system will 
 be severely tried. 
 
 3. Notwithstanding the redemption of American Bonds and Stock 
 referred to, the United States have still to remit a very large sum 
 
 • Right Hon. John Bright, in his speech of the 25th October, 1S79. •
 
 VI PREFACE. 
 
 annurilly to Europe for imerest and dividends, (or which tlity j ny in 
 exports. 
 
 4. The commercial operations of one year are so interwoven with 
 those of the year before and of the year after, that a series of years 
 must be taken into account ; — and the enormous increase of the Ameri- 
 can bread-stuffs, which deficient har\'ests have compelled Europe to 
 import, only dates a couple of years back. Its effects are not yet fully 
 disclosed. 
 
 To these remarks I fully adhere, and I may take this opportunity 
 of adding that : — 
 
 1. It is not our gold that has gone to pay for our large imports from 
 America. Our stock of bullion has remained remarkably steady 
 throughout, and is more than ample for our requirements. 
 
 2. American indebtedness to England, far from being reduced, is 
 now greater than it was, for our fresh investments in the United States 
 exceed the amount of American State Bonds, &c., redeemed. 
 
 3. Our exports to the United States have, in spite of the exorbitant 
 import duties, exhibited within the last two years a very considerable 
 augmentation. 
 
 4. The largely increased revenue-receipts of the United States 
 customs, in consequence of their largely increased importations from 
 Europe, constitute a largely increased tax on the American consumers. 
 For that revenue comes out of their pockets, and is not paid by the 
 European exporters, who have made handsome profits on their sales. 
 
 5. As long as America continues to export largely, she must also 
 import largely, at whatever enormous cost (under the present tariff), to 
 American consumers. 
 
 6. The superfluously large Customs' revenue that is being raised by 
 heavy duties on heavy importations, will year by year become a source 
 of greater trouble and perplexity to the United States Government. 
 
 7. Every fresh addition to the productive and exporting power of 
 American agi'iculture will increase the difficulty and hasten the crisis. 
 For there is no escape from the inexorable law that the more a country 
 exports, the more, in the same proportion, it must import. 
 
 AUGUSUSTUS MONGREDIEN. 
 
 Forest Hill, London, S.E. 
 March, 1 88 1.
 
 CONTENTS. 
 
 PART I. 
 
 CHAP, fAGE 
 
 I. Introductory ...... 9 
 
 II. Exports (unless in Payment of Debt) necessitate Imports 
 
 to the same Amount . . . ,12 
 
 III. Futility of the Attempt to Export Much and Import 
 
 Little ...... 16 
 
 IV. If Protection be Beneficial as between Country and 
 
 Country, it must be Beneficial as between Province 
 
 and Province . . . . .17 
 
 V. Reciprocity ...... 19 
 
 VI. Division of Labour ..... 21 
 
 VII. Protection applied to Young States . . .24 
 
 VIII. Protection in Old States . . . .27 
 
 IX. What England is to do if she be the only Nation that 
 
 adopts Free Trade . . . . .31 
 
 X. Impossibility of encouraging Exports and at the same 
 
 time checking Imports . . . .36 
 
 XI. Free Trade practised Internally by all Protectionist 
 
 States ...... 39 
 
 XII. Concluding Remarks . . . . .43
 
 vm 
 
 cox TENTS. 
 
 PART II. 
 
 CHAP. PAGE 
 
 XIII. Population, Debts, and Trade of the World . . 45 
 
 XIV. The Amount of our Foreign Trade has been Diminishing 
 
 since 1874 • • • • • -5° 
 
 XV. Fall in Prices since 1874 . . -57 
 
 XVI. Competition- in Neutral Markets . . .62 
 
 XVII. Fall in the Wages of Labour .... 66 
 
 XVIII. Commercial and Banking Failures since 1S74, and Ratio 
 
 of Fall in Prices . . . . .70 
 
 XIX. The Increased Excess in the Amount of our Imports 
 
 over that of our Exports . . ... 76 
 
 XX. The Depression in Trade not confined to England, 
 
 but prevalent everywhere . . . .87 
 
 XXI. The Effect on Trade of Political Complications and of 
 
 Losses on the Debts of Defaulting States . . 92 
 
 XXII. Summing-up ...... 94
 
 FREE TRADE AND ENGLISH COMMERCE. 
 
 CHAPTER I. 
 
 INTRODUCTORY. 
 
 It is intended in the following pages to take a short review 
 of the present position of the free trade question in respect 
 to the world at large, and especially in respect to the com- 
 merce of England. Such an inquiry might be useful, and 
 perhaps interesting, at any time, but now,* when commerce 
 is abnormally depressed, and when it is a moot point how 
 far that depression is connected with our free-trade pohcy, 
 it becomes an important and urgent one. 
 
 It is proposed, in the first part, to show the bearings of 
 free trade on the commerce and industry of nations gene- 
 rally ; and in the second to examine into the real causes 
 of the present condition of English commerce, and ascertain 
 to what extent, if any, it may be ascribable to the operation 
 of free trade. 
 
 The subject will be treated from a practical and popular 
 point of view, its technical and scientific aspect having had 
 ample justice done to it by Professor Fawcett and others. 
 In matters of this kind, where the practical application of 
 scientific conclusions depends on the action of men 
 laboriously engaged in political or mercantile pursuits, 
 who have little time to devote to the study of abstract 
 questions, it is necessary to place the subject before them 
 in the most direct and concrete form, and to appeal to 
 demonstrable facts and undeniable figures, in order to arrest 
 their attention and obtain their assent. Still more necessary 
 it is to treat the subject in a popular manner in order to 
 secure a hearing from the mass of the public, Avho, not 
 
 * In 1879.
 
 FREE TRADE 
 
 unnaturally, shrink from the study of dry works on Political 
 Economy. 
 
 Neither is it necessary to study Political Economy as a 
 science in order to arrive at a definite conclusion as to the 
 principle of free trade. The question narrows itself into a 
 few simple issues, on which plain common sense is quite 
 competent to deliver a verdict. 
 
 We propose, in the first part, to show — 
 
 1. That balances due by one country to another are paid 
 directly or indirectly in commodities, and not in specie, un- 
 less occasionally and to an insignificant extent. 
 
 2. That, consequently, for every export of goods that is 
 not sent to pay a previous debt there must be an import of 
 goods to the same amount ; and, vice versa, for every im- 
 port of goods that is not received in liquidation of a pre- 
 vious debt there must be an export of goods to the same 
 amount. 
 
 3. That all artificial limitation of imports necessarily 
 Hmits exports to the same extent ; that it curtails foreign 
 trade, neutralises the benefits of division of labour, and dis- 
 places labour and capital from productive into unproductive 
 channels of employment. 
 
 4. That various other inconveniences and disadvantages 
 result from the curtailment of foreign imports and the 
 restriction of commercial intercourse between man and 
 man. 
 
 To revert to the first proposition : a slight consideration 
 of the actual course of events as they occur under our owzi 
 eyes, shows that the precious metals play a very small part 
 indeed in the payment of debts between nation and nation. 
 Hardly any specie changed hands in the payment of the 
 enormous Frencli indemnity to Germany; or in the trans- 
 mission of the ;^40o,ooo,ooo or so which we lent to foreign 
 countries in the years 1871, 1872, and 1873 ; or in the 
 settlement of the ;^23o,ooo,ooo which we imported in ex- 
 cess of exports during the last four years, 1875 to 1878. 
 The ebb and flow of bullion is on a scale far too minute to 
 do much towards the settlement of international accounts. 
 A country rarely possesses much more or much less specie
 
 AND ENGLISH COMMERCE. 
 
 than is needed for the purposes of currency and of the arts ; 
 and never exports specie so as to trench, beyond a trifling 
 extent, on the amount required for circulation. On the other 
 hand, a country never retains much of the specie that is in 
 excess of its circulation requirements. In the first case a 
 comparatively small withdrawal of gold raises the rate of 
 interest, lowers the price of goods, discourages importation 
 and encourages exportation, so that the balance is soon 
 restored. In the second case the redundant specie that 
 remains after the wants for circulation are supplied lowers 
 the rate of interest, raises prices, checks the outflow and 
 attracts the influx of merchandise, and finds its way abroad, 
 where its value is greater. This is constantly being exem- 
 plified by the action of the Bank of England. When it 
 is wanted to attract a few millions of gold from abroad, the 
 rate of interest is raised, and it flows in; when the stock 
 becomes redundant, the rate of interest falls, and the surplus 
 beyond circulation requirements gradually disappears. The 
 amounts which turn the scale are comparatively trivial. So 
 sensitive is the money market, that three or four millions 
 abstracted from, or added to, the currency are quite 
 enough to depress or to raise the rates of interest sufiiciently 
 to produce a counterbalancing effect either way. And yet 
 there are people who fancy that the balances owing to us, 
 or by us from and to foreign nations, are paid in specie ! 
 Last year (1878) we imported from abroad ^63,000,000 in 
 excess of what we exported. To send abroad that amount 
 in specie, or one-half of it, or even one-quarter of it, would 
 have been simply an impossibility. 
 
 Specie tends, like water, to find its level everywhere, the 
 standard being the circulation requirements of each country. 
 When short of that, its value is raised ; when in excess of 
 it, its value falls, and it flows in or flows out of the country 
 in proportion. It is under the operation of this law that 
 inconvertible paper money drives bullion out of a country. 
 If its circulation requirements be partly supplied by paper 
 money, less specie is wanted, and as a country does not 
 long retain specie in excess of its circulation requirements, 
 the precious metals (of course not the paper) are sent
 
 FREE TRADE 
 
 abroad where ihey are in greater demand and of greater 
 value. If not a part but the whole of the circulation require- 
 ments be provided for by inconvertible paper money, then 
 the whole of the specie (except perhaps a little hoarded here 
 and there) will disappear. 
 
 If it be admitted that no diminution of, or increase to, the 
 amount of specie required for the circulation of a country 
 can be otherwise than both trifling and temporary, it follows 
 as a necessary consequence, that " balances due by one 
 country to another are paid directly or indirectly in com- 
 modities and not in specie, unless occasionally, to an insig- 
 nificant extent." 
 
 CHAPTER II. 
 
 EXPORTS (unless IN PAYMENT OF DEET) NECESSITATE 
 IMPORTS TO THE SAME AMOUNT. 
 
 Ik it is not specie that we receive in return for our exports, 
 or that we send in return for our imports, there is no 
 alternative but to conclude that they pay for each other. 
 In the case of national indemnities, subsidies, loans, interest 
 on loans and foreign investments, these are paid for by the 
 export of goods without any return for them. But as far 
 as commercial dealings go, it is utterly impossible to export 
 goods without importing goods to the same amount, and 
 vice versa. Of course, this is a mere truism to those who 
 are conversant with the subject, but there is a large number 
 of people who look with dread on large imports, and it is 
 necessary to make it clear to them that large imports mean 
 large exports. If it be, as they deem, an advantage to 
 import as little as possible, it follows as an indispensable 
 consequence that they deem it an advantage to export as 
 little as possible, and to have as little foreign trade as 
 possible ; for reduced imports necessarily imply reduced 
 exports, and reduced foreign trade.
 
 AND ENGLISH COMMERCE. 1 3 
 
 But let US suppose it possible for a country to export 
 largely without importing in return any commodity except 
 bullion, and equally possible for it, to compel the retention 
 of the bullion, by prohibiting its re-exportation, would that 
 country be the richer for it ? Certainly not. Let us work 
 it out. There could be no increase of real wealth, for the 
 bullion being in over-supply in respect to the commodities 
 which it represents, would fall in value in the exact proportion 
 of such over-supply ; in other words the money price of all 
 commodities would rise in that ratio. No one would be the 
 richer for that, for the exchangeable value of all commodities 
 (that is, their relation to each other) would remain precisely the 
 same. If the working man received twice his former wages, he 
 would have to pay double for all he consumed, which would 
 leave him where he was ; indeed, the cost of living would 
 rise upon him far more rapidly than he could, by remon- 
 strance or strikes, &c., enforce a rise of wages from his 
 employers. The gold and silver coins being but the 
 counters used to represent the various objects that con- 
 stitute the wealth of the country, the result of doubling the 
 number of the counters would be, not to increase the wealth 
 of the country, but simply to diminish the purchasing power 
 of the counters, and make two of them necessary to represent 
 the same commodity which was before represented by one. 
 
 Meanwhile the money-cost of production would have 
 become so great that the foreigner could no longer afford to 
 purchase the productions of that gold-glutted country, and 
 exportation would cease. Foreign trade would, therefore, 
 be totally suppressed, and the happy country would, like 
 Japan of yore, live within itself, and be independent of the 
 foreigner— a model result of the perfection of protective 
 policy. True that there would be an accumulation of twice as 
 much bullion as before, but as its purchasing power would 
 be diminished by one-half the possessors would be no 
 richer than those men abroad who had but half the quantity. 
 The only way to obtain the full value of the accumulated 
 bullion would be to allow its export, and sell it to the 
 foreigner. But to export bullion means the importing of 
 goods, for what else could be got in exchange for it? And
 
 14 FREE TRADE 
 
 that means a total abandonment of the gold-accumulating 
 policy. Yet what is to be done ? Gold may be piled up in 
 mounds, but if it loses its purchasing power it ceases to 
 be wealth. Bullion is only worth what it will fetch in the 
 commodity-market. It would buy twice as much abroad as it 
 would at home. To utilise it, therefore, it must be sold to the 
 foreigner. Then there would occur the converse of the 
 operations that produced the glut of bullion. There would 
 be large imports and small exports of goods, the protected 
 interests would be ruined, internal commerce would be 
 disorganised for a time, and ever>-thing w^ould be unsettled 
 until the superfluous bullion had been worked off, and its 
 quantity reduced to the level of legitimate circulation 
 requirements. But what can be said of a policy that led 
 to such disasters as its reversal alone could remedy ? 
 
 The supposititious case, however, of a country which 
 let specie flow in but allowed none to flow out, never did 
 actually occur, because no prohibitory measures ever could 
 prevent the precious metals from being transferred from a 
 country where their value is less to those countries where 
 their value is greater. But the hypothesis serves to show 
 that even if such regulations could be enforced, they would 
 be productive, not of advantage, but of evil. 
 
 There are countries of which the imports habitually exceed 
 the exports, and others in which the converse is the case. 
 These apparent exceptions to the rule that every import 
 must be balanced by an export are easily explained, and only 
 tend to prove the rule. 
 
 In the first place, the balance on either side is not paid 
 or received in specie, the movements of which, as we have 
 seen, are quite insignificant in comparison with the balances 
 in question. For instance, the imports into the United 
 Kingdom exceeded the exports in 1877 by ;,^8o,ooo,ooo, 
 and in 1S78 by ;j{^63,ooo,ooo. If these enormous balances 
 had had to be paid in specie, they would have swept away 
 not only every coin, but also all the plate, watches, and 
 trinkets, in these islands. For it is calculated that the 
 entire circulation of the country, together with all the 
 precious metals it possesses as articles of ornament or
 
 AND ENGLISH COMMERCE. 1 5 
 
 Utility, from a gold tankard to a silver pencil-case, barely 
 amount to the ;,^i43, 000,000 in question. But far from the 
 country being drained of its gold and silver, there is in it now 
 quite as much as there was two years ago, before these 
 balances arose, and our circulation requirements have not 
 been trenched upon in the slightest degree. 
 
 Neither has England obtained these ;^i 43,000,000 worth 
 of goods on credit. Merchants do not, in these days, give 
 or take the same long credits as formerly. If the enormous 
 sum in question had to be paid for by England at all, it has 
 been paid long ago. Indeed a certain portion of our 
 imports are paid for long before the goods themselves come 
 to hand. A cargo of wheat from California takes four to five 
 months from the day of the ship's sailing before it reaches 
 England, but it is paid for by drafts on England at sixty 
 days' sight, which, sent forward by rail and steam, mature 
 one or two months before the wheat itself arrives here.. No ! 
 In whatever way we obtain the possession and use of this 
 immense mass of commodities over and above what we send 
 away, it is certain that the amount is not a debt owing by 
 us. In fact, it is just the contrary ; it is sent to us in satis- 
 faction of debts owing to us for interest and dividends on 
 money lent to, and invested in, foreign countries. We shall 
 treat this subject fully later on, meanwhile we will just 
 indulge in one or two remarks. 
 
 All wealthy nations which have lent money to other 
 countries must of necessity import more than they export, 
 since the annual income which they derive from those 
 countries is paid to them in goods. In the same way, the 
 poorer nations who have borrowed money from other 
 countries must of necessity export more than they import, 
 since it is in goods that they pay the yearly interest on 
 the money they owe. Indeed, the comparative wealth or 
 poverty of nations may be pretty fairly deduced from the 
 amount by which their imports or exports are permanently in 
 excess of each other. That amount which a nation exports 
 without receiving a return for it in imports, goes to pay a 
 debt that it owes. That amount which a nation imports 
 without sending out a return for it in exports, constitutes
 
 1 6 FREE TRADE 
 
 the payment of a debt owing to it. Consequently, instead of 
 a persistent excess of exports being a matter of pride, it is a 
 proclamation of indebtedness to other countries ; and on 
 the other hand, to view with regret the increased excess of 
 imports over exports, is to view with regret the increase of 
 national income arising from foreign investments. 
 
 In the following pages it is always to be understood that 
 in viewing the relation between imports and exports, allow- 
 ance is made for that portion of either that is sent or 
 received as payment for loans, war indemnities, subsidies, 
 interest on investments, &c., leaving the question of the com- 
 mercial interchange of commodities to rest on its own merits. 
 
 CHAPTER III. 
 
 FUTILITY OF THE ATTEMPT TO EXPORT MUCH AND IMPORT 
 LITTLE. 
 
 All parties seem to agree as to the great advantage it is to 
 a country to export largely. Each country produces some 
 things that are useful and desirable to other countries, and 
 whether from climate, soil, geological formation, natural 
 aptitude or practice and education, it has some speciality in 
 which it excels. It benefits itself by exchanging its surplus 
 productions for the productions of other countries, and the 
 latter are also benefited by the process. The more largely 
 that country exports, the greater the benefit to itself and 
 others. To put it more concisely — foreign trade is a 
 universal benefit. Up to this point the unanimity of 
 opinions is wonderful ; and what we have said appears a 
 mere enunciation of a string of truisms. But how are these 
 truths acted on practically ? By a persistent attempt on the 
 part of the majority (at present) of nations to export a great 
 deal and to import very little, ignoring the utter incompati- 
 bility of the two courses. All are agreed as to the great 
 advantage it is to a country to export largely, only it has been, 
 and should not be, overlooked that those exports must be 
 paid for in goods, since, as we have seen, specie is not u.'ied
 
 A \D ENGLISH COMMERCE. I 7 
 
 for that purpose (except sometimes provisionally and to a 
 fractional extent). If, therefore, you import little, you can only 
 export little. If you want to export much, you must import 
 much. You cannot curtail your bcie noin\ imports, without cur- 
 tailing to just the same extent your pet, exports. For every 
 hundred pounds' worth of foreign articles which, by prohibi- 
 tion or by prohibitory duties, you prevent coming into your 
 country, you prevent one hundred pounds' worth of your own 
 articles of production from going abroad. It cannot be re- 
 peated too often — because it is at the very root of the question 
 — that to restrict imports is (by the inexorable law of logical 
 sequence) to restrict exports to the same extent, and there- 
 fore to that extent, to restrict foreign trade. The delusion 
 of wishing to sell without buying is equivalent to the old 
 paradox of a valley without a mountain. In vain do the 
 prophets of protection preach — " Let us have an extensive 
 foreign trade to consist wholly of exports." It is simply an 
 impossibility. As well say let us have shadows without 
 light, or a square without corners. The doctrine that 
 foreign trade is an evil would be, though a questionable, at 
 all events an intelligible, one ; but to maintain that foreign 
 trade is a good while the influx of foreign commodities is 
 an evil, is a palpable contradiction. Practically, all inter- 
 change of commodities is barter, and money is merely a 
 common standard by which to measure their relative values. 
 
 CHAPTER IV. 
 
 IF PROTECTION BE BENEFICIAL AS BETWEEN COUNTRY AND 
 
 COUNTRY, IT MUST BE BENEFICIAL AS BETWEEN PROVINCE 
 
 AND PROVINCE. 
 
 If to protect native industry by putting such duties on 
 foreign commodities as shall keep them out of the market, 
 and compel the consumers to deal exclusively with native 
 producers, be beneficial to a country, the same system must, 
 for the same reasons, be beneficial if applied to the various 
 
 B
 
 fS r-RER TRADE 
 
 provinces of that country. Let us take an instance. Wales 
 at present buys her cotton goods from Lancashire, and her 
 pottery from Staffordsliirc. 'J'here are a few small cotton- 
 mills and three or four manufacturers of coarse earthenware 
 scattered here and there throughout the Principality, but 
 these cannot develop themselves under the competition of 
 English producers. Wales therefore demands " protection 
 for her native industry," through the imposition of such 
 protective duties on English cottons and pottery as shall 
 keep them out of the Welsh market. Supposing the request 
 granted, the Welsh cotton-mills and potteries at once receive 
 great extension ; capital and labour are diverted to them 
 from other industries, and the entire Cambrian community 
 pays a heavy tax in the shape of high prices for bad goods, 
 in order to support a few native manufacturers, and in order 
 that capital and labour should be transferred from profitable 
 to unprofitable employments. We will suppose, however, 
 that this is a benefit to the Principality. If so — by parity of 
 reasoning — why should not the native industry of Monmouth- 
 shire be protected against the competition of the Carmar- 
 thenshire producers? And if we continue to carry out the 
 principle to its logical results, we finally arrive at a state of 
 things which in primitive times did really exist — viz., that in 
 which each family live on their own farm produce, and in 
 clothes of their own spinning and making — a state of things 
 in which there would be no imports, and which would 
 afford complete protection against foreign competition. 
 
 We have put the case of England and Wales, but the 
 reasoning equally ajijplies to the various parts of which all 
 large states are constituted. If America or France deem it 
 good policy to protect their population from foreign com- 
 petition at the expense of their foreign trade, they must, as 
 a logical sequence, deem it good policy for California to be 
 protected from the competition of New England, or for 
 Provence to be protected from that of Normandy. Why 
 should not San Francisco and Marseilles be protected 
 against the cotton goods of Lowell and Rouen, so as to 
 foster and develop cotton manufactures of their own ? Why 
 should the west of America be dependent on the east, or
 
 AND ENGLISH COMMERCE. 19 
 
 the south of France dependent on the north, for hardware 
 or Hnen fabrics ? The fact of San Francisco and Lowell, or 
 of Marseilles and Rouen, being under the same national 
 government does not affect the question of free trade or 
 protection in the slightest degree, for this is an economic, not 
 a political question. If a free interchange of commodities 
 between two regions be an evil at all it must be an evil 
 inherent to the system itself, and not convertible into a 
 good, if the two regions happen to be under the same 
 government. If it be to the advantage of a community to 
 restrict its trade with the rest of the world by lessening its 
 imports, it can make no difference as to the truth of that 
 doctrine whether the community be large or small, or 
 whether it be independent or politically connected with 
 other communities. We shall have occasion in a subsequent 
 chapter to advert again to this subject. 
 
 CHAPTER V. 
 
 RECIPROCITY. 
 
 It has been proposed to enlarge our foreign trade by the 
 following curious process. We are to prevail upon foreign 
 countries to take more of our goods by threatening that, if 
 they do not, we shall take less of theirs. We are to induce 
 our neighbours to extend their foreign trade by proposing, 
 as the alternative, that we shall diminish our own. This is 
 called the reciprocity, but it ought to be called the re- 
 taliatory, system. If the foreign country with which we are 
 negotiating yield to our pressure, we increase our foreign 
 trade ; if not, we diminish it. In the first case we increase 
 our exports and consequently our imports too. In the 
 second case we diminish our imports and consequently our 
 exports too. It is to be left to the caprice, ignorance, or 
 ill-will of a foreign nation to decide whether England is to 
 lose a portion of her foreign trade or not. For it cannot be 
 too often repeated that if we carry out our threat of import- 
 ing less, it necessitates our exporting less to the same
 
 FREE TRADE 
 
 extent. It is proposed that we sliould enter into a formal 
 international engagement to lop off a portion of our foreign 
 trade, and in various other ways to do ourselves a serious 
 injury, unless otlicr people agree to alter their fiscal policy. 
 Supposing that other countries decline acceding to our 
 minatory invitation that they should reduce their tarifts, 
 and that we accordingly impose such an import duty on 
 articles that they have been in the habit of sending us, as 
 shall reduce our annual importations thereof by ;,^i 0,000,000, 
 what then ? No doubt they will not like it, but how shall 
 we? A reduction of imports of ^10,000,000 means a 
 corresponding reduction of exports to the same amount, and 
 is equivalent to a diminution of our foreign trade to the 
 extent of ^20,000,000 per annum, to say nothing of the 
 disastrous effects to every consumer in the country, of the 
 rise that would ensue in the price of the articles which we 
 ceased to import, and the numerous other evils which the 
 change would entail. Are we prepared to enter into a 
 compact that we will submit ourselves to all these calamities 
 in the event of other countries declining to be coerced by 
 us into free trade ? It is surely better to leave things as they 
 are than to resort to measures that shall subject us to such 
 an alternative. 
 
 Fortunately, reciprocity possesses one great advantage — 
 viz., it is impracticable. Among the articles which we re- 
 ceive from abroad there is hardl}' one that reciprocity can 
 lay hold of. Ninety-one per cent, of w^hat we import consists 
 of food and raw materials, to tax which is out of the question, 
 and the nine per cent, of manuf\\ctured goods — which is all 
 that the entire world supplies to us — affords far too feeble 
 a leverage to work with.* This part of the subject has, 
 
 ♦ By taking in the mullifarious and insignificant odds and ends 
 lumped together in the Board of Trade returns as " Unenumerated 
 Articles," and by classing as manufactures such things as pictures, 
 works of art, books, medical drugs, toys, confectionery, &c. &c., the 
 percentage of foreign manufactures imported has been distended by 
 Reciprocitarians to 13^ per cent. Even if we admit this incorrect 
 classification, the argument remains untouched, for foreign nations 
 would hjirdly be coerced by our threat of taxing such trifles as their 
 sulphate of quinine, or their violin strings, or their macaroons, &c. &c.
 
 AND ENGLISH COMMERCE. 
 
 however, been made so clear in various recent publications 
 that we need not dwell on it. 
 
 There is the greater incongruity about the reciprocity 
 system, from its being advocated by many who, in other 
 respects, profess free-trade principles. For there is a mani- 
 fest inconsistency in asking our foreign friends to admit our 
 goods and so far adopt our policy of free trade, under the 
 alternative that, otherwise, we shall shut out theirs and so 
 far adopt their policy of protection. Since free trade teaches 
 us that it is unwise in foreign nations to exclude our com- 
 modities from their ports, how can it be wise in us to carry 
 out our threat and exclude their commodities from our 
 ports ? It is tantamount to proclaiming to the foreigner, 
 " Unless you will become free traders we will become pro- 
 tectionists." We might just as fitly proclaim to the Turks, 
 " Unless you become converted to the blessed truths of 
 Christianity we will ourselves turn Mahometans " If free 
 trade be a truth and a reliable principle it must remain an 
 immutable standard of right to those who understand and 
 believe in it ; and is not to be alternately professed and 
 ignored in order to drive a bargain or gain an advantage. 
 Those who entertain a firm conviction that free commercial 
 intercourse is for the benefit of all men in all countries, will 
 never consent to enter into conditional arrangements under 
 which there may be a possibility of their having to act in 
 opposition to that conviction. To adopt the reciprocity 
 system would be the first step towards re-enacting the Corn 
 laws. 
 
 CHAPTER VI. 
 
 DIVISION OF LABOUR. 
 
 Among the many advantages conferred on mankind by free 
 foreign trade — that is, by the unrestricted interchange of 
 commodities between man and man throughout the globe — 
 one of the most signal is that, in the highest degree and to
 
 22 FREE TRADE 
 
 its widest extent, it promotes division of labour. There is 
 surely no need to expatiate on the important jmrt which 
 division of labour plays in multiplying and perfecting the 
 products of human industry. Througli its instrumentality 
 the productive forces of the human race are employed in 
 such a way as to lead to the most efficient and remunerative 
 results. The larger the community or the aggregation of 
 communities, the more effectually the division of labour 
 can be carried out. In a country village, or in an incipient 
 colony, a shop is a miscellaneous store, a dealer devotes his 
 attention to a number of incongruous articles, and an artisan 
 is a jack-of-all-trades. In a populous district labour is more 
 divided, and to each individual is allotted some special 
 work to do, which constant practice enables him to perform 
 with greatly-increased efficiency. In large countries each 
 province settles down more specially to certain forms of 
 industry, according to a variety of influences, such as geo- 
 graphical position, soil, climate, natural productions, here- 
 ditary tendencies, early education of the people, sometimes 
 chance immigration, and other causes more or less accidental. 
 By means of this division of labour each province produces 
 more abundantly, more cheaply, and in greater perfection, 
 the special articles to which it devotes itself, and all work 
 hamioniously together for the common good. The benefits 
 confened by division of labour would be lost if these 
 provinces were to split among themselves, and each deter- 
 mine on combining within itself all the various trades and 
 industries which before formed the speciality, some of one 
 province, some of another. All of them would be losers ; 
 because, whereas before, in each of them capital and labour 
 were concentrated on certain employments to which they 
 were the most competent, they are now diverted from these 
 and directed to a variety of others to which they are the 
 least competent. If the pottery district in Staffordshire 
 were to decide on diverting a portion of its capital and of 
 its skilled labour to the creation of woollen and linen manu- 
 factures, in order to become independent of Leeds and 
 Belfast, it is plain that the operation would be a losing one, 
 chiefly because the immense advantages derived from division
 
 AND ENGLISH COMMERCE. 23 
 
 of labour and industrial organisation would be wantonly 
 thrown away. 
 
 So, in the world at large, had it not been for the per- 
 nicious interference of governments with the natural course 
 of things, each country would have settled down more 
 specially to certain forms of industry, and, were trade left 
 free, would, through this natural division of labour, each 
 produce cheaply and abundantly those special articles to 
 which it had devoted its attention, and contribute, to the full 
 extent of its productive power, to the wealth of the world. 
 It would, moreover, follow that as each country would 
 devote its energies to the production of those commodities 
 which it was more specially fitted to raise, with a view of ex- 
 changing the surplus for such commodities as other nations 
 were more specially fitted to produce, the amount of inter- 
 national traffic would be enormous, and foreign trade would 
 be developed to an extent at present undreamt of 
 
 It is in the performance of this function of interchanging 
 the commodities of one country with those of another, that 
 foreign trade is instrumental in promoting division of labour 
 all the world over ; and whatever tends to impede the 
 former must impair the latter. Now, protection, by checking 
 imports checks exports, and in that proportion curtails 
 foreign trade. It is, therefore, clear that the protective 
 system interferes detrimentally with the division of labour. 
 Indeed, if that system were carried out to its full extent by 
 not only isolating, as it now does, nation from nation, but 
 also province from province, community from community, 
 and family from family, division of labour with its attendant 
 benefits would be altogether suppressed. 
 
 Fortunately Nature herself interposes a limit to the isola- 
 ting tendency of protection, by the diversity of the products 
 yielded by different parts of the earth. The most thorough 
 protectionist will admit that there are many foreign com- 
 modities which each country must either import or entirely 
 deprive itself of The utmost he can accomplish is to 
 abridge foreign trade, he cannot altogether annihilate it. 
 Thus, under the operation of a natural law, no nation can, 
 without an intolerable degree of privation and suftering, be
 
 24 FREE TRADE 
 
 completely self-dependent, and man is, in order to inter- 
 cliange tlie special products of one zone with those of 
 another, compelled, apparently against his will, to exercise, 
 at all events to a certain extent, the humanising influence of 
 international commerce. 
 
 CHAPTER VII. 
 
 PROTECTION APPLIED TO VOUXG STATES. 
 
 There are two classes of states which, while admitting the 
 theoretical truth of the free-trade system, claim exemption 
 from its operation for contradictory reasons — young states 
 because they are young, old states because they are old. 
 The former say that were they old they would not dream 
 of maintaining protection, but .being young their case is 
 exceptional. The latter say that, were they young they 
 would not dream of hampering themselves with protection, 
 which they now find so onerous, but being old their case is 
 exceptional. 
 
 Let us first take the case of the young states. Their plea 
 assumes the following shape. 'I hey are supposed to say, 
 " As a theory, free trade is, we admit, unassailable, but, 
 exceptionally, and for a time, it does not apply to young 
 nations or colonies, for they would never learn to manu- 
 facture anything for themselves unless their early efforts were 
 * protected ' from the sweeping rivalry of older and more 
 expert producers. Give the native manufacturer a fair start 
 by artificially fostering his infimt labours, and when he has 
 made some progress, and reached a certain amount of pro- 
 ficiency, we will then strip him of protection, lei him breathe 
 the bracing air" of open competition, and adopt free trade 
 without reservation." This doctrine will not, however, stand 
 the test of close examination. On the contrary, it can, we 
 thi'nV. be shown that it is precisely to young countries, or
 
 AND ENGLISH COMMERCE. 2$ 
 
 newly-founded colonies, that the application of the protective 
 principle is the most pernicious and indefensible. 
 
 These young communities are generally situated in the 
 midst of an inexhaustible area of fertile land which only 
 waits the application of human industry to be converted 
 into mines of wealth. There is a strong demand for labour, 
 which accordingly receives a high rate of remuneration. But 
 so favourable are the natural conditions, that high wages are 
 perfectly compatible with the cheap production of articles 
 which foreign countries readily take in any quantity, giving 
 in exchange such other articles as the young country could 
 not produce except at a much greater cost. Its commerce 
 is thus carried on under the most favourable possible con- 
 ditions, and the working power of the young nation is all 
 directed into the most profitable channels. It is now pro- 
 posed to alter this prosperous state of things. Some of the 
 articles hitherto obtained from abroad in exchange for the 
 staple commodities of the young country are, at any cost, 
 to be raised or manufactured at home, and the export of the 
 staple commodities lessened in proportion. The capital 
 and labour which are now working with admirable results 
 are to be abstracted from the production of commodities so 
 cheap and good that foreign countries willingly buy them, 
 and to be devoted to the production of commodities so dear 
 and bad, that in order to compel the native consumers to 
 buy them, the importation of the same articles from abroad 
 has to be prevented by prohibitory duties. And who is it 
 that is benefited by this policy? No one, not even the 
 workman or capitalist whose labour and money are engaged 
 in the new manufacture; tliey were fully and remuneratively 
 employed before, and now that they are diverted into new 
 channels, competition keeps wages and profits down to the 
 average level, wliile to enable them to get even that, the 
 entire community has to be taxed. Certainly not the rest 
 of the nation, for they have to subsidise the new industry 
 to keep it going. 
 
 It is much more to the purpose to inquire who it is that 
 is injured by this policy. Everybody is. All the consumers 
 of the "protected" fabric, who are mulcted in the difference
 
 26 FREE TRADE 
 
 between the low price at which they used to get a good 
 article from the foreigner and the high price which they 
 now have to pay for an inferior article to the native. All 
 the i)roducers and traders in the country, who suffer from 
 the diminution that takes place in their foreign commerce in 
 consequence of the reduced amount of the importations. 
 And, finally, even the protected industries themselves; for, 
 while the labour and capital employed in them obtain no 
 more than the average remuneration, they are subject to 
 one peculiar disadvantage : they exist on sufferance, and 
 the system of protection by which they were brought into 
 being, and under which alone they can live at all, is pre- 
 carious, questionable, and liable to break down altogether 
 at any moment that the nation may get tired of paying a 
 yearly subscription for the purpose of artificially maintaining 
 it. These industries, the nurselings of well-meaning but 
 short-sighted patriots, are for the most part sickly, nerveless, 
 and etiolated ; and although reared into existence with the 
 professed view that they shall some day stand the brunt of 
 foreign competition, the day never arrives when they are 
 equal to the struggle, and protection has either to be 
 continued indefinitely, or its removal is their death- 
 warrant. 
 
 As these fragile protected industries increase in number 
 and importance they at last become formidable obstacles to 
 the full adoption of free trade. As to encouraging their 
 growth with the idea that at some future period they will 
 willingly encounter, or be found able successfully to with- 
 stand, foreign competition, it is an error and a delusion of 
 which most old countries furnish abundant illustrations. The 
 time will come when those young countries which have 
 acted in that vain hope, will bitterly repent having done so. 
 They will find that tliey have made sacrifices to create 
 interests, the vitality of which is entirely dependent on the 
 national bounty, and which will have either to be left to their 
 fate, or will remain a perpetual drain on the resources of 
 the country. Far better not to have called them into exist- 
 ence than to let them grow until the alternative faces you 
 of either immolating them, or of unwillingly adhering to a
 
 AND ENGLISH COMMERCE. 27 
 
 commercial policy which you know to be injurious, and which 
 you only adopted temporarily. 
 
 The plausible cry under which this mischievous policy is 
 usually inaugurated is, " Do not let us pay the foreigner for 
 what we can produce ourselves ! " The answer is obvious, 
 " You do not pay the foreigner for his goods in the sense 
 you mean it, that is, in money. Imports are paid for by 
 exports, not in bullion." All commerce is barter. You 
 simply exchange with the foreigner what you can produce 
 better than he can, for what he can produce better than you 
 can, and both parties are benefited. In prohibiting that 
 exchange, you at the same time nullify both the sale of your 
 own, and the purchase of the foreign commodity. In order 
 yourselves to produce the foreign article, you have to pro- 
 duce so much less of the native article which you would 
 otherwise have given in exchange for it ; for the same capi- 
 tal and labour cannot produce both, and by stopping the 
 import of the former you stop the export of the latter. The 
 phrase, "Do not let us pay the foreigner for what Ave can 
 produce ourselves," correctly interpreted, means " Do not 
 let us exchange our productions for those of the foreigner," 
 or, in other words, " Do not let us have foreign trade." 
 
 CHAPTER VIII. 
 
 PROTECTION IN OLD STATES. 
 
 The doctrine that we have just examined — as to young states 
 being the only proper exceptions to the universal adoption 
 of free trade — offers a curious contrast to another which 
 asserts the precise contrary, viz., that it is the old states, 
 and not the young ones, that are entitled to form the ex- 
 ceptions in question. The plea may be condensed into the 
 following shape : — " As a theory, free trade is, we admit, 
 unassailable, but, exceptionally, it does not apply to old 
 states, in which interests have grown up under the shelter of
 
 28 FREE TRADE 
 
 protection for such a length of time, and have attained such 
 dimensions, that the change now to a free-trade pohcy would 
 bring with it wide-spread ruin and desolation, and must 
 therefore be avoided. Would that these interests had never 
 been created and fostered by protective laws ! But, un- 
 fortunately, here they are, and we shrink from the task of 
 disturbing them. Of course, young states would not be so 
 foolish as to encumber themselves with such burdens, but 
 our forefathers were unaccjuainted with political economy, 
 and hence the errors of which we are now feeling the 
 effects." We may observe, in the first place, that as the 
 truth of the free-trade theory is not controverted, and as 
 the only question is whether the positive and permanent 
 advantages which its adoption offers would compensate for 
 the temporary disturbance which it would occasion to pro- 
 tected interests of old standing, we need only address 
 ourselves to the latter topic. 
 
 To paraphrase the old Roman axiom, saliis popnli, suprema 
 Aw; we may say that the good of the people ought to be the 
 first and paramount consideration. That the interests of 
 certain limited classes should be consulted to the detriment 
 of the country at large, that all should be injured in order 
 that a few should be favoured, is a doctrine which has too 
 often been acted upon, but has never been unblushingly 
 proclaimed. In the present day, if put forth in its naked 
 deformity, it would be denounced as utterly false and 
 untenable. And yet that is, in plain words, the doc- 
 trine advocated in the foregoing plea. It implies oppo- 
 sition to all change and denial of all progress, because 
 the change might be injurious to a few, though the 
 i:)rogress would be the beneficial to the many. It is, no 
 doubt, to be regretted that the interests which stand in 
 the way -of the public good should ever, from a false policy, 
 have been placed in that position, and we may sympathise 
 with the individuals who may prove to be the innocent 
 victims of an evil system, but that sympathy must not blind 
 us to the fact that the community had for a long period 
 been suffering from the existence of the abuse, nor still less 
 induce us to stay the hand that is lifted to destroy it. The
 
 AND ENGLISH COMMERCE. 29 
 
 longer the evil has lasted, the more just and necessar}^ it is 
 to put a speedy end to it ; and since we know that the change 
 is for the national good, our desire to confer a permanent 
 benefit on the community must overrule our regret at 
 abolishing privileges by which a few gained and all the rest 
 suffered. 
 
 All improvements in the machinery by which our social 
 requirements are supphed involve changes that are injurious 
 to some class or other. Railways occasioned a vast dis- 
 placement of the capital and labour employed in the pre- 
 viously-existing modes of conveyance. The adaptation of 
 electricity to lighting purposes would, if successful, occasion 
 heavy losses and deal a severe blow to the innocent holders 
 of shares in gas companies ; and so on in hundreds of 
 analogous instances which are of constant recurrence. Yet 
 no one has ever seriously maintained that these improvements 
 were to be " prohibited " in order to " protect " the interests 
 which such improvements interfered with. Even a century 
 ago, when the buckle-makers of Birmingham petitioned 
 Parliament to protect them, by prohibiting shoe-ties, their 
 request was refused, although it was in perfect consonance 
 with the protective principles that then prevailed. 
 
 Under the Tudors and the Stuarts the protective system 
 in England assumed the shape of patents and monopolies 
 under the Crown. By arbitrary edicts consumers were not 
 left free to buy where they could buy the best and cheapest 
 wares, but were compelled to deal for certain articles with 
 certain " protected " parties only, who frequently were new 
 and clumsy at their trade. This system became so costly 
 and oppressive that the Commons frequently remonstrated 
 with Elizabeth and James against it as an intolerable griev- 
 ance. It was accordingly alternately remedied and renewed, 
 until the sturdy Puritans came and put an end to it alto- 
 gether. The people of Europe and America who at the 
 present day suffer by the protected trades, as we, of old, 
 suffered by patentees and monopolists, and who also are 
 " not free to buy where they can buy the best and cheapest 
 wares, but are compelled to deal for certain articles with 
 certain 'protected' parties only," have not yet thoroughly
 
 30 FREE TRADE 
 
 realised tlie situation, and suffer in silence. The fact is, 
 that those who are pecuniarily interested in the maintenance 
 of high duties and protective laws, are few in number but 
 wealtliy, energetic, clamorous, and united; while the people, 
 whose individual loss is small, though the aggregate is large, 
 are apathetic and frequently misinformed and misled. It is 
 hardly therefore to be wondered at that the rulers of 
 nations should, hitherto, have foimd it expedient to court 
 the alliance of the former, instead of siding with the inert 
 and indifferent mass of the public. 
 
 But if statesmen are sincere in their recognition of the 
 advantages derivable from the adoption of free trade, and 
 only hesitate from the fear of injuring " old protected 
 interests," let them bear in mind that this disturbance of 
 interests is limited and temporary, since, as has been the 
 case with all new movements, whether from scientific or 
 political causes, the displaced capital and labour rapidly get 
 re-distributed into other channels, while the improvement is 
 universal, permanent, and expansive. Moreover, li it should 
 be absolutely necessary, the disturbance which is so much 
 dreaded can be mitigated by graduating the fiscal changes, 
 and spreading them over a certain space of time. As a 
 certain quantity of the previously-prohibited articles gradually 
 obtained admittance from abroad into the country, its ex- 
 ports would increase to the same extent, and to the pro- 
 duction of this increased export, the capital and labour 
 disengaged by importing what was before produced at 
 home, would by degrees be applied. This process would 
 go on until the protective duties were wholly removed, 
 and very soon the " old interests," which were dependent 
 for a precarious existence on a subvention from the rest 
 of the community, would become "new interests," vigorous, 
 self-supporting, and contributing to the wealth of the 
 country instead of subtracting from it.
 
 A\n ENGLISH COMMERCE. 3 I 
 
 CHAPTER IX. 
 
 WHAT ENGLAND IS TO DO IF SHE BE THE ONLY NATION 
 THAT ADOPTS FREE TRADE. 
 
 It has sometimes been asked, " Of what avail is the 
 adoption of free trade to a country if every other country 
 adheres to the protective system ? What is a single free- 
 trading nation like Great Britain to do when every other 
 nation is tightening the bonds of restriction, and isolating 
 itself as much as it can from the rest of the world ? 
 What is to become of our foreign trade if all other countries 
 resolve on having as few dealings as possible with each 
 other and, as a necessary consequence, with us ? " In 
 the first place, let us observe that this question must 
 proceed from a free trader, and must pre-suppose that the 
 curtailment of foreign trade is an evil. For if it were not 
 so, and if the querist deemed commercial isolation to 
 be an advantage, what room has he for complaint if 
 foreign nations, by carrying the protective system out in 
 its integrity, should force upon us the blessings of isolation ? 
 If it really be the final object of sound commercial policy 
 that each country shall supply its own wants {far da se) and 
 be independent of the outer world, then it must be absurd 
 for us to hanker after foreign trade. Why should we repine 
 at protection indirectly producing the same effects on us 
 as it directly does on its own votaries ? If those effects are 
 beneficial to them they must be so to us. It is evident 
 then that the querist is a free trader, only he is scared and 
 shaken by the unanimity with which free trade has so far 
 been scouted by foreign nations. True that all scientific 
 inquirers are in favour of it, but the " still, small voice " 
 of science is drowned in the loud clamour of the interested, 
 while the people not understanding the question are silent 
 and the rulers side with the active and energetic. 
 
 That protectionist doctrines and policy do prevail in 
 almost all countries but England, and among the people as
 
 3 2 FREE TRADE 
 
 well as among the governing classes, is very true and some- 
 what strange. Not strange, perhaps, among the people, 
 to whom the old cries, such as, " Keep the balance of trade 
 in your favour" — "Sell much, buy little" — "Do not be 
 dependent on foreigners '' — and similar fallacies in the shape 
 of aphorisms have been handed down traditionally as the 
 condensed wisdom of their ancestors. But certainly strange 
 among the governing classes, whose business and duty it is 
 to study and make themselves masters of a subject of such 
 vital importance to the people whose destinies they rule. 
 On the question of the truth or falsity of free trade 
 principles, depends the policy which involves the greater 
 or lesser well-being of many millions of human beings. 
 The statesman who, in his fiscal measures, acts on the 
 protective principle without first examining with the utmost 
 care and conscientiousness whether it be a true and reliable 
 one, or whether it be (as political economists assure us) a 
 false and misleading one, is utterly unjustifiable. A grave 
 responsibility rests on him if he persists in ignoring or 
 neglecting the warnings of scientific experts who have 
 devoted years to the investigation of the subject, and 
 thus stakes the welfare of a nation on the line of policy 
 which they utterly condemn. 
 
 It is a remarkable fact that among the eminent men who 
 have made political economy their special study there is not 
 one who does not uphold free trade and pronounce protec- 
 tion to be a disastrous error. In the Index to the Catalogue 
 of the London Library there is a list of seventy-seven 
 authors who have written on that science. Most of their 
 works are written in English and French, but several are in 
 German, Italian, and Russian. Here, then, are seventy- 
 seven professional witnesses, men who have investigated 
 the subject thoroughly, and whose opinion must, therefore, 
 carry great weight. What do they say? By a majority of 
 seventy-five to two (the two being eccentrics of no note), they 
 declare that the protective system is a mistake most injurious 
 to the country that adopts it. What a startling contrast I 
 The scientific men (who have studied the subject) recommend 
 one line of policy ; the statesmen (who have not) mostly act
 
 AND ENGLISH COMMERCE. ^7^ 
 
 on the opposite. For a statesman to justify to his own 
 conscience the adoption ot a protective poHcy, he must 
 have arrived at a moral certainty that all those m6n who 
 have scientifically analysed that policy, and have unreservedly 
 condemned it, are utterly mistaken. Their verdict, how- 
 ever, will outlive his action, for the conclusions of eminent 
 thinkers are not to be scornfully ignored, and the Napoleonic 
 contempt for Messieurs les ideologues is a thing of the past. 
 
 One thing is certain : there can be no compromise 
 between the two systems. Either the one or the other 
 must be irretrievably bad, and it is almost impossible to 
 adopt the one without totally discarding the other. The 
 fiscal measures requisite to carry out protection are in 
 diametrical opposition to those called for by free trade. 
 The question, therefore, as to which is right and which 
 is wrong is too important to be left in abeyance. It 
 ought to be settled at once and for ever. Scientific men 
 have done their part, and have unanimously decided in favour 
 of free trade. It remains for the people and their rulers 
 to institute a thorough examination of the subject, and 
 to give practical effect to their decision. Symptoms of 
 awakened attention to this all-important matter are nov/ 
 apparent in France, Germany, and the United States. In 
 all these countries the resisting power of vested interests 
 is strong ; but, on the other hand, those nations abound in 
 able men and profound thinkers, and error will not live 
 long under the "fierce light" that they will throw upon the 
 question — a question that has unfortunately been rather 
 neglected abroad, as appearing to be, though in reality 
 not being, too abstract and technical for general discus- 
 sion. 
 
 There is a mistaken notion afloat in the minds of some 
 of our neighbours that of two countries that trade together 
 one gets a larger profit than the other, and that England, 
 for instance, in her mercantile transactions with other 
 nations, reaps from them miOre advantage than do those 
 she trades with. But a little consideration shows that 
 this is impossible. The act of trading, whether by sale, 
 purchase, or barter, is a purely voluntary one, and unless 
 c
 
 34 FREE TRADE 
 
 it suited both parties it would not take place. A man 
 buys because he prefers the article that he purchases to the 
 money which he gives for it, and he sells for the con- 
 verse reason ; but that preference is spontaneous, and he 
 yields to his own wish, not to compulsion. When two 
 persons interchange commodities, each is actuated by the 
 belief and expectation that he reaps a benefit from it. 
 National trade is but the aggregate of individual mercan- 
 tile operations, just as national profit is only the aggre- 
 gate of individual gains ; and individual traders have so 
 keen a perception of, and so eager a desire for, lucrative 
 traffic, that they may safely be trusted only to do 
 business when they see a fair prospect of gain. And if 
 they gain, what matters it if the parties they deal with 
 gain too ? It is of the very essence of commerce that 
 buyers and sellers, importers and exporters, siiould all be 
 benefited. In fact, were it otherwise, no interchange of 
 commodities would take place at all ; for who would buy 
 were it only profitable to sell? And who could sell il 
 there were no buyers ? For a government, therefore, to 
 restrain its subjects from buying because the seller is 
 benefited, or from selling because the buyer is benefited, 
 cannot be deemed a rational policy. If England has 
 profited largely by her foreign trade, it has not been 
 because her percentage of gain has been over the average 
 (for it could easily be shown that it has generally been 
 below it), but simply because of, and in proportion to, the 
 enormous dimensions to which it has reached. 
 
 Of this enormous expansion ot her foreign commerce, 
 England owes the greatest part to her adoption of Iree trade. 
 The development of her commercial intercourse with the 
 rest of the world since the repeal of the Corn Laws in 1846, 
 and of the Navigation Laws in ^849, is marvellous. In 1S40 
 our combined exports and imports were ;^i72,coo,oco ; in 
 1878 they were ;^C)i 1,000,000. True that in most countries 
 some increase of foreign trade has taken place within the 
 same period, but in many cases it has only been slij;ht, and 
 in no instance has it i)rogrcsscd in an) thing like the sanic 
 ratio. It is open to all nations to obtain siuilar results by
 
 A. WD ENGLISH COMMERCE. 35 
 
 the adoption of the same commercial policy. That free 
 trade causes an increase of imports is admitted by its 
 opponents, and, indeed, forms the very ground of their 
 complaint, and since increased exports follow as a necessary 
 consequence, there must ensue a proportionate development 
 of foreign trade. 
 
 And that all nations will sooner or later adopt the free 
 trade system there is not, we think, the slightest room 
 for doubt. How slow the world is in recognising and 
 acting upon scientific truths there is many a precedent to 
 show. Almost every improvement has had to make its way 
 through a long period of neglect, of misconception, of pre- 
 judice, and, where " old interests " were encroached upon, of 
 positive and obstinate I'csistance. A theory maybe slighted, 
 misrepresented, pooh-poohed, and even persecuted for a 
 time, but if it possesses the vitality of truth, the day will 
 come when it will pierce through all opposition, and triumph 
 in universal recognition. So will it be with free trade. It 
 has become a scientific truth, and has gone through the 
 ordeal of the most critical examination. All who have 
 seriously studied it have become converts. It is neglected, 
 not confuted. It is as a policy, not as a theor}^, that it has 
 opponents. This discrepancy, however, cannot long pre- 
 vail. Practice has a slow but steady tendency to conform to 
 principle. The mass of the people do not yet clearly see 
 how injuriously they are affected by a protective policy, 
 because the tax which it inflicts on them is paid indirectly, 
 and as it were imperceptibly, in the shape of the enhanced 
 prices that they have to give for the protected articles. If 
 that tax were collected from them directly and avowedly, 
 their eyes would quickly be opened. They would begin to 
 inquire why they should be asked to subscribe so niucli a 
 year in order that A B & Co., and C D & Co., should be 
 enabled to make money out of a losing business. And when 
 the process of inquiry is once entered on, discussion and 
 analysis will lay bare the truth, and a general reaction will 
 take place in favour of free trade. 
 
 Meanwhile, all that England needs to do is to pursue her 
 way unmoved, trade with other nations as much as they will
 
 36 FREE TRADE 
 
 let her, be ready to multiply dealings with them when tliey 
 are ready, and open up new markets when opportunities 
 offer. As to trying to force our intercourse upon others by 
 raising our tariffs against them, we have already shown that 
 all such retaliatory measures are much worse than useless, and 
 have for effect merely to wilfully abridge our own foreign 
 trade, in order to spite those who refuse to increase theirs. 
 
 CHAPTER X. 
 
 IMPOSSIBILITY OF ENCOURAGING EXPORTS AND AT THE 
 SAME TIME CHECKING IMPORTS. 
 
 Fortunately no government and no legislation can succeed 
 in altogether putting a stop to international trade. The 
 world is preserved from the complete application of pro- 
 tectionism by two important influences. The one is the 
 fact that there are several commodities which a country must 
 either do without or import from abroad, as the native pro- 
 duction of them is impossible. No amount of protection 
 could enable England to produce her own wine, or P"rance 
 to raise her owti cotton, or America to grow her own tea. 
 To some extent, therefore. Nature compels nations to inter- 
 change commodities, and thus she points the way to free trade. 
 The other influence is almost as forcible and effective. It 
 arises out of the intense desire that exists everywhere, and 
 is perhaps most intense in protected countries, to sell, that 
 is, to export, to the greatest possible amount. Indeed, this 
 eagerness to export did formerly often, and does even now 
 sometimes, prompt governments to grant bounties on the 
 exportation of certain articles, so as to enable the producer 
 to sell his goods cheap abroad, while he gets the full price 
 of them at home. This process simply amounts to taxing the 
 community in order to make a present to the foreigner of a 
 portion of the proceeds. The absurdity, however, proved too 
 flagrant to endure, and has therefore nearly (not quite — see 
 the French Sugar bounties) become obsolete. All govern-
 
 AND ENGLISH COMMERCE. 37 
 
 ments and all nations are exceedingly anxious to swell the 
 amount of their exports to the rest of the world, and, strangely- 
 enough, this passion for selling co-exists with a vehement 
 aversion to buying, or importing from other countries ! As if 
 the achievement of both these purposes at once were not an 
 utter impossibility! It has been clearly shown that if a com- 
 munity desires to export, it must, from the nature of things, 
 import in proportion — and if it determines on curtailing its 
 imports, it must be content, in a similar ratio, to curtail its 
 exports. 
 
 As we have elsewhere pointed out, some nations do 
 indeed export more than they import, but that is because 
 they are in debt to the rest of the world, either for interest 
 on loans, &c., or for war indemnities, or for tribute to a 
 suzerain power, and such like. These debts are provided 
 for, not by the transmission of specie, but by the export of 
 goods, and for that portion of their exports those countries, 
 of course, receive no imports in return. So likewise some 
 countries (among which England stands foremost) import 
 more than they export, because the rest of the world is in 
 debt to them, and this excess of imports being sent in pay- 
 ment of that debt, no return is made for it in the shape of 
 exports. But beyond the amount of such debt-payments, it 
 is an incontrovertible fact that for every hundred pounds' 
 worth exported, a country must receive back one hundred 
 pounds' worth of foreign commodities. If you determine on 
 only importing fifty pounds' worth of foreign commodities, 
 you must be content with only exporting fifty pounds' worth 
 of your own productions. Such must of necessity be the 
 final result of your commercial transactions with the world 
 at large. Of course, with one or more individual countries, 
 your separate account may stand differently \ you may 
 export largely to these, and get but few imports from them 
 in return ; but your imports will be, in the same proportion, 
 larger from, and your exports smaller to, other countries, 
 so as to restore the equilibrium, and in the aggregate, your 
 imports and exports will balance each other. 
 
 It is this passion for exporting which practically acts, 
 to a certain extent, as a counterpoise to the aversion of 
 
 411910
 
 38 FREE TRADE 
 
 protectionist countries to the importation of foreign com- 
 modities. They cannot indulge their love for selling, and, 
 at the same time, indulge their rcinignance to buying. Of 
 this they arc unaware, and they delude themselves by a vain 
 expectation that they can compel the foreigner to pay in 
 specie for the goods wliich they sell to them. But it is not 
 so, it cannot be so, and even if it were so, it would be of no 
 advantage to them, for the reasons which we have given 
 elsewhere. The goods which they export will be paid for in 
 goods. Practically and substantially all commerce is barter. 
 Some have proposed, as a milder and more allowable 
 form of protection, that protective duties should be levied 
 on foreign manufactured goods only, and not on agricultural 
 produce or raw materials. The reason assigned is that the 
 former represents a larger percentage of capital and labour 
 than the latter class of commodities. This distinction, if 
 admissible, would not meet any of the objections to which 
 we have shown the protective system to be open. But it is 
 not admissible. The only difference (and that a slight one) 
 is that the element of rent of land enters rather more directly 
 into the value of raw material than into that of a manu- 
 factured article. But otherwise, fifty pounds sterling's worth 
 of the former represents as much of wages of labour and 
 remuneration to capital as fifty pounds' worth of the latter. 
 The identity of their market price shows the identity of 
 their exchangeable value, and, as nearly as possible, the 
 equivalence of their cost of production. There is un- 
 doubtedly more labour and capital absorbed in a ;£c^o 
 pianoforte than in a ton of pig iron at ^5 per ton ; but not 
 more than in ten tons of the same pig iron, since they also 
 represent the same sum of ;;^5o. It is not the question 
 of relative bulk or weight which we have to consider, but 
 that of relative value, and whether it is expensive cutlery or 
 cheap raw cotton that constitute the import, the same value 
 of each represents, as nearly as possible, the same amount 
 of capital and labour.
 
 AND ENGLISH COMMERCE. 39 
 
 CHAPTER XI. 
 
 FREE TRADE PRACTISED INTERNALLY BY ALL PROTECTIONIST 
 STATES. 
 
 The avowed and no doubt sincere object of the protectionist 
 statesman is "to foster native industry, by employing it to 
 supply the wants of the community, instead of paying 
 triijute to the foreigner by resorting to him for the supply of 
 those wants." This is only the isolation principle in another 
 shape. If you wish for an outlet for your productions, you 
 must submit to employ and pay the foreigner for his produc- 
 tions to the same value, for you will have to receive them in 
 payment for yours. If, on the other hand, you wish your 
 country's wants to be supplied exclusively by its own inhabi- 
 tants, you must cease interchanging commodities with the 
 outer world, lose the advantages of division of labour on a 
 large scale, and, as the Japanese formerly did from choice 
 and on system, or as our remote ancestors did from 
 ignorance and necessity, shut yourselves up within your own 
 circle of resources. 
 
 But even then you are not relieved from the detested 
 presence of free trade. It reigns paramount within your own 
 country. It may not exercise its alleged baneful influence on 
 your relations with other countries, but it does exercise its 
 full influence (baneful or not) on the relations of one part of 
 your country with the rest. All the commercial intercourse 
 that takes place between the various provinces of your empire 
 is entirely governed by free trade principles. Vet it is not 
 found that this unrestricted competition benefits some to the 
 injury of others. On the contrary, each part works har- 
 moniously with the rest, and all are left free to adjust their 
 dealings under the natural laws of supply and demand. 
 Each district settles down to that form of industry to which 
 circumstances have best adapted it, and requires no Govern- 
 ment interference to protect it against the competition of 
 neighbouring districts. All trades in all places within that
 
 4© FREE TRADE 
 
 country are open to all men, and no one would deem it to 
 be a benefit that a heavy tax should be imposed on the 
 cheap and good wares produced in one spot, in order to 
 force the sale of dear and bad wares produced in another. 
 In fact, the principle of free trade has been, and is, acted 
 upon to the fullest extent by all governments within the 
 limits of their own dominions. There may have been some 
 few apparent exceptions, such as the ociroi duties on the 
 introduction of certain commodities into some Continental 
 towns, and similar local taxes, but these were levied for the 
 purpose of revenue, not of protection. In the completest 
 and widest sense, it is a fact that no government, however 
 protectionist in its practice towards other countries, has ever 
 acted counter to free trade principles within the range of its 
 own empire. 
 
 It is not easy to justify this inconsistency. If free trade 
 be an evil as between the United States of America and the 
 other countries of the world, how can it be a good as 
 between, say, Pennsylvania and the other states of the 
 Union? The economic relations of these to each other are 
 not in any way affected or modified by the fact of their being 
 members of the same political confederation. The native 
 industries of Kentucky and Illinois remain exposed to the 
 competition of the well-organised and old-established indus- 
 tries of New York and Massachusetts in spite of their being 
 all represented in Congress at Washington. If protection be 
 so beneficial to the country at large, why not extend its 
 blessings to each of the states of which it is composed? 
 
 Until recently, Italy was split up into several different 
 realms, and each was (of course for the "good of the 
 people") " protected" against the productions of the other. 
 But when the Italian states merged into one nation, those 
 restrictions were removed. If those protective shields 
 against competition had really worked efficiently for the 
 " good of the people," their removal must have occasioned 
 great suffering and distress, but no " cry of anguish " has 
 reached us on that score. If, twenty years ago, it had been 
 really good for the people of Piedmont and of Naples re- 
 spectively to have had few commercial dealings with one
 
 AND ENGLISH COMMERCE. 4 1 
 
 another, the mere accident of a change of government 
 cannot have altered the eternal fitness of things, or made it 
 right now, as it was wrong then, to leave those two popu- 
 lations exposed to the terrible misfortune of unrestricted 
 commercial intercourse with each other. 
 
 Again, let us imagine the deplorable contingency (which 
 we most sincerely trust may never occur) of the Western and 
 Eastern States of America separating and forming two 
 several independent republics, what then about protective 
 customs' duties? If it be a wise and beneficial policy for 
 the present United States to protect its people against the 
 cheap manuflicturers of old Europe, it would follow as a 
 necessary consequence, that it would also be a wise and 
 beneficial policy for the Western republic to protect its 
 people against the comparatively cheap manufactures of the 
 older Eastern states. To judge by all historical precedents 
 of what men would do under such circumstances, we should 
 infer that the government of the new dominion would un- 
 doubtedly (unless they were very much in advance of the 
 present state of public opinion in America) adopt the usual 
 old policy of "fostering native industry" by means of the 
 protective system. But here again there would be a mani- 
 fest and palpable inconsistency. If, in case of separate 
 sovereignty, the welfare of the Western republic of America 
 required the adoption of a protective policy against the 
 Eastern states, why should such not be required now ? The 
 pleas as to fostering native industry, protecting infant 
 manufactures, and being independent of extraneous supplies 
 are as urgent at the present time as they would be then. 
 Why are those pleas to be only attended to in case of 
 secession, and disregarded while the Union is maintained ? 
 Are we to believe that, under the present form of government, 
 commercial prosperity is only obtainable by free trade, while, 
 under another, it would only be obtainable by protection ? 
 
 Each state of the Union is at present exposed to the 
 competition of more than forty other states and territories 
 extending over a vast continent and occupying a space 
 equal to one-fifteenth of the habitable part of the globe, 
 and yet none of them have uttered a syllable of complaint
 
 42 FREE TRADE 
 
 in respect to the system of free trade which prevails among 
 them, or asked for the enactment of defensive tariffs to 
 ])rotcct them against each other. Yet, at the same time, 
 the aggregate of these forty or fifty states fancy that they 
 cannot get on without a defensive tariff to protect the entire 
 body of tlicm from other countries. If one-fiftecnth of the 
 world can prosper under internal free trade, why should 
 not a tliird, or a half, or indeed the whole of the world ? 
 
 But let us glance at another contingency. At present, the 
 United States and the Dominion of Canada form two sepa- 
 rate and distinct governments. Accordingly, each is hedged 
 round by clievaux de /rise of tarifis, and their commercial 
 intercourse is checked and hampered by impost duties and 
 restrictions having for avowed object the protection of their 
 respective populations and the increase of their prosperity. 
 According to the protectionist theory, each ration is bene- 
 fited by these arrangements, and would be injured by their 
 removal. Very good ; but let us su]ipose that political 
 changes were to bring about the admission of Canada into 
 the Union, and a fusion of the two dominions into one 
 federal rej)ublic, what would happen with regard to the 
 fiscal regulations which are now declared to be essential to 
 the prosperity of both populations? AVould they be per- 
 severed in ? It is not likely ; it Avould be an unexampled 
 anomaly that one part of a republic should be debarred 
 from free commercial intercourse with the other parts. Con- 
 sequently, the principle of free trade which now governs 
 the commercial relations of the different states of the Union 
 among themselves would be extended to Canada, and the 
 results of unrestricted commercial intercourse between the 
 two dominions, now so carefully guarded against, would 
 have to be faced. On the protectionist theory, those results 
 should prove ruinous to both parties ; but can any one 
 seriously believe that such would be the case ?
 
 ASD ENGLISH COMMERCE. 43 
 
 CHAPTER XII. 
 
 CONCLUDING REMARKS. 
 
 Sometimes objections are made to free trade, not founded 
 on any imperfection in the theory itself, but arising from 
 altogether extrinsic considerations. But such objections are 
 quite irrelevant. Each science has its own province of 
 inquiry, and its conclusions are confined to the topics that 
 form the special objects of its investigation. The purpose 
 of political economy is to ascertain the laws under which 
 human industry can produce the most ample results, and 
 the "wealth of nations" be best developed. It is no im- 
 pugnment of the truths which it propounds to contend that 
 there are considerations foreign, to the science itself which 
 render it inexpedient to act on its conclusions. In an 
 aesthetical point of view, factories may be objects too hideous 
 to be tolerated, and it may be better to leave a coal-mine 
 unworked than to destroy the lovely trees which adorn its 
 surface. In a political point of view, it may be better that 
 each country should keep itself independent of foreign 
 commerce, so as to be prepared, at any moment, without 
 feeling its loss, to wage war with other nations. Or, in a 
 theological point of view, it may be better for men not 
 to devote too much attention to such subjects, as tending 
 to seduce their minds into mammon-worship. But it is 
 the business of the statesman, not of the political economist, 
 to examine these allegations, and allow them practically 
 such weight as they may deserve. The mission of political 
 economy is confined to the elucidation of economic prin- 
 ciples and their application to plutology or the science of 
 wealth ; and it is no refutation of the truth of its conclusions 
 that objections may be raised to their practical adoption, 
 which arise out of a quite different order of considerations. 
 
 We have confined ourselves, in these pages, to some of 
 the most salient points connected with the antagonism be-
 
 44 FREE TRADE 
 
 tween free trade and protection. There are, however, a 
 variety of subsidiary and collateral topics that might furnish 
 ample matter for contrasting the two principles. To quote 
 only a few instances, we might enlarge on the tendency of 
 hostile tariffs to excite and maintain feelings of irritation 
 between one country and another, and on the contrary ten- 
 dency of large international dealings, through free trade, 
 to bind nations together by a strong community of interests, 
 and thus to check and discourage war. We might advert 
 to the beneficial operation of free trade in partially obviating 
 " gluts," that is, the over-production of some articles as 
 compared with others, and in rendering the commercial 
 world far more sensitive than it now is to variations in 
 supply and demand, so that incipient fluctuations would 
 be quickly checked, and would never reach the extreme 
 range which they now attain. We might point out that 
 free trade would tend to equalise prices throughout the 
 world, and would pave the way to many important improve- 
 ments, such as the general unification of weights, measures, 
 and coins; perhaps even to the assimilation and codification 
 of the laws which now in each country variously affect 
 commerce. But we must refrain from dwelling on these 
 matters, for this does not pretend to be an exhaustive treatise 
 on free trade ; it is simply a rough sketch of its principal 
 features as they practically affect the commerce of the 
 world. 
 
 We shall now proceed to examine the relation in which 
 free trade stands to the commerce of the United Kingdom, 
 and see how far the present depression of trade may or 
 may not be connected with its adoption here about thirty 
 years ago.
 
 AND ENGLISH COMMERCE. 45 
 
 PART II.— ENGLISH COMiMERCE. 
 1879. 
 
 CHAPTER XIII. 
 
 POPULATION, DEBTS, AND TRADE OF THE WORLD. 
 
 That there exists a great and general depression in trade 
 throughout the United Kingdom is so notorious and recog- 
 nised a fact, that it is needless to do more than to assert it. 
 This depression has been growing in intensity since the year 
 1874, when it only just began to be perceptible; and the 
 hopes that have from time to time been entertained that it 
 had readied its maximum, and that a reaction was at hand, 
 have hitherto been disappointed. What are the causes that 
 have led to this untoward state of things ? Are those causes 
 of a permanent, or only of a transitory, nature ? If the 
 former, are they remediable by a change in our commercial 
 policy ? If the latter, when may we look for their ceasing 
 to operate, and can any measures be devised to accelerate 
 that result ? 
 
 These are the inquiries to which we purpose to turn our 
 attention, and in order to give shape and method to our 
 investigation, we shall examine and analyse tlie following 
 propositions, which are all intimately connected with the 
 subject in hand : — ■ 
 
 1. The amount of our foreign trade (combined imports 
 and exports) has been diminishing since 1874. 
 
 2. Since 1874 the price of almost every commodity, British 
 and foreign, has been gradually falling — in many cases, con- 
 siderably, but, more or less, in nearly all. 
 
 3. Since then, there has been greater competition than
 
 46 FREE TRADE 
 
 before in neutral markets, between the English and foreign 
 producer. 
 
 4. The wages of labour have been forced down by ihe 
 decline in the price of goods. 
 
 5. Since 1874, there have been heavy failures among 
 merchants, manufacturers, and banking establisliments. 
 
 6. Since then, the excess in the amount of our imports 
 over that of our exports has exhibited a marked and unpre- 
 cedented increase. 
 
 7. The inactivity of trade and the decline in prices have 
 during the last few years been more or less general through- 
 out the civilised world. 
 
 8. The peace of Europe has been much disturbed the last 
 few years by actual war and by rumours of war. 
 
 9. Since 1874, there have been some additional large 
 national defaulters in the payment of interest on the loans 
 made to them, 
 
 10. Since then, we have made fewer foreign loans, and 
 embarked in fewer foreign enterprises than before. 
 
 11. There is, and there has been of late years, a larger 
 amount in the country than usual of surplus unemployed 
 capital. 
 
 Lefore we enter on the consideration of these various 
 topics, we must put forward an important statistical docu- 
 ment which we have been at some pains to draw up as 
 accurately as possible. It exhibits at a glance a compara- 
 tive view of the population, of the indebtedness, and of the 
 foreign trade of every country that can make any pretension 
 to be called civilised. By a reference to it, it will be seen 
 that, ist, it records the financial and commercial position of 
 fifty- six states whose united population amounts to nearly 
 1,200,000,000 — that is, within about 200,000,000 of the 
 computed population of the entire globe.* 2nd. The 
 
 * From the reports of the latest African travellers, we are led to 
 think that the population of Central Africa has hitherto been under- 
 rated, and we are inclined to estimate the number of the uncivilised 
 nations of ihe earth (those not enumerated in our tal)Ie) at nearly 
 400,000,000; which would make the total population of the earth 
 about i,6oo,oco,ooo.
 
 AND ENGLISH COMMERCE. 47 
 
 amount collectively due, for loans made to them, by the 
 specified fifty-six governments to a number of individuals 
 residing in all parts of the world, is ^4,818,000,000, and on 
 that sum the lenders are entitled to yearly interest according 
 to certain stipulated rates. Seventeen states, however, 
 have ceased paying interest on their debts, amounting 
 to ;j^9 2 9,000,000. On the remaining amount, viz., 
 ;,£"3, 889, 000,000, interest is being paid, and of this interest, 
 we are led, by what research we have been able to make, 
 to estimate the average rate to be 4^ per cent. Assuming 
 this to be correct, the holders of these various government 
 stocks are in the annual receipt of ;^i 65,000,000 from the 
 aggregate of the indebted countries. It may be remarked 
 that these loans were contracted for at somewhat less 
 than the nominal capital, not all of which therefore passed 
 into the borrowers' hands, but they, nevertheless, engaged to 
 repay the nominal capital in full, and meanwhile to pay 
 interest thereon. 
 
 In the customs' returns of a country's imports, the amount 
 is always in excess of that which has actually to be paid to 
 the foreigner; for the valuation taken of them includes 
 freight, insurance, and other expenses, whereas the foreign 
 sender has only to receive the net amount after deduction of 
 those charges. To him the importer has only the cost of the 
 goods to pay ; he has to pay the freight to quite a different 
 person, viz., to the ship-owner. What percentage must, on 
 the average, be deducted from the customs' valuation of 
 imports in order to arrive at the correct sum which accrues 
 to the foreign sender is a question of some difficulty. On 
 cheap and bulky articles the percentage of freight is large, 
 as is also the insurance when the voyages are long. On the 
 other hand it is the reverse on compact articles of value and 
 on short voyages. Taking everything into consideration, 
 we have come to the conclusion that we shall be near the 
 mark in estimating the average of freight, insurance, and 
 other minor charges at 11 per cent, on the customs' valua- 
 tion of imports. Accordingly, if we take 1 1 per cent, off the 
 ;^i, 456,000,000, which we tini imported into all countries 
 during the one year given, it reduces the amount to
 
 48 
 
 FREE TRADE 
 
 ;^ 1, 2 96, 000,000, which is within a mere trifle of the 
 p/^i, 316,000,000 exported, in totality, by the same countries 
 during the same year. 
 
 Tap.ular View of the Population, Indebtedness, 
 AND Foreign Trade of all the (more or less) 
 Civilised Countries of the Earth. 
 
 N.B. — I. In the figures given 00,000's are omitted : that is, our figures 
 represent millions and tenths of millions. Thus, 5.9 stands for 
 5,900,000 ; ;^i6. for j^i6,ooo,ooo, and so on. 
 
 2. The population, debt, and annual trade given are those of the 
 latest year of which we could obtain a record. 
 
 3. The annual foreign trade given is the aggregate of both imports 
 and exports. 
 
 4. The National Debts include both the home and the foreign, but 
 
 not the floating debts. 
 
 States. 
 
 Popula- 
 
 National 
 Debt. 
 
 Annual 1 
 Foreign 
 
 Divided into 
 
 
 
 
 
 t'\ 
 
 Trade. 
 
 Imports. 
 
 Exports. 
 
 
 
 
 £ 
 
 £. 
 
 £ 
 
 Algeria ' 
 
 2.9 
 
 
 16. 
 
 9- 
 
 7. 
 
 Argentine Confedera- 
 
 
 
 
 
 
 tion & liucnos Ayres 
 
 1.8 
 
 21. 
 
 17- 
 
 7. 
 
 10. 
 
 Austria and Hungary 
 
 37. 
 
 343- 
 
 103. 
 
 52. 
 
 51- 
 
 Belgium 
 
 5- 
 
 47. 
 
 185. 
 
 98. 
 
 S7. 
 
 Bolivia 
 
 2. 
 
 3-3 
 
 2. 
 
 I. 
 
 I. 
 
 Brazil 
 
 10. 
 
 74- 
 
 32.5 
 
 15-5 
 
 17- 
 
 Canada 
 
 3-7 
 
 30. 
 
 35- 
 
 20. 
 
 15- 
 
 Cape Colony 
 
 1.4 
 
 6. 
 
 9. 
 
 5- 
 
 4- 
 
 Ceylon 
 
 2.4 
 
 .8 
 
 ID. I 
 
 5-6 
 
 4-5 
 
 Chili ... 
 
 2. 
 
 12.7 
 
 13- 
 
 7- 
 
 6. 
 
 China 
 
 425. 
 
 2. 
 
 45- 
 
 21. 
 
 24. 
 
 Colombia 
 
 3- 
 
 14.7 
 
 3-3 
 
 1-3 
 
 2. 
 
 Costa Rica 
 
 .2 
 
 3-4 
 
 1-5 
 
 .6 
 
 •9 
 
 Denmark 
 
 2. 
 
 ID. 
 
 23- 
 
 13- 
 
 10. 
 
 Ecuador 
 
 I. 
 
 3.3 
 
 •7 
 
 •3 
 
 •4 
 
 Egypt 
 
 17- 
 
 S7. 
 
 16. 
 
 4- 
 
 12. 
 
 France 
 
 37- 
 
 750. 
 
 367. 
 
 174. 
 
 193- 
 
 Germany 
 
 43- 
 
 190. 
 
 324. 
 
 196. 
 
 128. 
 
 Greece 
 
 ' 1-5 
 
 15- 
 
 8. 
 
 1 
 
 5- 
 
 3-
 
 AND ENGLISH COMMERCE. 
 
 49 
 
 States. 
 
 Popula- 
 tion. 
 
 National 
 Debt. 
 
 Annual 
 Foreign 
 
 Divide 
 
 d into 
 
 ^- 
 
 
 
 
 Trade. 
 
 Imports. 
 
 Exports. 
 
 
 
 J~ 
 
 £ 
 
 £ 
 
 £ 
 
 Guatemala ... 
 
 1.2 
 
 •9 
 
 1.2 
 
 .6 
 
 .6 
 
 Haiti 
 
 .6 
 
 3- 
 
 2-5 
 
 1.2 
 
 1-3 
 
 Honduras 
 
 •3 
 
 6. 
 
 •4 
 
 .2 
 
 .2 
 
 India 
 
 240. 
 
 127. 
 
 114. 
 
 49. 
 
 65. 
 
 Italy 
 
 27. 
 
 400. 
 
 85. 
 
 45- 
 
 40. 
 
 Japan 
 
 33- 
 
 3-5 
 
 10.3 
 
 4.8 
 
 5-5 
 
 Java 
 
 18. 
 
 
 17- 
 
 7- 
 
 10. 
 
 Mexico 
 
 9-3 
 
 79- 
 
 10.7 
 
 5-7 
 
 5- 
 
 Morocco 
 
 6. 
 
 
 2.6 
 
 1-5 
 
 I.I 
 
 Natal 
 
 •3 
 
 •3 
 
 1.9 
 
 I. 
 
 •9 
 
 Netherlands ... 
 
 3-9 
 
 80. 
 
 104. 
 
 59- 
 
 45- 
 
 New South Wales ... 
 
 .6 
 
 12.5 
 
 27.6 
 
 14.6 
 
 13. 
 
 New Zealand 
 
 •4 
 
 20.7 
 
 13-3 
 
 7- 
 
 (J- 3 
 
 Nicaraf^ua 
 
 .4 
 
 2. 
 
 .3 
 
 . ^ 2 
 
 . I 
 
 Paraguay 
 
 .2 
 
 3- 
 
 .2 
 
 . I 
 
 . I 
 
 Persia 
 
 s-."; 
 
 
 3-9 
 
 2.4 
 
 1-5 
 
 Peru 
 
 3-2 
 
 49- 
 
 12. 
 
 4- 
 
 8. 
 
 Portugal 
 
 4- 
 
 85. 
 
 14. 
 
 8. 
 
 6. 
 
 Queensland 
 
 .2 
 
 6.5 
 
 6.8 
 
 3-2 
 
 3-6 
 
 Roumania 
 
 5-3 
 
 21. 
 
 9.4 
 
 4.1 
 
 5-3 
 
 Russia 
 
 88. 
 
 350- 
 
 109. 
 
 59- 
 
 50. 
 
 San Salvador 
 
 • 4 
 
 •9 
 
 I.I 
 
 • 5 
 
 .6 
 
 Servia 
 
 1-7 
 
 
 2.9 
 
 1-3 
 
 r.6 
 
 Siam 
 
 9- 
 
 
 2.8 
 
 I. 
 
 1.8 
 
 South Australia 
 
 .2 
 
 4-3 
 
 8.9 
 
 4- 
 
 4.9 
 
 Spain 
 
 17- 
 
 460. 
 
 31- 
 
 15- 
 
 16. 
 
 Sweden and Norway 
 
 6. 
 
 14. 
 
 46. 
 
 27. 
 
 19. 
 
 Switzerland 
 
 2. 
 
 '•3 
 
 6. 
 
 3-5 
 
 2.5 
 
 Tasmania 
 
 •3 
 
 '•5 
 
 2-7 
 
 1-3 
 
 1-4 
 
 Tunis 
 
 2.7 
 
 5. 
 
 I.I 
 
 •4 
 
 • 7 
 
 Turkey 
 
 21. 1 
 
 194- 
 
 32. 
 
 14. 
 
 18. 
 
 United Kingdom 
 
 34- 
 
 778. 
 
 611. 
 
 366. 
 
 245. 
 
 United States 
 
 47- 
 
 460. 
 
 226. 
 
 87. 
 
 139- 
 
 Uruguay 
 
 •5 
 
 12. 1 
 
 s.s 
 
 2.8 
 
 3- 
 
 Venezuela ... 
 
 1.8 
 
 8. 
 
 6.2 
 
 3. 
 
 3-2 
 
 Victoria 
 
 .8 
 
 17- 
 
 31- 
 
 16. 
 
 15- 
 
 Western Australia ... 
 
 .1 
 
 .2 
 
 •7 
 
 •3 
 
 •4 
 
 Total 
 
 1,189.9 
 
 4,818.9 
 
 2,772.4 
 
 1,456. 
 
 1,316.4
 
 50 FREE TRADE 
 
 CHAPTER XIV. 
 
 THE AMOUNT OF OUR FOREIGN TRADE HAS BEEN 
 DIMINISHING SINCE 1874. 
 
 The subjoined table exhibits the fluctuations in our foreign 
 trade (exports and imports combined) since 1S67 ; in mil- 
 Uons of ^ sterHng. 
 
 Total trade in 
 
 
 
 1867 . 
 
 • £s^i- 
 
 
 
 1868 . 
 
 • 523-, 
 
 an increase of 4 per cent, compared \vi 
 
 th 1867 
 
 1S69 . 
 
 • 532., 
 
 ,, ,, 2 per cent. „ ,, 
 
 1868 
 
 1870 . 
 
 • 547-, 
 
 ,, ,, 3 per cent. ,, ,, 
 
 - 1869 
 
 1S7I .. 
 
 . 615., 
 
 ,. )) 124 per cent. ,, ,, 
 
 1870 
 
 1872 . 
 
 . 669., 
 
 ,, ,, 9 per cent. ,, ,, 
 
 1871 
 
 1873 .. 
 
 . 6S2., 
 
 ,, ,, 2 per cent. ,, ,, 
 
 1872 
 
 1874 .. 
 
 . 668., 
 
 a decrease of 2 per cent. ,, ,, 
 
 1873 
 
 iS/S .. 
 
 . 656., 
 
 )> ,. 2 per cent. ,, ,, 
 
 1874 
 
 1876 .. 
 
 . 632., 
 
 >. ,. 3-f per cent. ,, ,, 
 
 1875 
 
 1^77 • 
 
 . 646., 
 
 an increase of 2 per cent. ,, ,, 
 
 1876 
 
 1878 . 
 
 . 611., 
 
 a decrease of 5 J per cent. ,, ,, 
 
 1877 
 
 In the above trade returns, the influx and efilux of bullion 
 are not included. But the balance between the export and 
 import of the precious metals is, on an average of years, so 
 insignificant and has so slight a connection with our trade 
 in goods, that it is of very little account. Taking the three 
 last years of the above series, viz., 1876, 1877, and 1878, 
 the total amount of the gold and silver imported into, and 
 exported from, the United Kingdom during that period was 
 as follows : — 
 
 Importation during tlie three years, of gold ;^59,ooo,ooo 
 Exportation „ „ ,, 51,500,000 
 
 Excess ;^7,5oo,ooo 
 
 Importation during the three years, of silver ^46,800,000 
 Expoitalion „ ,, ,, 44,100,000 
 
 Excess ;^2, 700,000
 
 AND ENGLISH COMMERCE. 5 1 
 
 So that the operations of the country in bulHonand specie 
 during the last three years resulted in an excess of impor- 
 tation amounting to about ^{^'10,000,000, or a little more 
 than ;^3,ooo,ooo a year. It may, by-the-by, be as well to 
 note that, during those same three years, the aggregate ex- 
 cess of our imports over our exports amounted to upwards 
 of p^2oo, 000,000, and that, instead of our sending our bullion 
 abroad to pay for this excess of imports, as the protectionists 
 assume, we actually received ;^i 0,000,000 in bullion from 
 other countries. But we shall refer to this more fully else- 
 where. 
 
 It appears, then, that in the years 1871 and 1872 there 
 occurred a large and sudden inflation in the amount of our 
 foreign trade. Instead of the previous steady and normal 
 advance of about 2 per cent, each year, it, at that period, 
 increased by sudden jumps of izh per cent, one year, and 
 9 per cent, the next. A brisk demand arose for all kinds 
 of commodities, and the activity extended more or less to 
 every branch of trade. In the year 1872 we sent abroad 
 and received from abroad goods to the amount of 
 ;^i 20,000,000 more than in 1870, Not that this 
 enormous increase in the money value represented a pro- 
 portionate increase in the quantities exported and imported. 
 Mines, collieries, factories, &c., when in ordinary fair work, 
 as they were when this exceptional activity sprang up, could 
 not be made suddenly to increase their productiveness be- 
 yond a certain ratio. The enhanced amount of our trading 
 operations was to no small extent due to the great and rapid 
 rise that took place in the prices of commodities. This 
 rise (as will be shown further on by tables) was entirely 
 confined to our own productions. While we charged much 
 dearer for our exports, we paid no dearer for our imports, 
 and the increased money amount of the latter was 
 owing to their increased volume. But, as regards our 
 exports, the increase in their amount was largely due to 
 enhancement of prices, and only partially to increase of 
 quantity. The demand from abroad for our staple 
 productions was, during the height of the inflation 
 far in advance of the supply, and the advance prices,
 
 S* FREE TRADE 
 
 caused by tlie competition of buyers yielded magnificent 
 profits to the manufacturers, abundant wages to the 
 working men, and stimulated production to its utmost. 
 Capital and credit came forward profusely, and almost 
 pressingly, to share in the general prosperity, and increased 
 the activity of trade by the unusual facilities which they 
 afforded. 
 
 That this feverish prosperity was short-lived, and that, as 
 is usual, it was followed by a grievous reaction, we know 
 but too well, for we are still under the chilling influence of 
 that reaction. It is now well understood and admitted 
 that the operation of that brief period of lurid prosperity 
 was injurious to the permanent and legitimate progress of 
 the country. We had to give way and yield back a large 
 part of the ground which we had gained by an ill-advised 
 rush, and this, like all retreats, was attended with losses 
 and disaster. Habits of indulgence and even of extrava- 
 gance had been fostered by the rich profits and high wages 
 of those halcyon days. Increased expenditure prevailed 
 among all classes of society, and everything was couicur de 
 rose, even to the budgets of the Chancellor of the Ex- 
 chequer. But the bubble burst. Prices declined, foreign 
 trade diminished, and profits and wages have, since 1874, 
 been continually falling. We are in the position of an 
 individual who, having had his income unexpectedly doubled 
 by some lucky accident, and having adapted his style of 
 living to his improved circumstances, suddenly finds his 
 income cut down again to its old limit, and has to go 
 through various unpleasant processes of retrenchment and 
 self-denial. 
 
 If, instead of the " leaps and bounds " which our foreign 
 trade made in 1871 and 1872 (as shown by the tables at 
 p. 50), we had only progressed at the old steady rate of 
 2 per cent, per annum, a calculation will show that, starting 
 from the amount of our foreign trade in 1870, viz., 
 ;^547,ooo,ooo, it would by this time have arrived at a 
 higher figure than it actually has attained, notwithstanding 
 the jumps of 12^ per cent, and 9 per cent, in 1871 and 
 1872. For instance, adding the supposed gradual increase
 
 AND ENGLISH COMMERCE. 
 
 SI 
 
 of 2 per cent, per annum, our foreign trade would have 
 reached 
 
 ;[{^558,ooo,ooo in 1 871, instead of the 
 
 569,000,000 in 1872 ,, , 
 
 581,000,000 in 1873 ,, , 
 
 593,000,000 in 1874 )> : 
 
 605,000,000 in 1875 ,, , 
 
 617,000,000 in 1S76 „ , 
 
 629,000,000 in 1 87 7 ,, , 
 
 641,000,000 in 1878 ,, , 
 
 actual sum of ^^6 15, 000, 000 
 669,000,000 
 682,000,000 
 668,000,000 
 656,000,000 
 632,000,000 
 646,000,000 
 611,000,000 
 
 As, therefore, the causes that led to the inflation of our 
 trade in 187 1 and 1872 are, as it were, at the root of the 
 commercial depression from which we are now suffering, 
 it is of importance to trace and determine them, in order to 
 arrive at a correct view of our present position. 
 
 Among those causes, the most direct and the most potent 
 was the immense amount of money which England lent to 
 foreign nations in the course of the years 1870, 187 1, 1872, 
 and 1873. During that period France, Russia, Turkey, Egypt, 
 Peru, Brazil, India, American States and cities, together with 
 a host of South American republics, and also the pro- 
 moters of foreign undertakings of all sorts, such as railways, 
 telegraphs, gas-works, water-works, &c., appeared as suc- 
 cessful borrowers in the English money-market to an extent 
 totally unprecedented till then, and quite unequalled since. 
 No doubt a certain share of the amount was contributed by 
 foreign investors, but it was British capital that provided a 
 very large proportion of the colossal sum that was raised. 
 It is very difficult to ascertain with any degree of precision 
 the total amount that England had to remit abroad in con- 
 sequence of making these loans, for they were contracted 
 for at various rates of deduction from the nominal capital — 
 some were payable in instalments, and of others a portion 
 was set aside for sinking funds, &c. But it may not perhaps 
 be very wide of the mark to estimate the total amount that 
 England had during the four years, 1870 to 1873, to 
 transmit abroad in fulfilment of these engagements, at 
 ^^450,000,000; forming an average of ;^i 10,000,000 per 
 annum.
 
 54 FREE TRADE 
 
 How was tlie transfer of this enormous amount accom- 
 plished ? Assuredly not by shipments hence of bullion and 
 specie. \Vc have already seen that no large movements of 
 money from one country to another are ever effected by 
 corresponding displacements of the precious metals. A 
 comparative slight encroachment on the circulation require- 
 ments of the exporting country so violently disturbs the 
 exchanges that reaction ensues, and the balance is speedily 
 redressed. But setting aside all theoretical reasoning, it is a 
 fact that English imports and exports of bullion and specie 
 for the four years during which the transmission abroad of 
 the vast sum in question took place, were as follows : — 
 
 GOLD AND SILVER. 
 
 Year. Imi-orts. Exports. 
 
 1S70 ;/^29,400,ooo ;i^i8,90o,ooo 
 
 1871 ... ... 38,100,000 ... ... 33,700,000 
 
 1872 29,600,000 30,300,000 
 
 1^73 33,600,000 28,900,000 
 
 £\Tp,'joo,o(x> ;^iii, 800,000 
 
 We, therefore, during the four years in question, received 
 from abroad gold and silver bullion and specie to the 
 amount of p{^i 9,000,000 more than we sent away. 
 
 In proceeding to solve the question, it must be borne in 
 mmd, in the first place, that British investments abroad had 
 for many years before 1870 been constantly on the increase, 
 so that by that time the dividends which foreign debtors 
 had to remit yearly to England formed a very considerable 
 sum. Each year after 1S70 those annual payments have 
 become larger, and by this time they have expanded into a 
 prodigious total. It has been shown (p. 47) that after 
 deducting the dividends that should be, but are not, paid 
 by the insolvent States, the yearly sum of ;!^i 65,000,000 is 
 still actually divided among the holders of national stock 
 throughout the world. To these dividends on national
 
 AND ENGLISH COMMERCE. 55 
 
 loans must be added the dividends payable on a multipli- 
 city of foreign, municipal, joint-stock, and other public 
 investments which swell the total sum distributed annually 
 among private investors to upwards of ;z£"20o,ooo,ooo. 
 What proportion of this amount falls to the share of the 
 British investors can only be a matter of conjecture. It 
 must, however, be observed that, with the exception of 
 France, the United States, Portugal, and, perhaps, one or 
 two others, only a small proportion of the money borrowed 
 by the fifty other States of the world has been lent to them 
 by their own subjects respectively. Who, then, are the 
 lenders? France, Germany, and Holland are wealthy 
 nations, and are holders of a considerable amount of foreign 
 stocks; as also are, of course, a certain number of opulent 
 individuals in most civilised countries, but, undoubtedly, it 
 is British capital which is the most profusely invested abroad, 
 and which is the recipient of a proportionately large share of 
 the total annual dividends. 
 
 Whatever that share may now be, there is reason to 
 believe that in 1870 the annual amount accruing to Eng- 
 land for interest and dividends on foreign investments was 
 at least ;:/^3o, 000,000, and that by 1874 this amount was 
 increased, by the large fresh advances made meanwhile, 
 to ;,^5o,ooo,ooo, which gives an average of ;^4o,ooo,ooo 
 for the intervening period. This sum would naturally form 
 a part of the ^110,000,000 remitted to the borrowers 
 abroad each year of the four in question, leaving 
 ^70,000,000 still to be accounted for. This enormous 
 amount was supplied, either directly or indirectly, by an 
 increase to the same annual amount in the exportation 
 of British goods. That this was the case, we have both 
 negative and positive proofs. Negative, because there is 
 no other way of showing how the money was handed over 
 to the borrowers. That they did receive it, nobody denies ; 
 that it was not sent to them in the shape of bullion or 
 specie we have made abundantly clear ; there is, therefore, 
 no other possible way in which it could have reached them, 
 except in goods, either directly or indirectly. And as re- 
 gards proof positive, we have merely to refer to the unerring
 
 56 FREE TRADE 
 
 records of the Board of Trade. These show that the 
 exports from the United Kingdom during the four years 
 1S71-1874 averaged nearly jQ(iZ,ooo,oQO in excess of 
 those of the preceding four years, 1867-70; which excess 
 as nearly as possible accounts for the ^{^7 0,000,000 which 
 remained to be provided for out of the p{^ 110,000,000. 
 The following are the exact figures : — 
 
 Total exports (in millions of j[^) from the United 
 Kingdom for the years 
 
 1867 
 
 I86S 
 
 ^226. 
 228. 
 
 187I ;^284 
 
 1872 314 
 
 1869 
 
 1870 
 
 237- 
 245. 
 
 1873 3" 
 
 1874 29S. 
 
 
 ;^936. 
 
 L^aoi. 
 
 Annual average, £2 
 
 34- 
 
 Annual average, ;^302. 
 
 exhibiting an excess of ;^68,ooo,ooo per annum in the 
 latter four years. 
 
 To show that the great increase in the exports of the 
 years 1871-1874 was owing not to the natural growth 
 of trade, but to the abnormal stimulus given to exportation 
 by the vast sums which England had then contracted to 
 lend to foreign nations, we append a statement of the 
 annual exports (in millions) of the four years which followed 
 the cycle of 1 871-1874, viz : — 
 
 1875 ;^^8i. 
 
 1876 257. 
 
 1877 252. 
 
 1878 ... ... 245. 
 
 ;^1.035- 
 
 Aiuiual average, £2^^. 
 
 It is evident, therefore, that, as soon as the " abnormal 
 stimulus to exportation " was withdrawn by the cessation 
 of England's mania for granting foreign loans, the amount 
 of our exports rapidly diminished, and they have continued 
 gradually to recede until at the present time they have fallen
 
 AND ENGLISH COMMERCE. 57 
 
 to the exact point in 1870 (;^245, 000,000 per annum) 
 from which they darted forward so briskly in 187 1. 
 
 No small portion of the loans made to foreign countries 
 had been handed over direct to them in the shape of 
 commodities required for national purposes, such as iron 
 rails, locomotives, iron steamers, machineiy, fire-arms, 
 steam-coal, and similar objects; and while exportation 
 generally was stimulated to an unprecedented extent, the 
 articles above referred to were, beyond all others, forced up 
 to unnatural prices. Of course, these were the articles that 
 most keenly felt the reaction. England, after 1S74, not 
 only lent money abroad much more sparingly, but had 
 yearly to receive more from abroad for interest and divi- 
 dends. Exportation, therefore, no longer artificially excited, 
 gradually fell ofi^, and now flows within its former natural 
 channels, so that compared with its previous impetuosity, 
 the current appears to have become languid and sluggish. 
 
 So much for the causes of the transient prosperity of the 
 years 1871-1874, and for their bearings on the depression 
 in trade that has since prevailed. 
 
 CHAPTER XV. 
 
 FALL IN PRICES SINCE 1874. 
 
 We have already adverted to the fact that the great increase 
 in the amount of our exports in 1872 and 1873 was more 
 the result of advanced prices than of augmented production. 
 Similarly the decrease in the amount of our exports since 
 then has been far more the result of diminished prices than 
 ol diminished supply. We will endeavour to verify and as 
 nearly as possible measure this decline in values. 
 
 We append a table of the comparative quantities and 
 values of the leading articles of export for the years 1872 and 
 1878 respectively, these years being the highest and lowest 
 points of our exportation since 1868. It will show, among 
 other interesting inferences, that the amount exported in
 
 58 
 
 FREE TRADE 
 
 1878 represents nearly as many tons, yards, &c., of goods, 
 as the larger amount exported in 1872. 
 
 T.\BLE.— In Millions and Tenths or Millions; that is, 00,000's 
 
 OMITTED. 
 
 Articles Exported. 
 
 Quantities 
 IN 1872. 
 
 Quantities 
 IN 1878. 
 
 Amovnts 
 
 IN 1872. 
 
 Amounts 
 IN 1878. 
 
 Alkali cwts. 
 
 Bags and Sacks doz. 
 
 Coal, Coke,&c tons 
 
 Cotton Yarn lbs. 
 
 Cotton Goods yds. 
 
 Iron and Steel tons 
 
 Linen Goods yds. 
 
 Linen Yarn lbs. 
 
 Woollen Yam lbs. 
 
 Worsted StufTs yds. 
 
 4-5 
 
 3-7 
 
 13.2 
 
 212.3 
 
 3.538. 
 
 3-4 
 
 245. 
 
 31.2 
 
 39-7 
 345- 
 
 5-6 
 
 5-2 
 
 15-5 
 
 250.5 
 
 3,618.1 
 
 2.3 
 161. 
 
 18.S 
 
 31.2 
 
 192.6 
 
 2-5 
 
 1.6 
 10.4 
 
 16.7 
 
 63.5 
 36. 
 
 8.2 
 2.1 
 
 6.1 
 20.9 
 
 2. 
 
 1.6 
 7-3 
 
 13- 
 
 48. 
 
 18.4 
 
 4-9 
 1.2 
 
 3-9 
 7-4 
 
 4,436. ' 4,300.5 ' 168. 107.7 1 
 
 It appears from the foregoing table, supposing that the 
 important articles named aftord a fairly approximative index 
 to the rest, that, if the quantities exported in 1878 had been 
 at the same prices as ruled in 1S72, the amount thereof would 
 have been ;;^i 62,900,000, instead of the actual amount 
 ^^107,700,000; consequently the general fall of prices must 
 have been in that proportion, viz., 34 per cent.; of course, 
 the decline was lighter in some articles, and heavier in 
 others, but that must have been the average percentage.* 
 
 * In these calculations we have taken for basis the total quantities 
 and the total amounts. In working out each article separately, the 
 result is somewhat different, because in some years the changes are 
 greatest in those items which represent the greatest value, while, in 
 others, the contrary occurs. But in the long run these variations cor- 
 rect each other, and for the comparison of large results, the total values 
 of the total quantities constitute suflicient data to indicate the general 
 tendency. The pcr-centages of fall on the various items by themselves 
 are as follows : — Alkali, 35 per cent. ; bags and sacks, 30 per cent. ; 
 coal and coke, 40 per cent. ; cotton yarn, 34 per cent. ; cotton goods, 
 26 per cent. ; iron and steel, 25 per cent. ; linen goods, 9 per cent. ; 
 linen yarn, no change ; woollen yarn, 19 per cent. ; and worsted stuffs, 
 37 per cent. The above remarks also apply to imports.
 
 AND ENGLISH COMMERCE. 
 
 59 
 
 On the other hand, the prices we paid in 1878 for our 
 imports were also much reduced, though not in the same 
 proportion, because in them the previous rise had not been 
 great. By the following table of the comparative quantities 
 and values of the leading articles of import for the years 
 1872 and 1878 respectively, it will be seen that the average 
 decline since the former year in the prices of those articles 
 is about 22 per cent. 
 
 TABLE. — In Millions and Tenths of Millions; that is, 00,000's 
 
 OiMlTTfcD. 
 
 Articles Imported. 
 
 Quantities ' 
 in 1872. 
 
 Quantities 
 IN 1878. 
 
 Amounts 
 IN 1872. 
 
 Amounts 
 IN 1878. 
 
 £ 
 6.7 
 9.9 
 4.9 
 
 6. 
 
 27.4 
 
 6.8 
 
 24.1 
 
 33-5 
 3-5 
 3-5 
 3-2 
 4-9 
 
 3-2 
 
 3-7 
 20.8 
 
 131 
 
 3-7 
 6. 
 
 13.1 
 
 22.8 
 
 1.4 
 
 1 
 
 Bacon cwts. 
 
 Butter ,, 
 
 1.8 
 I.I 
 I.I 
 
 1.5 
 42. 
 4.4 
 
 55-3 
 12.6 
 2. 
 1.4 
 4- 
 1.5 
 6.9 
 7.2 
 
 15-5 
 186. 
 
 46.5 
 
 19.9 
 
 4.9 
 
 302.9 
 
 II. 7 
 
 3.5 
 1.8 
 
 2. 
 
 1.3 
 
 49.8 
 7.8 
 
 71.6 
 
 12. 
 1.6 
 1.2 
 
 4.2 
 
 1-9 
 
 6.1 
 
 4.2 
 
 18.2 
 
 205.5 
 91.4 
 
 16.5 
 
 5-3 
 
 395.5 
 
 11-3 
 
 £ 
 
 3.8 
 
 6. 
 
 3. 
 5.2 
 26. 
 4.1 
 
 20.7 
 
 53.6 
 
 4-9 
 4- 
 4-5 
 3-5 
 7.7 
 21. 1 
 12.8 
 2.6 
 
 7-7 
 12.7 
 18. 1 
 
 1.4 
 
 Cheese ,, 
 
 Coffee ,, 
 
 Corn : Wheat ,, 
 
 Flour ,, 
 
 Maize, ) 
 Barley, &c. \ " 
 
 Cotton (Raw) ,, 
 
 Fla.K ,, 
 
 Hides ,, 
 
 Jute •„ 
 
 Linseed ,, 
 
 Rice ,, 
 
 Silk (Raw) lbs. 
 
 Sugar cwts. 
 
 Tea lbs. 
 
 Tobacco , , 
 
 Wine galls. 
 
 Wood & Timber . . .loads 
 
 Wool lbs. 
 
 Woollen Yarn ,, 
 
 730.2 
 
 912.7 
 
 22S.4 
 
 222.2 
 
 For, taking the leading articles selected as a criterion 
 for the rest, if the quantities imported in 1878 had been 
 worth the same prices as those which ruled in 1S72, the
 
 6o FREE TRADE 
 
 amount thereof would have been p/^285, 500,000, instead 
 of the ;^2 2 2, 200,000 that they actually did amount to. 
 Consequently the general fall of prices must have been 
 in tiiat proportion, viz., 22 per cent. 
 
 That this fall in values is chiefly due to reaction from 
 their sudden inflation in 187 1-2-3 i^ beyond all question, 
 but it must be observed that the fall has been hastened and 
 probably intensified by another cause that is working slowly 
 and silently, but efflciently and continuously. We allude 
 to the diminished, and still diminishing, production of gold, 
 in the face of the yearly extension of its use for currency 
 purposes. Not only are the auriferous districts of California 
 and Australia yielding smaller quantities than formerly, but, 
 at the same time, gold has been rapidly replacing silver as 
 the chief circulating medium of France, Germany, and 
 Holland ; and as the bimetallic system loses ground, the 
 currency of Europe will consist more and more of gold, and 
 will absorb it in greater quantities. Tending in the same 
 direction is the fact that the greater the production, the 
 commerce, and the wealth of the world, the larger become 
 its circulation requirements. As the objects constituting 
 material wealth multiply, so either the number of golden 
 counters by which they have to be represented must be 
 multiplied in the same proportion, or else, each counter will 
 have to represent more of such objects than before, that is 
 to say, prices will have to fall. 
 
 For a time, the increasing demand for gold was amply 
 met by copious supplies from California and Australia. 
 Indeed at one period it was thought that there would be a 
 great excess of supply, and speculations were rife as to the 
 extent to which prices might be expected to rise in con- 
 sequence. But, for some years past, the yield of the gold- 
 fields has fallen off, and has not kept pace with the increased 
 demand for gold. If this disparity should continue, and 
 a fortiori^ if it should become greater, there must necessarily 
 ensue a corresponding fall in the money-equivalent, or price, 
 of all commodities. Were it not for two incidental cir- 
 cumstances, this general fall of prices would be of little 
 importance, as commodities would still retain the same
 
 AND ENGLISH COMMERCE. 6t 
 
 relative, or exchangeable value, and the wealth of the world 
 would remain unaltered. But these two circumstances, 
 which are as follows, introduce some rather complex 
 elements into the subject. 
 
 I. The recipients of fixed incomes, such as interest on 
 loan investments, &c., will have to receive the same nominal 
 sum, whatever rise may take place in the value of money, 
 and, in proportion to such rise, will they be receiving more 
 than the real amount contemplated when those liabilities to 
 them were originally contracted. Such variations are of 
 small consequence as long as they keep within a limited 
 range. There have constantly been some fluctuations in 
 the value of money, but these have never gone beyond 
 certain bounds, and the oscillations have sometimes moved 
 in one direction, sometimes in the other. But should the 
 supply of gold persistently continue inadequate to the 
 demand (and it must be remembered that, besides what is 
 used in the arts, the actual wear and tear by abrasion, (Sec, 
 and loss by shipwreck, hoarding, &c., amount to many 
 millions per annum), the aggregate deficiency year after year 
 must be productive of serious changes in the relations 
 between the payers and the receivers of fixed annual sums 
 between the governments throughout the world and their 
 creditors, the holders of stock. If the time should come 
 when gold shall have so increased in value as to acquire 
 twice the purcliasing power which it now possesses, England, 
 for instance, will find herself in a very peculiar position. 
 The yearly interest of her own debt, if then nominally the 
 same, will in reality be twice as costly and onerous as it now 
 is ; while, on the other hand, the ^^50,000, coo, or there- 
 abouts, which the British public now receive yearly from 
 abroad for interest, &c., on foreign investments will, if then . 
 paid, be equivalent to ;^i 00,000,000 of money at its 
 present value ; or, as the sum would be received in imports 
 at half the present range of prices, foreign nations will have 
 to send to England twice the quantity of commodities which 
 they now send, in payment of the same nominal sum. 
 
 2. A tendency to lower prices is generally adverse to the 
 revival of trade. Capital and credit, the two wheels on
 
 62 FREE TRADE 
 
 which commerce revolves, and without which it drags, keep 
 aloof from falling markets, and distmst the security of 
 property that is declining in money value. It is when prices 
 are rising that capital and credit freely come forward and 
 accelerate the rise. They like to connect themselves with 
 prosperity, and it is their recklessness in assisting it that 
 often pushes it beyond the mark ; just as, when the reaction 
 comes, the wild rush of alarm with which they tear them- 
 selves away aggravates the panic from which they seek to 
 fly. It is best for the interests of trade that prices should 
 remain as steady as possible, or, at all events, should be free 
 from other fluctuations than those to which it is inherendy 
 liable. But unless the increasing circulation requirements 
 be met by an increasing supply of the medium of circulation, 
 the divergence will materially affect the stability of prices, 
 independently of all other causes. 
 
 The disturbing influence which a very deficient gold 
 supply would exercise may, let us hope, be averted by 
 increased production, and even if not, it is only by degrees, 
 and in the course of years, that its effects would be felt to 
 any severe extent. We thought it right, however when 
 treating of the fall of prices, to advert to a cause which, 
 although only a subordinate one for the present, is likely, as 
 time advances, to become more and more powerful. 
 
 CHAPTER XVI. 
 
 COMPETITION IN NEUTRAL MARKETS. 
 
 In 1S72 our exports amounted to ^^3 14,000,000. In 1S77 
 they had sunk to ^^2 5 2,000,000. To what extent was that 
 decline in our exports due to the successful competition in 
 neutral markets of our foreign rivals ? An interesting and
 
 AND ENGLISH COMMERCE. 
 
 63 
 
 important question, which the detailed information afforded 
 us by the Board of Trade returns will enable us to solve 
 without difficulty. On examination, we find that the 
 deficiency of ;^62, 000,000 in the exports of 1877 as com- 
 pared with those of 1872, is entirely made up of the decline 
 of our exports to six only out of the 56 countries enu- 
 merated in table at page 48, with which we trade. Here 
 are the figures, the accuracy of which are beyond all 
 dispute. 
 
 Exports in Millions and Tenths of Millions 
 (oo,ooo's omitted). 
 
 
 In 1872. 
 
 In 1877. 
 
 Deficiency. 
 
 
 £ 
 
 £ 
 
 £ 
 
 To Russia 
 
 9-5 
 
 6.2 
 
 3-3 
 
 To Germany 
 
 43-1 
 
 28.9 
 
 14.2 
 
 To Holland 
 
 24-3 
 
 16. 
 
 8.3 
 
 To the United States 
 
 45-9 
 
 19.9 
 
 26. 
 
 To Egypt 
 
 7-3 
 
 2.3 
 
 5. 
 
 To South Ameiican Republics, 
 
 
 
 
 viz., Columbia, Uruguay, 
 
 
 
 
 Peru 
 
 8.4 
 
 3-4 
 
 5- 
 
 138.5 
 
 76.7 
 
 61.8 
 
 Our total Exports in 1872 were ;^3 14, 000, 000 
 ,, 1877 ,, 252,000,000 
 
 Deficiency ,(^62,000,000 
 
 ^vhich is (within a fraction) the deficiency on our exports to the six 
 states named. 
 
 It is quite clear, therefore, that the large diminution 
 referred to in the amount of our exports in 1877 arose 
 entirely out of, and is fully accounted for by, our dealings 
 with the six States indicated. To the rest of the world 
 we have exported as much in amount in 1877 as in 1S72, 
 and, taking into consideration the fall in prices, at least
 
 64 FREE TRADE 
 
 25 per cent, more in quantity. Taking the average of 
 the other fifty markets which we supply with goods, these, 
 in 1877, took from us 25 per cent, more in weight, 
 measure, and bulk than they did in 1872, when, in conse- 
 quence of high prices, the amount of our exports reached 
 the highest point. To put it in another way, if we leave out 
 the six countries we have named, then, to the rest, that is to 
 the fifty neutral markets, our exports in 1872 at the high prices, 
 amounted to ;^i 75,000,000, whereas in 1877, had the same 
 prices existed, they would have amounted to ^219,000,000. 
 We have taken 1877 as the basis of calculation because the 
 reports of that year were complete, but our remarks and 
 inferences are quite as applicable to 1878, as the exports 
 were then within two per cent, of the former year, 
 and for that difference we have amply allowed by taking 
 the fall of prices at 25 per cent., which is less than the 
 reality. 
 
 In the face of these facts, there does not exist the 
 slightest ground for supposing that we have been sup- 
 planted to any extent whatever in the neutral markets of 
 the world. On the contrary, we have been sending to 
 them and receiving from them more and more goods 
 every year. A collateral proof of this fact will be found 
 in the following statement of the tonnage of British and 
 foreign vessels (sailing and steam), entered and cleared 
 each year with cargoes at ports in the United Kingdom, 
 from and to foreign countries and British possessions : — 
 
 1S70 ... ... 31,624,680 tons 
 
 •871 35.502,797 ,, 
 
 1872 ... ... 37,154,292 ,, 
 
 1873 ... ... 37,934,422 ,, 
 
 1874 38,834,893 „ 
 
 1875 39,453,667 „ 
 
 1876 ... ... 42,537,484 „ 
 
 1877 43,326,980 „ 
 
 It is also deserving of notice that as we admit foreign 
 manufactures free of duty we should, if we were undersold 
 by them at all, be undersold in our own country nearly as 
 effectually as in neutral markets ; yet what is the fact ? Of
 
 AND ENGLISH COMMERCE. 65 
 
 our total imports 91 per cent, consist of raw materials and 
 articles of food, and barely 9 per cent, consist of manu- 
 factured articles ; while of this fraction, fully half consists of 
 silks and woollen fabrics, which we have always been in the 
 habit of importing. In contrast to this, 92 per cent, of our 
 exports consist of manufactured goods, and only 8 per cent. 
 of raw produce, of which latter two-thirds consist of coal, 
 coke, and pig iron. 
 
 Let us now examine our position with regard to the six 
 countries to which our exports in 1877 were ;^62,ooo,ooo 
 less than in 1872. Is this serious diminution the result of 
 foreign competition, and have we been supplanted in those 
 six countries by our rivals ? Not at all ! The real causes 
 are obvious. In the case of the United States, it is in- 
 creased import duties that have excluded our goods from 
 their markets. It is protective tariffs that have curtailed 
 both their and our foreign trade. If the Americans prefer 
 a policy of commercial isolation, that is not our fault, 
 and it proves anything but our inferiority in the art of cheap 
 production. Our exports to Germany (direct and through 
 Holland) received a sudden and enormous expansion in 
 1872 and 1873, chiefly owing, no doubt, to the increased 
 spending power of that country resulting from the French war 
 indemnity, but the trade soon subsided to its previous level. 
 In the case of Egypt and the three South American republics, 
 they have bought less from as recently because we have lent 
 them less. In 1872 we sold them large quantities because 
 they paid us out of our loans to them. In 1877 we sold 
 them much less because they then had to pay us out of 
 their own resources. As to Russia, the deficiency is slight, 
 and is accounted for by the state of her political relations 
 with us. 
 
 It may perhaps be said that the two years that we have 
 selected for comparison, viz., 1872 and 1877, might happen 
 to furnish data exceptionally favourable to our views. We 
 have therefore taken the average of the three years, 187 1 
 to 1873, to compare with the average of three later years, 
 1875 to 1877, a^d we find that they yield the same result. 
 Here are the figures : —
 
 66 
 
 FREE TRADE 
 
 Exports, in Millions and Tenths of Millions. 
 
 Total Exports to 
 
 In Thkek 
 
 Years, 
 1871 — 2 — 3. 
 
 In Three 
 
 Years, 
 1875—6—7. 
 
 Total 
 Deficiencv. 
 
 
 £, 
 
 £ 
 
 f. 
 
 Russia 
 
 31- 
 
 26.1 
 
 4-9 
 
 Germany 
 
 118.3 
 
 92.7 
 
 25-6 
 
 llolbml 
 
 71- 
 
 54-8 
 
 16.2 
 
 United States 
 
 121. 3 
 
 65.2 
 
 56.1 
 
 Egypt 
 
 20.7 
 
 8. 
 
 12.7 
 
 Three South American Re- 
 
 
 
 
 pubHcs 
 
 22.3 
 
 9.9 
 
 12.4 
 
 384.6 
 
 256.7 
 
 127.9 
 
 Our total exports during the three years 1871— 2— 3 
 
 were ... ... ... ••• •. .• ;^9 10,000,000 
 
 Ditto ditto ditto 1S75 — 6— 7 791,000,000 
 
 Total deficiency 
 
 ;|f 119,000,000 
 
 The decline in the exports to Holland arises chiefly from 
 a diminution in the sendings to Germany in transit through 
 Holland. 
 
 CHAPTER XVII. 
 
 rWLL IN THE WAGES OF LABOUR. 
 
 Just as commerce, after having been unduly stimulated in 
 187 1, 1872, and 1873, has since been suffering from the 
 consequent reaction, , so wages, after rising enormously 
 during the same period, were affected by the same reaction, 
 and have been from that time gradually falling. The well- 
 being of the wage-receivers, or working men, has fluctuated 
 with that of the profit-receivers, or capitalists. In both
 
 AND ENGLISH COMMERCE. 67 
 
 instances the intoxication arising from sudden and inordi- 
 nate prosperity led to improvidence and rashness. . The 
 employers were tempted into erecting too many new mills 
 and factories, or into working poor mines that could only 
 pay as long as prices continued exceptionally high. The 
 operatives, in most of the flourishing industries, not content 
 with an advance of from 30 to 120 per cent, on their former 
 wages, insisted on working shorter hours, and on lessening 
 the value of that work by unsteadiness and unpunctuality. 
 In the coal districts they adopted the suicidal policy of 
 limiting the output with a view of enhancing prices and 
 keeping wages up ; as if the smaller the harvest the more 
 food there would be for everybody. This policy was very 
 much akin to that of the Dutch formerly, who are said to 
 have burnt all the spices their tropical islands produced 
 beyond a certain quantity, in order to enhance their value. 
 When, after the unnatural inflation, demand subsided into 
 its legitimate channels, wages gradually fell, and have con- 
 tinued to fall, in sympathy with, but not in the same 
 proportion as, the reduced profits of capital and the 
 lessened prices of commodities. 
 
 Against this decline the wage-receivers have (as is natural 
 and excusable) fought inch by inch. By concerted action, 
 by strikes, by the partial adoption of co-operation, and by 
 every weapon which trade-unionism put in their hands, they 
 opposed all the resistance in their power to the reduction of 
 their wage. But the irresistible course of events proved too 
 strong for them, and they had to yield. 
 
 In former times the effects of such severe and protracted 
 commercial depression as that which we have gone through 
 would have been visible in the general destitution of the 
 people, in mass meetings of hundreds of thousands of un- 
 employed workmen, in an immense increase of pauperism, 
 and in lawless and destructive riots, such as were of 
 periodical recurrence a generation or two ago, when we 
 were a highly ** protected " people. That nothing of the 
 kind should have occurred in the present day, is no doubt 
 partly due to the better education and softer manners that 
 now prevail among the working men, but it nnist be
 
 68 
 
 FRkE tRAbk 
 
 observed that the fall in prices has pressed far more heavily 
 on the mercantile than on the operative classes. If the 
 latter received less pay than before, on the other hand, 
 their outgoings were less, and there was more than a pro- 
 portionate reduction in the cost of living. Moreover, in 
 consequence of the fact, to which we have adverted, of 
 the volume of our j^roductions not having diminished since 
 the culminating period of excitement, 1872, there was 
 plenty of work to be done, although it might be paid for 
 at a lower rate. If there was less employment for labour in 
 some branches of our industries, there was more of it in 
 others, and the surplus in the former quickly became 
 absorbed in the latter. That the transition from high to 
 moderate wages has not inflicted severe distress on the 
 wage-receivers and that the condition of the bulk of the 
 people has been continuously improving, is made evident 
 by the following facts : — 
 
 I. Pauperism has decreased. Here are the numbers of 
 the paupers relieved yearly in England and Wales since 
 1871 :— 
 
 10/ 1 
 
 1872 
 
 977,664 
 
 1873 
 
 890,372 
 
 1874 
 
 829,281 
 
 1875 
 
 815,587 
 
 1876 
 
 749,593 
 
 1877 
 
 728,350 
 
 1878 
 
 742,703 
 
 2. Emigration has decreased. 'J"he yearly number since 
 1 87 1 of emigrants from the United Kingdom to America, 
 Australia, and other places, is given below : — 
 
 1S71 ... ••• 192,751 
 
 1872 ... ... 210,494 
 
 1S73 ... ... 228,345 
 
 1874 ... ... 197.272 
 
 1875 140,67s 
 
 1876 ... ... 109,460 
 
 1877 
 
 95,105 
 
 Against the 95,105 emigrants in 1877, there were no less 
 than 81,848 immigrants.
 
 AND ENGLISH COMMERCE. 
 
 69 
 
 3. Convictions for criminal offences are fewer relatively 
 to the population. Here are the numbers of the convic- 
 tions for the United Kingdom and of the population since 
 1871 :— 
 
 
 CONVICTIONS. 
 
 rOri'LATION. 
 
 I87I 
 
 16,387 
 
 31,513,000 
 
 1872 
 
 15,686 
 
 31,836,000 
 
 1873 
 
 15,741 
 
 32,125,000 
 
 1874 
 
 16,107 
 
 32,426,000 
 
 187s 
 
 15,643 
 
 32,749,000 
 
 1876 
 
 16,590 
 
 33,093,000 
 
 1877 
 
 16,255 
 
 33,447,000 
 
 4. The Excise 
 
 las yielded a larger revenue. Here are the 
 
 ^'early amounts since 187 1 : — 
 
 
 1871 
 
 
 ^23,339,000 
 
 1872 
 
 
 23,386,000 
 
 1873 
 
 
 25,904,000 
 
 1874 
 
 
 27,116,000 
 
 1875 
 
 
 27,254,000 
 
 1876 
 
 
 28,300,000 
 
 1S77 
 
 
 28,408,000 
 
 1878 
 
 
 28,381,000 
 
 5. The people consume more per head of sugar, tea, 
 tobacco, and imported food than ever. We give the 
 average annual consumption of the following articles per 
 head of the total population of the United Kingdom in lbs. 
 and looths of lbs. : — 
 
 In Lbs. and 
 
 lOOTHSOFLBS. 
 
 1871. 
 
 1872. 
 
 1873- 
 
 1874. 
 
 1875. 
 
 1876. 
 
 1377. 
 
 Bacon ...lbs. 
 
 1.38 
 
 5-44 
 
 9.07 
 
 7.84 
 
 8.26 
 
 9-49 
 
 8.04 
 
 Wheat ) 
 & Flour f " 
 
 150.63 
 
 162.S6 
 
 170.79 
 
 162.11 
 
 197.08 
 
 167.80 
 
 203.26 
 
 Suc^av ) 
 (kaw) \ " 
 
 41.40 
 
 41.18 
 
 43-96 
 
 47-48 
 
 53-97 
 
 50.16 
 
 54.06 
 
 Tea ,, 
 
 Tobacco ,, 
 
 3-92 
 1.36 
 
 4.01 
 1-37 
 
 4.11 
 1.41 
 
 4-23 
 1-44 
 
 4.44 
 1.46 
 
 4.60 
 1-47 
 
 4-52 
 1.49 
 
 6. The deposits in the Savings Banks have increased. 
 Below is a statement showing the amount invested in both
 
 70 FREE TRADE 
 
 the Trustees' Savings Banks and the Post Office Savings 
 Banks, year by year, from 1871 to 1877 : — 
 
 1871 ^55,844,667 
 
 1872 ... ... 50,406,687 
 
 1873 ... ... 61,667,884 
 
 1874 ... ... 64,663,418 
 
 1875 67,595,114 
 
 1576 ... ... 70,280,120 
 
 1577 72,979,443 
 
 ^\'e come therefore to the conckision that while the wages 
 of labour have undergone a considerable decline since the 
 extravagant rise of 187 1 — 1873, it is no less certain that it 
 has by no means seriously deteriorated the condition of 
 either the wage-receiver or of the bulk of the community ; 
 and that it is the manufacturing and trading classes that 
 have most suffered from the commercial depression that has 
 prevailed for the last few years. 
 
 CHAPTER XVIIL 
 
 COMMERCIAL AND BANKING FAILURES SINCE 1874, AND 
 RATIO OF FALL IN PRICES. 
 
 It is in the nature of things that, during the period when, 
 from whatever cause, prices are falling, commercial operations 
 should, as a general rule, result in loss. During the tran- 
 sition from high to low values, a purchase made one week 
 is dear the next. At whatever price a merchant may buy an 
 article, he will, in a falling market, be undersold in a few 
 days, or at all events before he can get quit of his merchan- 
 dise. Under these circumstances, he naturally curtails his 
 operations and buys less from the manufacturer. The latter 
 finds, therefore, that, in spite of his having submitted to gra- 
 dual reductions in price, his stocks are accumulating; and as 
 he cannot pay wages and meet engagements, v.ithout making 
 sales, he is compelled, whatever his loss, to tempt purchasers 
 by still lower and lower prices. To meet this reduction in
 
 AND ENGLISH COMMERCE. 7 I 
 
 the value of his fabric, he has to lower the rate of wages. 
 After a struggle the wage-receiver submits, but as he has 
 less money to spend among the tradespeople, they, in their 
 turn, come in for their share ot the bad times. As the 
 process continues each step downward makes matters worse. 
 The depreciation of value extends to all sorts of property. 
 Not only do commodities become cheaper, but factories, 
 mills, mines, machinery, stock, shares in industrial enter- 
 prises, houses and even land, all participate in the depre- 
 ciation. Banking capital that has all along been freely 
 making advances on commercial securities, now takes fright, 
 and seeks to disengage itself from those investments by 
 calling in its advances or contracting their amount. This 
 demand falls heavily on the trader at that moment, for, in 
 declining markets, everything he touches loses money, what 
 stocks he holds have sunk in value, those who owe to him — • 
 themselves under pressure from the same cause — defer their 
 payments, the credit by which he was before assisted is 
 now sparingly given or witiiheld, and he finds difficulty even 
 in discounting his bills. In spite of all this, he must go on, 
 or his business and position will be compromised. Those 
 who have sufficient strength and capital, withstand the 
 pressure and can afford to wait to recoup themselves when 
 good times return; but some have to give way, and one 
 failure leads to another. 
 
 Some banks, when deeply involved witli one or more 
 large and over- weighted mercantile firms, have tried to prop 
 them up and carry them through the transition period, 
 hoping thus to retrieve the fortunes of both ; but in most 
 cases they have themselves sunk under the burden, and the 
 efforts made to avert the catastrophe have only tended to 
 render it doubly disastrous. Thus enormous and unexpected 
 bank failures have contributed their sinister effects to the 
 general loss and depression. 
 
 These are the features by which the commercial history 
 of the last few years have been marked, and such features 
 have always more or less accompanied a continuous fall in 
 prices. The brunt of the evil has been borne by the 
 trading and professional (that is the middle) classes ; for.
 
 72 FREE TRADE 
 
 as to the wage-receivers we have before explained that the 
 reduction in the cost of living has nearly coincided with 
 the reduction in wages ; and as to the receivers of fixed in- 
 comes, they have been, not injured, but positively benefited 
 by the fall in the value of commodities. 
 
 ^V'e may conclude that while the commercial and banking 
 failures that have occurred of late years are the outcome, 
 and not the cause, of the fall in prices that set in in 1874 
 and 1875 ; on the other hand, they undoubtedly contributed 
 to increase the gloom and ruin out of which they sprung. 
 
 Since the upward or downward tendency of prices pro- 
 duces so powerful an effect on commercial prosperity, it 
 becomes of the utmost importance to ascertain : (i) at what 
 point of the fall we have now arrived; (2) how far prices 
 have sunk below the level from which they started upwards 
 in 1871 ; and (3) at what stage we may fairly hope to have 
 reached the turning-point. The first two inquiries we may 
 solve without much difficulty. 
 
 By means of tables constructed on the plan of those given 
 at page 58 (the details of which, however, would occupy 
 too much space here) we have arrived at the conclusion 
 that the following are the exponent numbers that represent 
 the comparative average prices of the chief articles of our 
 export trade for the undermentioned eight years, taking 
 1 86 1 as the standard, and assuming that the average price 
 of our export commodities for that year were represented by 
 the figure 1,000 : — 
 
 Average prices of exports for 1S57 represented hy 1,087. 
 
 I86I 
 
 
 1,000. 
 
 1865 
 
 
 1.593- 
 
 IS67 
 
 
 1.305- 
 
 1870 
 
 
 1,283. 
 
 1872 
 
 
 1.396. 
 
 1876 
 
 
 1,023. 
 
 1878 
 
 
 923.* 
 
 * Thus, supposing the average prices of 1S61 to be represented by the 
 figure 1,000, the higher or lower figures appended to the other years 
 indicate the relative rise or fall in the average prices of those years as 
 compared with i86i. Hence 1865 shows the highest and 1878 the 
 lowest prices of the series.
 
 AND ENGLISH COMMERCE. 73 
 
 , From the above it will be seen : — 
 
 1. That average prices rose to a higher point in 1865 
 than in 1872. This was chiefly owing to the enhanced 
 value of cotton goods in 1865, arising from the scarcity and 
 dearness of the raw material in America. 
 
 2, That prices in 1878 sank to a lower point than in any 
 other of the years given, and were 8 per cent, below the 
 average of those of 1861, which was a year of great com- 
 mercial embarrassment and stagnation. 
 
 The latter is a fact of peculiar significance, and we shall 
 shortly advert to it more fully. But it is necessary, in order 
 to take an accurate survey of the course which the average 
 prices of all commodities have taken for some years past 
 to turn to our imports, and examine into the fluctuations 
 of price that have taken place in that branch of our trade. 
 
 On the plan of the table given on page 59 of the com- 
 parative quantities and values of certain articles of import, 
 we have constructed a series of others by which we have 
 arrived at a number which represents the comparative 
 average price of all the articles of import comprised in that 
 table for each year. The articles which we have selected as 
 bases of calculation are 21 in number, out of about 100 
 which appear in the Board of Trade list, but they are by far 
 the largest and most important, for they constitute nearly 
 two-thirds of the entire amount of the imports, leaving only 
 one-third to be represented by the remaining 79 articles. 
 These latter, it may be assumed, fluctuate in nearly the same 
 lines as the larger items, and if there are any small devia- 
 tions in one direction or the other, they are pretty sure, in 
 obedience to the law of averages, to neutralise each other. 
 
 The following are the results which these investigations 
 have yielded. Giving that the average prices of our imports 
 for the year 1861 shall be represented by the figure 1,000, 
 then 
 
 The average price of imports for 1861 is indicated by 1,000. 
 
 ,. ,. ,, 1867 ,, 935. 
 
 „ ,, ,, 1870 ,, S87. 
 
 )» )) )) 1872 ,, S71. 
 
 1876 „ 745. 
 
 ,> ,, ,, 1878 „ 678.
 
 74 FREE TRADE 
 
 From these remarkable deductions let us draw a few 
 inferences : — 
 
 1. While our exports have generally ruled at higher 
 (sometimes much higher) prices than those of the year 
 1 86 1, the prices of our imports have since that year been 
 continuously declining. 
 
 2. While the articles which we sell now (end of 1878) 
 command within 8 per cent, of the prices of 1861, the 
 articles which we buy are 32 per cent, cheaper than they 
 were at that period. 
 
 3. The articles of which the prices remain nearly the 
 same as in 1861 (those we export) consist in great measure 
 of manufactures. The articles of which the prices have 
 fallen largely since 1861 (those we import) consist almost 
 exclusively of raw materials of agricultural produce. 
 
 4. For the same quantity of our exported goods for 
 which we got ^1,000 in iS6r, we got ^1,396 in 1872. 
 For the same quantity of imported goods for which we paid 
 ;^i,ooo in iS6r, we only paid ^871 in 1872. Thus the 
 brisk trade of the latter year did not raise the prices of 
 foreign commodities, but only, for a time, checked the 
 rapidity of their fall. 
 
 5. The prices of our export goods which had in 1872 
 advanced 395 per cent, from those of 1861, fell in 1878 to 
 7§ per cent, below those of 1861. This is a fall of 47^ per 
 cent., taking 1861 as the standard, and is equivalent to a 
 fall of 34 per cent, on the increased prices of 1872. On 
 the other hand, the prices of our foreign importations, 
 which in 1872 had fallen 13 per cent, below those of 1861, 
 fell in 1878 to 32 per cent, below them, which is equivalent 
 to a firll of 22 ])er cent, on the diminished prices of 1872. 
 In other words, the fall on our goods of 34 per cent, 
 between 1872 and 1878 was upon a great rise; that on 
 foreign goods of 22 per cent, during the same period was 
 upon prices already reduced. 
 
 6. The alteration that has steadily been going on in the 
 relative, or exchangeable, values of the two great classes of 
 commodities, viz., the agricultural and the manufactured, is
 
 AND ENGLISH COMMERCE. 75 
 
 very suggestive, and leads to some interesting considera- 
 tions, for which, however, we cannot find place here. 
 
 It is easy enough to trace the course which the price 
 of each separate article takes from year to year be- 
 cause you have to deal with single factors ; but the result 
 is of no use in an inquiry as to the march of prices 
 generally. The difficulty is to trace the course from year to 
 year of the total average price of all commodities. Not only 
 is their variety immense, but their relative quantities must 
 also enter into the calculation. In the table which follows 
 we have averaged the price-exponents of our exports and of 
 our imports, making due allowance for the relative quantities 
 of each. It will therefore show the relative average prices 
 of one year to another of the entire volume of commodities 
 that constitute the import and export trade of the United 
 Kingdom, assuming that the leading articles (in value and 
 bulk) fairly represent the rest. Indeed, as our trade 
 embraces nearly every article of any importance which the 
 world produces, and as the variations in price that occur in 
 our markets are rapidly responded to in every part of the 
 globe, our table may be said, in a rough way, to represent 
 the relative average prices of all the world's commodities. 
 Given that the average prices of all the articles both of 
 export and import for the year 1861 shall be represented 
 by the figure 1,000, then 
 
 The average price of all articles for iS6i is indicated by 1,000. 
 
 1S67 ,, 1,102. 
 
 ,, ,, ,, 1S70 ,, 1,064. 
 
 ,, „ ,, 1S72 ,, 1,118. 
 
 ,, ), ,, 1S76 ,, 85S. 
 
 1878 „ 776. 
 
 We arrive, then, at the conclusion that since 1861 the 
 average price of commodities, after rising for some years, 
 has again fallen, and is now 22^ per cent, below the average 
 of that year, and 30^ per cent, below the high figure wliich 
 it had reached in 1872. 
 
 If reaction from the high prices of 1872-1873 had been 
 the sole origin of the existing depression of trade, we must
 
 76 FREE TRADE 
 
 by this time have more than reached the turning-point, for 
 prices have receded much beyond the level from which they 
 started. But another cause is at work. We have already 
 adverted to the influence exercised over prices by the 
 decreased production of gold, and the increased volume of 
 commodities which gold has to represent. The combined 
 operation of these two agencies, while it has no effect on 
 exchangeable value, has produced, is producing, and will 
 continue to produce, a reduction more or less rapid in the 
 money value of commodities. The strain on gold is the 
 heavier on account of the demonetisation of silver in some 
 countries, so that gold has to do additional work. But this 
 is far too large a subject to be treated in a cursory manner, 
 and is fully entitled to a separate and careful inquiry. 
 
 At all events, we have seen that, from whatever combina- 
 tion of causes, prices have descended to a lower level than 
 mere reaction warranted, and that the fall since 1861 has 
 been considerably greater on foreign goods than on those of 
 our own production. 
 
 CHAPTER XIX. 
 
 THE INCREASED EXCESS IN THE AMOUNT OF OUR IMPORTS 
 OVER THAT OF OUR EXPORTS. 
 
 That we import foreign goods to an amount largely in 
 excess of that of our exports, and that this excess has, of 
 late years, been far greater than it ever was before, are 
 notorious facts which have attracted general attention. The 
 prevailing notion among a large portion of the community 
 is, that this state of things is an evil, and many persons 
 consider that it betokens the decline of our trade and the 
 diminution of our wealth. " Foreign countries," say they, 
 " resort to every device to curtail and pare down their 
 purchases from us, while we go on purchasing enormously 
 and increasingly from them. It is not our goods but our
 
 AND ENGLISH COMMERCE. 77 
 
 money that the foreigner wants in exchange for his goods ; 
 and the increasing excess of our purchases over our sales is 
 the measure of our decadence." That this view of the 
 matter is utterly erroneous, and that it is only a reproduction 
 of the old exploded fallacies about the " balance of trade," 
 is susceptible of easy proof As the shortest way, we pro- 
 pose to estabhsh the following propositions, which lead to 
 precisely opposite conclusions : — 
 
 1. This excess of imports does not cause our money to 
 flow out of the country. 
 
 2. It is the sign, not of our decay, but of our wealth. 
 
 3. All prosperous nations import more than they export, 
 and 7'tce versa, an excess of exports nearly always indicates 
 an indebted or a declining country. 
 
 Before going further into the matter, let us see what have 
 been the actual relative values of our exports and imports 
 for a series of years past. It will be found that they are 
 considerably less divergent from each other than would 
 appear from a prima Jacie view of the annual returns of 
 the Board of Trade. As for the imports, we must, for the 
 reasons given at page 47, deduct 1 1 per cent, from the 
 official returns, in order to arrive at the actual amount which 
 the foreign seller has to receive from us in payment of his 
 goods.* As for the exports, the official returns do not, as 
 they do in the case of the imports, include the freight, 
 insurance, &c. But two-thirds of the goods we export are, 
 and have been for many years, conveyed to their destination 
 in British ships. The total tonnage that in 1878 cleared 
 with cargoes from British ports to foreign countries was 
 17,544,000 tons. Of this tonnage the proportion of British 
 was 12,050,000 tons, of foreign of all nations 5,494,000. 
 In at least the same proportion, the insurance on the cargoes 
 
 * It is true that only two-thirds of our imports are brought in 
 British bottoms, and that one-third of the 1 1 per cent, in question is 
 paid to foreign shipowners, but we have left this as a set-off against the 
 amount of freight which our immense mercantile navy earns from the 
 foreigners (and remits to England) on intermediate voyages between 
 one foreign port and another. This amount is greater than that which 
 we leave to stand against it.
 
 78 
 
 FREE TRADE 
 
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 AND ENGLISH COMMERCE. 7g 
 
 was affected in London. Two-thirds, therefore, of the 1 1 per 
 cent, freight and charges which the foreign consignees of 
 our exports have to pay, are paid to British shipowners and 
 underwriters, and must be added to the official returns of 
 exports in order to arrive at the real amount, which the 
 foreign buyer has to remit to us in payment of our goods. 
 
 Accordingly in the table (page 78) of our imports 
 and exports for each year since 1861, we have made the 
 deductions and additions called for by the above considera- 
 tions, and have thus elicited the real differences that have 
 occurred between what we have had to pay for our imports, 
 and what we have had to receive for our exports for the last 
 eighteen years. 
 
 From this table we collect that, with the exception of 
 1871, 1872, and 1873, we have regularly for many years im- 
 ported more than we exported, and tliat the excess of imports 
 during the entire series of eighteen years has, on balance, 
 been ;^322, 000,000, of which ^^23 1,000,000 represents 
 the excess on the last four years alone, viz., 1875, 1876, 
 1877, and 1878. 
 
 Now the question is, did we, or did we not, pay for this 
 ;;^j 2 2,000,000 excess of importations in specie ."^ Or for 
 what part of it did we pay in specie? Or, finally, did we pay 
 in specie for any part of it whatever ? There is no difficulty 
 at all in solving this question, for we have an exact record 
 of all the specie and bullion we received from, and sent to, 
 foreign countries during the period referred to. We open 
 those valuable returns of the Board of Trade, which substi- 
 tute for idle rhetoric the arbitrament of cold, stern, immu- 
 table figures, and we find as follows : —
 
 8o 
 
 FREE TRADE 
 
 Table of Exports and Imports of Gold and Silver 
 Bullion and Specie from and into the United 
 Kingdom for the Following Years (in Thou- 
 sands OF Pounds). 
 
 Veak. 
 
 Exports. 
 
 Imports. 
 
 
 £ 
 
 £ 
 
 lS6i 
 
 20,811 
 
 18,747 
 
 1S62 
 
 29,326 
 
 31,656 
 
 1S63 
 
 26,544 
 
 30,031 
 
 1864 
 
 23,132 
 
 27,728 
 
 1865 
 
 15-092 
 
 21,462 
 
 1866 
 
 22,639 
 
 34,287 
 
 1867 
 
 14.324 
 
 28,821 
 
 1868 
 
 20,220 
 
 24.853 
 
 1S69 
 
 16,377 
 
 20,501 
 
 1870 
 
 18,920 
 
 29,456 
 
 1871 
 
 33.760 
 
 38,140 
 
 1872 
 
 30.336 
 
 29,608 
 
 1873 
 
 28,899 
 
 33.599 
 
 1874 
 
 22,584 
 
 30,379 
 
 1S75 
 
 27,628 
 
 33,265 
 
 1876 
 
 29.464 
 
 37,054 
 
 1877 
 
 39,798 
 
 37,163 
 
 1878 
 
 26,687 
 
 32,421 
 
 446,541 
 
 539,171 
 
 Showing an excess of imports of /^92, 630,000. 
 
 These figures are decisive. Far from our having sent out 
 any specie whatever in payment for the ;!{^3 2 2,000,000 ex- 
 cess of imports during the eighteen years referred to, we 
 actually received from abroad during that period an excess 
 of specie amounting to ^92,630,000 ! This sum gives an 
 average of ;^5, 000,000 per annum, which is about what it 
 is calculated that we require annually to supply the demand 
 for art purposes, to replace wear and tear, and to meet 
 increased circulation requirements. 
 
 Let us look at it in another way. During the four years 
 1871, 1872, 1873, and 1874, we e.xported more than we im-
 
 AND ENGLISH COMMERCE. 
 
 ported by ;!^28,ooo,ooo ; during the four years 1875, 1^7^) 
 1877, and 1878, we imported more than we exported by 
 ;^23 1,000,000. Now if international balances were paid in 
 specie, it would follow that we must have received from 
 abroad gold in far larger quantities than usual during the 
 first of those two periods ; and sent away large quantities of 
 gold during the second. But what do we find to be the 
 fact ? If any one will make a calculation from the figures 
 in the table just given, he will see that during the first 
 period, the balance of specie received over the specie 
 sent was ;i^i6, 147,000, while during the second it was 
 ;^i 6,3 26,000. That is to say, during the four years that 
 we exported largely, we received _;,^i 80,000 less specie from 
 abroad than we did during the four years that we imported 
 ;^23 1,000,000 in excess of our exports. Is it possible to 
 show more clearly and conclusively that we do not pay 
 in specie for the excess of our imports over our exports ? 
 
 In fact, as we have shown before, no large international 
 payments are ever made in specie. The stock of it in each 
 country (except at places of production) is totally inadequate 
 to such a purpose. When in 1^71 to 1873 we undertook 
 to send large sums abroad as loans to foreign countries, 
 they went not in specie, but in the shape of increased ex- 
 ports. France, after 187 1, had an enormous indemnity to 
 pay to Germany. What part of it was paid in specie ? The 
 merest fraction. In the Economist of March 15th, 1873, 
 there appeared a statement to the following effect : — that 
 the French Government had just completed a payment to 
 Germany of ;!^94,6oo,ooo, and that the various items of 
 which the payment consisted were as follows : — 
 
 French gold and silver ... ... ...;^6,400,ooo 
 
 Bank-notes, French and German ... ... 8,200,000 
 
 Bills of Exchange on Belgium and Holland... 16,000,000 
 ,, ,, Germany ... ... 40,000,000 
 
 ,, ,, England ... ... 24,000,000 
 
 ;^94,6oo,ooo
 
 82 FREE TRADE 
 
 The Economist adds that the ;^8o, 000,000 on Holland, 
 Germany, and England represent the excess of commodities 
 which France has furnished in order to meet the ransom ; 
 and that, meanwhile, the bullion in the bank of France has 
 been maintained at ^^30,000,000. Thus the circulation 
 requirements of France were not interfered with by this 
 enormous payment, and even the ^6,000,000 of gold and 
 silver paid were probably the produce of the hoards which 
 had been accumulating in the old stockings and under the 
 hearthstones of the frugal and industrious French peasantry, 
 and which had not before been in circulation. 
 
 We dwell the more on this topic because it is a very 
 common notion that the balances due from nation to nation 
 are paid in specie, and it is this radical error chiefly that 
 leads protectionists to aim at selling as largely as possible 
 and buying as sparingly as possible, in the delusive hope of 
 getting the difference in specie. The futility of such an aim 
 is at once apparent, when it is clearly seen that specie is 
 not the medium through which the balance between exports 
 and imports is adjusted, or through which heavy pay- 
 ments, from whatever cause, are made by one country to 
 another. 
 
 We undertook next to show that our large excess of im- 
 ports over exports is " the sign, not of our decay, but of our 
 wealth." 
 
 Th3t England has, or rather that individual Englishmen 
 (using that term generically for the inhabitants of the United 
 Kingdom) have yearly to receive from almost every foreign 
 country large sums of money for interest, dividends, &:c., 
 on loans, shares, and other investments, everybody is aware, 
 but what the aggregate amount is that has thus to be annually 
 transmitted to this country, is a mere matter of conjecture, 
 and has been variously estimated at any sum between 
 ;^30, 000,000 and ;!{^7o,ooo,ooo sterling. Mr. E. Seyd in 
 1876 estimated the indebtedness of other countries to this 
 at ;!^r, 1 00,000,000 with an annual interest of ^^40, 000, 000 
 to ^^50, 000, 000. Professor Fawcett, in his recent Avork on 
 "Free Trade and Protection," says that "it has been calcu- 
 lated by competent authorities tkat the balance annually due
 
 AND ENGLISH COMMERCE. 83 
 
 to England as interest on capital invested in India and 
 America alone is about ^30,000,000," which seems high, 
 considering that it refers to only two countries. We have 
 taken considerable pains to collect all available data on 
 which to found a conclusion, but even these still leave a 
 considerable margin for mere conjecture. If any one will 
 consult Wetenhall's official "London Daily Stock and Share 
 List," he will see a classified enumeration of the various foreign 
 securities in sterling money for which London is the central, 
 and, in some cases, the only market. Besides these, there 
 are a vast number of others which are in foreign currency, 
 and of which the chief markets are abroad. After analysing 
 these, calculating the yearly return yielded by each, and 
 estimating as closely as possible the portion thereof which 
 has annually to be remitted to England, including the 
 amount which India has to send each year in payment of 
 that portion of her government expenditure that is defrayed 
 here, we find the total to reach the sum of _;^55,7oo,ooo. 
 On the next page is a detailed statement of the various 
 classes of securities of which the total is made up. 
 
 It therefore appears that we are the recipients of an 
 income from abroad of about ^{^5 6,000,000 per annum, in 
 addition to which, if we take into account the repayment of 
 some small part of some few loans which take place every 
 year, the profits remitted here on British capital invested 
 in private undertakings never heard of on the Stock 
 Exchange, and those sent from numerous branch houses 
 abroad to the parent firms here, we shall probably find that 
 the amount which has to be remitted each year to England 
 from abroad does not fall far short of /^6o, 000, 000. 
 
 It is that large amount which, being transmitted to us in 
 the shape of goods, constitutes the excess of our imports 
 over our exports, and as long as our debtors continue to 
 fulfil their engagements, so long (and long may it be 1) shall 
 we contmue to witness the same excess of imports. Indeed, 
 it would have been considerably larger but for the cessation 
 of dividend payments by defaulting states. We have for 
 half a century past been a lending nation, and therefore have 
 always been receiving an income from abroad in return for
 
 84 
 
 FREE TRADE 
 
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 AND ENGLISH COMMERCE. §5 
 
 British investments (though by no means to the same extent as 
 now), but a reference to the table at page 78 will show that 
 since 1S63 and up to 1S74 the excess of imports, in spite of 
 the income in question, was but small; and indeed, in the years 
 187 1, 1872, and 1873, it was the exports that were in excess 
 of the imports. Of these fluctuations the reason is obvious. 
 From 1863 to 1870, we were steadily investing money in 
 foreign loans, &c., and thus absorbing in fresh investments 
 part of the sums that we were receiving for interest, &c., on 
 our previous ones, and accordingly during those years there 
 was but a small excess of imports. But during the years 
 1871, 1872, and 1873, we suddenly and largely increased 
 our foreign investments ; we contracted foreign loans with 
 indiscriminate eagerness, and lavished our money abroad 
 with almost blind profusion. Hence exports received an 
 extraordinary stimulus and an unprecedented development. 
 The money which the British capitalist lent w^as largely laid 
 out with the British manufacturer, mine-owner, shipbuilder, 
 &c. Wages rose, traders made more and spent more, and 
 the pulse beat quicker throughout the whole commercial 
 body. Thus not only were the sums absorbed that we were 
 receiving as returns for our previous investments, but more 
 was required, to provide for which we had to export in 
 excess of our imports, as pointed out at page 56. However, 
 this mania for lending money to foreign countries rather 
 suddenly came to a stop in 1875, partly because our surplus 
 capital had been pretty well exhausted for a time, but chiefly 
 because several of the countries to which we had lent money 
 declared their inability to pay their dividends, and a well- 
 founded apprehension arose that the example would be 
 followed by others. These defaults caused heavy losses 
 to British investors, and made them so cautious, that from 
 that time up to this, very little money has been lent to 
 foreign countries. The consequences of this change were 
 immediately visible. Our income from foreign investments, 
 which we have show^n to be nearly ^^60, 000, 000, not being 
 neutralised by any outflow for loans as it was during the 
 preceding years, and being of course sent to us in goods, 
 there was a proportionate increase in the excess of our
 
 86 FREE TRADE 
 
 imports. According to the preceding calculations, that 
 excess ought to be equal to the amount of our investment 
 income, viz., ;^6o, 000,000 i)er annum. On reference to the 
 table at page 78, it will be seen that the e.xcess of imports 
 for the four years 1875, 1876, 1877, and 1878, amounted to 
 ^231,000,000, which gives an average of _V^5 8,000,000 per 
 annum — a closeness of api)roximation between results arri\'ed 
 at through two ditiercnt processes, which strongly confirms 
 the accuracy of both. 
 
 The effect of our abstention during the last four yeais 
 from foreign investments has manifested itself in two 
 directions : i. A great collapse in the export trade whicli 
 the loan system had stinuilated to an abnormal extent. 
 The British capitalist lends much less money abroad to be 
 laid out with the British manufacturer, mine-owner, &c. 
 Wages have fallen, traders have made less and spent less, 
 and the pulse beats more feebly throughout the whole com- 
 mercial body. 2. A large accumulation in England of capital 
 that seeks, but cannot yet find, profitable and safe employ- 
 ment. Our large income from abroad, instead of being 
 squandered in loans to foreign nations, is retained in the 
 country, and is daily adding to the mass of money that is 
 lying unused. The rate of interest has sunk as low as it has 
 ever been known, consols are rising, and seem likely to reach 
 par, and it is estimated that the amount now lodged on 
 deposit at the various banks throughout the United Kingdom 
 is upwards of ^^600,000,000 — an amount far exceeding all 
 precedent. 
 
 That excess of imports proves the wealth of a country 
 and excess of exports its indebtedness to foreigners, is a fact 
 that necessarily results from the foregoing considerations, and 
 has been the subject of some remarks at p. 15. But we shall 
 give here a few illustrations of its truth. On a reference to 
 the table at p. 48, it will be seen that, besides England, 
 imports are in excess of exports in Germany, Belgium, the 
 Netherlands, Denmark, Sweden, and Norway, all wealthy or 
 improving countries with debts that are moderate compared 
 with their foreign trade. The case of Norway is a peculiar 
 one. It is the large mercantile navy of that little state that
 
 AND ENGLISH COMMERCE. 87 
 
 brings them in so rich a tribute from the foreigner every 
 year. In 1878 there entered with cargoes at British ports, 
 1,734,000 tons of Norwegian sliipping, by far the largest of 
 any foreign country ; Germany coming next with 1,048,000, 
 and the United States lagging a long way behind with 
 54?, 000. On the other hand, we find that the countries in 
 which the exports exceed the imports are the United States, 
 Spain, Turkey, Austria, Brazil, India, and Peru, all of them 
 indebted states wath large foreign debts as compared with 
 their foreign trade. As to France, she has not yet wholly 
 recovered from the financial and commercial disturbance 
 occasioned by the German indemnity, but she is rapidly 
 assuming her place among the over-importing countries, as 
 all wealthy and progressive nations must do. 
 
 CHAPTER XX. 
 
 THE DEPRESSION IN TRADE NOT COXFINED TO ENGLAND, 
 •BUT PREVALENT EVERYWHERE. 
 
 If, as some assert, free trade be the main cause of the 
 depression in trade that has prevailed in England for the 
 last three or four years, it would follow that those countries 
 that lived under the protective system should, by way ol 
 contrast, exhibit great commercial activity, and be revelling 
 in prosperity. If it be from the unwholesome influence ot 
 free trade that our commerce is suftering, the commerce ot 
 those countries that are free from that influence ought to be 
 healthy and vigorous. But this is far from being the case. 
 The trade of the rest of the world is mostly in a more 
 depressed state than it is here. From every country on the 
 continent of Europe there arise loud cries of distress both 
 from the employers and the sellers of labour ; and the 
 shield of protection hangs so uneasily on them that they 
 are asking for it to be shifted, either higher or lower, they 
 hardly know which. As to the United States of America,
 
 88 FREE TRADE 
 
 the most highly protected country in the world, the con- 
 dition of the trading and industrial classes is, in spite of 
 their access to abundant, fertile, and cheap land, worse than 
 it is in Europe. Of this conclusive proofs are at hand. In 
 the two years 1872 and 1S73, at the highest point of our 
 commercial inflation, when labour was both scarce and dear, 
 328,000 persons emigrated from the United Kingdom to the 
 United States of America. In 1876 and 1877, when trade 
 here was greatly depressed, the number of emigrants had 
 dwindled down to 54.000 and 45,000 respectively. Indeed, 
 during the latter years, nearly as many returned to England 
 from the United States as went there. Surely the gTeat fall 
 in wages here in 1876 and 1877 ought to have stimulated 
 our working men to leave us for America in very much 
 larger numbers than in 1872 and 1873 when they were 
 getting ample wages, and labour was in great demand. 
 Instead of which, quite the contrary has happened, and 
 emigration has almost come to a stop. How was it possible 
 for this to occur if the protective system was working bene- 
 ficially for the United States, while free trade was working 
 detrimentally for England ? If this should meet the eye of 
 some working man yearning after protection, we beg that 
 he will ponder over that question. The fact is, that while 
 industrial prosperity had declined in England, it had, in 
 spite of all the protection lavished upon it, declined in a far 
 greater degree in the United States. Of this, the working 
 classes here, deeply interested in ascertaining the value of 
 labour in different labour-markets, became so well aware, 
 that they preferred moderately low wages here to idleness or 
 starvation wages in the United States. It is clear, therefore, 
 that free trade cannot be accused of causing a state of things 
 which exists in an aggravated form in countries where the 
 contrary system ]")revails. 
 
 As an instance (and it is an important one) of the com- 
 parative results of free trade in England and of protection in 
 the United States, let us look at the relative success of each 
 in securing a share in the carrying trade of the world — a 
 prize worth contending for. Up to 1849, Great Britain 
 " protected " her mercantile navy by the celebrated Naviga-
 
 AND ENGLISH COMMERCE. 89 
 
 tion Laws, which created ahiiost a monopoly of our trade 
 for our own merchantmen. In that year we repealed those 
 laws, and boldly threw our trade open to universal com- 
 petition. Of course, the total downfall of our mercantile 
 navy was confidently predicted by the protectionist party, 
 but their fears were not realised. Instead of decadence 
 came development ; our mercantile marine became more 
 pre-eminent than ever ; we have become the carriers for the 
 world, and our flag waves in every port where any trade 
 exists at all. This was the effect of discarding protection. 
 
 Now let us look at the working of the opposite system 
 (protection) on the carrying trade of the United States. 
 Previously to i860 the American mercantile marine com- 
 peted stoutly with our own as carriers of merchandise from 
 one part of the world to another, and they obtained a 
 considerable share of that lucrative employment for capital 
 and labour. Nearly three-fourths of the goods that were 
 sent from, or brought to, their own shores were conveyed in 
 United States vessels, and the Stars and Stripes were con- 
 stantly found alongside the Union Jack in the principal 
 trading ports of the world. The unfortunate Civil War 
 between North and South put a temporary stop to this 
 competition, for with the characteristic spirit of the Anglo- 
 Saxon race, all the energies of the American people were 
 concentrated on that fierce struggle. But after the close of 
 the war there was apparently nothing to. prevent the Ameri- 
 can shipowners from resuming their rank among the 
 mercantile navies of the world. One thing, however, had 
 occurred meanwhile which destroyed all their chances of 
 success. The protective system had assumed formidable 
 dimensions. The ruling party carried it out to an unprece- 
 dented extent, and by the imposition of excessive import 
 duties shut out cheap foreign goods, to be replaced by dear 
 native ones. Prices were raised thereby to such a point 
 that it became no longer possible for America to construct 
 and equip merchant ships (whether sailers or steamers) 
 on terms that would allow the owners to compete with 
 British merchantmen, and the latter have accordingly had 
 the carrying trade almost to themselves ever since. The
 
 90 FREE TRADE 
 
 United States, nevertheless, possess a large and very fine 
 mercantile navy, but its operations are in great measure 
 restricted to their extensive coasting and internal trade. 
 Owing to her immense sea-board bathed by two vast oceans, 
 the Atlantic and the Pacific — to the noble rivers that afford 
 navigable access to the very heart of the country — to the 
 great expanse of her lakes, or rather inland seas — owing, 
 above all, to the free trade system that jjrevails between 
 state and state, and to the skill and enterprise witli which it 
 is utilised in the extension of trade between one part of the 
 huge continent and the other, a very large tonnage is re- 
 quired to meet that internal demand. But when we come to 
 the external relations of the United States, in which free 
 trade is abolished and replaced by protection, American 
 shipping is so heavily handicapped that it is distanced by 
 some even of the minor states of Europe. From her own 
 ])orts her own produce is now carried away mostly in foreign 
 bottoms. We have before us a recent number of a publica- 
 tion (Dornbusch's "Floating Grain Cargoes List") in which 
 the names and nationalities are given of 107 vessels which 
 were then loading grain for England at San Francisco, 
 California, and Portland, Oregon. Of these 107 vessels, 
 most of them of large size, 84 were British, 9 were German, 
 2 were French, and only 12 were American. Without 
 having similarly precise statistics, our inquiries lead us to 
 believe that in the eastern pofts of the United States the 
 proportion of foreign tonnage employed in conveying 
 American produce to Europe is equally large. Such are the 
 effects of discarding free trade. 
 
 It is curiously typical of the two systems adopted in the 
 two countries respectively, that while we in the United 
 Kingdom take three-fourths of the total American ex- 
 ports, the United States barely take one-twelfth of the total 
 of ours. Some are shocked at the contrast, and think that 
 it means a heavy loss to us. No such thing ! How can it be 
 a loss to us to obtain what we require ? It would really be 
 a loss if wanting a thing we could not get it, but how we 
 lose by getting it is not easy to understand. If, indeed, it 
 were forced upon us, that might be objectionable; but, no !
 
 AND ENGLISH COMMERCE. 
 
 our purchases are quite spontaneous. Some people talk as 
 though it were an act of great kindness and condescension 
 on our part to buy largely from the Americans, and that 
 they ought to be very grateful to us for it. This is a 
 delusion. If we import cotton or wheat from the United 
 States, is it out of love and regard for our American 
 cousins ? Do we do so in order to confer upon them so 
 great a favour that it entitles us to ask them in return to 
 alter their fiscal system in order to please us?- Not a bit of 
 it ! We buy their commodities out of selfish motives, 
 because it suits us to do so, and it entitles us to no 
 gratitude whatever. The very men who tell us that we 
 ought to discourage the importation of American produce, 
 encourage it by eating bread made from American wheat 
 and wearing garments made from American cotton. If it is 
 so WTong to buy from Americans because they do not 
 choose to buy from us, why then do we do it? "Oh !" 
 it will be said, " they inundate us with their wheat and 
 maize, and once here what can we do ? " Now, it is a 
 great though a common mistake to say that the Americans 
 inundate us with their grain. Far from that being the case, 
 the Americans do not send us as much as one ship-load ot 
 grain in the course of the whole year. Many years ago the 
 Americans used to consign a little wheat and maize to 
 Liverpool for sale, but of late years none at all. There are 
 not 100,000 qrs. of grain of all kinds imported in a year for 
 American account. The whole of the large importations 
 into the United Kingdom of American wheat, maize, &c., 
 are purchases made in New York, Baltimore, &c., by 
 English millers and dealers, which are shipped there for 
 English account, at English risks, and paid for by the 
 English buyer before he gets possession of the goods. 
 This is a very different thing from sending the grain over 
 to seek a sale for it here. Nor does it look as if the 
 Americans were foisting their produce on us. They are 
 not pedlars who bring their goods to your door and ask you 
 to buy. They keep an open shop where you may go and 
 make purchases if you choose. If it is such a grand favour to 
 them and such a bad thing for you to buy their grain and their
 
 92 FREE TRADE 
 
 bacon and their cotton, why do you do it? There is no 
 compulsion. The Hact is that you do it for your own sake, 
 not for tlieirs ; and it suits you to buy quite as much as 
 it suits them to sell. As to their being ungrateful because 
 they prefer making their goods themselves at a heavy cost 
 instead of buying them cheaply from you, that is nonsense. 
 It may be a mistaken policy of theirs (and we are sure that 
 it is) to restrict their dealings with the rest of the world 
 when they might expand them threefold or more by 
 adopting free trade; but, after all, it is their own affair, 
 and while you may have a right to feel surprise or regret, 
 you have none to express indignation. 
 
 CHAPTER XXI. 
 
 THE EFFECT ON TR.\DE OF POLITICAL COMPLICATION'S AND 
 OF LOSSES ON THE DEBTS OF DEFAULTING ST.\TES. 
 
 The depression in trade, of which we have been tracing 
 the main causes, was no doubt in some degree enhanced 
 by the fear lest the political complications connected with 
 the Eastern Question might drag us into war. Indeed, the 
 evil eftects of war on trade are chiefly felt just before its 
 commencement from uncertainty, and just after its close 
 from reaction. Actual hostilities occasion a large expendi- 
 ture on the part of Government, and a stimulus is given to 
 a variety of trades. Hence a brisk demand for labour and 
 corresponding animation among the retail dealers. Money 
 is rapidly circulated, and for a time the industrial and mercan- 
 tile classes enjoy a factitious and artificial prosperity. But at 
 the close of a war a reaction sets in very much akin to that 
 which followed the " leaps and bounds " of our commerce in 
 1872-3, and stagnation and distress ensue. Thus it was, after 
 the termination of the long war with Napoleon in 18 15, that 
 the country underwent a commercial crisis more severe than 
 any that she has since sustained. Hundreds of thousands
 
 'AND ENGLISH COMMERCE. 93 
 
 were thrown out of work, and were driven to desperation. 
 Incendiary fires, attempts at plunder, and "bread or blood" 
 riots spread alarm throughout the country during the years 
 1816 and 1817. Again, the close of the war with Russia in 
 1856 was succeeded by a severe panic in 1857. Numerous 
 failures occurred, and the aggregate liabilities of the failed 
 houses were computed to amount to ^{^45, 000,000. Govern- 
 ment had to interfere, and saved commerce from a dead- 
 lock by empowering the Bank to extend its issues beyond 
 their legal limits. 
 
 We do not think, however, that political apprehensions 
 exercised much influence on the recent state of trade — 
 certainly far less than resulted from the losses sustained by 
 the British investing public through the non-payment 01 
 dividends by several indebted states. Not only did there 
 ensue the immediate loss of the interest that was due, but 
 also the fear that the capital itself was endangered. Neither 
 individual nor national suspensions are often followed by a 
 resumption of payments. When a country once forfeits its 
 credit by the non-payment of its dividends, it loses one 
 great incentive to the punctual performance of its engage- 
 ments, viz., the hope of contracting fresh loans. These losses 
 were, pro /anio, a diminution of the available capital of the 
 country, and thus they contributed in a certain measure to the 
 general depression. Fortunately the bulk of these losses fell 
 on wealthy persons, to whom they brought disappointment, 
 but not ruin. One compensating effect attended them. 
 The faith of English capitalists in the solvency and morality 
 of foreign governments was thoroughly shaken. Fewer 
 fresh investments have been made abroad, the last few years, 
 and the savings of the country, roughly estimated at from 
 ^180,000,000 to ;^220, 000,000 per annum, have mostly 
 remained at home to accumulate into the unprecedentedly 
 large sum that now lies nearly idle, and is eagerly seeking 
 fresh fields for profitable employment.
 
 94 FREE TRADE 
 
 CHAPTER XXII. 
 
 SUMMING UP. 
 
 We have in the course of these pages endeavoured, 
 among other things, to show : — 
 
 1. That balances due by one country to another are 
 paid, directly or indirectly, in commodities, and not in 
 specie, unless occasionally and to an insignificant extent. 
 
 2. That for every export of goods, except what is sent to 
 pay a previous debt, or to create a new one, there must be 
 an import of goods to the same amount, and rice versa. So 
 that to restrict imports is, to that extent, to restrict exports, 
 and to diminish foreign trade. 
 
 3. That free trade is the only system under which capital 
 and labour find their most natural and permanently profit- 
 able fields for employment. 
 
 4. That the protective system transfers capital and labour 
 from natural and profitable into forced and unprofitable 
 employments, artificially raises the cost of commodities, 
 forfeits the advantages accruing from the division of labour, 
 reduces foreign trade, and tends to isolate a country from 
 the rest of the world. 
 
 5. That the reciprocity or retaliatory system, were it 
 practicable (and it is not), would be fraught with all the 
 evils of protection, of which it is the reproduction under a 
 different name. 
 
 6. That the sudden increase of our exports in 1S71 and 
 1872 was caused by the exceptionally large sums which, 
 at that period, we sent abroad by way of loans to divers 
 foreign countries and of other foreign investments ; which 
 sums were transmitted, not in specie, but in commodities. 
 
 7. That on the cessation of that exceptional state of 
 things, a reaction took place, and the amount of our foreign 
 trade has been decreasing since 1874. 
 
 8. 'I'hat while the money value of our foreign trade (com- 
 bined exports and imports) has declined, the bulk or volume 
 of the goods which we have sent out and received in, has 
 undergone no diminution.
 
 AND ENGLISH COMMERCE. 95 
 
 9. That owing partly to reaction, and partly to diminished 
 gold production, a general fall has taken place in the average 
 price of all commodities, and it has been by far the heaviest 
 on those articles which we import from abroad. The 
 present average price of all British produce is 8 per cent., 
 and the present average price of all foreign produce is 32 
 per cent., below the average price of the same two classes 
 of commodities respectively in the year 1861. 
 
 10. That the wages of labour have also fallen, but not in 
 full proportion to the fall that has taken place in prices 
 generally, so that the burden of depression has chiefly 
 weighed on the mercantile and middle classes. 
 
 11. That the depression in trade was not confined to 
 England, but was universal, and has been severest in the 
 most protected countries, so that it cannot be ascribed to 
 free trade. 
 
 12. That we have not suffered from foreign rivalry in 
 neutral markets. 
 
 13. That the increased excess of our imports over our 
 e\i)orts is the sign of our wealth, not of our decay ; and that 
 all prosperous nations import more than they export ; while, 
 on the other hand, an excess of exports is a sure sign of 
 indebtedness. 
 
 14. That our recent abstention from foreign investments 
 has produced a larger accumulation in the country of un- 
 employed floating and loanable capital than has perhaps 
 ever been known. 
 
 The conclusion to which all these considerations lead us 
 is, that just as the free trade system enabled us to take the 
 utmost possible advantage of the period of prosperity, so it 
 has enabled us to meet the phase of reaction and adversity 
 with less strain on our resources than any of the protected 
 countries ; and that any change in, or modification of, our 
 commercial policy would prove in the highest degree inex- 
 pedient and disastrous. The present combination of low 
 prices and of abundant capital warrant the expectation that 
 before long there will be a movement towards higher values. 
 As soon as this occurs, business operations will become 
 more profitable, capital will regain confidence and circulate
 
 96 FREE TRADE AND ENGLISH COMMERCE. 
 
 more freely, commerce will resume its activity, and we shall 
 enter on a fresh cycle of prosperous years. Such periodical 
 oscillations in trade are of never-failing recurrence, and we 
 ought by this time to be prepared for them. But instead of 
 this, when business is brisk and flourishing, we act as if 
 high prices and large profits were the normal condition of 
 trade ; while, when prices fall and profits vanish and the 
 " depression ' comes on, we sink into gloom and despair, 
 fancy that things never were so bad before, that "this time " 
 trade is past all recovery, and we clutch at any quack 
 nostrum as a " kill or cure " remedy. This same thing has 
 happened every ten years on an average since the com- 
 mencement of the century, and there is no merchant with 
 some experience who does not remember within his own 
 time two or three " crises," each of them being " the worst that 
 ever before occurred." These alternations are, in regard to 
 their frequency, duration, and intensity, subject to certain 
 laws which it would be useful to study and bear in mind. 
 It may safely be predicted, for instance, that a cycle of 
 prosperous years will be of shorter or longer duration ac- 
 cordmg to the steadiness or the precipitancy of the upward 
 movement. The swifter the pace at which, and the greater 
 the height to which, prices are driven up, the greater will 
 be the corresponding reaction, and the sooner it will occur. 
 The more moderate the rate of progress, the longer will it 
 be before we experience a check, and the less violent will 
 that be when it does come. 
 
 But, no doubt, the lessons which we are thus taught will 
 soon be forgotten or unheeded, and when the time of ex- 
 citement comes, each one of us will push and press on with 
 all his might until prices reach their climax, when reaction 
 will ensue, and another period will supervene of loss, de- 
 pression, and gloom, similar to that through which we have 
 been passing, and from which wc hope and bclic\'e that we 
 shall before long emerge. 
 
 Ca;s:ll, Petler, Galpm& Co., Belle Sauvage Works, London, E.G.
 
 THE 
 
 WESTERN FARMER 
 
 \ 
 
 OF 
 
 AMERICA. 
 
 AUGUSTUS MONGREDIEN, 
 
 Anihor of "Free Trade and. English Commerce." 
 
 Cassell, Petter, Galpin & Co.: 
 
 LONDON, PARIS d- XEIV YORK.
 
 THESE PAGES 
 
 ?lic rf»jpfft(ullij 3!n5aibfti 
 
 TO 
 
 T HE FA R M 1-. K S OF AMERICA 
 
 liY THLIK 
 SlNCLlv'L FKILND, 
 
 A. MOXGREDIEX. 
 
 Fitrc^: Hill, near London, Eviicnd,
 
 THE 
 
 WESTERN FARMER OF AMERICA. 
 
 CHAPTER I. 
 
 INTRODUCTORY. 
 
 The golden rule for successful trading is " to buy in the 
 cheapest and sell in the dearest market." Strange to say, 
 the American farmer * reverses this rule. He sells in the 
 cheapest and buys in the dearest market. For what he 
 raises he gets a lower price, and for what he consumes he 
 pays a higher price, than the land-tillers get and pay in any 
 other country in the world. This is a very singular state 
 of things, and is well worth thorough examination. 
 
 While the Western farmer himself neither receives nor 
 seeks any legislative "protection," he is compelled by law 
 to supply his wants, not from the cheapest sources, but 
 from certain privileged establishments to which he has to 
 pay extravagant prices. While he requires no State sub- 
 vention, because his occupation is of itself a profitable one, 
 he is heavily taxed to support unprofitable manufactures in 
 the Eastern States, and has to make good their losses out 
 of his profits. That this is hard upon him everybody must 
 admit, but no one can realise how really hard it is, or 
 how vast a sum is year after year wrung from him in this 
 way, without resorting to figures and setting it forth in 
 
 * The word "farmer " will be used throughout these pages as mean- 
 ing the producer of all articles derived from the cultivation of the soil, 
 whether grain or cotton, meat or tobacco, <S;c.
 
 THE WESTERN' FARMER 
 
 dollars and cents. This we shall proceed to do as 
 
 accurately and as briefly as we can. 
 For this purijose let us inciuire — 
 
 1. How much is actually taken yearly out of the 
 pockets of the American farmers by compelling them to 
 buy dear, instead of allowing them to buy cheap, goods. 
 
 2. What becomes of the enormous sum that is yearly 
 drained from them in this way. 
 
 3. How this dreadful and wanton waste can be 
 avoided.
 
 OF AMERICA. 
 
 CHAPTER II. 
 
 HOW MUCH IS ACTUALLY TAKEN (yEARLY) OUT OF THE 
 POCKEl'S OF THE AMERICAN FARMERS BY COMPELLING 
 THEM TO BUY DEAR, INSTEAD OF ALLOWING THEM TO 
 BUY CHEAP, GOODS. 
 
 By the census of 1S70 the population of the United States 
 was found to be 38,600,000; and the number over ten 
 years of age was 28,229,000. Of these, 12,506,000 were 
 engaged in various kinds of occupations, the rest being 
 women, young persons of both sexes, idlers, &c. What 
 were the respective employments of these 12,506,000 
 workers ? According to the census returns there were — 
 
 5,922,000 persons engaged in agriculture. 
 
 2,685,000 ,^ ,, in professional and personal service. 
 
 1,191,000 ,, ,, in trade and transportation. 
 
 654,000 ,, ,, in mechanical trades and mining. 
 
 2,054,000 ,, ,, in manufactures. 
 
 12,506,000 
 
 In round numbers, there were two millions of persons 
 engaged in manufactures, and these were exclusively privi- 
 leged to supply nearly all the physical wants (except food 
 and lodging) of the other ten and a half millions of workers 
 and their families. 
 
 As in these pages we only profess to represent the case 
 of the American farmer, we must confine our attention to 
 the six millions of persons and their families who are en- 
 gaged in the cultivation of the soil. It is quite true that 
 the remaining four and a half millions engaged in professions, 
 jii trading, in mining, and in personal service, are sufferers to
 
 8 THE WESTERS FARMER 
 
 (luite a proportionate extent, but they do not come within 
 the scope of the present inquiry. 
 
 Now let us see wliat is the actual amount which tlie 
 farmers (that is, soil-workers generally) spend yearly on the 
 goods produced by the manufacturers. 
 
 In the first place, the six millions of agriculturists of 
 1870 must by this time have increased to at least 
 7,500,000, as will no doubt be seen by this year's census. 
 To be within the mark we will call them 7,000,000, 
 nearly all of them having wives and children. Now, 
 what is the average annual expenditure on all articles 
 of consumption, except food and drink, of each of these 
 families ? On careful investigation, and consultation with 
 conscientious inquirers and with persons most competent to 
 judge, we feel confident that we are within the mark in 
 computing such annual expenditure at 200 dollars per 
 family, including within that average the small minority of 
 unmarried men among the 7,000,000 agriculturists. It must 
 be borne in mind that this amount includes : — i. Woollen, 
 cotton, linen, and silken fabrics, and, therefore, every species 
 of clothing for male and female, as also sheets, curtains, 
 blankets, carpets, &c. 2. Iron and steel manufactures, and 
 therefore all iron-work, wire, cutlery, tools, farming imple- 
 ments, farriery, agricultural machinery, as well as railway 
 conveyance on iron, which cost very much more than it would 
 have cost had it been imported from abroad. 3. Leathern 
 fabrics, and therefore boots and shoes, saddlery, gloves, &c. 
 4. Earthenware and crockery, tinware and glass, and num- 
 berless other household necessaries, all of which come under 
 the price-inflating influence of the Customs tariff. It is on 
 these objects that the greater portion of the agriculturist's 
 outgoings is expended, for he is but at little expense for 
 his food. Moreover, this yearly average of 200 dollars per 
 family comprises a large number of rich and well-to-do 
 persons, and it may safely be assumed as rather under than 
 over the reality. 
 
 Having now cleared the way thus far, it is easy to calcu- 
 late the total sum annually spent on manufactured goods by
 
 OF AMERICA. 
 
 the farmers and agriculturists generally of the great Central 
 and Western States. The anaount being 200 dollars to 
 7,000,000 families, is, therefore, 1,400,000,000 dollars in the 
 aggregate. 
 
 The next step is to ascertain what portion of that amount 
 the Western formers would save if, by the abolition ot 
 import duties, they were left free to suply their wants from 
 the cheapest market, wherever that might be, whether in 
 America or in Europe, whether in New England or in Old 
 England. This question is easily solved, as, fortunately, 
 we have the guidance of positive facts supplied by the 
 official returns of the United States Government. From 
 these we learn that prices are so high in America and so 
 low in Europe, that, in spite of the enormous duties levied 
 on them, considerable quantities of European goods are 
 imported into the United States, where they must, of course, 
 leave a profit to the senders, or they would not be sent. 
 Let us enumerate some of the leading articles imported in 
 the year 1878, stating their amounts and the rate per cent, 
 of duties which they had to pay : — 
 
 Articles Imported. 
 
 Amount in 
 Dollars. 
 
 Ad valorew Import Duties paid on 
 them, according to sorts. 
 
 Woollen Manufactures 
 
 Cotton ,, 
 
 Linen , , 
 
 Silk 
 
 Iron and Steel ,, 
 
 Leather ,, 
 
 Earthenware and 
 
 Crockery ... 
 Tin Plates and Ware 
 Hemp and Jute Fabrics 
 Window Glass 
 
 % 
 
 $24,604,000 
 
 15,458,000 
 
 14,384,000 
 
 20,103,000 
 
 6,554,000 
 
 6,906,000 
 
 3,978,000 
 
 9,874,000 
 
 1,005,000 
 
 675,000 
 
 54, 57, 66, 70, and 77 per cent. 
 35) 45) 57) and 63 per cent. 
 30, 35, and 40 per cent. 
 50 and 60 per cent. 
 30, 35, 45, 48, and 50 per cent. 
 20, 25, 35, and 50 per cent. 
 
 40 and 45 per cent/ 
 
 27 per cent. 
 
 40 per cent. 
 
 68 and 72 ^^x cent. 
 
 103,541,000 
 
 
 What do these figures mean? They mean that the prices
 
 lO THE WESTERN FARMIR 
 
 which the Western farmers (and the American people gene- 
 rally) now pay for their woollen cloths and stuffs are so ex- 
 cessive that the British woollen manufacturers can afford to 
 pay from 54 to 77 per cent, import duties for the admission 
 of their goods into the States, and still get a profit. That is 
 to say, that (taking the average duty at 66 per cent.) the 
 Western farmer could, if he were allowed to buy where he 
 could buy cheapest, get the same quantity and quality of 
 woollen and worsted stuffs for 1 2 dollars for which he now 
 has to pay 20. Eight dollars out of twenty thrown away ! 
 
 They mean that the prices which the Western farmers now 
 pay for their cotton and linen goods are so excessive that 
 the British makers of the same goods can afford to pay from 
 30 to 63 per cent, import duties for the admission of their 
 manufactures into the States, and still get a profit. That is 
 to say, that (taking the average duty at 50 per cent.) the 
 farmer's wife could, if she were allowed to buy where she 
 could buy cheapest, get the same articles for 6 dollars for 
 which she now has to pay 9. Three dollars out of nine 
 thrown away ! 
 
 They mean that the American railways are constructed 
 of iron which cost so dear that the British makers can 
 afford to pay 30 to 50 per cent, import duties for the admis- 
 sion of their goods into the States, and still get a profit ; so 
 that the railway companies are compelled to charge the 
 Western farmer a proportionately excessive rate for the con- 
 veyance of his produce to a market. The burden of the 
 difference, of course, falls on the patient back of the 
 Western farmer ! 
 
 Those figures mean, in short, that the same enormous 
 artificial inflation of natural prices runs through every 
 article (except food) with which the farmer has to provide 
 his family. 
 
 The American has extraordinary advantages over the 
 British farmer. He has, first, a soil so fertile as to produce 
 freely with cheap tillage and no manure ; second, a climate 
 highly favourable to agricultural operations; third, abundance 
 of land so cheap that the fce-simiile costs less than is annu-
 
 OF AMERICA. 
 
 ally paid for rent in England. But, on the other hand, the 
 British farmer enjoys for the present one decided advantage : 
 he sells his produce in the dearest, and buys his clothing, 
 implements, &c. &c., in the cheapest market in the world. 
 
 Let us, however, continue our inquiry as to the total 
 annual amount taken out of the pockets of the Western 
 farmers by exorbitant protective duties. These duties 
 have a very wide range. They are as low as lo per cent, 
 on diamonds which the ^^'estern farmer does not use, and 
 as high as 93 per cent, on cleaned rice which he does use. 
 They are levied on no less than 1,600 different articles, some 
 of them yielding less revenue than it costs to collect it, and 
 the whole producing a complexity which gives comfortable 
 em])loyment to swarms of clerks, &c., at every seaport. 
 The heaviest per-centage rates are those imposed on articles 
 of general and necessary consumption by the people, which 
 accordingly contribute very nearly three-fourths of the total 
 amount collected. But let us strike an average. By a care- 
 ful comparison of the total value of the chief dutiable 
 foreign articles imported in the year 1878, with the total 
 amount of duties levied in that year on the same articles, 
 it has been clearly ascertained that the average rate of 
 duties paid on their value was 42I per cent. Were the 
 average confined to the articles named in the table at p. 9, 
 it would no doubt much exceed 42|per cent, but, to be within 
 the mark, we will adopt the general average. This average, 
 then (42I per cent.), is the measure of the difference be- 
 tween the prices which the Western farmers now pay for 
 what they consume, and those which they would pay were 
 foreign articles admitted duty free. The prices which the 
 manufacturers in the Eastern States make the American 
 people pay for their goods are not, and cannot be, less, but 
 are, and must be, something more than 42 1 per cent, in 
 addition to British prices, or else how could the Britisher 
 pay an average of 42^ per cent, duties, and still make a 
 profit on what he sends to America? If the prices paid by 
 the Western farmer to the manufacturers of the Eastern 
 States only exceeded British prices by, say 25 per cent., no
 
 12 THE WESTER tf FARMER 
 
 British goods, having to pay 42 1 per cent, import duties, 
 could possibly be sent to the United States. The very 
 fact of large imports being poured in, year after year (as 
 sho\vn in table at p. 9, for 1878), in spite of the 42I per 
 cent, duty for admission, makes it clear that the prices 
 in America must be at least 50 per cent, in excess of those 
 current in England, or else those sendings would leave a 
 loss, and would be discontinued. Those importations, be it 
 noted, are not fitful or intermittent, but are, though fluctu- 
 ating in amount, constant in their recurrence. The con- 
 tinuous overflow, however slight, of a tank is clear evidence 
 of its being full ; and, in the same way, the continuous im- 
 portation of goods burdened with 42I ])er cent, duty is 
 clear evidence that the ordinary i^rices of such goods in the 
 importing country must keep sufficiently high to make such 
 importations profitable. 
 
 Howe\er, to err on the side of caution, we will instead 
 of 50 per cent, or 42I per cent., take 40 per cent, as the 
 overcharge which the Western farmers have to pay for 
 the goods which they require to supply their wants. Now, 
 we have shown at p. 9 that their annual exi)enditure on 
 the supply of those wants amounts in the aggregate to 
 1,400,000,000 dollars. Let us see what proportion of 
 that sum is unnecessarily squandered. If the American 
 farmers were allowed to buy, as they could buy, for 100 
 dollars what they are now compelled to pay 140 dollars 
 for, it is clear that they could buy for 1,000 million dollars 
 what they now pay 1,400 million dollars for, and con- 
 sequently they would save 400,000,000 dollars ever}' year. 
 In other words, by being left free to buy where they could 
 buy cheapest, they would benefit to the extent of 400 
 million of dollars, which they now lose by the operation of 
 the ]irotective duties. 
 
 Truly a startling sum ! A stujiendous sum ! That such 
 a pile of wealth should year after year be unnecessarily 
 and wantonl)- flung away and wasted seems utterly in- 
 credible, and yet it is literally true. " What ! " we can 
 imagine a Western farmer exclaiming, " do you mean to say
 
 OP AMERICA. 13 
 
 that we farmers, our class alone, are every year, out of our 
 hard earnings, needlessly and heedlessly throwing away 400 
 millions of dollars, and that we could, if we would, save in 
 our yearly expenses a sum large enough to defray the 
 whole of the national expenditure nearly twice over ? " 
 "Yes, sir," we reply, "it is a fact. "We have clearly shown 
 that the same articles of consumption that you could get 
 from the Britisher for 100 dollars, you have now to pay 
 140 for. Now, if you, one with the other, rich and poor, 
 spend 200 dollars a year on such articles, the common rule 
 of three shows that but for your heavy Customs duties you 
 need only spend 143 dollars for the same things instead of 
 200, and that, while living just as comfortably, you would 
 on an average save fifty-seven dollars a year. Now, as there 
 are 7,000,000 of you agriculturists, multiply that number by 
 the fifty-seven dollars which each would save, and you will find 
 it comes to 400,000,000 dollars. The fact is, that you never 
 realised the amount of your loss — never put it into figures. 
 It is so mingled up in small doses with your daily spend- 
 ings that, though enormous in the gross, it does not strike 
 you in the detail. You go on paying thirty cents for a knife 
 instead of twenty ; or fifty cents for a piece of canvas instead 
 of thirty ; or ten dollars for woollen clothing instead of six ; 
 or your wife buys a printed calico gown for three dollars 
 instead of two, and so on throughout the whole range of 
 your requirements; but you do not stay to inquire how 
 much you are overcharged at each step. Now, this has 
 been calculated for you. For every seven dollars which you 
 now spend you ought only to spend five ; the other two 
 dollars are simply thrown away in consequence of your 
 import duties.'' 
 
 It has been said the American farmers actually prefer 
 paying seven dollars to the Eastern State manufacturers to 
 paying five dollars for the same thing to the Britisher, espe- 
 cially as the extra two dollars do not go out of the country. 
 Well, if the two dollars do not go into another country, they 
 at all events go into another pocket, and surely the 
 farmers can hardly be persuaded that it is the same thing
 
 14 THE WESTERN FARMER 
 
 to them whether they pay seven dollars to a man in Massa- 
 chusetts, or five dollars for the same article to a man in 
 Lancashire. We believe, on the contrary, that the hard- 
 working Western farmer prefers getting as much as he can 
 for his money. But if we arc wrong, and if it be really true 
 that the farmers are content, knowingly and voluntarily, to 
 pay out of their i)ockets a yearly contribution of 400,000,000 
 dollars as a free gift to the Eastern States manufacturers, to 
 enable them to carry on a losing business, which, without 
 that assistance, would have to be given up, we can only 
 admire and wonder. And we wonder all the more as this 
 immense sacrifice is made in vain, and is of very little or no 
 benefit to any one. This we shall show in the next chapter, 
 when we examine what becomes of the 400,000,000 dollars 
 which the farmers lose. 
 
 At all events the farmers ought surely to have a voice in 
 the question, whether they really do (as it is stated they do) 
 prefer losing, or whether they prefer saving, the ^400,000,000. 
 
 Again, it is said that the American farmers have 
 flourished and prospered ; that they have profitably ex- 
 tended, and are still extending, their operations, and that 
 therefore they cannot have suffered the yearly loss all'^ged. 
 That does not at all follow. No one contends that an 
 average loss of 85 7 per annum sustained by each agri- 
 culturist could turn the scale and make farming a losing 
 business. It does not destroy the farmer, but it sweeps 
 away so much of his profits. By the census of 1S70, 
 the total value of (cereal) farm productions amounted 
 to $2,448,000,000. Out of this farmers could aftbrd to 
 throw away a certain portion, and still thrive and make 
 money. But that is no reason why they should persist in 
 throwing that portion away. A man with an income of 
 $2,500 may live on $1,000, muddle away $500 on rotten 
 Speculations, and still lay by $1,000 a year, but he would 
 certainly be richer if he did not muddle away the $500. 
 A waste of $57 a year multiplied 7,000,000 times does none 
 the less amount to $400,000,000 in the aggregate. 
 
 Again, it is said that the prices of some of the Eastern
 
 OF AMERICA. 
 
 States' manufacturers are not so much higher than those of 
 the foreigner as we make out. But, if so, why keep up such 
 heavy import duties. And, again, if so, how it is that, in 
 spite of those heavy duties, foreign goods can still afford 
 (see p. 9) to come in ? The Western farmer might say, 
 "Come, I do not mind paying 10 per cent, dearer to you 
 than to the foreigner. Reduce the import duties therefore 
 from an average of 42^ per cent, to 10 per cent. If your 
 prices are, as you say, moderate, surely, with a bonus of 10 
 per cent., besides freight and charges, you can withstand 
 foreign competition ! But if not, and if the condition of 
 your existence as manufacturers is an import duty of 42 1 
 per cent., which means that we farmers, as a class, are to 
 subscribe out of our earnings $400,000,000 a year to keep 
 you gentlemen of the East pegging away at a losing busi- 
 ness, we protest against it. It is paying far too dear ' for a 
 whistle.' ^\' e will withdraw from a game in which we are to 
 find the stakes (and heavy ones too) for others to win, and 
 we will go in for buying where we can buy cheapest." 
 
 It should further be observed that the more freight the 
 Western farmer has to pay to get his produce delivered into 
 the European markets, the smaller the net residue that 
 comes to him; for the European buyers' prices include 
 freight. Cheap freights from America to Europe, therefore, 
 mean large profits to the farmer, and dear freights small 
 profits. But as the enormous American import duties 
 prevent heavy and bulky goods, such as iron, coal, &c., 
 from being freely sent from Europe to the United States, 
 and as ships must make a certain amount of freight on the 
 round or cease running, what happens } They make up for 
 getting little or no freight from Europe to America by 
 charging nearly double freight on the cotton, grain, and 
 other farmer's produce which they convey from America to 
 Europe. This surcharge of freight from, to compensate for 
 the absence of freight to, American ports, amounts in the 
 aggregate to a very large sum, which comes out of the pocket 
 of the Western farmers, and constitutes another heavy burden 
 inflicted on them by the present oppressive tariff.
 
 1 6 THE WESTERN FARMER 
 
 But the mischief done to the American farmers by heavy 
 import duties is not confined to the immense direct losses 
 inflicted on them. Their interests are also vitally injured 
 in another way. 'i"he very essence of their prosperity 
 depends upon their having large and increasing outlets 
 abroad for the large and increasing amount of their produce. 
 They grow far more grain, meat, cotton, &c., than their owti 
 country can consume, and must look to their foreign cus- 
 tomers to take off the surplus. But the protective duties 
 step in to thwart, cripple and restrict the farmers' dealings 
 with their foreign customers. How are the farmers to ex- 
 port if the manufacturers will not allow of imports? " What 
 is the foreigner to pay you in," we would say to the farmers, 
 " if you refuse to take his goods ? \\'ill it be in gold and 
 silver? No such thing. It is now well established and 
 universally admitted that debts between nation and nation 
 are not paid in specie (beyond the merest fraction), but in 
 commodities, and that all commerce is substantially barter. 
 If you will only take from the foreigner such of his goods 
 as he can make a profit on after paying 42 1 per cent, 
 import duty, you limit his power of buying from you, and 
 consequently your own power of selling to him. It 
 becomes a necessary condition of your dealing with him 
 that you should get so low a price for your produce and 
 give him so high a price for his goods, that the margin shall 
 make up for the 42^ per cent, import duties. These, there- 
 fore, cut against you both ways. Not only you pay more 
 for what you consume, but you get less for what you pro- 
 duce. You may not feel the pinch so much just now, but 
 average harVests in Europe would make it absolutely neces- 
 sary for the United States to secure free sales by making free 
 purchases. If you aspire to feed the world you must take 
 in payment what the world can give you." 
 
 I-ct us now look at another branch of the subject.
 
 OF AMERICA. 1 7 
 
 CHAPTER III. 
 
 WHAT BECOMES OF THE $400,000,000 YEARLY TAKEN OUT 
 OF THE POCKET OF THE AMERICAN FARMERS ? 
 
 The amount of Customs revenue which the United States 
 Government derived in 1878 from duties on foreign goods 
 imported was $130,000,000. To this amount, the agricul- 
 turist, being rather less than half of the total population of 
 the country, contributed about $60,000,000. This was, 
 therefore the proportion of the $400,000,000 overcharged 
 to the American farmers on their annual expenditure that 
 went to the legitimate purpose of national revenue ; and 
 so far, $60,000,000 of the total is satisfactorily accounted 
 for. But what of the remaining $340,000,000? Who are 
 the lucky men whom this mighty sum, drained year after 
 year out of the farmer's earnings, goes to enrich ? Strange 
 and incredible as it may appear, careful examination and 
 analysis will show that all this money has been, and is 
 being, absolutely wasted, squandered, and spent as uselessly 
 as it would be in hiring an army of men to dig holes and 
 fill them up again. It has neither enriched, nor even 
 benefited anybody. AVhile it has to that extent impover- 
 ished the farmers, it has only served to fill up the gap and 
 make good the losses occasioned by the misapplication of 
 capital and labour in the Eastern States to the wrong kinds 
 of production. 
 
 Let us trace where these $340,000,000 go. They form 
 the extra sum paid annually to the manufacturers of the 
 Eastern States over and above what the farmers would 
 have had to pay for the same articles were they allowed to 
 make their purchases from abroad. If the Eastern manu- 
 facturers were able to produce their goods as cheaply as
 
 l8 THE WESTERN FARMER 
 
 the foreigner, all that money would be saved to the farmers; 
 but as they cannot, the farmers are made to pay the 
 difference. Nothing whatever is got by anybody in return 
 for those 8340,000,000 ; and that sum is simply thrown 
 away and sacrificed to make up for the want of skill, or of 
 capital, or of whatever else it may be, by reason of which 
 the Eastern manufacturer makes no more profit by selling 
 an article at $140 than the Britisher does by selling the 
 same article at 3 100. If, indeed, the Eastern manufacturer 
 could produce the article for $100, and if he did get $140 
 for it, he would be benefited and enriched ; and it might 
 be some consolation to the farmers for their loss of 
 $340,000,000 a year that it went to form large accumula- 
 tions of wealth in the pockets of their fellow-citizens in the 
 Eastern States. But this consolation does not exist, and 
 we shall presently show that, in spite of the enormous sum 
 overcharged to the farmers, the profits of the Eastern 
 manufacturer are precarious, fluctuating, and by no means 
 above the average of other occupations. His charge of 
 $140 for what the Britisher can afford to sell for $100, only 
 leaves him a bare living profit, because it costs him $40 
 more to produce the article than it costs the Britisher. Why 
 this should be the case we cannot here stay to inquire, but 
 such is the fact. Indeed, how else could British goods be 
 largely imported into the States in spite of the 42 1 per cent, 
 import duties which they have to pay } 
 
 It is these $40 uselessly spent out of 140, Avhich, 
 added up, form the $340,000,000 which the farmers of 
 America are called upon to throw away every year without 
 any benefit to themselves or to anybody else. It is sheer 
 waste ; just as it is sheer waste to pay one man exorbitantly 
 for doing the same work {no more and no better) which 
 another man, more expert, will do cheaply; — just as it 
 would be sheer waste to go on thrashing with a flail instead 
 of using a machine, merely because the man with the flail 
 was a neighbour, and the machine-maker was a stranger. 
 We can fancy a shrewd Western farmer saying, " A man 
 down East makes a article which he can't aft'ord to sell me
 
 OF AMER CA. 1 9 
 
 under ^140, while a man over the water offers me the 
 same article for $100. I want to deal with the latter, 
 but to prevent that, they clap $40 duty on to the 100, 
 and then tell me that, as now, in either case, I shall have to 
 pay $140 for the article, I may as well buy of the man 
 down East, because he's a kind of brother, whereas, the 
 man over the water is only a cousin. All I see in it is, that 
 I am done out of $40." 
 
 That the Eastern manufacturers only make the average 
 profit, and their men the average wages, of other occupa- 
 tions, is the necessary result of internal competition. No 
 trade can for any length of time maintain higher rates of 
 profit or of wages than the average, because people soon 
 flock from other trades into that, and thus they all settle down 
 to about the same level. There does, indeed, at intervals 
 occur a sudden spurt of demand, causing for a brief period 
 high prices, high profits, and high wages, but these bright, 
 short flashes of prosperity cost the manufacturers and their 
 men very dear. Fresh capital and fresh labour are thereby 
 freely enticed into the trade, and when the spurt is over 
 there is not sufficient vent for the increased supply. The 
 result is, ruin to many, loss to all. Such a spurt occurred 
 in 1872-3. In 1874 the reaction came, and there followed 
 five years of commercial depression and suffering. An 
 immense body of American workmen were thrown out of 
 employ, and in the course of those five years (mostly in 
 1877 and 187S) upwards of 600,000 persons left the East 
 to seek a living in the West. During those five years a 
 large number of industrial establishments closed their doors, 
 and in the iron trade alone 250 blast furnaces were blown 
 out, and 60 to 70 rolling mills ceased work. In the six years 
 1873 to 1878, the average number of commercial failures in 
 the United States per year was 7,866 against an average of 
 2,889 the previous seven years. In short, those five years 
 were the worst that American commerce had ever expe- 
 rienced. Yet during all that time the farmers were yearly 
 disbursing $340,000,000 to support the manufacturers. 
 So far, however, from enriching them, this large sum was
 
 THE WESTERN FARMER 
 
 engulfed in their losses and was squandered in vain. It is 
 abundantly clear that, as we said at p. 19, "the profits of 
 the Eastern manufacturers are precarious, fluctuating, and 
 by no means above the average of other occupations." 
 
 Just now (1880), the iron manufacturers are enjoying 
 another temporary spurt, owing to the wealth created by the 
 farmers and the consequent necessity for more raihvays ; 
 and tliis leads to another question of vast importance to the 
 farmers. At what cost are those new railways to be con- 
 structed? Is the farmer's produce to be conveyed to the 
 sea-board on cheap rails at a fair rate, or on dear rails at an 
 exorbitant rate ? Are the railway-makers to pay Pennsyl- 
 vanian prices or British prices for their rails ? If the former, 
 the cost of the required iron and steel will be nearly twice as 
 much as if the latter.* Now, as the rates of freight must be in 
 proportion, every one who may use the railways about to be 
 constructed will have to pay high fares and freights for ever, 
 because the legislature interdicts cheap iron and artificially 
 makes it dear ! Surely this would be an enormous evil, and 
 all the less excusable as it could so easily be avoided ! 
 
 At first glance it appears almost impossible that so 
 vast a sum as $340,000,000 should be lost in the mere 
 diversity of value between what two ditTerent sets of men 
 in two different countries can produce by the application of 
 the same amount of capital and labour. And yet the 
 explanation, when sought for, is soon found. To take a 
 man away from what he can do well, and set him to do 
 what he can only do badly makes an immense difference in 
 the result of his labour. A baker would earn poor wages 
 indeed as a tailor ; and a clever carpenter would starve on 
 his performances as a watchmaker. A ^\'estern farmer 
 produces excellent and cheap crops, but if he were to set 
 up as a woollen manufacturer he would soon come to grief 
 (unless indeed his neighbours subscribed handsomely to 
 make good his losses and bolster him up). The difference 
 between what men produce who are expert and what men 
 
 *The import duty on steel at this time amounts to 120 per cent.
 
 OF AMERICA. 2T 
 
 produce who are inexpert, constitutes a very large percentage 
 on their production, and a large percentage on the total pro- 
 duction of the world means a sum to which {^340,000,000 
 is a trifle. As things are, to take the world at large, the 
 human race do not produce perhaps the hundredth part of 
 what they might produce if their labour were properly and 
 intelligently applied. The greatest creator of wealth at the 
 smallest cost is division of labour, and whatever interferes 
 with it is an obstruction to human productiveness. Every 
 man ought to be allowed to do the work which early edu- 
 cation, long experience, natural aptitude, peculiarity of posi- 
 tion, or other circumstances enable him to do best ; and 
 that legislature is sadly mischievous which shunts him off 
 from the right on to the wrong line, and compels him to lay ' 
 aside the work which he can do well and take to that which 
 others can do better. 
 
 It may perhaps be asked, " How are the Eastern manu- 
 facturers, and the workmen they employ, to live if the 
 farmers withdraw the yearly subsidy which is their only 
 support?" The answer is easy. The increased imports which 
 the abolition of customs duties would -bring about would 
 necessitate increased exports to the same amount to pay for 
 them ; for there can be no additional import without a 
 corresponding additional export. There would arise a brisk 
 demand for fresh capital and labour to produce those 
 increased exports, and that demand would absorb whatever 
 capital and labour might be set free by the diminished 
 consumption of the P^astern States manufactures. It is 
 quite an exploded notion that if you import what you made 
 before, workmen are thrown out of work. It is not so ; 
 they are merely thrown on to other work to supply the 
 articles that will be exported to pay for the new imports. 
 The same amount of American capital and labour would be 
 employed as before, with this difference, that then, their 
 operations would be remunerative, whereas before they 
 were not. No doubt this transference of capital and labour 
 from one kind of business to another is attended with 
 temporary inconvenience and delay to the parties interfered
 
 2 2 THE WESTERN FARMER 
 
 Avith, but not more than was the introduction of steamboats, 
 railways, electric telegraphs, and other improvements, which 
 largely benefited the many, while they were, for a time, dis- 
 pleasing to a few. Indeed, it would not be long before the 
 owners both of the displaced capital and of the displaced 
 labour would feel and recognise the advantage of being 
 engaged in industries which were self-su]-)porting, instead of 
 industries which were dependent for their very existence on 
 a national subvention revocable at any moment at the will 
 of the people. 
 
 The manufacturers of the Eastern States "object to their 
 trades being called losing trades, because they and their work- 
 men live out of them." But they do not live out of them ! 
 They mostly live out of the §340,000,000 which the farmers 
 yearly pay to those trades over and above what they need 
 pay if they dealt with others. They live out of that, and 
 of as much more paid to them in the same way by the 
 rest of the American people. We believe that many trades 
 would thrive better unassisted, but by clinging to Protection 
 they proclaim their dej^endence on it. Were it otherwise, 
 why keep up such. heavy import duties, and how is it that, 
 in spite of those heavy duties, foreign goods can still afford 
 to come in? Surely those must be "losing trades" in which 
 $140 worth of capital and labour are spent to produce $100 
 worth of goods. Such trades depend for their maintenance, 
 not on their own merit, but on other people's help. They 
 are private establishments supported by public involuntary 
 contributions. 
 
 We feel sure, however, that the manufacturers of the 
 Eastern States underrate their own strength, and that they 
 would soon walk alone, if they were, deprived of the go-cart 
 of Protection. Under the wholesome stimulus of open 
 comj^etition, the energy, activity, and shrewdness of their 
 race would rapidly enable them to recover the ground they had 
 lost under the enervating intluence of the coddling system. 
 We would venture to say to them, "Why, gentlemen, should 
 you not, with raw cotton at your doors, compete with the 
 Britisher, to whom it goes across the ocean ? Yet whereas
 
 OF AMERICA. 27, 
 
 in i860 your export of cotton manufactures was $i 1,000,000, 
 it was only $11,500,000 in 1878, a paltry increase of ^5 00, 000 
 in eighteen years ! In England the increase within the 
 same period was §60,000,000. There is no doubt that had 
 you been left unencumbered by the fatal boon of Protection 
 you would have made infinitely greater process, and you 
 might by this time have proved formidable rivals to the 
 Britisher in neutral markets. Again, in three years 1866 
 to 1868, agricultural exports formed 74 per cent, and manu- 
 facturing and other exports 26 per cent, of the total exports. 
 In three years 1876 to 1878 the agricultural exports 
 formed 80 per cent., and the manufacturing and other exports 
 only 20 per cent, of the totality. No doubt that, but for 
 the fatal boon of Protection, you would not have lagged 
 behind in the race, and that your relative proportion of 
 exports would ha\-e shown an increase instead of a diminu- 
 tion. ■ Again, in spite of the vast expansion of the world's 
 commerce, the tonnage of the United States mercantile navy 
 is actually less now than it was twenty years ago. From 
 1855 to 1863 it was upwards of 5,000,000 tons; from 1874 
 to 1878 it was little more than 4,000,000. English tonnage 
 in 1861 was 4,350,000 tons; in 1877 it was 6,115,000. 
 Within the last twenty years English tonnage has increased 
 by 2,000,000 tons while yours has diminished by 1,000,000. 
 Formerly your mercantile navy shared the carrj^ing trade of 
 the world with England ; now, not only that is lost, but your 
 own produce is carried away from your own ports in foreign 
 bottoms. Is it that the American of to-day has degenerated 
 in energy, skill, or enterprise ? Not a bit of it. But here 
 also Protection has shed its baneful influence. Iron has 
 superseded wood in the construction of large ships, and your 
 tariff makes iron nearly twice as costly to the American 
 shipbuilder as it is to his British rival. Abolish your import 
 duties, and you will speedily see your mercantile marine 
 restored to its former splendour." 
 
 To sum up, the vast amount yearly wrested out of the 
 earnings of the American farmers is simjily a useless and 
 wanton waste. It makes them by so much the poorer,
 
 24 THE WESTERN FARMER 
 
 without making others one whit the richer. Moreover, it 
 must be borne in mind that we have in these pages only 
 calculated that share of the general loss which accrues to 
 the agriculturists These barely form half of the total 
 population of the United States, and the other half suffers 
 a fully projiortionate loss on their yearly expenditure, from 
 the same causes and with the same results. What steps 
 should be taken to put a stop to these extravagant and 
 unjustifiable losses shall be examined in the next chapter.
 
 OF AMERICA. 25 
 
 CHAPTER IV. 
 
 HOW TO PUT A ST'OP TO THE INTOLERABLE LOSSES WHICH 
 ARE YEAR AFTER YEAR INFLICTED ON THE FARMERS 
 OF AMERICA. 
 
 Fortunately, great as is the grievance, its removal is easy. 
 The remedy is in the farmer's own hands. It Hes in the 
 exercise of his voting power. It is simply this : let the 
 American farmers give their support to no candidate for a 
 seat in the House of Representatives who does not pledge 
 himself, if elected, to propose, or at least to vote for, "« re- 
 duction of 5 per cent, eveiy successive year on the import 
 duties^ till the whole are abolished." Never mind what party 
 he may belong to. The relief of the farmers from an in- 
 tolerable burden is not, cannot be, and must not be, a 
 party question. It is a paramount and inevitable measure 
 which comes before, overrides, and casts into the shade all 
 party distinctions. To refuse the abolition of the tariff is 
 to refuse justice to the agriculturists. It amounts to a per- 
 sistence in the iniquity of confiscating the farmer's property. 
 Up with the tariff means down with the farmer ! 
 
 If it be said that abrogation of the tariff would suppress 
 one of the sources of State revenue, the Western farmer's 
 ready reply would be, " Out of the .f 400,000,000 yearly 
 taken from us, only .^60,000,000 go to the revenue. There 
 are plenty of ways of raising $60,000,000 of revenue 
 without resorting to the clumsy, wasteful, roundabout pro- 
 cess of inflicting on us a loss of $400,000,000 to enable 
 the State to get $60,000,000. You might as well say 
 that there is no other way of roasting a pig than by burning 
 down the house. We shall be all the better able to pay the 
 taxes necessary to replace the import duties if our earnings 
 are left with us intact."
 
 26 THE VVESTER>f FARMER 
 
 The farmers, by insisting on justice being done to them- 
 selves, are at the same time fighting the battle of the 
 American community at large. All are sufferers from the 
 same fiscal absurdity, [and all ought to join the farmers 
 heart and hand, in enforcing the redress of a common 
 grievance. 
 
 Every farmer should hold this language to the candi- 
 dates : " 1 will only vote for you if you will vote for me ; 
 and voting for me means voting in the House for A re- 
 duction of five per cent, ei'ery successive year 07i the import 
 duties till the whole are abolished." If this were done 
 pretty generally, the tariff, in its present shape, would not 
 survive the first sitting of Congress. The voting power 
 of the farmers is overwhelming, and will further increase 
 after the next census. They hardly know their own 
 strength. They are the backbone of the great American 
 Republic. They own most of its soil, they have created 
 most of its wealth, and they form the most numerous and 
 inllucntial body among its population. The exercise of 
 their voting power would forcibly influence the commercial 
 policy of the government, and if they choose to exercise it 
 an end will be put for ever to the yearly exactions from 
 which they are now suffering. In other words, they have 
 but to signify unmistakably by their votes that they wish 
 to be freed from the unjust burdens laid upon them by 
 heavy import duties, and those duties will speedily cease to 
 exist. Is it possible to imagine that they should feel the 
 evil, know the remedy, and hesitate to apply it ? 
 
 It is doubtless true that many, perhaps most, of the 
 American farmers are unaware of, or haA-e given little atten- 
 tion to the facts set forth in these pages, and hence their 
 silent endurance. But if every farmer who reads this 
 concurs in our views, would order from the nearest town ten 
 or twenty copies of this little paper, and would distribute 
 them by hand among his neighbours, or by post among his 
 friends at a distance, a spirit of inquiry would rapidly be 
 roused, and a definite expression of public opinion would 
 soon be elicited. By such means each man would con-
 
 OF AMERICA. 
 
 27 
 
 tribute to the good work, and, with little trouble and little 
 expense, the exact state of the case might be laid before 
 every farmer in the Union. It would be for him, after 
 obtaining a knowledge of facts so interesting to his class, 
 to decide whether he would contmue to endure the grievance 
 or insist on its removal. 
 
 Meanwhile, all honour, Western farmers of America, to 
 the brave and blessed work which your indomitable energy 
 and brawny arms are accomplishing ! A^'hile in Europe 
 millions of able-bodied men are dragged from the plough 
 and the loom to be trained to bloodshed and destruction, 
 you are pursuing your beneficent conquests over nature, 
 and converting barren wastes into orchards and cornfields. 
 Surely the least that you can demand in return is that your 
 earnings should not be wrung from you by unjust laws, and 
 that you should be allowed to enjoy undividedly the fruits 
 of your unremitting toil. 
 
 It is for vou to dfxide, and to enforce your 
 decision. 
 
 -.:;;OV.»i^^ ^jl. 
 
 •^'/y
 
 28 THE WESTERN FARMER 
 
 APPENDIX. 
 
 In order to ensure all possible accuracy in the estimate of 
 the yearly expenditure of the American farmers and their 
 families, the writer printed and distributed among those 
 persons whom he deemed most competent to judge, fifty 
 copies of the following memorandum : — 
 
 "ESTIMATE OF EXPENDITURE IN AMERICA. 
 
 *' It would greatly assist the undersigned in the comple- 
 tion of a little work on which he is engaged if you would 
 kindly give him the best estimate in your power in relation 
 to the following subject. 
 
 "By the census of 1870 there were in the United 
 States of America, out of a population of 38,600,000, a 
 total of 12,506,000 persons engaged in various occupa- 
 tions. Of these 5,922,000 were engaged in agriculture, 
 which number has by this time (1880) increased to at least 
 7,000,000. 
 
 " An estimate is u-i-Dited of the average annual expendi- 
 ture of each of these 7,000,000 persons (most of whom have 
 families) on all articles of consumption, except eatables and 
 drinkables. Those articles would comprise every description 
 of clothing, household ware, tools, agricultural implements, 
 railway conveyance, &c. &c. 
 
 " Of course, strict accuracy is unattainable, and all cal- 
 culations must necessarily be conjectural and approximative. 
 
 "It may be noted — 
 
 " I. That by ' agriculturists ' are meant, not only the 
 cereal farmers, but the producers of all articles
 
 OF AMERICA. 29 
 
 derived from the soil, whether grain or cotton, 
 meat or tobacco, &c. &:c. 
 
 That there are in the United States 2,600,000 
 farmers, who, most of them, own the soil which 
 they till, and whose annual expenditure must be 
 considerable. 
 
 That the wages of farm labourers in the North 
 and West range, (see an article in the Times of 
 26th August, 1879) from $19 69c. monthly ($236 
 per annum) to $38 22c. monthly ($458 per 
 annum). In the South, under the competition 
 of negro labour, wages are only $15 monthly 
 ($180 per annum). 
 
 That, as food and lodging cost the farmers and 
 labourers but little, most of their expenditure 
 falls on the articles of consumption comprised 
 in this inquiry. The question therefore is, 
 ' \\^hat is the average yearly expenditure, on 
 such articles, of each of those 7,000,000 persons 
 in the United States of America, who are en- 
 gaged in agricultural pursuits, some of whom 
 are single, but most of whom have families ? ' 
 It will be esteemed a favour if you will address a 
 communication at your earliest convenience to 
 
 "A. MONGREDIEN, 
 
 " Author o/^ P'rec Trade and EngUsh Coiiiincrcc.' 
 
 FoKEsr Hii.L, near Lon'DON. 
 " Ztk March, 1880." 
 
 The answers received (and they were not many) ranged 
 from $150 per annum up to ^.'^ per week ($260 per annum). 
 In the work we have taken $200 as a fair mean. But, 
 even upon the lowest estimate the sum is so vast, .that 
 it really matters very little which valuation is adopted. 
 If any reader thinks that $200 per annum is too high 
 an estimate let him boldly strike off 25 ])er cent., and
 
 THE WESTERN FARMER OE AMERICA. 
 
 the balance will still be found amply large enough to justify 
 all our conclusions. 
 
 P'or our American statistics we are chiefly indebted 
 to that valuable compilation, " The American Almanack 
 for 1S79," by Mr. A. R. Spofford, to which we beg to 
 refer those who may doubt the accuracy of our figures. 
 
 Casscll, Pclter, Galpin & Co., Lellc Sauvage Works, LoiitiuP, E.G.
 
 d 
 
 PLEAS FOR PROTECTION 
 EXAMINED. 
 
 AUGUSTUS MONGREDIEN, 
 
 Author of 
 "Free Trade and English Commerce,'''' &'c. 
 
 Cassell, Petter, Galpin & Co. : 
 
 LONDON, PARIS cL- NEW YORK. 
 1882.
 
 PREFACE. 
 
 The following pages mostly form part of, and are, for the 
 purpose of separate and early publication, borrowed from, 
 a larger work on which I have been for some time engaged. 
 That work embraces a somewhat wide range of topics, of 
 which Free Trade only forms one. But as the larger work 
 may not be completed for some months, and as it has 
 been deemed advisable not farther to delay the issue of 
 that portion of it which is here given under the title of 
 " Pleas for Protection Examined," I am content that it 
 should be so. I, however, hereby reserve to myself the 
 right of re-incorporating into my larger work the whole or 
 part of the present pages, as their subject-matter is essential 
 to its entirety, and forms a necessary, though subordinate, 
 part of its plan. 
 
 AUGUSTUS MONGREDIEN. 
 
 Forest Hill, S.E., 
 
 /anuary, 1882.
 
 TABLE OF CONTENTS. 
 
 LIST OF THE PLEAS FOR PROTECTION HEREIN EXAMINED 
 AND ANSWERED. 
 
 I'AtJE 
 
 1. Balances due by one country to another are paid for in specie. 
 
 Hence, if the balance of trade be against us, we shall be 
 drained of our specie to pay for such balance ... ... 9 
 
 2. Commerce is not the exchange of goods for goods, which 
 
 would be barter, but of goods for money, which is not 
 barter ... ... ... ... ... ... lO 
 
 3. Permanent excess of imports impoverishes, and permanent 
 
 excess of exports enriches, a country ... ... ... 13 
 
 4. It is false that imports and exports balance each other, since 
 
 many countries import more than they export, and vice 
 I'i'ysA ... ... ... ... ... ... 16 
 
 5. Protection promotes native industry, by providing fresh 
 
 channels for the employment of native labour ... ... 17 
 
 6. Import duties on foreign goods fall on the foreigner, and 
 
 are paid by him ... ... ... ... ... 20 
 
 7. Under Free Trade native indu^try is tixed, while foreign 
 
 industry is not ... ... ... ... ... 21 
 
 8. If the labour-seller in protected countries pays more for what 
 
 he consumes, on the other hand his wages arc propor- 
 tionately higher ... ... ... ... ... 28 
 
 9. Protection promotes diversity of industries in the jirotccted 
 
 country ... ... ... ... ... . 29
 
 VI CONTENTS, 
 
 PAGE 
 
 10. Some protected nations are prosperous, therefore Protection 
 
 is a benefit ... ... ... ... ... ... 32 
 
 11. Protection renders a country independent of foreigners ... 34 
 
 12. Free Trade would he a special boon to England if all nations 
 
 adopted it ; but till then it is a disadvantage to us ... 36 
 
 13. Other countries are too wise to follow the example of England 
 
 and adopt Free Trade ... ... ... . . 38 
 
 14. England has not prospered under Free Trade, and is living 
 
 on her former capital ... ... ... ... 40 
 
 15. England has no doubt prospered, but that prosperity is due, 
 
 not to Free Trade, l)ut to the gold discoveries in California 
 and Australia ... ... ... ... ... 42 
 
 16. By threatening to lay import duties on foreign commodities 
 
 we shall induce foreign countries to reduce, or remove, 
 their present import duties on ours ... ... ... 43
 
 Pleas for Protection Examined. 
 
 CHAPTER I. 
 
 Introduction. I. International debts not paid in specie. 2. All 
 commerce is barter. 
 
 It is marvellous how unanimous in England is the assent to 
 the abstract theory of Free Trade. It is equally marvellous 
 how many of its professed votaries, while they extol that 
 theory, object to its practice. They loudly abjure the name 
 of " Protectionists," but adhere to the thing " Protection- 
 ism." They are Free-traders with " ifs " and " buts." This 
 is their plea : " We are doctrinally as thorough Free-traders 
 as that incarnation of the Cobden Club, Thomas Bayley 
 Potter himself; but only under certain circumstances — only 
 if all other countries become Free-traders as well as our- 
 selves." So that, according to these notions, truth is bound 
 to remain in practical abeyance until it is universally acted 
 on ! As long as it is not practised by everybody, it must 
 be practised by none ! It is most salutary to mankind 
 if all mankind adopt it, but it is most injurious as long 
 as only a portion of mankind adopts it! A curious paradox, 
 showing how the same thing may at the same time be both 
 true and false ! 
 
 The fact is that these "if" and "but" Free-traders are 
 simply Protectionists under the pseudonyms of Reciproci- 
 tarians, Fair-traders, and what not. It is hardly "fair" or 
 them to deny that they are Protectionists. The test that 
 shall draw the line between true Free-traders and sham Free- 
 traders is simple, and of easy application. Free Trade does 
 not allow of any import duties being imposed on such
 
 8 PLEAS FOR PROTECT/ON EXAMINED. 
 
 articles as are likewise jiroduced at home.* Protection 
 does. Here is, in a itw words, the radical difiference 
 between them, and that difference is clear and definite. 
 Free Trade lays down a broad general principle. Under 
 it no protection is given to home industries, the entire 
 amount levied by import duties goes to the revenue, and 
 our market is freely and fully open to foreign competition. 
 Under Protection, the import duties imposed are protective ; 
 of the duties levied, part goes to the protected native pro- 
 ducer, and only part to the revenue, and foreign competitors 
 are handicapped in our market to the extent of those duties. 
 The distinction is, we think, clear and unmistakable. Which 
 of the two systems is the best is not the question now before 
 us ; we have discussed that before, and shall discuss it 
 again. At present we have only to point out the plain line 
 of demarcation that divides Free Trade from Protectionism, 
 and to ask to which of the two does Fair Trade belong. 
 The reply is obvious. The very thing which Fair Trade 
 proposes to do is to impose import duties on some of the 
 foreign articles which are also produced at home. This is 
 also the very thing which Protectionism in its old form did 
 and does ; therefore the two are identical. 
 
 What those foreign articles are which Protectionism, under 
 the guise of Fair Trade, proposes to tax, its advocates are 
 not agreed, but they are determined to tax something, and 
 the majority seem inclined for a 5s. per quarter import duty 
 on wheat. That is the proposal that " divides them least." 
 Be this as it may, the essential and distinctive programme 
 of the so-called Fair-traders is to impose protective import 
 duties. They are, therefore, to all intents and purposes 
 Protectionists. They may call themselves by another name, 
 but they advocate the same fiscal measures, and adduce the 
 same arguments to advocate them. We shall, therefore, 
 use the old denomination of Protection and Protectionism 
 as embracing all classes of opponents to Free Trade, 
 whether to its principles or to its practice. 
 
 * The article "spirits " is an apparent, but not a real, exception. The 
 import duties levied on foreign spirits are the exact counterpart of the Excise 
 duties levied on home-produced spirits. Thus foreign and native distillers 
 are placed on exactly the same footing.
 
 PLEAS FOR PROTECTION EXAMINED. 
 
 It is our intention in these pages to collect and pass 
 under review the most prominent or plausible of those pleas 
 which have been adduced to justify the adoption of a Pro- 
 tective policy and the rejection of Free Trade. We shall 
 endeavour to state them, discuss them, and refute them 
 fairly, freely, and briefly. The Protectionist pleas we shall 
 print in italics, to be followed by our remarks on each. 
 
 I. Balatices due by otie country to atiothe7- are paid for in 
 specie. Hence, if the balance of trade be against us, we shall 
 be drained of our specie to pay for such balance. 
 
 Now, in the first place, there is practically no such thing 
 as a " balance of trade." The trade between two countries 
 entirely consists of a series of commercial dealings between 
 a number of persons in one country and a number of persons 
 in the other ; and there can be no national balance of trade, 
 because each dealing (of which the totality is formed) is 
 settled for at the time, and balances itself. 
 
 We may, it is true, buy from some countries more than 
 we directly sell to them, but the difference is not paid for in 
 specie ; it is paid for by bills on other countries to which we 
 sell more than we buy from them. On the whole, the com- 
 mercial dealings of a country with the world at large are 
 self-adjusting, and leave no balance to be paid to or from 
 either side. But although there is no such thing as a 
 " balance of trade," most countries do either import more 
 from the rest of the world than they export to it, or vice 
 versci; and it is this excess, on whichever side it maybe, that 
 is ordinarily, though wrongly, termed the balance of trade. 
 
 How such excess arises we shall shortly see ; here the 
 question is simply whether it be true, as alleged, that if we 
 import more than we export " we shall be drained of our 
 specie to pay " for such excess of imports. Past history and 
 present experience conclusively show that it is not true. 
 Amounts due (from whatever cause) by one country to 
 others are not paid for in specie. In England, our imports 
 have exceeded our exports, year after year, for more than a 
 quarter of a century, by an average of about ^50,000,090 
 a year ; and yet throughout all those years, instead of our 
 bullion having been drained from us, our import has largely
 
 PL FAS FOR PROTECTION EXAMINED. 
 
 exceeded our export of it. This fact is at once so unde- 
 niable and so conclusive, that we shall not waste time upon 
 it. If any one desires fuller details and statistics on the 
 subject, we beg to refer him to Mr. G. ^V. Medley's recent 
 pamphlet, where it is treated in a masterly manner.* 
 
 The ebb and flow of bullion between various countries 
 has comparatively a very small range, and depends almost 
 entirely on their respective circulation requirements. Even 
 in wealthy England, the abstraction of a few millions' worth 
 of gold so deranges the circulation as to raise the rate of 
 interest to a point sufficient to bring it back again. How 
 then can any one dream of our sending away loo millions 
 of it annually to pay for our annual excess of imports ? 
 The fact is, that every country possesses and retains as 
 much specie as is required for circulation purposes — some- 
 times a little less, sometimes a little more, but never much 
 less, nor much more. No country was ever drained of its 
 specie by its foreign commerce. The only way in which it 
 can ever be denuded of specie is by the adoption of an 
 inconvertible paper currency. The circulation requirements 
 being then supplied by paper, the specie becomes surplus- 
 age, and is sent abroad where its value is greater. 
 
 To sum up, the truth is that balances due (from 
 
 WHATEVER CAUSE) BY ONE COUNTRY TO ANOTHER ARE 
 NOT PAID FOR IN SPECIE \ AND NO COUNTRY HAS EVER 
 BEEN DRAINED OF ITS SPECIE THROUGH THE OPERATION 
 OF FOREIGN TRADE. 
 
 2. Commerce is not the exchange of goods for goods, which 
 would be barter ; but of goods for 7notiey, which is not barter. 
 It will not, we think, be difficult to show that the exchange 
 of goods for money is virtually as much barter as though 
 the goods were directly exchanged for other goods. 
 
 The only possible value of money consists in its 
 purchasing power. Money is only worth what it can buy. 
 Just consider. Of what possible use can money be if it be 
 not used to purchase something with } Whether that "some- 
 thing " be commodities, or land, or labour, &:c., matters not ; 
 the only worth of money is in its power to purchase such 
 
 * " Reciprocity Craze," by G. W. Medley : Cassell's, 1881 : pp. ri — 14, 
 et passim
 
 PLEAS FOR PROTECTION EXAMINED. 
 
 things. True that it may be melted down and applied 
 to manufacturing purposes, but then it ceases to be money, 
 and becomes only a metal. A dollar may be converted 
 into a pencil-case. In its latter shape it is useful, but has 
 no purchasing power ; in the former shape, it is utterly 
 useless except by reason of its purchasing power. Now in 
 all commercial transactions, if the money which the seller 
 of the goods receives for them is ever utilised at all, it 
 can only be by the purchase with it of some other com- 
 modities. Hence it follows that, virtually, an interchange 
 takes place between the commodities which that seller has 
 sold for money and the other commodities which he has used 
 that money in acquiring. All trade dealings are inevitably 
 attended by the same process. No sale is made by any 
 person without his making, sooner or later, a corresponding 
 purchase. The goods so sold are, virtually and substan- 
 tially, bartered for the goods so purchased, and the money 
 merely serves as the medium of interchange. In most cases 
 the barter is not effected either directly or at once, and is 
 only completed when the money received for the goods is 
 made use of for some definite purpose. It may for a time 
 be deposited in a bank, but it will not long remain idle. 
 It may for a time be transferred from one person to another 
 as a loan ; but, soon or late (in most cases, soon), it is 
 used as a payment in exchange for something, and that 
 something is the " thing " for which the goods originally 
 sold are ultimately bartered. 
 
 Occasionally a long time elapses before the barter is 
 completed ; as, for instance, when the receiver of the 
 money, instead of using it at once, puts it in an old stocking 
 and hoards it. The completion of the barter is suspended 
 until the owner takes the money out of the old stocking 
 and utilises it. He may use it, let us say, to pay the wages 
 of labour ; in which case the interchange is perfected, 
 and the goods originally sold are bartered for labour. 
 In point of fact, the money paid by the buyer to the 
 seller is equivalent to a ticket authorising the holder 
 to receive, in exchange for the goods which he has sold, 
 other commodities to the same amount, of any kind which' 
 he may choose, and at any time that he may think fit. The'
 
 12 PLEAS FOR PROTECTION EXAMINED. 
 
 moment he utilises that ticket the barter is complete, and 
 the commodities which he receives form the counterpart to 
 the goods which he has sold. 
 
 The money which the seller receives for his goods 
 would be little more than so many pieces of broken slate 
 were it not for its purchasing power. The consideration 
 for which his goods have been given is not the mere coins, 
 it really is the commodities which those coins will purchase. 
 The mere money itself is utterly valueless, unless it be, 
 sooner or later, turned into commodities, whatever those 
 commodities may be, whether land or labour, raw materials, 
 or manufactured products. If you purchase wheat, and pay 
 for it in money, that money may perchance be used for 
 purchasing a horse, in which case the horse has been, 
 indirectly but no less truly, bartered for wheat. To put 
 it into a more general form, every sale or purchase is a 
 barter of the commodities so sold or purchased with the 
 commodities on which the seller may expend the money 
 received. If money, as money, had any other value beyond 
 its purchasing power, it might be said that every sale or 
 purchase is a barter between goods and money. But 
 money, as money, has no real but only a representative 
 value. The barter really is between the definite goods 
 given for the money, and the undefined goods which that 
 money represents, and which it may at any moment realise. 
 Just as when you buy a ticket for a concert, the considera- 
 tion given for your money is not the piece of paste-board of 
 which the ticket itself consists, but the musical performance 
 which the ticket represents. 
 
 Let us conclude by an illustration. You buy, we will 
 say, a cargo of wheat from New York. Against the bill of 
 lading, &c., of this shipment you accept a bill drawn on you 
 by the seller, payable in England, and probably you pay for 
 this bill in money before you get possession of the wheat. 
 Now, pray observe. The money which you pay for that bill 
 is not sent over in specie to America. It remains in Eng- 
 land, to the credit of the banker in New York to whom the 
 bills drawn on you were endorsed. The usual and natural 
 use which he makes of this credit is to draw bills from New 
 York against it, which bills he will sell in America, for a given
 
 ■PLEAS FOR PROTECT/ON EXAMINED. 1 3 
 
 number of dollars, to any one who wishes to make a remittance 
 to England — perhaps to a man who has ordered some Man- 
 chester goods, for which he pays by remitting those bills 
 to Manchester. In such case, it is evident that the specie 
 does not leave England, and that, substantially, the American 
 wheat has been bartered for Manchester goods. 
 
 Frequently the process is more indirect and circuitous ; 
 but, if analysed, it comes to the same thing. For instance, 
 the bills referred to above, instead of being sent direct to 
 England may be sent to Rio Janeiro to pay for coffee ; and 
 sent from Rio Janeiro to England to pay for Sheffield steel- 
 w^are bought for Brazil. In this case England gets the 
 American wheat, America the Brazilian coffee, and Brazil 
 the English steel. And thus a double barter — something 
 like Capt. Marryat's triangular duel — has taken place with- 
 out the slightest displacement of specie. Note, moreover, 
 that this is the regular, normal, and nearly universal practice 
 in mercantile operations. Hardly once in a thousand cases 
 are foreign goods paid for by direct export of specie. 
 
 To sum up, the truth is that all commerce is barter ; 
 
 FOR IT IS AN interchange BETWEEN THE COMMODITIES 
 SOLD FOR MONEY AND THE COMMODITIES WHICH THAT 
 MONEY WILL BE USED IN PURCHASING. 
 
 CHAPTER II. 
 
 3. Excess of imports mostly a sign of wealtli. 4. Imports and exports 
 (except those for loans or repayments) balance each other. 5. Pro- 
 tection discourages native industry. 
 
 3. Permanent excess of imports impoverishes^ and permanent 
 excess of exports enriches^ a country. This is the reverse of the 
 fact. It would not be true even if such excess of imports had 
 to be paid for by the receivers, or if such excess of exports 
 implied a return payment of some kind. But this is never 
 the case. For had such excess to be paid for, the payment 
 must necessarily be either in goods or in specie. Now, it 
 could not be in goods, as then, ex hypothesis the goods ex- 
 ported would equal the goods imported, and how could
 
 14 PLEAS FOR PROTECTION EXAMINED. 
 
 there be an excess either way? Neither could that pay- 
 ment be made in specie, for it has been shown over and 
 over again that the displacement of specie between country 
 and country is confined within a very narrow range, that it 
 is almost exclusively governed by circulation requirements 
 and that balances due by one country to another are never 
 paid, unless to a mere fractional extent, in specie. The fact 
 is that these permanent excesses of imports over exports, or 
 vice versa, consist of non-mercantile operations which are 
 not repayable. They consist of national loans (repayable 
 at indefinite periods, but scarcely ever repaid), of invest- 
 ments in foreign undertakings, of interest and dividends on 
 such loans and investments, of subsidies to allies (less in 
 fashion now than formerly), of war indemnities (that of 
 France to Germany in 187 1 to wit), ocean freight earnings, 
 and other similar disbursements which are outside of, and 
 in addition to, ordinary commercial interchanges. 
 
 " How," the Protectionists ask, " can a nation go on 
 buying more than it sells without at last (like a spendthrift 
 who lives beyond his income) becoming utterly ruined?" 
 The answer is simply that no country ever buys more than 
 it sells, nor sells more than it buys. The trade of a country 
 consists of the aggregate operations of individual traders, 
 which are always equal, co-ordinate, and self-balancing ; 
 and which necessitate to a mathematical certainty (with the 
 exception of bad debts) an import as a counterpart to every 
 export, and vice versa. As we have already shown, all com- 
 merce is direct or indirect barter. "Whatever a countr}' ex- 
 ports beyond what it imports, it gets no return for ; whatever 
 it imports beyond what it exports, it gives no return for. 
 Such excess goes either to liquidate old international debts 
 or to contract new ones. "Whatever is brought into a country 
 over and above what is sent out from it is either a payment 
 or a loan. If a payment, it is retained for ever ; if a loan, it 
 will be retained till repaid at some future indefinite period. 
 Of the rare and exceptional case of a nation paying off its 
 foreign indebtedness, we shall treat elsewhere, but it does 
 not invalidate the general princijjle that a permanent excess 
 of imports over exports is not i)aid for, and must, therefore, 
 far from impoverishing a country, add to its present wealth
 
 PLEAS FOR PROTECTION EXAMINED. \^ 
 
 if the excess represents a loan ; or to its permanent wealth 
 if it represents a payment. 
 
 How it comes to pass that this excess of imports or of 
 exports takes place, we have already in great measure 
 explained. Beside the normal commercial profits which 
 naturally contribute to make what comes in of greater value 
 than what goes out, wealthy nations which have lent money 
 to foreign states, or otherwise invested money in foreign 
 countries, have annually to receive large amounts for divi- 
 dends on those loans and investments. These amounts are 
 periodically remitted to them in goods (not in specie), which 
 figure in their statistical returns as excess of imports. Let 
 us take the case of England. She has yearly to receive 
 about ^60,000,000 from abroad for interest on foreign in- 
 vestments. She has also to receive some ^^40,000,000 to 
 ^50,000,000 more for ocean freight (gross) and charges, 
 because two-thirds of the entire ocean-carrying trade of 
 the world is conducted by her mercantile navy. Now, 
 since England has to receive about ;^i 00,000,000 per 
 annum from abroad in goods, for which, as they consti- 
 tute a payment to her and not a sale, she has to make 
 no return, it is clear that these will figure in the Board 
 of Trade returns as imports without any corresponding 
 amount of exports. They will appear as an excess of 
 imports over exports to the extent of ^^100,000, 000. But 
 how can receiving ;!^i 00,000,000 a year, and keeping it with- 
 out making any return, be either a cause or a symptom of 
 impoverishment ? By what peculiar twist of the mind can 
 this be made the subject of regret or alarm? At all events, 
 this excess of imports must continue, and probably in- 
 crease, as long as England possesses an annual income from 
 abroad and the ocean-carr)'ing trade. Even if England were 
 to double or treble her yearly exports, her imports must of 
 necessity continue ahead of them by that ^100,000,000, or 
 probably more. 
 
 The converse applies to over-exporting countries ; their 
 excess of exports generally represents the amount which they 
 have to pay to the world, as borrowers, for annual interest, &c. 
 The fact, in brief, is that all lending nations must necessarily 
 import in excess of their exports, and all ]x)rrowing nations
 
 PLEAS FOR PROTECTION EXAMINED. 
 
 must export in excess of their imports ; and the alarm which 
 some feel at our over-importations should be converted into 
 exultation at the wealth which they imply and to which they 
 minister. To sum up, the truth is that the wealthier 
 
 A NATION IS, THE GREATER WILL BE THE PERMANENT 
 EXCESS OF HER IMPORTS OVER HER EXPORTS ; AND A PERMA- 
 NENT EXCESS OF EXPORTS IS A SURE SIGN OF INDEBTEDNESS. 
 
 4. // is false that imports aiid exports balance each other, 
 since viajiy countries import more thati they export, and vice 
 versa. Why it is that some countries over-import and 
 others over-export, we have just explained. But if we leave 
 out those exports which are sent to pay a previous debt or 
 to create a new one, we shall find that all other exports are 
 balanced by corresponding imports. For, indeed, how 
 otherwise could they possibly be paid ? That they are not 
 paid for in specie, we have seen ; so that, if they are 
 ever paid for at all, it must be in kind. All commercial 
 transactions resolve themselves, directly or indirectly, into 
 interchanges of commodities ; so that, as we have said 
 before, all commerce is barter ; and there can (loan and 
 investment payments excluded) be no import without an 
 export to same amount, and vice versa. Every purchase 
 implies a corresponding sale. 
 
 It must be borne in mind that in speaking of the imports 
 or the exports of a country we of course mean the total 
 imports or the total exports of that country from, and to, 
 the world at large, and not those from, or to, any one 
 particular other country. Some have misapprehended this, 
 and have applied what had reference to the total foreign 
 trade of a country to the special trade between that and a 
 single other country. The aggregate commercial imports 
 and exports of each country must, as we have seen (that is, 
 debt-payments excepted), balance each other, but it does 
 not at all follow that the separate dealings between two 
 individual countries will show a similar result. Over- 
 imports from countries A, B, &c., will be counterpoised by 
 over-exports to countries C, D, <S:c., and, in the aggregate, 
 one will make up for the other, and the equilibrium between 
 the total commercial imports and total commercial exports 
 of each country will be maintained. To sum up, the truth
 
 PLEAS FOR PROTECTION EXAMINED. 1 7 
 
 is that FOR EVERY EXPORT OF GOODS TO THE WORLD AT 
 LARGE, EXCEPT WHAT IS SENT TO PAY A PREVIOUS DEBT, OR 
 TO CREATE A NEW ONE, THERE MUST BE AN IMPORT OF GOODS 
 FROM THE WORLD AT LARGE TO THE SAME AMOUNT, AND 
 VICE VERSA. 
 
 5. Protection promotes native industry by providing fresh 
 chan/iels for the employment of native labour. It would be 
 well if this were all, but truth requires the addition of the 
 following words : " It at the same time destroys more of the 
 old channels for the employment of native labour than it 
 provides new." Such is the fact, and in its suppression lies 
 the fallacy. Ceasing to import foreign goods means ceasing 
 to export those native goods which were sent in exchange 
 for the former, and throwing the producers of such native 
 goods out of work. A country that adopts the Protective 
 system ceases to import, and produces for itself, certain 
 articles which we may call X Y Z, and thus capital and 
 labour acquire "fresh channels for employment." So far, 
 so good ; but this good inseparably brings with it an evil 
 that far more than counterbalances it. When the nation in 
 question imported the articles X Y Z, it exported in 
 exchange for them other articles of native manufacture 
 which we may call ABC. But when it ceased importing 
 the former, it necessarily (for imports and exports are, as 
 we have seen, correlative) ceased exporting the latter. 
 What is the consequence? The articles ABC are no 
 longer produced, and the capital and labour which produced 
 them remain idle. The capital can aftbrd to wait ; but 
 what of the labour-sellers who are thrown out of work? 
 Instead of " native industry " being " promoted," it is " the 
 old channels for employment " that are " destroyed." 
 
 Eventually, the displacement is partially remedied by 
 the absorption of the disorganised capital and labour into 
 the new industry. But is the change which has been 
 effected through this displacement a benefit ? Certainly not. 
 Quite the contrary. The advantages which the division of 
 labour confers have been set aside. The capital and labour 
 which were employed in the production of articles ABC, 
 with which the foreign producer could not compete, are now 
 diverted to the production of articles X Y Z which cannot
 
 l8 PLEAS FOR PROTECTION EXAMINED. 
 
 compete (else, why protective duties ?) with the production 
 of foreigners. In otlicr words, men are taken away from 
 what tliey can do better than others, and set to work on 
 what others can do better than they can. The capital and 
 labour which used to be employed remuneratively are now 
 producing a ]o§s which has to be made up by a public 
 subvention in the shape of an import tax. 
 
 If, instead of taking the instance of a nation that is 
 adopting the Protective system, we take that of a protected 
 nation that is adopting Free Trade, we arrive at analogous 
 results. Such nation, by abolishing the import duties on 
 certain articles X Y Z, imports them from abroad, where 
 they are cheaper, and discontinues their production at 
 home. Thus capital and labour lose some of their old 
 channels of employment. But let us look at the other side. 
 Now that this same country imports, instead of making, the 
 articles X Y Z, it necessarily exports in exchange for them 
 (for every increase of imports necessitates an increase of 
 exports) other articles of native production, which we may 
 rail ABC, and thus fresh channels of employment are 
 ereated. The capital, fixed and floating, and the labour, 
 which have become disused by ceasing to produce the 
 articles X Y Z, are utilised in producing the articles ABC, 
 for which an export demand is created by the importation 
 of the articles X Y Z. And now let us inquire — Is the 
 change which has been effected through this displacement a 
 benefit ? Yes ! and a very decided one. The same capital 
 and labour that was before unprofitably employed in pro- 
 ducing the protected articles X Y Z, which the foreigner could 
 ])roduce cheaper or better, are now profitably employed in 
 producing the articles ABC, which suit the foreigner's 
 market, and which he readily takes in exchange for his own. 
 Hence the capital and labour which used to be devoted to 
 losing are now devoted to remunerative industries, the con- 
 sumers enjoy the benefit of cheap goods instead of dear ones, 
 the division of labour is effectually carried out, and a great 
 impulse is given to foreign trade. In this way the ]iroducer 
 gains, the consumer gains, the national wealth is increased, 
 and the general commerce of the country is extended. 
 
 The fresh industries which Protection creates are created
 
 PLEAS FOR PROTECTION EXAMINED. 1 9 
 
 at the expense of the staple old industries which Protection 
 curtails. The former can only exist by taxing the entire 
 community; the latter were self-supporting. A country 
 cannot at the same time cease importing foreign articles, 
 and go on exporting the native articles which used to be sent 
 in exchange for them. Free Trade says, " Go on exporting 
 the cheap native article and importing the cheap foreign 
 one." Protection says, " Leave off producing the native 
 article which you produce so cheaply, and turn to 
 producing the foreign article which you can only produce 
 at a high price, and the law will compel the consumers to 
 pay you that extra price by laying a heavy import duty on the 
 cheap foreign article." Were the principle of opening new 
 losing industries at the expense of old profitable ones fairly 
 carried out, England might create a fresh industry by pro- 
 ducing her own wines, and thus being independent of 
 France; France, by producing her own cotton, and thus 
 being independent of America ; Germany, by producing her 
 own silk, and thus being independent of China, &c., &c. 
 The absurdity of such a policy is palpable, but the absurdity 
 is equally positive, though not so palpable, in every case 
 wherein nations discourage the industries for which they are 
 best adapted in order to create others for which they are 
 less fitted. 
 
 Protection, therefore, does not promote native industry, 
 but simply displaces it from a good to a bad position. We 
 have dwelt at some length on this topic because the fallacy 
 of the Protectionist proposition is not immediately obvious, 
 and many honest inquirers have been temporarily misled by 
 it. The key to its solution is in the fact that just in the 
 proportion that a country curtails its imports, in that same 
 proportion it curtails its exports. To sum up, the truth is 
 
 that PROTECTION DISCOURAGES NATIVE INDUSTRY, BY CLOSING 
 PROFITABLE CHANNELS FOR ITS EXERCISE AND SUBSTITUTING 
 FOR THEM UNPROFITABLE ONES.
 
 PLEAS FOR PROTECTION EXAMINED. 
 
 CHAPTER III. 
 
 6. Import duties on foreign goods fall on the importers. 7. Free Trade 
 supplies native industry with cheap materials and cheap living. 
 
 6. Import duties o?i foreign goods fall on the foreigner, and 
 are paid by him. This is absolutely the reverse of the 
 fact, but the assertion has been frequently made, with a 
 jaunty indifference as to its truth, in order to coax the 
 consumer into acquiescence with levying duties on foreign 
 goods. He is told, " Let us lay on, say, 10 per cent, import 
 duty on such or such a foreign article. You will not have 
 to pay it ; oh ! dear, no ! It is the foreigner who will bear 
 it. He will let you have his goods 10 per cent, cheaper 
 than you pay now, so that the duty will make no difference 
 to you, and the revenue will be benefited at the expense of 
 the foreigner." Very tempting, but alas ! quite untrue. 
 The foreign producer will not, and cannot, make the reduc- 
 tion. Before the duty is laid on, competition has already 
 reduced the price of the article as low as it could go without 
 trenching on a fair living profit. Such a profit leaves no 
 margin for such a reduction. The imposition of the duty by 
 no means diminishes the amount of labour and capital ex- 
 pended on the production of the article. The foreign pro- 
 ducer may, if the imposition of duty takes him by surprise 
 and he has a large stock, submit to some deduction for the 
 moment. But permanently he must get the old price, or 
 the importing country must do without the article. If the 
 importing country will, however, have the article, it must 
 itself bear the i o per cent, duty which it imposes. Suppose 
 that England laid an import duty of a penny a pound on 
 raw cotton, does any one for a moment imagine that the 
 price of cotton would thereupon fall a penny a pound in 
 America, so that cotton would stand in ,to English spinners 
 no more than it did before the duty? Who, in this case, 
 would have to bear and pay the duty — the American grower 
 or the English consumer ? Can there be a doubt as to the 
 reply ? Again, if ])utting a duty on foreign imports makes 
 no difference to the consumers of the importing country, 
 then, of course, neither would taking the duty off make any 
 difference to them. So that, according to this doctrine, if
 
 PLEAS FOR PROTECTION EXAMINED. 
 
 England were to abolish her import duty on tea, the Chinese 
 would get all the benefit, and the English consumers would 
 still pay the same price as before ! But as the subject is again 
 referred to under the next head, we will not enlarge upon it 
 here. The proposition implies that the prices which we now 
 pay for foreign goods are so exorbitant, that they could easily 
 be reduced by the amount of import duties which we might 
 levy on them — which is simply absurd. Of course, some 
 slight and temporary variations in the relative demand and 
 supply might occasion some slight and temporary variations 
 in prices, but they would be both trifling and transient. To 
 sum up, the truth is that import duties on foreign goods 
 
 FALL on the consumers OF THE IMPORTING COUNTRY, AND 
 ARE PAID BY THEM. 
 
 7. Under Free Trade native mdustry is taxed, while foreign 
 industry is not. If it were possible for a nation to tax 
 foreign industry, it is most wonderful that such a scheme, 
 which would shift the unpleasant burden of taxation from 
 our own to other people's shoulders, should not be uni- 
 versally resorted to. Why should the native be taxed at all, 
 if the necessary taxes can be levied on the foreigner ? What 
 are statesmen about that they do not raise the entire 
 revenue of the country by taxing foreign industry ? The 
 fact is that to tax foreign industry is a sheer impossibility, and 
 to fancy that it can be done is one of those delusions which 
 only exist as long as they escape examination. " Oh ! but 
 it is possible," interposes a Protectionist; "it is done every 
 day. The United States of America tax foreign industry 
 through their import duties on foreign goods, and in 1880 
 they levied from this source a revenue of $186,000,000, 
 equal to _;^37,ooo,ooo." Here then we join issue. The 
 Protectionist maintains that this enormous amount of 
 Customs' duties levied in the United States on foreign 
 commodities falls upon, and is borne by, the foreign 
 producers ; while we maintain that it falls upon, and is 
 borne by, the American consumers. Evidently one of us 
 must be egregiously wrong. The question is narrowed to a 
 very simple issue, and there ought to be no difficulty in 
 solving it. Let us look into it carefully, and, to avoid 
 complexity, let us take some average article as a type
 
 22 PLEAS FOR PROTRCTI'W EXAMINED. 
 
 of the rest. In 1880 the United States imported, chiefly 
 from Kngland, cotton manufactured goods to the vakie of 
 $25,723,000 (;;/^5, 200,000), on which the Customs' duties 
 levied on athnission at American ports amounted to 
 5^9,976,000 (nearly ^^2,000,000), which is equivalent to an 
 average import duty of 38^ per cent, ad valorem on the 
 amount imported. 
 
 Now, then, comes the question, who pays that 
 ;j^2, 000,000 of duty ? If the Protectionist is right, the 
 American consumers do not pay it, but only pay the 
 J/J5, 200,000 Avhich is the current value of the goods 
 imported at their place of production, //?c5 the freight. Tlie 
 ^{^,'2,000,000 of duties " constitute a tax on British industry, 
 and are paid by the British producer.' The latter conse- 
 quently only receives ^3,200,000 in payment for goods 
 of which the current value in Lancashire is ^^5, 200,000. 
 He is actually content to accept in America ^3,200,000 
 for what he can get ;^5, 200,000 elsewhere. This is the 
 Protectionist view. Does it accord with common sense ? 
 Merely to state it clearly is a refutation. Do English 
 manufacturers make two prices — one for the general 
 market, and another, 38^ per cent, cheaper, for the 
 American market ? Or are their profits so enormous that 
 they can allow a discount of 38^ per cent, to the American 
 buyers, and still make sufficient profit to induce them to 
 continue the trade year after year ? 
 
 Let us take another article. In 18S0 the United States 
 iiaported pig iron to the value of $11,619,000 (^2,300,000), 
 ( u which the Customs' duties amounted to 84,318,000 
 (^863,000), equivalent to a duty of 36^ per cent, ad valorem. 
 Can any one for a moment imagine that our iron-masters 
 could afford to supply the American market at prices 
 36I per cent, below those current at home, and would go 
 on doing so year after year? It is patent to all who have 
 any knowledge of trade (i) that the average profits on all 
 our large staple commodities are kept within very moderate 
 limits by the pressure of competition, and (2) that, as a 
 i-ule, those markets which do not aflbrd that moderate 
 margin of profits cease to be resorted to. But that the 
 producers of such articles will continue to send them to a
 
 PLEAS FOR PROTECTION EXAMINED. 
 
 market where they can only get within 36 or 38 per cent, of 
 what they get elsewhere is an assertion which, although it 
 may possibly be believed by the assertors themselves, is 
 quite too heavy a demand on average human credulity. 
 
 The instances which we have quoted fairly represent the 
 entire list of the dutiable articles imported by the United 
 States of America. We could easily find instances far more 
 striking. For instance, steel rails are not admitted into 
 America under a duty of 90 per cent, ad valorem; so that, 
 on the assumption that import duties " constitute a tax on 
 the foreign producers and are paid by them," the British 
 steel producers are content for every hundred pounds' worth 
 that they send out to receive back only ^10 ! On that assump- 
 tion, was it generosity or foolishness that induced them to send 
 out to America in 1880, on terms equivalent to giving them 
 away, a quantity of steel rails of no less an amount than 
 $1,644,000 ? If iron be as cheap in America as it is here — 
 as it ought to be, barring a trifle of freight, if the Protec- 
 tionist assumption be correct — why have the American 
 ship-building industrj' and their ocean-carrying trade col- 
 lapsed ? 
 
 But it is, perhaps, needless to multiply proofs, and we 
 think that all our readers will by this time agree that the 
 Protectionist doctrine is erroneous, and that, beyond all 
 doubt, import duties on foreign goods are borne by the 
 consumers in the importing nation. 
 
 To revert, however, to the ;^5, 2 00,000 worth of 
 English cotton goods imported into America in 1880, 
 on which an import duty of ^{^2, 000,000 had to be paid, 
 it is perfectly clear that those goods were not sent 
 to America to make a loss of ^^2,000,000, but they 
 were sent because the current prices ruling in America for 
 such goods made it probable that they would realise there 
 an amount sufficient to cover (i) the cost, (2) the freight 
 and charges, and (3) an average trade profit. Otherwise, 
 where are the madmen to be found who would, year after 
 year, send out that amount of goods to bear a large amount 
 of loss ? The trade would not be carried on at all unless 
 the American consumers paid for those goods at least 
 ;^7, 700,000; viz. : —
 
 24 PLEAS FOR PROTECTION EXAMINED. 
 
 ;^5, 200,000 for the cost of the goods in England. 
 2,000,000 paid for im|)ort duty to the Customs in America. 
 500,000 (at least) freight, charges, and profits. 
 
 £,T, 100,000 
 
 At anything less than that, the goods would leave no profit, 
 and a trade that leaves no profit quickly dies out. The 
 same process of reasoning applies to all cases, and to all 
 countries, in which an import duty is levied on foreign com- 
 modities. The duty is paid, not by the producers in the 
 exporting countries, but by the consumers in the importing 
 country. 
 
 It is clear that the American producers of that class of 
 cotton goods which we above referred to as imported from 
 England were unable to produce them for less than 
 ;^7,7oo,ooo; or else why should the American consumers 
 have paid that amount for British goods? Hence it follows 
 that if, from any cause, such importation of those British 
 goods were to cease, the American consumers would still 
 have to pay ^7,700,000 for them to the native manu- 
 facturer, while the United States Government would lose 
 the ;^ 2, 000,000 per annum which it now receives for import 
 duties. In other words, the American consumers who now 
 pay for those goods ;^5, 7 00,000 cost and freight, and 
 ;^2, 000,000 duty to their Government, would then pay the 
 whole of the ;!^7, 700,000 to the native manufacturers. Nor 
 would these benefit much out of the ;j^2,ooo,ooo thus lost 
 to the revenue. They would increase their sales by 
 ;^7, 700,000 annually, on which, assuming their net profits 
 to be 6 per cent., they would realise ;^46o,ooo, leaving 
 ;;^i, 540,000 (or three-fourths of the ;^2, 000,000 duties lost 
 to the revenue) as a dead loss, owing to capital and labour 
 being diverted to losing trades which the consumer is taxed 
 to maintain. 
 
 In all countries which impose import duties on foreign 
 merchandise these duties will assume one of three forms. 
 These three forms will be (i) purely revenue duties, (2) pro- 
 tective duties, and (3) prohibitory duties. Now, (i) pure 
 revenue duties are those which are levied on such com- 
 modities as are not produced at home, but are wholly
 
 PLEAS FOR PROTECTION EXAMINED. 25 
 
 imported from abroad ; as well as upon such commodities 
 as are partly produced at home, but on which the native 
 producers pay precisely the same percentage of internal or 
 Excise taxation as the foreign importation does of import 
 duties. In these cases, whatever the consumers pay extra 
 in consequence of those duties goes, in its entirety, to the 
 revenue. (2) Protective duties are those levied on such 
 commodities as are partly produced (free) at home, and 
 partly imported (under duty) from abroad. In these cases, 
 whatever the consumers pay extra in consequence of the 
 duties goes in part to the revenue and in part to the native 
 producers, who could not withstand foreign competition 
 were it not for the tax so paid by the consumers. (3) Pro- 
 hibitory duties are those which are too high to allow of 
 importations from abroad, and leave the consumers entirely 
 at the mercy of the native producers. In this latter case, 
 the revenue gets nothing, and whatever the consumer pays 
 extra for the prohibited commodities goes entirely to the 
 native producer, who could not withstand foreign competi- 
 tion were it not for the tax so paid by the comsumers. In 
 none of these cases do the foreign producers bear any part 
 of the import duty. It falls entirely on the native consumers. 
 In the first of these cases, the whole of the extra price which 
 the consumers pay in consequence of the import duties 
 goes to their own Government, and relieves them to that 
 extent from other- taxes. In the second case a part, and in 
 the third case the whole, of such extra charge to the con- 
 sumers goes to cover the losses of the protected producers. 
 From such portions, therefore, of that extra charge the 
 national revenue derives no benefit, and the deficiency has 
 to be made up by some other tax in some other form on the 
 poor consumers, who thus have to pay two taxes instead of 
 one. 
 
 Some, in reply, have said, " Admitted that heavy import 
 duties are borne by the importing country, but a small duty 
 is a different thing ; the foreigner will lower his price to 
 that extent sooner than lose his market." The answer is 
 easy. Say that you tax a foreign article. A, i per cent. 
 The foreign producer will certainly not lower his price as 
 long as you continue to take from him the same quantity of
 
 26 PLEAS FOR PROTECTION EXAMINED. 
 
 that article, A, as you did before. Price is regulated by 
 relative supply and demand. If that relation remains un- 
 altered, the price will also remain unaltered. The only 
 chance of buying that article cheaper would be to sensibly 
 diminish your purchases of it from the foreigner. But to 
 do so, and yet meet the consumptive demand, you must to 
 the same extent increase the native production of that 
 article. Now, at the price hitherto current the native pro- 
 ducer must have produced all that he could produce at a 
 profit, and he can be stimulated to increase his production 
 only by paying him an increased price. But the proposition 
 stipulates that the price to the consumer is to remain the 
 same. How are these two incompatibilities to be adjusted ? 
 By what process is the native producer to get a higher price 
 for his article, A, and yet, at the same time, is the price of 
 it to the consumer to remain the same ? If the native pro- 
 ducer does not get that higher price, he can produce no 
 larger quantity than he did before ; you will take from the 
 foreigner the same quantity as you did before ; in which 
 case, as the relative supply and demand will remain un- 
 altered, he will obtain from you the same price as he did 
 before, and the i per cent, duty will, against your proposi- 
 tion, fall upon the consumer. 
 
 If the consumer does pay the i per cent, duty, it then 
 becomes a common case of Protection to that extent. The 
 native is enabled to produce a little more than he did ; the 
 foreigner will supply a little less than he did ; your expor- 
 tation of other articles will diminish a little ; the consumer 
 will have to pay a little more than he did ; and, generally, 
 the same effects will take place, though on a small scale, as 
 though the import duty, instead of i per cent., were lo per 
 cent, or 40 per cent. In every case, import duties, whether 
 they be small or whether they be large, will equally fall upon 
 the consumers. 
 
 " You will however grant," says a Protectionist, " that if 
 not the whole, at least some part, of the import duty is 
 paid by the foreigner." ^^'e regret that truth will not allow 
 us to be so complaisant. The average profits made in a 
 regular trade are, as a rule, kept down by competition to a 
 certain level, below which the trade would not be continued.
 
 PLEAS FOR PROTECTION EXAMINED. 2 "J 
 
 Under the additional burden of an import duty, that trade 
 would first droop and soon die, unless prices rose in the 
 importing country so as to cover the import duty. No 
 merchant (unless for a short time and as a mere experiment) 
 will go on employing his capital in a trade which does not 
 yield him the average profits which capital earns in other 
 channels. Now if prices rise in the importing country so as 
 to cover the duty, and thus allow the trade to continue, it 
 clearly must be at the expense of the importing consumers, 
 and not of the foreign traders. 
 
 But Free Trade is blamed not only for not taxing foreign 
 industry, which we have shown to be impossible, but also 
 for taxing native industry. This is a totally unfounded ac- 
 cusation. Not only it is false that Free Trade specially 
 taxes native industry, but it is true that Free Trade assists 
 and promotes it in the most effective manner. Both these 
 assertions we will in a few words make good. It is obvious 
 that Free Trade imposes no sj^ecial tax on native industry. 
 All members of a community, whether under Free Trade or 
 Protection, are subject to the general taxation deemed ne- 
 cessary to defray the Government expenditure, and they are 
 liable to exactly the same burdens under both systems. 
 This we think clear and incontrovertible. Now, on the 
 other hand. Free Trade greatly assists and fosters native in- 
 dustry by supplying it with all the foreign materials which it 
 needs to work with, or to work upon, at the cheapest pos- 
 sible cost, and unburdened, by any import duties whatever. 
 It at the same time lessens the cost of living, and increases 
 the comforts obtainable for the same expenditure. It is 
 hardly possible to over-estimate the enormous advantages 
 which this cheapness confers on, or the strong stimulus 
 which it affords to, productive industry. The cheap pro- 
 ducts of this industry will, of course, find a vent in all 
 neutral markets, since the dear products of protected coun- 
 tries cannot possibly compete witli them. Where the 
 materials on which productive industry is exercised are en- 
 hanced in cost by protective import duties, it is impossible 
 that the product should not be enhanced in cost in the 
 same proportion. But the cheapness arising from untaxed 
 materials not only fosters a demand from abroad, but also
 
 a8 PLEAS FOR PROTECTION EXAMINED. 
 
 lessens the cost to the native consumers, and the benefit is 
 thus twofold. It is, therefore, abundantly clear that native 
 industry is largely promoted and developed by having, as a 
 consequence of Free Trade, cheap untaxed materials to 
 work with and to work upon. If the United States had 
 had cheap untaxed iron, they would not have lost their 
 valuable share of the ocean-carrying trade. 
 
 We must apologise for devoting so much time to the refu- 
 tation of a fallacy so easy to refute ; but this we thought 
 necessary from the frequency of the allegation, and from the 
 number of honest-minded men who, not having a ready answer, 
 have been mystified by it. To sum up, the truth is that 
 
 FREE TRADE TAXES NO INDUSTRY, WHETHER NATIVE OR 
 FOREIGN ; BUT, AMONG OTHER ADVANTAGES, IT GREATLY FOS- 
 TERS NATIVE INDUSTRY, BY AFFORDING IT CHEAP, UNTAXED 
 MATERIALS WHEREWITH AND WHEREON TO WORK, AND BY 
 ALLOWING IT TO FLOW IN ITS NATURAL AND MOST PROFIT- 
 ABLE CHANNELS. 
 
 CHAPTER IV. 
 
 8. Wages highest where most wealth is created. 9. Protection frus- 
 trates division of labour. 10. If protected nations prosper, it is in 
 spite of, not because of, Protection. 
 
 8. Jf the labour-seller in protected countries pays more for what 
 he consumes^ on the other hand his wages are proportionately 
 higher. It does not at all follow. The present average rate 
 of wages in Free Trade England, now that everything is 
 cheap, is at least 50 per cent, higher than it was formerly in 
 protected England, when everything was dear. Indeed, if 
 the statement tliat heads this paragraph be correct, how 
 comes it that our Protectionist friends so persistently warn 
 us that we are being, or are going to be, undersold by our 
 foreign competitors in consequence of the lower rate of wages 
 and the longer hours of labour that prevail abroad ? How 
 is it that they so loudly call on Government to protect the 
 Ikitish workman by import duties, to prevent him from being
 
 PLEAS FOR PROTECTION EXAMINED. 29 
 
 reduced to the low wages and long hours of his protected 
 continental fellow-workmen ? Here is surely a curious con- 
 tradiction. Wages in protected countries cannot be at the 
 same time higher and lower than they are here. If higher, 
 what need is there to protect the British labour-seller against 
 his higher-paid foreign competitor? If lower, then Protec- 
 tion in foreign countries, while it enhances the cost of living, 
 does not enhance the rate of wages. How are these utter 
 discordances to be resolved ? This is how it is done. Divi- 
 sion of labour is resorted to. One set of the Protectionist 
 party uses statement No. i, and another set uses statement 
 No. 2. There is the " higher wages abroad " division and 
 the " lower wages abroad " division. If the one fails to 
 convince you, you are handed over to the other, who pro- 
 ceeds on a diametrically opposite tack ; and it will go hard 
 if, between the two, you can help being, if not convinced, 
 at least mystified. 
 
 The fact is that the money rate of wages does not depend 
 (except when it is at the famine level) on the cost of living, 
 but on the relative demand for, and supply of, labour. Wages 
 are higher than with us in protected America, and lower 
 than with us in the protected continental States of Europe. 
 It is wliere there is aljundance of cheap capital, as in Eng- 
 land, or abundance of cheap land, as in America, that there 
 will be the greatest demand, and consequently the greatest 
 remuneration, for labour. Capital is the fund out of 
 which the wages of labour are paid, and the larger that fund, 
 compared with the number of labour-sellers, the higher Avill 
 be the rate of wages. The increase of that fund depends on 
 increased production, and there are no more powerful agen- 
 cies in the production of wealth than free commercial inter- 
 course, general and international division of labour, and such 
 an application of capital and labour as will produce a 
 maximum result. To sum up, the truth is that wages 
 
 ARE NOT REGULATED (EXCEPT AT STARVATION POINT) BY 
 THE COST OF LIVING, BUT BY THE GREATER OR LESSER 
 DEMAND FOR LABOUR, WHICH IS GREATEST WHERE WEALTH 
 IS MOST RAPIDLY CREATED. 
 
 9. Protectioti promotes diversity of industries in the pro- 
 tected country. So much the worse. It is a matter of regret,
 
 30 PLEAS FOR rlWTECTION EXAMINED. 
 
 not of boast. The greater the diversity of industries in a 
 given locality, the less scope there is for universal division 
 of labour. This fertilising and wealth-creating jmnciple is 
 crippled in proportion to the smallness of its sphere of 
 operations. By whatever it is short of being international 
 and world-pervading, by so much is its efficacy impaired. 
 ' It is merely sectional and intranational in those countries 
 where great diversification of industries prevails. Nowhere 
 does the diversity of industries exist in a higher degree than 
 among the Pitcairn islanders, unless it were among the country 
 people of the olden times, when each family raised its own 
 food and spun its own garments. 
 
 No doubt Protection does promote sectional diversity of 
 industries, since it discourages commercial interchanges be- 
 tween nation and nation. If it were possible for each country 
 to have within itself such a diversity or universality of indus- 
 tries as that all its wants could be supplied by native capital 
 and labour, there would at once be an end to all foreign 
 commerce ; for as all countries would have their needs sup- 
 plied out of their own resources and exertions, no one of them 
 would take anything from the other, and, of course, no one of 
 them would raise or produce anything beyond its own wants, 
 since there would be no outlet for such surplus. The more 
 perfect the system of self-sufficing diversity of industries, the 
 more complete would be the isolation. It has not been the 
 fault of man's fiscal enactments that this complete isolation is 
 not attained ; it is the fault of nature's laws. Not only does 
 each nation want something which other countries can, but 
 which itself cannot, produce, but each nation has through its 
 aptitudes, natural or acquired, certain surplus productions 
 for which it desires to find a vent, and for which it must 
 — positively and inevitably must — take in exchange the 
 products of other nations. 
 
 Suppose, for instance, a country. A, blest with a fertile 
 soil, with a genial climate, and with land, abundant and 
 cheap, cultivated by an energetic and industrious race of 
 men ; the result will be the production of agricultural com- 
 modities far in excess of the requirements of that country 
 itself. If for that surplus produce the producers find a vent in 
 the other countries of the world, they will have to take in pay-
 
 PLEAS FOR PROTECTION EXAMINED. 
 
 ment for it the world's commodities of other kinds ; for there 
 is no other mode of payment. If country A, in its deter- 
 mination to be self-sufficing, were totally to prohibit the 
 admission of any foreign goods whatever, its surplus of food 
 productions could not be sent abroad at all, since nothing 
 foreign was admitted in exchange for it. Its vent would be 
 confined to the home demand, and the production would 
 have to be cut down to the limit of that demand. The 
 diversity of industries fostered by the self-sufficing system 
 would exercise a blighting and fatal influence on the great 
 staple industry of that country. 
 
 If this diversity of industries is promoted by Protection, it 
 would be still far more completely promoted by total prohibi- 
 tion. Indeed, it would be yet farther promoted by cutting up 
 the country into small districts, each to supply its own wants 
 by its own industries. In this case, each little community 
 would have its occupations diversified to the fullest extent, 
 and the division of labour would be effectively impeded. 
 The antagonism between the diversification of industries and 
 the division of labour may be exemplified thus :— -If 3,000 
 men be set to produce pins, needles, and thread, the former 
 system diversifies the industries by setting each man to pro- 
 duce as many pins, as many needles, and as much thread as 
 he can, by his separate and individual efforts, produce in a 
 given time; whereas the division of labour sets 1,000 of 
 these men conjointly to produce nothing but pins, 1,000 to 
 produce nothing but needles, and the remaining 1,000 to pro- 
 duce nothing but thread. By which of these two processes 
 will the greatest quantity of pins, needles, and thread be pro- 
 duced within that given time? Can any one doubt the 
 result ? Will it not be 100,000 to i in favour of the latter? 
 If the greatest possible diversification of industries be right, 
 then the division of labour must be a mistake, and we must 
 go back to the good old times when each family combined 
 within itself a diversity of industries, raised its own food, 
 spun its own clothes, and reared its own hovel. 
 
 Under a system of perfect freedom of commercial 
 intercourse between country and country there would be 
 such a distribution of industries as was consonant with the 
 aptitudes, natural or incidental, peculiar to each country,
 
 32 PLEAS FOR PROTECTION EXAMINED. 
 
 and on these the productive energies of each country would 
 be concentrated. The total productiveness of each would 
 be far greater, although there would be a smaller diversity 
 in the variety of articles produced. Nature says, " Devote 
 your efforts to producing abundantly those things which you 
 can produce best." Protection says, " Produce a little of 
 everything, whether they be things which you are most 
 fitted, or things that you are least fitted, to produce." 
 Left to themselves^ capital and labour easily discover and 
 promptly adopt those industries from which they derive 
 the most productive results, and the diversity of in- 
 dustries thus naturally attained furnishes them with 
 their most remunerative employment. On the other 
 hand, Protection diverts them, to a greater or lesser ex- 
 tent, from that profitable employment to other industries 
 which can only flourish by the imposition of a tax on the 
 community at large; and to that extent, while the diversity 
 of industries is enlarged, the wealth of the country is 
 diminished. All diversification of industries which goes 
 beyond its natural boundary, and which, instead of being 
 the result of the regular course of things, is artificially 
 extended by State ordinances, is an encroachment on the 
 division of labour, and therefore an evil. To sum up, the 
 truth is that protection frustrates the division of 
 
 LABOUR BY ARTIFICIALLY LOCALISING THE GREATEST POS- 
 SIBLE DIVERSITY OF INDUSTRIES WITHIN LIMITED AREAS, 
 WITHOUT REGARD TO THEIR NATURAL DISTRIBUTION. 
 
 I o. Some protected tiations are prosperous, therefore Pro- 
 tection is a benefit. In this sentence the word "therefore" 
 is entirely out of place. It involves a non sequitur. It 
 might just as well be said that whereas some ignorant 
 persons are clever, therefore ignorance is a benefit. VV^e 
 hold, on the contrary, that those protected nations which 
 are prosperous are prosperous not because of, but in spite 
 of, Protection — just as we hold that the ignorant persons who 
 are clever, are clever not because of, but in spite of, their 
 ignorance. No doubt, protected nations may and do attain a 
 certain degree of prosperity in spite of Protection, for its 
 evil influence only stunts without destroying their productive 
 power. What we contend, is that they would be far more
 
 PLEAS FOR PROTECTION EXAMINED. ^^ 
 
 prosperous if they adopted Free Trade. We have never said 
 that protected nations accumulate no wealth, but simply 
 that they would accumulate it much faster if they abandoned 
 the protective system. If a property being badly managed 
 yields an income of ;^i,ooo per annum, whereas under good 
 management it would yield ;^ 1,500, it does not follow that 
 the owner is utterly ruined by his bad management, but it 
 does follow that, through it, his income is ^^500 per annum 
 less than it might be. Neither does it follow that, because 
 a badly-managed property yields a comfortable income, 
 "therefore bad management is a benefit." The owner is 
 prosperous not because of, but in spite of, his bad manage- 
 ment. By adopting a better system, he might add 50 per 
 cent, to his income. 
 
 The mere fact of a nation's comparative prosperity is 
 surely no bar to improvements that may render that nation 
 more prosperous still. It will be time enough to scout 
 improvements and arrest progress, when we have reached 
 (if ever we shall reach) the extreme limits of human perfecti- 
 bility. Till then it is irrational to say, " We are prospering, 
 and we therefore decline entertaining any scheme for the 
 increase of that prosperity." To allege that the Free Trade 
 scheme will not conduce to such increase of prosperity, 
 affords a fair and legitimate subject for discussion. We 
 contend that it will, and have adduced our reasons for 
 coming to that conclusion. But to contend that Free Trade 
 is an evil merely because a certain amount of prosperity has 
 attended the opposite system, is an inconclusive inference, 
 since it does not exclude the probability that a much greater 
 amount of prosperity might have attended the Free Trade 
 system ; in which case. Free Trade would have been a benefit. 
 No argument against Free Trade is deducible from that style 
 of reasoning. Nations progressed at a certain rate before 
 the application of steam to locomotion by sea or land, but 
 afterwards the rate of that progress was greatly accelerated. 
 So do we say that nations may prosper to a certain extent 
 before the application of Free Trade to their international 
 relations, but that when so applied that prosperity will 
 increase in a greatly accelerated ratio. 
 
 The Protectionist proposition is a mere statement of
 
 34 PLEAS FOR PROTECTION EXAMINED. 
 
 o])inion, unaccompanied liy any proof, and ilierefore our 
 contradiction of it must partake of similar vagueness. The 
 truth or fallacy of either opinion must be reasoned out on 
 other grounds. Indeed, the issues raised have been fully 
 discussed by us in other shapes. Mere assertion can only 
 be met by counter-assertion, and therefore, to sum up, the 
 truth is that some protected nations are prosperous ; 
 but they would be far more prosperous still under 
 free trade; therefore protection is an evil. 
 
 CHAPTER, V. 
 
 II. As to dependence on foreigners. 12. Free Trade a boon to the 
 nation, whether others adopt it or not. 13. As knowledge spreads 
 so will Free Trade. 
 
 II. Protection renders a country independent of foirii^ners. 
 This is only another form of that principle of isolation 
 which, if fully carried out, would convert the various nations 
 of the world into so many hostile tribes. In what possible 
 way could mankind be benefited if each country were really 
 to be commercially independent of every other ? The evils 
 and privations which all would suffer fn m such mutual es- 
 trangement are too obvious to require pointing out, but 
 what would be the counterbalancing advantages? We can 
 see but this solitary one — that, in case of war, the country 
 that had no commercial intercourse with other countries 
 would be free from any inconvenience that might be caused 
 by hostile interference with such intercourse. This might, 
 perhaps, hold good if every nation were perpetually at war 
 with every other nation. But such a state of things never 
 did and never could exist. Even under the present very 
 imperfect system of international relations, wars are only 
 occasional, and are never universal. Where, .then, is the 
 wisdom of a nation voluntarily inflicting on itself for all 
 time the evils and inconveniences of isolation merely to avoid 
 their possible temporary infliction by an enemy in case of war 
 at some future uncertain period ? It is thus that the coward 
 commits suicide from fear of death. Is a man to deny him- 
 self all present enjoyments because he may some day or
 
 PLEAS FOR PROTECTION EXAMINED. ' 35 
 
 Other be deprived of them by illness or misfortune ? Are 
 you never to carry about -you in the streets a watch, or a 
 purse, or a handkerchief, because it is possible that, sooner 
 or later, they may be purloined by a pickpocket ? If the 
 mere fear of some future war is to divest us for ever of the 
 benefits of commercial intercourse with other nations, it is 
 one more to be added to the long train of evils which the 
 war system inflicts on mankind. 
 
 Moreover, it is to be noted that full and free commercial 
 intercourse does not imply the dependence of one country on 
 the rest — it implies the mutual and equal interdependence 
 upon each other of all countries. Interchanges ])resuppose 
 benefit to both parties, or they would not be entered into. In 
 the same way, the interruption which war would cause to such 
 interchanges would prove equally injurious to both parties — 
 to one just as much as to the other. The stronger the ties of 
 mutual interest and the more numerous the points of pleasant 
 and profitable contact, the greater will be the interdepen- 
 dence of nations upon each other. But that mutual inter- 
 dependence does not place any one of them at special dis- 
 advantage as compared with the rest. If there be any dis- 
 advantage when war supervenes, it will be common to all. 
 They will occupy in this respect the some relative positions 
 which they would have occupied if they had, during all the 
 time that they were at peace, deprived themselves of the ad- 
 vantages of foreign trade. It is true that the more nations 
 are knit together by the ties of mutual interest, the greater 
 will be the reluctance to break through them, and the more 
 they will all lose by bubstituting hostile collision for peaceful 
 commerce. But the reluctance will be felt, and the loss 
 will be shared alike by all of them. If there be a shade of 
 difference between them, it may perhaps consist in this. 
 The more largely and closely a nation is in connection with 
 the rest of the world, the more independent will that nation 
 be, supposing that its foreign commerce were partially dis- 
 turbed by war with one or more other countries. That 
 commerce would still continue, and would be carried on 
 partly through its old and partly through fresh channels. 
 ^Miat articles it might no longer procure from its enemies 
 would, through its organised intercourse with neutrals, be
 
 36 PLEAS FOR PROTECTION EXAMINED. 
 
 al)un(lantly poured in by the latter. Either from them or 
 through them its wants would be supplied ; and either by 
 them or through them its jiroductions would be taken in 
 exchange. 
 
 In reference to this subject, we may quote a speech 
 delivered by Macaulay in 1842. In answer to the argument 
 that England ought only casually to be dependent on other 
 countries for food supply, he said that he " preferred con- 
 stant to casual dependence, for constant dependence became 
 
 mutual dependence As to war interrupting our 
 
 supplies, a striking instance of the fallacy of that assumption 
 was furnished in i8ro, during the height of the continental 
 system, when all Europe was against us, directed by a chief 
 who sought to destroy us through our trade and com- 
 merce. In that year (18 10) there were 1,600,000 quarters of 
 corn imported, one-half of which came from France itself" 
 Napoleon's Berlin decrees were far more oppressive and 
 intolerable to the continental nations from which they nomi- 
 nally emanated than they were to England, against whom 
 they were directed. 
 
 Thus that " independence of foreigners," on which Pro- 
 tectionists lay such stress, is a privilege acquired at an im- 
 mense sacrifice of annual wealth, and which, when war 
 supervenes to test its value, is found to be worthless. To 
 secure it we are, according to this doctrine, to do without 
 foreign trade during peace in order to teach us to do with- 
 out it during war. We are to forego it when we can reap 
 its benefits in order to inure us to the privation when we 
 cannot. To sum up, the truth is that independence 
 
 OF FOREIGNERS REALLY MEANS COMMERCIAL ISOLATION, 
 WHICH NULLIFIES INTERNATIONAL DIVISION OF LABOUR, 
 DISCOURAGES PRODUCTION, AND FOMENTS A HOSTILE 
 SPIRIT AMONG NATIONS. 
 
 12. Free Trade 7vould be a special boon to England if 
 all nations adopted it ; but till then it is a disadvantage to us. 
 We maintain, on the contrary (i) that if all nations adopted 
 Free Trade it would be, not a special boon to England, but 
 a general and equal boon to all mankind ; and (2) that 
 meanwhile, till other nations adopt Free Trade, it is a 
 special boon to us. Let us examine these propositions.
 
 PLEAS FOR PROTECTION EXAMINED. 37 
 
 (i) Free Trade simply means unrestricted, and therefore 
 far more frequent and extensive commercial interchanges 
 than at present, between the various populations that tenant 
 this globe of ours. Now, all such interchanges, whether they 
 be few or many, are quite voluntary. None need either buy 
 or sell unless he reaps, or hopes to reap, some benefit from the 
 transaction. Self-interest guides both parties in every com- 
 mercial dealing. Both expect and believe that they are 
 gainers by it. To forbid, or to curtail, or to discourage 
 commercial interchanges, is to deprive both the parties (not 
 one of them only) of the advantages which they would, if 
 left alone, reap from them. To remove all impediments to 
 such interchanges between the people of all countries, and 
 to leave to the parties dealing together full and free scope 
 for their operations, is to allow both these parties (not one 
 of them only) to reap the advantages which such opera- 
 tions aftbrd. How, then, can this latter policy be said 
 to be a boon to any one country ? We know that such a 
 notion does exist ; but it is none the less an absurd, mis- 
 leading, and pernicious error. England can only share 
 with other nations, and not one jot more than otlier nations, 
 the benefits which these extended interchanges would confer. 
 
 It may be said that, if Free Trade were universally 
 adopted, England would export more goods to the world at 
 large. Very true ; but the world at large would at the same 
 time export more goods to England. For what could Eng- 
 land take in return for her increased exports ? Gold ? Cer- 
 tainly not. It has been demonstrated over and over again 
 that specie only migrates from country to country in homoeo- 
 pathic quantities as compared with the amount of commer- 
 cial dealings. It would be goods, then, that England would 
 take in exchange. In that case the foreign producers, 
 sellers, and exporters of those goods would reap at least 
 as much profit from them as the English would from the 
 goods for which they would be exchanged. Where is the 
 special boon to England? A policy by which all parties 
 benefit equally is a universal boon to all — not a special 
 boon to any one of them. 
 
 (2) While other nations are debarring themselves from the 
 advantages of Free Trade, those advantages are being specially
 
 38 PLEAS FOR PROTECTION EXAMINED. 
 
 enjoyed by ourselves. From a number of such advantages 
 thus accruing to us, we shall content ourselves with specifying 
 three, {a) Cheapness of living to our people, who, while 
 they earn higher wages than their continental comrades, 
 have their wants supplied at a cheaper rate. {l>) Cheapness 
 of production ; for as all the materials which we work upon 
 or work with come to us untaxed, we can undersell our 
 rivals in all neutral markets, and thus secure all but a mono- 
 poly in these, {c) Cheapness in naval construction and 
 equipTnent, which gives to us another all but monopoly of the 
 lucrative ocean-carrying trade. Lack of space prevent-: us 
 from detailing the numerous other direct and indirect ad- 
 vantages which we enjoy through our present monopoly of 
 Free Trade. Indeed, some able men have argued that we 
 derive greater advantages from being the only Free Trade 
 country than we should enjoy if all other nations were also to 
 become Free Traders. While dissenting from this view, it is 
 undeniable that, under the present system of Free Trade here 
 and Protection ever^ where else, we have secured an unex- 
 ampled pre-eminence in international commerce. Our 
 foreign trade (combined imports and exports) now forms no 
 less than one-fourth of the total foreign trade of the world at 
 large. To sum up, the truth is that free trade would be a 
 
 GENERAL BOON TO ALL NATIONS IF THEY DID ADOPT IT; 
 AND MEANWHILE IT IS A SPECIAL BOON TO ENGLAND, THAT 
 HAS ADOPTED IT. 
 
 13. Other coil fit ries are too wise to follow the example of 
 England, txnd adopt Free Trade. We submit that for the 
 words " too wise," we ought to substitute " not wise 
 enough." But, indeed, " wisdom " has had little to do with 
 the discussion of the subject abroad. The great bulk of the 
 people composing civilised nations have never studied, never 
 considered, and perhaps hardly ever heard the name of. 
 Free Trade ; and yet it is the great bulk of the people 
 who are most interested in it, and to whose welfare it would 
 most conduce. Of the wealthier and more leisured classes, 
 part are the capitalists who have embarked their fortunes in, 
 and identified their interests with, the protected industries, 
 and all their influence is directed against any change; 
 while the rest are, for the most part, indifferent to the sub-
 
 PLEAS FOR PROTECTION EXAMINED. 39 
 
 ject, absorbed in other pursuits, and averse to trouble them- 
 selves with dry questions of political economy. As to the 
 governing classes, they chiefly devote their attention to 
 those topics which more immediately press on them — such as 
 party triumphs or defeats, foreign politics, financial devices, 
 religious contentions, dynastic intrigues, and other matters 
 of statecraft. As to whether the people they govern would 
 prosper better under Free Trade than under Protection, why 
 should they trouble themselves about that, since the people, 
 who are the greatest sufferers, do not move in it ? Why 
 should they lose votes, and perhaps power, to introduce 
 changes which the many whom these changes would benefit 
 do not ask for, and the few whom they would inconvenience 
 loudly cry against ? 
 
 Nevertheless, from all these various social strata there 
 come forth in every nation a certain number of thoughtful, 
 truth-seeking men who do study the subject, and whom that 
 study has made Free Traders. These men, whose convic- 
 tions are founded on research, are by no means inactive in 
 promulgating the truth. But they are as yet comparatively 
 few, and their voice only reaches a small part of the multi- 
 tude itself, whose earnings are being clipped and pared by 
 protective taxes. Gradually and steadily, however, nations 
 are becoming leavened by Free Trade doctrines. A small 
 but increasing number of active politicians in every country 
 are clustering into a compact Free Trade party, and their 
 labours in the cause are entitled to our warmest appreciation 
 and sympathy. They have up-hill work before them. In 
 their endeavours to benefit their countrymen they meet with 
 apathy on the part of those whom they wish to serve, with 
 obloquy on the part of those interested in the abuse which 
 they wish to correct, and with neglect on the part of the 
 rulers whose policy they wish to influence. All honour to 
 their glorious efforts ! This passing tribute is amply due 
 from us, who have gone through the struggle, to our brother 
 Free Traders in protective countries who are going through 
 it. That they will succeed in breaking through the barriers 
 of ignorant indifference and interested opposition, no one 
 who sees how irresistibly the wave of progress is rolling 
 onward throughout the world, can for a moment doubt. To
 
 40 PLEAS FOR PROTECTION EXAMINED. 
 
 sum up, the truth is that the moment the mass of the 
 
 PEOPLE IN OTHER COUNTRIES SHALL BECOME AWARE THAT 
 protection taxes the many FOR THE BENEFIT OF THE 
 FEW, FREE TRADE WILL BECOME UNIVERSAL. 
 
 CHAPTER VI. 
 
 14. Increase of wealth under Free Trade. 15. That increase not due 
 to the gold discoveries. 16. Ay to threatening foreign countries 
 \\ith retaliation. 
 
 14. England has not prospered under Free Trade, and is 
 living on her former capital. Both statements are the reverse 
 of true. As to the first, the marvellous expansion of 
 England's prosperity and wealth within the last thirty years 
 is so notorious, and has been so clearly, amply, and 
 conclusively shown by statistical records, that it is mere 
 waste of time to dwell upon it. The great wonder to us is 
 that any man should be found so blind as not to recognise, 
 or so bold as to deny, the fact. As to the second, the only 
 ground on which the statement is based is the permanent 
 excess of our imports over our exports — a fact which, far 
 from proving, eftectually disproves the statement that 
 England " is living on her former capital." For, as we have 
 before put it, how can receiving a hundred millions per 
 annum more from abroad than we send away be a cause 
 of impoverishment? Or, rather, how can it be other than 
 a splendid accession to our wealth and capital ? 
 
 It is said that this excess of imports has been partly 
 paid for by the redemption of American Government bonds, 
 and that consequently the indebtedness of the world to 
 England is to that extent less. Let us examine this 
 assertion. It is quite true that the United States have 
 paid off a portion of their national debt, some of which was 
 held in England ; and all honour be to them for it ! But 
 how can the creditable liquidation of their debts prove
 
 PLEAS FOR PROTECTION EXAMINED. 4 1 
 
 a source of impoverishment and diminution of capital to 
 us ? "They now owe us less," is your feeble moan. Why 
 not? How can it be a loss and a grievance to you that 
 a high-minded debtor should take the earliest opportunity 
 of repaying what he owes you ? If it be an injury to you to 
 have solvent debtors, then long live the Turks and 
 Egyptians ! As regards them, you will ever be free from 
 the nuisance of having the world's indebtedness to you 
 diminished. But how the repayment of a loan can injure a 
 creditor passes conception. Because our Anglo-Saxon 
 brethren in the other hemisphere have repaid a portion 
 of their national debt, does it follow that the aggregate 
 indebtedness of the world to you (on which you lay such 
 stress) has diminished ? Not at all. Both in financial 
 circles and on the Stock Exchange (the best, and indeed 
 the only, authorities on the subject) the verdict is (i) that 
 a larger sum than has been repaid to us by the United States 
 in one form has, during the same period, been invested by 
 us in other American securities, and (2) that, in addition, 
 England has been, year by year, making fresh loans to, 
 and large investments in, other countries (chiefly her own 
 colonies). The result is — and it will relieve the fears of our 
 timorous friends to know it — that the present indebtedness 
 to England of the world at large is greater than it has 
 ever been before. Paying us off is a very rare operation ; 
 borrowing from us a very frequent one. 
 
 There are also other proofs patent to every one who looks 
 around him that, far from England's living on her capital, 
 that capital is yearly increasing at a rapid rate ; for it is 
 accumulating before his eyes. Every year the fixed capital 
 of the country is, visibly and tangibly, receiving a vast 
 accession by the construction of new dwelling-houses, new 
 ships, new factories, new railways, new harbours, new docks, 
 new warehouses, &c., &c., of which the aggregate value 
 is enormous. Every year vast sums are invested in new 
 commercial enterprises, both at home and abroad. Every 
 year our population increases at the rate of about 1,000 a 
 day; while food, clothing, lodging, &c., are more easily 
 and abundantly supplied to them than ever, for pauperism 
 has decreased 19 per cent, since 1870. And it is in the
 
 42 PLEAS FOR PROTECTION EXAMINED. 
 
 face of these facts that we are told that England is living on 
 her capital ! Out of what fund, then, if not from our annual 
 savings (excess of income over expenditure), does the 
 money come to provide these enormous annual additions 
 to our national wealth ? To sum up, the truth is that under 
 
 FREE TRADE WE HAVE ACCUMULATED WEALTH WITH UN- 
 PRECEDENTED RAPIDITY, AND ARE YEARLY iMAKING VERY 
 LARGE ADDITIONS TO OUR CAPITAL. 
 
 15. England has ?io doubt prospered, but that prosperity is 
 due, not to Free Trade, but to the gold discoveries in California 
 and Australia. If, instead of California and Australia, the 
 gold discoveries had been made in Yorkshire or Cornwall, 
 one might more easily understand how England would have 
 specially benefited by them ; but that the decay of England 
 should have been arrested by, and the huge fabric of her 
 prosperity have been erected upon, the discovery, thirty 
 years ago, of auriferous deposits in territories thousands 
 of miles distant, is an assertion that bears on the face of 
 it the stamp of absurdity. The effects of that increased 
 production of gold have been much over-rated. They no 
 doubt did enrich the people of America and Australia ; just 
 as the discovery of new copper mines or petroleum wells 
 enrich the people who own them. But the profits on 
 gold production are by no means excessive. The labour 
 which it absorbs is abstracted from the production ot 
 wealth in another form, and the average net result is 
 not considerable. No doubt, the consequent increase in 
 the world's stock of gold tended to arrest the general fall of 
 prices, and even in some degree to enhance them. It thus, 
 for a short time, gave some stimulus to the trade of the 
 world. But such eftects, limited as they were in extent and 
 transitory in duration, were common to all countries. 
 England merely shared that influence widi others, and 
 derived from it no special or exceptional advantage. We 
 should hardly have adduced for confutation so weak a plea 
 as the above, but that some Protectionists (not many) have, 
 from some peculiar turn of mind, considered that there was 
 something in it. To sum up, the truth is that England 
 
 SHARED WITH THE REST OF THE WORLD THE BENEFICIAL 
 INFLUENCE, SUCH AS IT WAS, OF THE GOLD DISCOVERIES IN
 
 PLEAS FOR PROTECTION EXAMINED. 43 
 
 CALIFORNIA AND AUSTRALIA, BUT DERIVED FROM THEM NO 
 ADVANTAGE SPECIAL TO HERSELF. 
 
 16. By threatening to inipose import duties on foreign com- 
 modities we shall ifiduce foreign countries to reduce, or remove, 
 their present iinport duties on ours. To such a threat the 
 foreigner might probably reply to this effect, "You urge 
 Free Trade on us, gentlemen ! Good. But do you 
 urge it upon us as being a benefit or an injury ? If you 
 really and sincerely deem Free Trade to be a benefit, then 
 you certainly will not carry out your threat of adopting Pro- 
 tection if we dechne your proposal. If, on the other hand, 
 you believe it to be an injury, then your proposal is — well, 
 self-answered." We cannot just now find the proper repartee 
 to this. Meanwhile, the Protectionists may exclaim, " It is 
 not fair for foreign nations to saddle our productions with 
 Customs' duties while we admit theirs free." Why not? 
 When we adopted Free Trade it was witli a view to our own 
 interests, and not in order to please or favour foreigners. 
 On what plea, then, can you ask them to discard their own 
 policy (good or bad) in order to please or favour you ? We 
 can imagine the foreigner answering you thus, " If you, 
 O Englishmen ! prefer Free Trade, be it so. We do not seek 
 to control you. We do not come to you, and threaten that 
 unless you adopt Protection we will lower our import duties 
 and become Free-Traders. That would be casting a stigma 
 on the sincerity of our belief in Protection. Like the fox in 
 the fable, you have cut off your tail, and you now want us 
 also to cut off our own ; but the very urgency with which 
 you press us begets the suspicion that you yourselves repent 
 the operation. If you do repent having Free Trade, your 
 remedy is easy — replace your tail — re-enact Protection ; but 
 do not be so inconsistent as to threaten us that unless we 
 participate with you in what you assert to be the benefits of 
 Free Trade, you will participate with us in what you assert 
 to be the evils of Protection." 
 
 This is all very fine," you will say, " but this Free Trade 
 of ours is one-sided. We buy freely at the world's shop, 
 while the world refuses to buy at ours." Divest yourself of 
 this error. The world buys of you just as much, neither 
 more nor less, as you buy of the world. No trade can pos-
 
 44 PLEAS FOR PROTECTION EXAMINED. 
 
 sibly be one-sided. The essence of trade is to give and 
 take. All commerce is barter. If you buy freely from the 
 world, the world is compelled, from the ver}' nature of 
 things, to buy just as freely from you. It cannot help itself 
 The goods you buy will and must be paid for, directly or 
 indirectly, in the goods you sell. The debts due to or by a 
 country by or to other countries, whether for goods, or loans, 
 or interest, or anything else, are not — never were — and 
 cannot be — paid in gold. But this has been demonstrated so 
 repeatedly and so clearly before that we need not further 
 dwell on it. 
 
 What Protection does is, not to sell more to us than we 
 sell to the protected world (for that is impossible), but to 
 prevent each protected nation from selling as much to the 
 rest of the world (by preventing it from buying as much 
 from the rest of the world) as it would do under Free Trade. 
 International exchanges, which constitute foreign commerce, 
 and by which both parties would profit, are discouraged, 
 checked, and curtailed. The loss of that profit is not one- 
 sided but two-sided. The protected nation and the rest of 
 the world are both equal losers ; and the evil is due to Pro- 
 tection, not to Free Trade. The curtailment of those mutually 
 beneficial international exchanges would become all the 
 greater if we ourselves adopted Protection. By so doing 
 we should no doubt punish the protected countries, but we 
 should punish ourselves in the same degree. We should 
 diminish their foreign commerce, but at the same time 
 diminish our own. Surely the very worst way of in- 
 creasing international exchanges must be to adopt the 
 very system which we complain of in others as curtailing 
 them. 
 
 As to what are the foreign articles that are to be taxed, 
 in the improbable case of the Fair Traders, alias Protec- 
 tionists, getting their own way, they are by no means 
 agreed among themselves ; and no wonder. The people 
 at large decidedly object to have their food taxed, the 
 manufacturing classes decidedly object to have their raw- 
 materials taxed, and the general consumers decidedly 
 object to have the miscellaneous articles taxed. What is to 
 be done? Well, as the general consumers are a long-
 
 PLEAS FOR PROTECTION EXAMINED. 45 
 
 suffering and patient race, let us suppose that they are 
 sacrificed, and miscellaneous articles of foreign manufacture 
 are to be selected for taxation in order to constrain foreign 
 countries " to reduce or remove their present import duties 
 on our commodities." But here comes another difficulty. 
 The amount of foreign manufactures imported by us from 
 each country is too small to afford the required leverage. 
 They consist of about 2,000 various articles, coming from 
 about fifty different countries, and ranging in amount and 
 importance from silks down to sarsaparilla. They constitute 
 in value about one-tenth of our total importations ; or, as 
 some make it, by rating such things as confectionery, and 
 works of art as manufactures, about one-eighth : it matters 
 very little which. The aggregate value of these 2,000 
 foreign taxable articles is from ;^4o,ooo,ooo to ;i^5o,ooo,ooo 
 annually, which amount is cut up into small portions, not 
 only by its distribution among a multiplicity of articles, but 
 by its further subdivision as coming from various countries. 
 The idea of frightening foreign nations into making a 
 change in their fiscal policy by taxing, or threatening to tax, 
 such comparative trifles, is sublimely ridiculous. 
 
 The Protectionists also talk of introducing difterential 
 duties, to be less on the productions of some countries 
 and more on those of others ; and these would occasion 
 fresh subdivisions and complications which it would require 
 an army of Custom-house clerks and revenue officers to 
 detect and apportion. The practical difficulties of assessing 
 and collecting duties on these fragmentary objects of minute 
 taxation would bewilder the greatest financier of the age, 
 Mr. Gladstone himself; and the Fair Traders, alias Pro- 
 tectionists, would have to evolve a Chancellor of the 
 Exchequer of lo-Gladstone-power to cope with them. To 
 sum up, the truth is that to threaten foreign countries 
 
 THAT WE SHALL ADOPT THEIR FISCAL POLICY UNLESS THEY 
 ADOPT OURS, IS TO LEAVE TO THE DECISION OF OTHERS 
 WHETHER WE ARE (rIGHTLY OR WRONGLY) TO ADHERE 
 TO FREE TRADE OR REVERT TO PROTECTION.
 
 46 PLEAS FOR PROTECTION EXAMINED. 
 
 CHAPTER VII. 
 Conclusion. 
 
 Besides the sixteen pleas for Protection wliich we have 
 now discussed, there are (for error is hydra-headed) a 
 number of minor and subordinate ones. But these are 
 either so trivial as to have no weight, or so obviously un- 
 sound as to carry with them their own refutation. Almost 
 all of them, moreover, are branches of, or correlative to, 
 those of which we have treated, and we shall, therefore, 
 refrain from passing them under review. 
 
 ^^'e cannot conclude without adverting to two curious 
 phenomena in connection with the subject under dis- 
 cussion. 
 
 I. Here is a matter of science, in wliich the facts or 
 data are numerous and well-authenticated. The inferences 
 from these data are by no means abstruse or recondite ; 
 and the arguments on either side have been abundantly, if 
 not always very luminously, set forth. And yet, of those 
 who have more or less inquired into the subject, while nine 
 out of ten have arrived at one conclusion, the remaining 
 one-tenth have arrived at a conclusion diametrically oppo- 
 site. By what peculiar twist of the brain is it that the same 
 data lead one man to a direct affirmative and another to as 
 direct a negative ? No admission on either side that there 
 is something to be said on the other ! There is no neutral 
 tint. All is either jet black or refulgent white. The 
 reasons for such contradictory conclusions from ascertain- 
 able facts may, we think, be traced to some of the following 
 explanations, which apply to imperfect reasoners on either 
 side of the question : viz., i. Some persons treat unsui> 
 ported assertions as admitted facts. 2. Some shrink from 
 statistics which they find troublesome, and therefore call them 
 misleading. 3. Some only take those figures which tell in 
 their favour, and leave out the rest. 4. Some ignore, or 
 forget, a portion of the essential data, and conclude from 
 incomplete premises. 5. Some admit a proposition, but 
 afterwards go on reasoning as if they had refuted it. 6.
 
 PLEAS FOR PROTECTION EXAMINED. 47 
 
 Some confine their attention to local and transitory topics, 
 but reason as if they were general and permanent. 7. Some, 
 biassed by self-interest, look obliquely instead of straight 
 at the data before them. 8. Some, clinging to foregone 
 conclusions, shut their eyes to new facts and their ears to 
 new arguments. 9. Some resist an argument, not as being 
 unsound, but simply as being adverse. 10. Some grant 
 that the formula 2x8 = 16 is quite correct in theory, but 
 contend that it is inadmissible in practice. 1 1. Some fancy 
 that what is verbose and obscure is profound, and that what 
 is concise and lucid is shallow. But we need go no farther. 
 These and similar logical shortcomings may serve to explain 
 the curious discrepancy noticed above. 
 
 2 Through what marvellous coincidence does it happen 
 that nearly all English Free Traders belong to the Liberal, 
 and nearly all English Protectionists belong to the Conser- 
 vative party ? Here is an economic question, purely scien- 
 tific, the discussion of which, and the conclusions in regard 
 to which, can only rest on considerations intrinsic to the 
 question itself. If different persons arrive at different con- 
 clusions upon it, such differences should be the outcome of 
 a diversity in their reasoning power, not of a diversity in 
 their party proclivities. And yet, by some peculiar elective 
 affinity, we find one set of conclusions identified with the 
 Liberal party and the opposite set with the Conservative 
 party. This cannot be the result of mere chance. Are we 
 to infer that the peculiar mental organisation which impels 
 a man to be a Liberal is precisely that which will impel him 
 to be a Free Trader ? Or that the special form of brain which 
 predisposes a man to adopt Conservatism happens to be 
 the very brain formation that will evolve Protectionism out 
 of his economic inquiries? These inferences are hardly 
 admissible, and we fear that the coincidence in question is 
 due to less recondite and more vulgar causes. The fact is 
 that the so-called convictions of many, both Free Traders 
 and Protectionists, are not owing to independent, fearless, 
 truth-seeking inquiry, but are the result of old traditions, 
 early education, immediate surroundings, class interests, 
 spirit of comradeship, and generally of influences extraneous 
 to the abstract question of truth or error.
 
 4^ PLEAS FOR PROTECT/ON EXAMINED. 
 
 While few Liberals are Protectionists, many, especially of 
 the leading, Conservatives are from conviction Free Traders ; 
 and to these the alliance of their party with an effete theory 
 must be distasteful and embarrassing. They would, per- 
 haps, not be sorry were a friendly voice to address the rank 
 and file of their party in something like the following terms : 
 — " Beware of identifying yourselves with a scientific heresy. 
 Protection is a defunct fallacy which no amount of political 
 galvanism can resuscitate. How long will you continue to 
 encumber yourselves with its dead body ? You compromise 
 the future of your party by hampering it with a discarded 
 policy. By so acting the triumph of Free Trade becomes 
 the defeat of Conservatism ; and if Free Trade be a scientific 
 truth, you are pledging yourselves to the adoption of a 
 scientific error. It is as though the Conservative programme 
 were to include a belief in astrology, or to involve a repu- 
 diation of the Copcmican system, and a return to the good 
 old times of Ptolemy. Pray do not make it anti-Conser- 
 vative in a man to assent to the binomial theorem." 
 
 But whatever party be in power, one thing is clear. The 
 people of England have made up their minds. They will 
 not go back to those miserable and memorable times when 
 Protection taxed their food, curtailed their foreign trade, 
 crippled their industry, and periodically spread starvation, 
 destitution, and despair throughout the land. You might 
 as well exhort the emancipated slave to resume his fetters. 
 We have adopted a living principle ; — under it we have 
 thriven, and to it we will cleave.
 
 THE FRENCH TREATY 
 
 RECIPROCITY. 
 
 DELIVERED IN THE HOUSE OF COMMONS, 
 
 Ok FRIDAY, AUGUST iith, iSSi, 
 
 BY THE 
 
 Right Hon. JOSEPH CHAMBERLAIN, M.P., 
 
 President of the Board of Trade. 
 [REVISED.] 
 
 PUBIJSIIED FOR THE COBDEN LLIR BY 
 
 Cassell, Fetter, Galpin & Co. 
 
 LOiXDOy, PARIS J: NEW YORK,
 
 THE 
 
 FRENCH TREATY AND RECIPROCITY. 
 
 Mr. Ritchie moved : — 
 
 " That an humble address be presented to the Crown, 
 praying Her Majesty to withhold her consent to any com- 
 mercial Treaty with France which proposes to substitute 
 specific duties for ad valorem duties, to the disadvantage of 
 any article of British manufacture, or in any way to raise the 
 present rate of duties payable on such articles, and which 
 does not leave Her Majesty's Government full liberty to 
 deal with the question of bounties, or which would bind 
 Her Majesty absolutely to its provisions for a longer psriod 
 than twelve months." 
 
 In the course of the debate Mr. Cha:\iberlain said — 
 At the commencement of the interesting and moderate 
 speech just deUvered by the honourable member for Preston 
 (Mr. Ecroyd), he referred to speeches from this side of the 
 House which in his opinion contained references to subjects 
 outside and beyond the immediate issue under discussion. 
 I cannot but think that the same criticism will apply to 
 much that has fallen from the hon. gentleman himself; but 
 I do not make this a matter of complaint. On the contrary, 
 I do not hesitate to say that the real interest of this 
 discussion consists in those portions of it which have 
 reference to the new doctrines of Fair Trade, Reciprocity, 
 and Retaliation, of which we have heard so much and know 
 so little, and with respect to which we are naturally anxious 
 to have accurate and definite information. I had hoped in 
 view of this debate that at last we should be able to grasp 
 the phantom which has so long eluded us. I confess that 
 these expectations have been disappointed, and that even 
 now after having listened attentively to everything which has 
 fallen from the hon. member and from previous speakers on
 
 THE FRENCH TREATY 
 
 his side of the House, I am still in the dark as to what they 
 mean, and even as to whether they understand their own 
 meaning themselves. It is gratifying, no doubt, to be as- 
 sured, as we have been by all of them, that they are ojjposed 
 to l^rotection and in favour of " real " Free Trade, but it is 
 difticult for a plain man to reconcile these assurances with 
 the other statements which they have made. We have had 
 expounded to-night several shades in the new heterodoxy 
 which seems at last to have secured the patronage of the 
 Conservative party. We have, in the first place, my hon. 
 friend the member for North Warwickshire (Mr. Newdegate), 
 whose consistency we all gladly recognise, and who tells us 
 that he stands before the House " unblushing," the last 
 chairman of the old Protection Society, the last rose of 
 summer for forty years left blooming alone, and now both 
 gratified and astonished to see himself surrounded by so 
 large a company. The hon. member for the Tower Hamlets 
 (Mr. Ritchie) refuses to go as far as the hon. member for 
 North Warwickshire. He tells us that he is not in favour of 
 Protection, but then he adds that he approves of counter- 
 vailing duties, and that he considers that we should now do 
 wisely to take up once more the weapons which we have pre- 
 maturely abandoned — meaning by this expression the duties 
 upon foreign produce by which in former times home industry 
 was supposed to have been protected. Then we have the 
 noble lord the member for Liverpool (Lord Sandon). He 
 is indignant that an attempt should be made to mix him up, 
 of all persons in the world, with the discarded doctrines of 
 Protection. He protests, in almost pathetic tones, his ad- 
 miration and respect for the deceased leaders of the Free 
 Trade movement ; and I cannot avoid saying in passing that 
 it is a characteristic fact in this and similar discussions that 
 those who agree with the noble lord are fond of expressing 
 their respect for the Free Trade leaders and political 
 economists who are gone from us, and who cannot repudiate 
 the heresies which are now attributed to them ; while they 
 are unwilling to accord any authority at all to the utterances 
 of those Free Traders and Economists who are still alive — 
 who are the legitimate heirs and successors of the dead, and 
 who continue and maintain their true faith and best traditions.
 
 AND RECIPROCITY. 
 
 The noble lord tells us that he is in favour of " Fair Trade." 
 I have a great respect for the noble lord, though I am not 
 able to take him at his own estimate as the true repre- 
 sentative of the trading classes and the commercial interests 
 of this country. But it is in no disrespect to his general 
 ability that I challenge him to point out to the House any 
 practical distinction between what he calls Fair Trade, and 
 what the rest of the world have hitherto consented to call 
 Protection. He complains, for instance, with regard to the 
 Cobden Treaty that it bound this country not to impose any 
 duties on French produce, while it left the French free to 
 levy duties not exceeding thirty per cent, on the products of 
 English industry, and he says that this is not a fair arrange- 
 ment. But how does he propose to alter it ? He may, of 
 course, endeavour to persuade the French to give up their 
 duties and to allow the free import of English goods. He 
 knows, however, that this is impossible, and the only alterna- 
 tive open to him is to meet the French in their folly and to 
 impose duties not exceeding thirty per cent, on our imports 
 from them. That may be right or it may be wrong, but at 
 least the operation would produce a state of things exactly 
 similar to that which existed under the Protective system 
 which the noble lord professes to disapprove. On the whole, 
 then, although the means are different and the language 
 varies, it appears in every case, and in spite of protests to 
 the contrary, that hon. members opposite do intend to revert 
 to a system of Protection, although they prudently refuse to 
 tell us the exact nature of the protective measures which 
 they desire us to adopt. Although in this respect they 
 continue indefinite and vague, we have at least as one 
 result of the discussion a full statement of the grounds on 
 which the claim for Reciprocity or Retaliation is based, and 
 I am here to challenge the allegations which have been made, 
 and to say with regard to them that they are, in the main, 
 either greatly exaggerated or altogether inaccurate. 
 
 Before I call the attention of the House to the facts and 
 figures on which I shall rest my case, I have to notice a 
 preliminary matter which has been referred to by the noble 
 lord the member for Liverpool. In language so strong as 
 to be almost offensive, he accuses the Government of prac-
 
 THE FRENCH TREATY 
 
 tising concealment upon Parliament and the people. I 
 cmpliatically repel these imi)utations of motive, and these 
 insinuations, which are unworthy of the noble lord. I 
 admit that he ouglit to be a good judge of what constitutes 
 concealment. While he was a member of the late Adminis- 
 tration he had much experience and practice in this matter ; 
 and I will venture to say that the great difference between 
 the late and the present Government is, that the present 
 Government conceal nothing that they can possibly publish, 
 while the late Government published nothing they could 
 ])ossibly conceal. Sir, the discovery of the noble lord is a 
 monopoly of his own : the charge of concealment has not 
 been made or supported by any other member. It has not 
 been suggested on behalf of any representative commercial 
 body, or on behalf of any of those organisations of working 
 men whose interests the noble lord now undertakes to 
 champion ; and the grounds on which he bases his accusa- 
 tion are childish and frivolous in the last degree. He 
 complains, in the first place, that we have not published the 
 propositions which have been made to us from time to time 
 on behalf of the French Government. He knows that we 
 have been anxious to lay these propositions before the 
 country, and that we have only been precluded from doing 
 so by the express refusal of the French Government to allow 
 them to be treated as otherwise than confidential. Then, 
 in the second place, he refers to what he calls once more, in 
 s])ite of contradiction, the refusal of the Government to 
 give a translation of the general tariff. We gave, at his 
 request, a copy of this tariff in the original French, 
 although we considered that it was entirely unneces- 
 sary, as the general tariff has not yet been the subject 
 of discussion, and it may never have any practical in- 
 terest for this country. The member for Sheffield (Mr. 
 Wortley) was the firbt to ask for a translation. Now, I 
 believe, it is usual not to refuse any return pressed for by 
 any hon. member unless its publication is inconsistent with 
 the interests of the public service, and, therefore, I did not 
 refuse the request of the hon. member for Sheffield ; but I 
 took him into my confidence, and explained to him the 
 reasons which led the Government to think that the transla-
 
 AND RECIPROCITY, 
 
 tion was unnecessary, and I asked him whether, under those 
 circumstances, he would not think it well not to press his 
 motion. A few days afterwards the noble lord came down 
 to the House, and, in a hectoring tone, and with a " stand 
 and deliver " manner, demanded an explanation of what he 
 called my extraordinary reply, and insisted on an imme- 
 diate assent to the motion. I ventured to deprecate the 
 noble lord's warmth, and I begged him to wait for a few 
 days until I had had an opportunity of consulting the repre- 
 sentatives of the commercial classes to know whether they 
 considered the publication would be of general service. 
 The noble lord has said to-night tliat we ought to have 
 consulted the Chambers of Commerce at an earlier period ; 
 but when I proposed to communicate with them, the noble 
 lord expressed his contempt for these authorities, and 
 declined absolutely to be bound by their opinion, preferring 
 to rely upon his own special sources of information. 
 This is the inadequate foundation on which the noble 
 lord seeks to erect his superstructure of charge and 
 accusation against the Government. He goes on to say 
 that in a return which we presented some time ago 
 we dropped out all information about agriculture, and 
 he insinuates that this, too, was part of the insidious 
 plan of the Government to withhold information from 
 all concerned. Sir, the noble lord would have been more 
 " straightforward," to use his own expression, if he had told 
 the House that the return to which he refers was a special 
 return, containing the changes of duty on the principal 
 articles of export from England to France. There is no 
 considerable export of agricultural produce to France, and 
 consequently it was not, and indeed could not have been 
 included in this return. But when the noble lord the 
 member for North Leicestershire (Lord John Manners) 
 asked for particular information on the point, I had no hesi- 
 tation, whatever, in at once acceding to his request. 
 Lastly, the noble lord complains that the Government did 
 not take an earlier opportunity— during the winter I think 
 he said — of consulting Chambers of Commerce and the 
 mayors of the large towns with regard to the propositions of 
 the French. The mayors of the large towns and the repre-
 
 8 THE FRENCH TREATY 
 
 sentatires of the commercial classes are people of common 
 sense, and they would not have thanked the (loveniment if we 
 had attempted to consult them before we had any proj^osition 
 at all to lay before them. My lionourable friend the Under- 
 Secretary of State for Foreign Affairs (Sir Charles Dilke) 
 has already pointed out that if it be an offence to delay the 
 publication of documents connected with commercial nego- 
 ciations, the late Government have much more to answer 
 for than we. It is true that the noble lord disclaims any 
 comparison between the present negociations and the arrange- 
 ments with Servia which were withheld from Parliament during 
 the time of the late Government. But my hon. friend did 
 not rest his case upon this, but on the fact that in the negocia- 
 tions on two several occasions — in Paris — in connection with 
 the French Convention, the protocols and papers were not 
 produced by the late Government. There is another case in 
 point. In 1877 a most important commission was held in 
 France to enquire into the state of industry in that country 
 and into the condition of the labouring classes. This was a 
 matter which had the greatest interest for the working classes 
 here, whose claims on the present occasion the noble lord 
 has without any authority assumed to represent. But what 
 happened? When my right hon. the Vice-President of the 
 Council (Mr. Mundella) again and again pressed the late 
 Government to give a translation of the report of the pro- 
 ceedings of this Commission it was refused by them on the 
 score of expense. I am not now saying whether the refusal 
 was justified or not, but I do complain that those who live 
 in glass houses like the noble lord should be so exceedingly 
 ready to throw stones. 
 
 In listening to the speech of the mover of the resolution, 
 I have had occasion to-night to ask myself several times 
 what can be the object of the motion which he has made. 
 I am driven to the conclusion that it is his desire and that 
 of the hon. members who support him to prevent any 
 treaty being negociated at all. I believe in i860 the 
 Conservative party did all in their power to secure the 
 failure of the negociations, and no doubt they are only 
 consistent in now endeavouring to make it difficult for the 
 Government to continue or to extend the provisions of the
 
 AND RECIPROCITY. 
 
 treaty then concluded. The hon. member asks the House 
 to agree to conditions precedent to the making of a treaty 
 which every one knows are impossible, and if they were 
 accepted by the House no treaty at all would be practicable. 
 The Under-Secretary of State for Foreign Affairs has already 
 pointed out, forcibly and conclusively, that under this 
 resolution if the French Government offered a treaty which 
 on ninety-nine points out of a hundred was a great ameliora- 
 tion of the existing Convention, the Government would be 
 unable to agree to it if on the hundredth point, however 
 unimportant it might be, there were any increase of duty, 
 however small. But I want more particularly to call the 
 attention of the House, to the third condition in the 
 resolution of the hon. member. We are in the words of 
 the resolution to conclude no treaty which does not leave 
 us "full liberty to deal with the question of bounties." 
 There is no doubt that this is aimed at the ' most favoured 
 nation clause' which has been asserted on other occasions 
 against the proposal of the hon. member to impose what he 
 calls countervailing duties in the case of sugar. The effect 
 of this condition would be, taken with those which precede 
 it, that not only would the Government be unable to make 
 what is ordinarily known as a commercial treaty, but they 
 would not even be allowed to fall back upon a simple " most 
 favoured nation clause," under which in the case both of 
 France and other countries, English trade has derived the 
 most striking advantages, and without which it would be 
 possible for France to impose differential duties against all 
 articles of English manufacture. On what ground is this 
 condition to be imposed? It cannot be necessary in the 
 case of the shipping bounties which the French have 
 recently, most imprudently and foolishly in my opinion, 
 undertaken to grant. There is nothing I believe in the 
 treaty stipulations which would interfere with the right of 
 the Government to re-enact the Navigation Laws if they 
 were silly enough to do so, after the experience of the past, 
 and with full knowledge of the enormous and unexampled 
 extension of British shipping which has taken place since 
 the repeal of that legislation, and which has made the 
 mercantile marine of this country the envy and astonish-
 
 lO THE FRENCH TREATY 
 
 ment of the world. * And as regards sugar, whatever might 
 have been the case in the past there is now no ground for 
 interference on this head either. In tlie course of the la^t 
 eighteen months the French Government have reduced the 
 duty on sugar by one-half, and have altered the method of 
 testing for drawback, and by these two changes they have, 
 in the opinion of the experts whom I have consulted, 
 reduced the drawbacks until there is now no bounty at all, 
 or at least no bounty of the slightest practical importance 
 on the export of refined sugar. But suppose that my 
 information is incorrect and that there still exists a bounty, 
 or that one results in the future from changes in manu- 
 facture. In this case who is to decide the amount of 
 countervailing duty which is to be imposed as against the 
 bounty ? There is not the slightest agreement between the 
 different representatives of sugar refiners, the Board of 
 Trade and other authorities, and the French Government 
 and their experts, as to what is the precise amount of 
 bounty in each case. Is it likely that any nation will allow 
 us to be judge in our own cause, and to assert, as against 
 their information and belief, the amount of duty which we 
 are entitled to levy without infringing the ' most favoured 
 nation clause? ' The only result of such an attempt would 
 be to lead to disputes and retaliation. The ' most favoured 
 nation clause' would be whittled away until it practically 
 ceased to exist, to the great injury of British commerce. 
 
 I say, then, that it is impossible to regard the resolution 
 otherwise than as an indication of the desire of the party 
 opposite that no treaty at all should be concluded with 
 France. The hon. member for the Tower Hamlets has said 
 that the people of this country would be unwilling to accept 
 any treaty that did not gready improve the existing condition 
 of things. (Mr. Ritchie : I did not say so. What I said 
 v/as that the people of this country would not accept any 
 treaty which was not on equal terms with the treaty of i860.) 
 I accept the hon. member's correction ; but if he did not say 
 so, other speakers in the debate, and notably the noble lord 
 the member for Liverpool, pressed his contention up to the 
 limit I have stated. But though the noble lord, by putting 
 
 * See Appendix, Talile XIV.
 
 AND RECIPROCITY. 
 
 forward impracticable demands, would do his best to make 
 a treaty impossible, I cannot dou!)t that he and his friends 
 would be disposed to throw the whole blame for failure on 
 the Government, and to ignore the part they themselves 
 would have taken in securing this result. 
 
 Before going further, 1 should like to ask the House to 
 consider briefly what has been the etfect of this treaty, whose 
 continuance seems to be regarded with indifference by hon. 
 members opposite. I find that in the ten years, 1851 to 
 i860, before the conclusion of the treaty, our average exports 
 to France were ;^8,3oo,ooo per annum. Of these, British 
 produce, as distinguished from colonial and other produce, 
 was represented by ^{^4, 400, 000. Last year these figures 
 had risen to a total export of ^^28,000,000, ;^i6,ooo,ooo 
 of this being for British produce alone. This return is 17 
 per cent, less than the return for 187 1, which was the 
 highest year, and 10 per cent, more than the return for 
 1877, which w^as the lowest in the last decade; and I 
 quote these figures because it is necessary to observe 
 that there are great fluctuations in the trade, and 
 nothing can be more unfair than to take only selected 
 years for purposes of comparison. Now, coming to the 
 imports, I find that for the first period of 1851-60 the 
 average imports were ;^i 1,300,000, and they had risen 
 in 1880 to about ^^42, 000, 000. These figures are 40 
 per cent, greater than those for 187 1, the lowest year; 
 and 10 per cent, less than those for 1875, which is the 
 highest of the decade.* 
 
 But these figures, important and satisfactory as they 
 are, do not rei)resent the whole facts of the case. The re- 
 turns of the Board of Trade, accurate in themselves, must 
 be taken with qualifications and applied with knowledge. 
 Thus the figure for the imports must be considerably re- 
 duced if we wish to arrive at the actual amount of produce 
 of French origin which is retained for consumption in this 
 country. There are, for instance, large exports of textiles 
 of different kinds from Switzerland to Great Britain which 
 come through France, and cannot possibly be separated in 
 
 * See also Appendix, Table I., showing the a\eragc Annual Uade with 
 trance, in periods of three years, from 1857 to 18S0.
 
 THE FRENCH TREATY 
 
 our returns from French imports. Again, much of what 
 comes from France is taken into warehouse for a short 
 time in this country, which is the great depot of the 
 commerce of the world, but is only temporarily held 
 here, and goes on quickly to its real and intended 
 destination in the United States or our own colonies. 
 With regard to the exports on the other hand, they have 
 to be increased if the true amount of British trade with 
 France is to be correctly ascertained. I am informed, for 
 example, that British yarns intended for French manu- 
 facturers in the Yosges go through by way of Antwerp, and 
 would consequently appear in our returns as exports to 
 Belgium, although really part of our transactions with 
 France. When these allowances are made it will be seen 
 that, satisfactory as are the figures derivable from the British 
 trade statistics, they do not fully represent the importance to 
 this country of the commerce which has been created and 
 stimu-lated by the action of the Cobdcn Treaty. 
 
 Passing now to more general considerations, I gather 
 from the speeches which have been made, that it is the 
 contention of honourable gentlemen opposite that during 
 recent years English trade has been declining and leaving 
 the country ; that wages have fallen, and that great suffering 
 consequently exists among the working classes ; that the 
 profits of trade have disappeared, and that generally the 
 country is on the verge of ruin. They also appear to think 
 that foreign countries have benefited by our loss, and in 
 proportion to it. Now, Sir, I challenge all these assertions. 
 It is said that we take too optimistic a view of the present 
 state of English industry, and I am prepared at the outset 
 to make some admissions. I admit that the state of 
 agriculture has been for sonic time such as to cause to all of 
 us the greatest concern. I believe Mr. Caird has estimated 
 that the difference in production from agriculture during the 
 past three years, as compared with the normal average, has 
 been equivalent to a loss of ;^i 50,000,000 sterling. Some 
 other economists have put it at double that amount ; and 
 clearly it is impossible that ^^300,000,000, or even 
 ;^i 50,000,000 can be subtracted from the purchasing 
 power of the country without more or less affecting
 
 AND RECIPROCITY. 1 3 
 
 injuriously every other trade and interest. But this is not a 
 question of Protection or Free Trade ; and the state of 
 things which we deplore arises mainly from the absence of 
 sun, and the unfavourable seasons of the last four or five 
 years. 
 
 Again, there have been special trades recently — as indeed 
 in all preceding periods — which have been injuriously 
 affected by special causes, and subject to special depression. 
 The case of the Bradford trade is the best known instance 
 of this ; but it is due almost entirely to a change of fashion, 
 and is also independent of questions of Protection and Free 
 Trade. 
 
 Lastly, there has been no doubt a most serious diminu- 
 tion in the profits of capital, due to the rash and violent 
 speculation and over-production which prevailed a few years 
 ago. The case of the coal trade is one in point. The 
 production of coal in this country last year, Avhich was the 
 year of greatest depression, was, nevertheless, the largest 
 ever turned out of our mines. The period when the demand 
 for coal exceeded the supply was known as the coal famine, 
 although even then more coal was being raised than in 
 preceding years. But that famine induced a rise in price of 
 something like i6s. a ton, and naturally brought into the 
 trade a number of persons who opened fresh mines ; and, 
 although the demand has continued, the supply has increased 
 in still greater proportion, and there has been a consequent 
 heavy fall in prices. The same thing has no doubt taken 
 place in other trades, and notably in the great iron industry 
 of the country. But a loss of profit from such a cause must 
 not be confounded with a loss of trade, or supposed to 
 indicate approaching ruin. It has sometimes been said 
 that grumbling is the secret of England's success, and no 
 doubt while we are grumbling we are continually tending to 
 improvement and perfection ; but it would not be safe 
 to accept, without further consideration, the complaints of 
 those who are not doing so well as they think they ought, 
 as representing accurately the general condition of the 
 country. Statistics are against them ; the irresistible logic 
 of facts is opposed to' the pessimism which sometimes 
 prevails.
 
 14 THE FRENCH TREATY 
 
 Let me call the attention of the House to some figures 
 illustrating the more cheerful view which I have ventured to 
 take of the situation. 
 
 First, as to our foreign trade. I find that, with re- 
 gard to exports, the total value of British produce ex- 
 ported in the six years, 1869 to 1874, was ^1,363,000,000; 
 the total value for the succeeding six years, 1875 to 
 1880, was ;^i, 23 1,000,000, or a fall of nearly 10 per cent. 
 But I must point out to the House that this fall was 
 in value only, and that as, during the same period, 
 there was a general reduction in price, averaging probably 
 not less than 20 per cent., the rc-al volume of our export 
 trade has considerably increased, even during the worst 
 period of depression, as compared with the period of greatest 
 inflation.* 
 
 And if even the value has not increased, and if the 
 volume has not increased in greater proportion than has 
 actually been the case, that, I may inform the House, is to 
 be attributed, not to Free Trade, but to the action of my 
 honourable and learned friend the Attorney-General. This 
 statement may appear paradoxical, but the House will re- 
 collect that it was at the instigation of my learned friend 
 that, some years ago, a committee sat, of which he was the 
 chairman, to consider the subject of foreign loans. That 
 committee destroyed the credit of more than one foreign 
 country. They were no longer able to borrow money here. 
 and as they could not get credit they could no longer take 
 our goods. It cannot be considered a disadvantage that we 
 do not sell to people who will never pay for what they buy ; 
 but the result, no doubt, was temporarily to reduce the 
 export of British produce. 
 
 Coming now to the imports, I find that, after deduct- 
 ing re-exports, they were, in the first period I have selected 
 for comparison, ^1,701,000,000, and, in the second, 
 P^T, 946,000, 000, or an increase of about 14 per cent. 
 There are some persons who regard the increase of imports 
 with dissatisfaction, and it may be interesting to point out 
 why it is that this increase has taken place. During the 
 period referred to we largely increased our investments in 
 * See also .Appendix, Table II.
 
 AND RECIPROCITY. 1 5 
 
 foreign countries. The interest on these investments had 
 to be paid, and foreign countries have paid for them by 
 exporting goods, which have, of course, swelled our import 
 returns. And if honourable gentlemen opposite, the advo- 
 cates of a reciprocity system, were successful in erecting 
 some barrier by which these importations could be arrested, 
 what would be the result ? Foreign countries must continue 
 to pay their debts. Not being able to pay in goods, they 
 would have for the time to pay in bullion and specie ; there 
 would be an accumulation of the precious metals in this 
 country, and that would speedily bring about a rise in the 
 price of all other articles. When that rise had been estab- 
 lished, our power to export would be diminished ; the 
 amount of our exports would be reduced until the balance, 
 or excess of imports over exports, was again re-established, 
 although the volume of each would be lessened, to the enor- 
 mous disadvantage of all concerned. In other words, the 
 effect of an attempt to redress the balance would be promptly 
 to lessen the value of our exports, but could not ultimately 
 affect the difference in amount between them and our 
 imports. 
 
 In confirmation of what I have said as to the increase 
 in the volume of our trade, I now turn to some items ot 
 our production.* I have taken the figures which I am going 
 to quote from an interesting article in last week's Economist, 
 from which it appears that in the first period of six years, 
 to which I have already referred, the production of coal 
 was 710,000,000 tons; in the second it was 813,000,000. 
 In pig iron the production increased from 37,000,000 tons 
 to 39,000,000. The consumption of wool advanced from 
 1,064,000,000 pounds to 1,232,000,000 pounds; and the 
 consumption of cotton from 7,215,000,000 pounds to 
 7,578,000.000. I might easily add to the list, but in all the 
 principal articles of which we have returns the increase in 
 our trade is equally marked. t But then it is said wages 
 have been reduced, and the condition of tlie working class 
 
 * See also Appendix, Tables III. and IV. 
 
 + See also Appendix, Tables V., VI., VII., and XIV., showing increase 
 in assessments to Income and Property Ta.v, Railway Traffic, and Bankers' 
 Clearing House Returns and Shipping.
 
 l6 THE FRENCH TREATV 
 
 is that of great distress, in fact we have been given to 
 understand that they can hardly keep body and soul 
 together. Undoubtedly there has been a reduction of 
 wages in almost every trade from the level which they 
 reached in the time of greatest inflation ; but, what is also true, 
 is that the purchasing power of wages has become consider- 
 ably gieater in the same period, and, as a matter of fact 
 it ajjpears that the consumption of every important article of 
 necessity or luxury by the working classes has shown a 
 remarkable increase. Thus the consumption of sugar, an 
 article which the hon. member for the Tower Hamlets 
 is so anxious to increase in price, has advanced from 
 42^ lbs. per head in 1869, to 63^ lbs. per head in 1880. 
 It is not wonderful under these circumstances that 
 the sugar trade, in spite of the desire of some of the 
 refiners for protective duty, is in a condition of great 
 prosperity — a fact which the returns leave beyond a doubt, 
 and which is confirmed by information I have recently 
 received to the eftect that on a dissolution of partner- 
 ship, in the case of a great firm in the north, while the 
 original house is maintaining its production, the outgoing 
 members of the firm have just purchased eight or ten acres 
 of land in London on which they propose to erect a 
 refinery at a cost of about jQiz^o^ooo, which will turn out 
 something like 70,000 tons of refined sugar per annum. 
 Then, in the same period, the consumi)tion of tea has in- 
 creased from 3'63 lbs. to 4*59 lbs. per head per annum ; of 
 tobacco, from i -35 lbs. to i '43 lbs. ; and of spirits, British 
 and imported together, from -98 of a gallon to I'og gallons. 
 It is imjjossible to ignore the significance of these facts, 
 which show that whatever may have been the depression 
 of trade it has not yet affected the power of the working 
 classes to procure for themselves increasing quantities of 
 the necessities, the comforts, and the luxuries of life.* 
 There is one other article to the consumption of which I 
 lefer with some reserve, as I have been unable to check the 
 figures which I have obtained from an interesting statistical 
 work, called " The Progress of the World ; " but, in this 
 book I find it stated that during the period of 20 years, 
 
 * See also Appendix, T.able VIII.
 
 AND RECIPROCITY. 1 7 
 
 from 1831 to 1850, the consumption of wheat per inhabitant 
 was 270 lbs. per annum. In the nine years, 187 1 to 1879, it 
 had risen to 341 lbs., and in the same period the price had 
 ■fallen from 55s. per quarter to 48s., which is a fact of the 
 more importance and interest because it has been shown 
 "by Dr. Farr, in his statistical abstracts, that the death-rate 
 of the population falls 3 per cent, for each 2s. per bushel in 
 the price of wheat. 
 
 I may also refer to the subject of pauperism. If the 
 working classes were being ruined in consequence of a mis- 
 taken fiscal and commercial policy, the result would be 
 manifest in the Poor Law returns, but on the contrary, it 
 appears that while in 1869 1,167,000 persons were receiving 
 pauper relief in England and Scotland, in 1880 the numbers 
 had fallen to a little under 902,000 persons.* 
 
 As regards emigration, while the total number of persons 
 of British and Irish origin who left these shores in six 
 years, 1869 to 1874, was 1,218,000, in the six years be- 
 tween 1875 and 1880 the numbers fell to 850,000; and 
 it is remarkable that in protected Germany, during that 
 period, emigration has considerably increased. f 
 
 I must now go back for a moment to the excess of 
 imports over exports which causes so much anxiety to a 
 •certain class of persons in this country, and is regarded by 
 them as a sign of weakness and a proof of our commercial 
 decline. I consider it on the contrary, as a fact, which 
 ought to give us the greatest satisfaction, and I think I can 
 show conclusively that this is the case. Let us take a com- 
 prehensive view of the question. I find that during the last 
 forty years, which embraces the whole Free Trade period, the 
 total balance of trade or excess of imports over exports is 
 roughly speaking, ;^i, 600,000,000. Now how is it supposed 
 that this is paid for? It seems to be the idea with some 
 persons that the whole of this vast sum has been paid by 
 this country in what they call " hard cash," meaning buUion 
 
 * See also Appendix, Table IX., showing amount of pnuperism in the 
 United Kingdom, and the proportion to population, from i860 to i88o. 
 
 t See also Appendix, Table X., showing the proportion of emigration 
 to population, 1869 to 1880; and Table XI., showing the increase in 
 Savings Banks deposits. See also Table VI., for increase in Third Class 
 Railway Traffic.
 
 1 8 THE FRESCll TREATY 
 
 and specie. But an examination shows that during the same 
 period the imports of bullion and specie have exceeded the 
 exports by something like ^'40,000,000, and therefore the 
 total balance of goods and specie together must be taken at 
 ;;^i, 640,000,000. 
 
 Again, I ask, how is this accounted for? Is it supposed 
 that this country owes that sum to other nations ? Nothing 
 can be farther from the fact. On the contrary, in the period 
 to which I have referred, the indebtedness of other nations 
 to this country has enormously increased. It is now estimated 
 at not less than ^^i, 500,000,000, and no one I imagine 
 would put its amount at the commencement of the period 
 at more than ^500,000,000. Consequently, foreign coun- 
 tries, while sending us ;;^i, 640,000,000 more than they have 
 received from us, have at the same time got into our debt 
 to the extent of ;,^i, 000,000,000. This investment has been 
 made not in specie or bullion, but in English goods, and if 
 it had not been made our exports would have been some- 
 thing like ;^i, 000,000, 000 less, and the balance of trade 
 would h:ive been increased to the larger sum I have named. 
 What does this enormous balance represent then ? In the 
 first instance it represents the cost of freight, the carrying 
 trade of the world, and especially of English goods, having 
 passed almost entirely into English hands.* But over and 
 above this item it represents nothing more nor less than the 
 profit derived by this country from its external trade and the 
 interest from its investments abroad, during these forty years. 
 
 There is another way of looking at this matter. Instead 
 of taking it in bulk, consider the details of our foreign trade 
 and let us follow out a particular transaction. I have seen 
 it stated that in Birmingham there exists a profitable industry 
 in the manufacture of idols for South African negroes, and 
 another industry for the manufacture of guns warranted to- 
 burst the first time they are fired. Generally speaking, I 
 observe that everything which is said about Birmingham is- 
 inaccurate, and I disclaim any belief in these stories ; but 
 suppose for the sake of argument that this charge against 
 the morality of my fellow-townsmen could be substantiated, 
 and that a Birmingham manufacturer sells a brass deity to- 
 « See also Appendix, Tables XII., XIII., and XIV.
 
 AKD RECIPROCITY. 19 
 
 the ncgioes, or a gun such as those which were disposed of 
 by the late Government to the number of 200,000 at the rate 
 of 2S. 6d. a-piece ; then, if for either of these commodities 
 the Birmingham trader received an ounce of gold, as he 
 well might, in return, the transaction would appear in the 
 Statistical tables as an export of half-a-crown, and an import 
 of about ^^3. The balance of trade would be £^2 17s. 6d. 
 against the Birmingham tradesman, and yet I do not think 
 he would have any cause to be dissatisfied with the 
 pecuniary results of the transaction. But why should what 
 is profitable in the case of the individual become unprofit- 
 able when multiplied by the thousand or the million in the 
 case of the nation ? And yet this is the contention of 
 gentlemen who fume and fret whenever the value of wliat 
 we receive is greater than the value of what we give. 
 
 I have a few more words to say on the proposition that 
 foreign nations have benefited during the period of depression 
 in this country. This supposition is entirely unwarranted 
 by the facts. There are periods of depression in all 
 countries, although it is important to bear in mind that they 
 are not always co-incident, and that it is therefore unfair to 
 compare the same years without taking circumstances into 
 account. Taking first the case of France, and dealing with 
 exports only as a test of prosperity, I find that the exports of 
 domestic produce, which averaged in the two years 1858-9 
 ;^83, 000,000, had increased in the two years 1878-9 to 
 _;^'i 28,000,000, an increase of ;^45, 000,000, or 54 per cent. 
 In the United Kingdom the increase in the same period 
 was from ;^i23, 000,000 to ;^i92, 000,000, an actual 
 increase of ^69,000,000, and a percentage of increase of 
 57 per cent. On these figures I have to make two observa- 
 tions : first, that it is more important to consider the actual 
 increase in money than the percentage, because, as the 
 initial figures in the case of foreign countries are very much 
 smaller than those of English trade, the proportionate 
 increase may well be larger, even when the actual increase 
 is very mucli less ; and, secondly, I must point out that the 
 increase, such as it is, in French trade is much greater than 
 it would have been but for the loss of Alsace and Lorraine. 
 In other words, while the internal trade of France has
 
 THE FRENCH TREATY 
 
 suffered by the cession of territory, the external trade 
 has increased by the transfer of this portion of her internal 
 trade, or a considerable part of it, to the statistics of her 
 external commerce. If to-morrow Ireland were separated 
 from the United Kingdom, no doubt a large trade between 
 the two countries would continue to exist, but it would go 
 to swell the exports, and apparently to increase the foreign 
 trade, and would cease to be reckoned as part of the in- 
 ternal transactions of the country. Taking these facts into 
 account it would appear, that in protected France the ad- 
 vance and improvement in foreign trade has been much less 
 marked and considerable than in Free Trade England. 
 
 I have already referred to the fact that in 1877 trade in 
 France was so bad that a commission was specially appointed 
 to inquire into it. In the United States the depression 
 ]>receded that in this country. It began and finished 
 earlier ; but as a proof of its severity, I may mention that 
 while from 1869 to 1873 the im.migration into the United 
 States averaged 200,000 per annum, in 1874 the balance 
 of immigration over emigration was only about 1,000. In 
 1878 the iron industry was so depressed that according to 
 the trade reports nearly two-thirds of the furnaces were out 
 of blast, while in 1866 the total exports from the United 
 States which had been ;^65, 000,000 in i860 had fallen to 
 ^27,000,000. Next year they were about double this 
 amount — the fluctuations being largely due to the action of 
 the Civil War, but they are illustrations of the fluctuations 
 which take place in the trade of all countries at some time or 
 another. I remember being in Belgium, at Liege, during 
 the height of the depression in the iron trade in this 
 country, and when it was supposed that Belgian manu- 
 facturers were largely competing with us. I found there 
 the same complaints as to loss of trade and of profit, and I 
 was told that the manufacturers were working at a loss, and 
 selling only to keep their works partially employed, while 
 the shares of great iron companies both in Belgium and 
 Westphalia had fallen in many cases much below par. 
 And in connection with this I might mention a statement 
 which was made to me by Mr. Hick, formerly an esteemed 
 member of this House. I had seen in the newspajjcrs, as a
 
 AND RECIPROCITY. 
 
 proof of the extent of foreign competition, a report that the 
 girders for a large factory in Lancashire had been purchased 
 in Belgium, and I asked Mr. Hick to explain it. He said — - 
 " the best explanation I can give you is a contradiction, for 
 those very girders were cast in my own foundry." The 
 fact is that the effects and extent of foreign competition are 
 almost always exaggerated. Unfounded statements are 
 made and accepted as true without inquiry, but I am con- 
 fident from my own experience that as regards the hard- 
 ware and iron trades more especially, of which I know most, 
 though I think the same remark would apply to other 
 industries also, there never has been for any considerable 
 time together, serious competition from foreign manu- 
 facturers with the standard industries of this country. 
 Within the last few days I have seen an extract from a 
 report of the Chamber of Commerce of Berlin in which a 
 protest is made against the Protectionist policy of Prince 
 Bismarck, and if time permitted I might multiply instances 
 to show that, whatever the extent of the depression here 
 may be, it has been in recent years paralleled or exceeded 
 in every other country in the world. 
 
 And now, sir, I turn to a consideration of the remedies 
 which are proposed by hon. gentlemen opposite, for a state 
 of things which, as I have shown, exists largely at all events 
 only in their imagination. We are to adopt a policy of 
 Reciprocity and Retaliation. But, I want to know, what 
 are the precise steps by wdiich this policy is to be carried 
 into effect ? Honourable gentlemen opposite do not agree 
 among themselves. The hon. member for Preston (Mr. 
 Ecroyd) is the only speaker who has gone into some 
 details. He said that it is the duty of our working men to 
 make some sacrifice in order to re-conquer the free and 
 fair trade which we have lost. There is no doubt about 
 the sacrifice which tlie working men would have to make in 
 order to adopt the policy of the hon. gentleman. His view 
 appears to be this — and I do not say that there is not 
 an appearance of justification for it — we are to retaliate on 
 foreign countries by putting on protective duties in order to 
 induce them to take off the duties which they now levy on 
 our goods. The hon. gentleman appeared to consider that
 
 ■IHE FRESCH TREATY 
 
 his proposal was a temporary expedient, to be adopted with 
 rehictance and regret, and to be abandoned as soon as pos- 
 sible. But suppose foreign countries are not persuaded by 
 the hon. gentleman, or by his retaliatory i)olicy, to take off 
 their duties? How long is the experiment to last ? Is it to 
 be for five years, or for ten years, or for twenty years, or for 
 ever, that the working classes are to be called upon to make 
 the sacrifices which it is admitted will be entailed upon them? 
 Then again, on what goods are we to retaliate ? On 
 which of our imports are we to put duties ? That is a 
 question of cardinal importance on which the advocates of 
 Reciprocity ought to, but do not, agree. Does the hon. 
 gentleman propose, for instance, to tax foreign manufac- 
 tures ? I understand him to say that it would be foolish in 
 the last degree to attempt to put duties on the principal 
 manufactures of foreign countries. (Mr. Ecroyd explained 
 that he meant that it would be foolish to put the same 
 duties. What he proposed was to put moderate duties on 
 foreign manufactures.) I am glad to have the explanation 
 of the hon. member. I understand that if the foreigner 
 charges 40 or 50 per cent, duty on English manufactures, 
 the hon. member would retaliate by putting 10 per cent, on 
 the manufactures of the foreigner. But the hon. member is 
 altogether inconsistent in such a proposal. He stands up 
 as the advocate of " Fair " trade, but does he not see that 
 it is just as unfair that there should be duties, say of 40 per 
 cent, on one side and 10 per cent, on the other, as if there 
 were 30 per cent, on one side and none on the other? 
 Unless the duties imposed by us are the same as those 
 imposed against us it is clear that trade will not be fair, 
 although it will no longer be free. But there is another 
 point which I submit to the consideration of the House. 
 England is of all countries the most vulnerable in this 
 matter — that is to say, that in spite of, or rather I am 
 inclined to say, in consequence of the Protectionist policy 
 of foreign countries, we export a great deal more than we 
 import in the way of manufactures. (Mr. Ecroyd : The 
 great bulk of our exports go to India and China.) I chal- 
 lenge the view of the hon. member, and I say that there is 
 no country with which we have trade of any importance to
 
 AND RECIPROCITY. 23 
 
 which our exports of manufactured goods are not in excess 
 of our imports. Take the case of the United States as an 
 example. That is the worst instance of Protection with whicli 
 we have to deal. I am speaking from memory, and I do not 
 pledge myself to the exact figure, but, roughly speaking, I 
 am under the impression that we export about ^16,000,000 
 of manufactured goods to the United States, while our 
 imports are only about ;!^3,ooo,ooo, the rest, and great bulk 
 of our imports, consisting entirely of raw materials and 
 food ; and, therefore, such a commercial war as the hon. 
 member proposes would do us more harm than the foreigner, 
 who might retaliate on our retaliation by prohibiting, or 
 still further increasing his duties on, our goods, or even by 
 putting a duty on the exports of articles which we do not 
 produce for ourselves.* 
 
 I have already asked how long these sacrifices are to be 
 imposed on the working-men : for ten, for twenty, or for 
 thirty years? {Mr. Ecroyd : No, no.) The hon. member 
 only intends it as a temporary expedient, but the efiect of 
 such a policy Avill be to foster weak industries unsuited to 
 the country, such, for instance, as those which existed in 
 Coventry or at Bethnal Green, which, even in the times of 
 Protection had only an unhealthy life, and which, when the 
 time of experiment ceased, would be immediately destroyed, 
 carrying with them in their ruin the fortunes of all who had 
 been tempted by this mistaken policy to engage in them. 
 (Mr. Ritchie: Wines.) Sir, I have already detained the 
 House too long in answer to the speeches which have been 
 made. If I am to undertake to answer arguments in the 
 nature of interjections, I am afraid I shall have to make an 
 excessive demand on the patience of hon. members. But 
 the answer which I have made to the hon. member for 
 Preston does not satisfy the hon. member for the Tower 
 Hamlets. It is the difficulty of this subject that every man 
 has his own separate specific, though all call it by the same 
 name of Reciprocity; but the Reciprocity of the Tower 
 Hamlets differs from the Reciprocity of Preston ; and the 
 
 * Sec ako Appendix, Tables XV. and XVI., showing for 18S0 exports 
 (f manufactures to L'liitcd States ^21,607,000, and imports of manufac- 
 tures, ^^2,578,000.
 
 24 THE FRENCH TREATY 
 
 Reciprocity of the Tower Hamlets differs at different times 
 in the evening. What I now understand the hon. member 
 for the Tower Hamlets to say is that we ought to put a duty, 
 not on manufactures generally, but on wines, and gloves, 
 and silks. As regards silks and gloves, I have the same 
 answer to make which I have already made to the hon. 
 member for Preston. If they are not industries which can 
 be maintained in this country without Protection, it would 
 be most imprudent and unwise to foster them by unnatural 
 means, and the result would only end in the misery and 
 suffering of all concerned. Wine, no doubt, stands on a 
 different footing. The duty on wine and on spirits is not 
 protective ; it is partly fiscal and partly moral, and might be 
 dealt with upon those considerations ; and if the treaty nego- 
 tiations with France should break down, the English Govern- 
 ment would be perfectly justified in dealing with the wine 
 and spirit duties as they thought best for the interests of the 
 country. 
 
 "Well then, does any one propose to put a duty on raw 
 materials ? The hon. member for Preston, in the speech 
 which he made at Exeter Hall, protested against so suicidal 
 a proposal. Is it conceivable that we should ever be foolish 
 enough to do away with the foundation of a great part of our 
 trade, namely, the freedom with which we receive the raw 
 material ? Take the case of sugar. W^hy is it that this trade 
 has been so prosperous of late years, so much so that 
 I have heard it currently reported that one of the leaders in 
 this manufacture has made a fortune of one or two millions 
 sterling in less than twenty years ? It is partly, at all events, 
 in consequence of the injudicious bounty system adopted by 
 other countries which has enabled our manufacturers to get 
 their raw sugar at less than cost price, and has enabled them 
 to undersell the manufacturers of the rest of the world, 
 especially in neutral countries. This is a fact which the 
 Austrians have begun to find out ; and manufacturers, both 
 in Austria and in France, are naturally protesting against a 
 system which places this immense advantage at the disposal 
 of the British refiner. 
 
 Lastly, sir, is any one bold enough to propose that 
 we should put duties upon food. The hon. member for
 
 AND RECIPROCITY. 25 
 
 Preston no doubt has the courage of his convictions. 
 He has referred to the sacrifices which he would require 
 from the working classes, and he does not hesitate to make 
 the demand upon them that they should pay an extra price 
 of 10 per cent, upon the most important articles of their 
 daily consumption. Well, sir, I can conceive it just possible, 
 although it is very improbable, that under the sting of great 
 suffering, and deceived by misrepresentations, the working 
 classes might be willing to try strange remedies, and might 
 be foolish enough to submit for a time to a proposal to tax 
 the food of the country ; but one thing I am certain of, 
 if this course is ever taken, and if the depression were 
 to continue, or to recur, it would be the signal for a state of 
 things more dangerous and more disastrous than anything 
 which has been seen in this country since the repeal of the 
 Corn Laws. With the growth of intelligence on the part of 
 the working classes, and with the knowledge they now 
 possess of their own power, the reaction against such a 
 policy would be attended by consequences so serious that I 
 do not like to contemplate them. A tax on food would 
 mean a decline in wages. It would certainly involve a 
 reduction in their productive value ; the same amount of 
 money Avould have a smaller purchasing power. It would 
 mean more than this, for it would raise the price of every 
 article produced in the United Kingdom, and it would in- 
 dubilably bring about the loss of that gigantic export trade 
 which the industry and energy of the country, working under 
 conditions of absolute freedom, has been able to create. 
 
 Sir, I think I have now dealt in turn with the arguments 
 which have been brought before the House. I may 
 summarise my conclusions by quoting to the House the 
 opinion of one entided to respect as an authority on this 
 subject. The extract I am about to read is from a work 
 entitled " Twenty Years of Financial Policy," and was 
 written in 1862 by the right hon. gentleman the member 
 for North Devon (Sir Stafford Northcote). It is, in my 
 opinion, as applicable to the present state of things as it was 
 to the time when it was written, and I do not suppose that 
 the right hon. gentleman has swerved since then one iota 
 from the views which he has so well expressed. He says : —
 
 THE FRESCH TREATY. 
 
 "The gi-eat fiscal and commercial measures of the last 
 twenty years have wrought a wonderful change in the 
 circumstances of the country. A complete revolution has 
 taken place in many parts of our moral, social, and political 
 system which may be directly traced, either wholly or in 
 great part, to the effects of those measures. Our material 
 wealth, too, has enormously increased — our trade has 
 developed, and our manufactures have been carried to 
 great perfection. There have been seasons of temporary, 
 local, and partial suffering, and the changes which have 
 proved beneficial to the public have sometimes pressed 
 hardly on particular interests ; but, upon the whole, it can 
 hardly be questioned that the condition of every portion of the 
 community has been greatly improved by the new policy." 
 
 In conclusion, I can assure the House that Her Majesty's 
 Government are fully alive to the feeling in this country 
 with reference to the present negociations. That feeling is 
 not keen for the conclusion of a treaty, and would not be 
 satisfied with any arrangement which was worse than the 
 one now expiring ; but 1 believe it would be disappointed 
 if any eftbrt were spared to bring the negociations to a 
 successful issue. As long, therefore, as there appears to be 
 a chance of a happy result, we will not be forced by 
 unwarrantable and frivolous charges of concealment and 
 secrecy, or by attempts to impose extortionate or unreason- 
 able conditions, to give up the negociations in a pet, 
 and without exhausting every means of arriving at an 
 understanding, honourable and beneficial to both countries. 
 The commercial results of the Cobden Treaty I have shown 
 to be of great importance — of great value to this country, 
 and of greater value still to France ; since the trade, large 
 as it is, is a much smaller proportion of our total trans- 
 actions than it is of those of our neighbours across the 
 Channel ; but these results are, in my opinion, overshadowed 
 by the political advantages of the good understanding which 
 has so long prevailed. I hope that, by the exercise of 
 wisdom and discretion, and good feeling on both sides, it 
 may yet be possible to renew and to extend relations which 
 have contributed so materially to the prosperity of both 
 countries, and to the welfare and the peace of the world.
 
 APPENDIX 
 
 The following Tables, prepared by the Statistical De- 
 partment of the Board of Trade are here added, as further 
 illustrating the facts stated in the foregoing speech : — 
 
 Table I. — Showing the trade of the United Kingdom with France 
 bffore and after the Cobden Treaty — in millions — from official statistics 
 of the United Kingdom. 
 
 Exports to France, 
 
 Average 
 of Three 
 Years. 
 
 1857-59 
 1860-62 
 1863-65 
 1866-68 
 1869-71 
 1872-74 
 
 1875-77 
 1878-80 
 
 Years. 
 1878 .. 
 1S79 ... 
 1880 ... 
 
 Imports 
 
 from 
 France, 
 -millions. 
 
 British 
 
 and 
 
 Irish Produce. 
 
 £, — millions. 
 
 Foreign 
 and 
 Colonial Produce. 
 ;i— millions. 
 
 Total. 
 
 14 
 
 5 
 
 5 
 
 10 
 
 19 
 
 8 
 
 9 
 
 17 
 
 27 
 
 9 
 
 15 
 
 24 
 
 35 
 34 
 
 II 
 14 
 
 13 
 12 
 
 24 
 26 
 
 44 
 
 46 . 
 
 17 
 15 
 
 12 
 12 
 
 29 
 
 27 
 
 40 
 
 15 
 
 12 
 
 27 
 
 Total for each of last Tiireb Years. 
 41 ... 15 ... 12 ... 27 
 38 ... 15 ... 12 ... 27 
 
 42 
 
 16 
 
 12 
 12 
 
 28
 
 28 
 
 APPENDIX. 
 
 Taule II. — Showinij the total Impoits and E.\poits of the United 
 Kinj^dom for the six years, 1869-74 ^"<J 1875-1880, compared— in 
 millions — from official statistics of the United Kingdom. 
 
 A. — I.M PORTS. 
 
 Years, 
 
 Total Less Re- Net 
 
 Imports. ' E.xports. Imports. 
 
 Years. 
 
 1 
 
 Total Less Re- 
 Imports. Exports. 
 
 Net 
 
 Imports. 
 
 £ 
 
 Millions. 
 316 
 319 
 
 316 
 306 
 
 348 
 
 1,946 
 
 1869 
 1870 
 1871 
 1872 
 1873 
 1874 
 
 £ 
 Millions. 
 
 295 
 
 303 
 
 331 
 
 355 
 371 
 370 
 
 £ 
 
 Millions. 
 
 47 
 44 
 61 
 
 ^l 
 56 
 
 58 
 
 £ 
 Millions. 
 248 
 259 
 270 
 297 
 
 315 
 312 
 
 1875 
 1876 
 1877 
 1878 
 1879 
 1880 
 
 £ £ 
 Millions. Millions. 
 
 374 58 
 
 375 56 
 394 53 
 369 53 
 363 57 
 411 63 
 
 Total 
 
 2,025 
 
 324 
 
 1,701 
 
 Total 
 
 2,286 340 
 
 B. — Exports or British and Irish Produce. 
 
 
 £ 
 
 
 £ 
 
 Years. 
 
 Millions. 
 
 Years. 
 
 Millions 
 
 1869 ... 
 
 ... 190 
 
 1875 
 
 223 
 
 1870 ... 
 
 . . . 200 
 
 1876 
 
 201 
 
 187I ... 
 
 ... 223 
 
 1S77 
 
 199 
 
 1872 ... 
 
 ... 256 
 
 1S78 
 
 193 
 
 1873 - 
 
 ... 255 
 
 1879 
 
 192 
 
 1874 ... 
 
 ■•• 239 
 
 1880 
 
 223 
 
 Total 
 
 1,363 
 
 Total ...1,231 
 
 Note. — The prices of the exports were much lower in the years 
 1875-80 than in the previous six years — especially cotton manufac- 
 turers, coal and iron. (See Report to Board of Trade on Prices of 
 Imports and Exports, C. 2484, Sept. 1880.) Subsequent to 1878, 
 there was a further fall of prices.
 
 APPENDIX. 
 
 29 
 
 Table III. — Showing the amounts of Raw Material produced in 
 the following Industries of the United Kingdom in the six years 1869 
 to 1874, and 1875 to 1880, compared: — 
 
 A,— Production of Pig Iron. 
 [hi Thousands of Tons. ) 
 
 Years. 
 
 Tons. 
 
 Years. 
 
 Tons. 
 
 1869 
 
 5,446 
 
 1875 
 
 6,365 
 
 1870 
 
 5,964 
 
 1876 
 
 6,556 
 
 1871 
 
 6,627 
 
 1877 
 
 6,609 
 
 1872 
 
 6,742 
 
 1878 
 
 6,381 
 
 1873 
 
 6,566 
 
 1879 
 
 5,995 
 
 1874 
 
 5>99i 
 
 1880 
 
 7,749 
 
 Annual Averag 
 
 e ... 6,223 
 
 Annual Average . . . 
 
 6,609 
 
 Years. 
 1869 
 1870 
 1871 
 1872 
 1873 
 1874 
 
 B. — Production of Coal. 
 {In Thousands of Tons.) 
 
 Tons. 
 107,428 
 110,431 
 117,352 
 123,497 
 127,017 
 125,068 
 
 Annual Average 118,465 
 
 Years. 
 
 1875 
 1876 
 1877 
 1878 
 1879 
 1880 
 
 Annual Av 
 
 erage 
 
 Tons. 
 
 131,867 
 
 133,345 
 134,611 
 
 132,655 
 133,808 
 146,819 
 
 135,517
 
 3° 
 
 APPENDIX. 
 
 Taui.e I\'. — Showing the amounts of Raw Material used, or of 
 Production in the following Industries of the United Kingdom in the 
 six years 1869 to 1874, and 1875 to 1880, compared. 
 
 A.— Cotton. 
 [In Millions of lbs. and yards.) 
 
 Amount of Raw Cotton used in the | N^^ber of Yards of Piece Goods 
 United Kingdom. 1 Exported • 
 From Ellison's Circular. ji ^ ' 
 
 Years. 
 
 lbs. 
 Millions 
 
 Years. 
 
 lbs. 
 
 Millions. 
 
 Years. 
 
 Yards. 
 
 Millions. 
 
 Years. 
 
 Yards. 
 Millions. 
 
 1869 
 1870 
 187I 
 1872 
 1873 
 1874 
 Annual " 
 Average 
 
 939 
 1,072 
 1,205 
 
 1,175 
 1,246 
 1,266 
 
 1,150 
 
 1875 
 I&76 
 1S77 
 1878 
 
 1879 
 1880 
 
 Annual 
 Average 
 
 1,230 
 1,280 
 1,237 
 1,177 
 
 1,173 ; 
 1,373 
 
 - 1,245 
 
 1869 
 
 1870 
 
 1871 
 
 1872 
 
 1873 
 
 1874 
 Annual 1 
 Average 
 
 2,869 
 3,267 
 3,417 
 3.538 
 3,484 
 3.607 
 
 3,364 
 
 1875 3,562 
 
 1876 3,669 
 
 1877 3,838 
 
 1878 3.619 
 
 1879 3725 
 
 1880 4,496 
 
 Annual ") -i c .0 
 Average) 0'^'^ 
 
 • These particular., are given to show the increase of manufacturing better than 
 the amounts of raw material consumed. The same quantity of cotton manufactures 
 more yards than it did. 
 
 B.— Wool.. 
 
 (From Schwartze df Co.'s Circular.) 
 Amount of Raw Wool Used {in Millions of lbs.). 
 
 Ye.nrs. 
 
 1869 
 1870 
 1871 
 1872 
 
 1S73 
 1874 
 
 Annual Average 
 
 lbs. 
 Millions. 
 
 299 
 323 
 337 
 324 
 359 
 365 
 
 334 
 
 Years. 
 
 1875 
 1876 
 1S77 
 1878 
 
 1879 
 1S80 
 
 .Annual Average 
 
 lbs. 
 Millions. 
 
 351 
 369 
 373 
 352 
 321 
 370 
 
 356
 
 APPENDIX. 
 
 31 
 
 Table V. — Showing the Annual Gross Assessment to Propeity 
 and Income Tax in the United Kingdom, in the six years 1869-74, 
 and six years 1875-80, compared — in millions.* 
 
 
 Schedules 
 
 1 
 
 
 SCHEDULF.S 
 
 , \ 
 
 Years. 
 
 
 
 Total 
 
 Years. 
 
 
 Total 
 
 A. 
 
 B. 
 
 C. 
 
 D. 
 
 E. 
 
 A. 
 
 E. 
 
 C. 
 
 D. 
 
 E^. 
 
 
 C 
 
 /; 
 
 I 
 
 f. 
 
 f. 
 
 C 
 
 
 I 
 
 £ 
 
 £ 
 
 I 
 
 I 
 
 £ 
 
 
 M;ls, 
 
 Mils. 
 
 MJs. 
 
 Mils. 
 
 M.ls. 
 
 Mils. 
 
 
 Mils. 
 
 Mli. 
 
 Vills. 
 
 Mils. 
 
 Mils. 
 
 Mils. 
 
 1869 
 
 145 
 
 64 
 
 .35 
 
 173 
 
 24 
 
 441 
 
 1875 
 
 162 
 
 t)7 
 
 42 
 
 267 
 
 33 
 
 571 
 
 1870 
 
 147 
 
 64 
 
 7,^ 
 
 178 
 
 26 
 
 451 i 
 
 1876 
 
 if^5 
 
 67 
 
 42 
 
 272 
 
 34 
 
 5^0 
 
 1871 
 
 IS2 
 
 65 
 
 .38 
 
 1 89 
 
 27 
 
 471 
 
 1877 
 
 174 
 
 69 
 
 40 
 
 257 
 
 30 
 
 570 
 
 1872 
 
 154 
 
 ^S 
 
 39 
 
 203 
 
 28 
 
 489 
 
 1878 
 
 177 
 
 69 
 
 40 
 
 261 
 
 31 
 
 57^S 
 
 1873 
 
 156 
 
 65 
 
 40 
 
 229 
 
 30 
 
 520 
 
 1879 
 
 180 
 
 fc9 
 
 40 
 
 257 
 
 32 
 
 57^ 
 
 1874 
 
 160 
 
 56 
 
 42 
 
 250 
 
 31 
 
 549 
 
 i88ot 
 
 i«5 
 
 69 
 
 40 
 
 249 
 
 32 
 
 575 
 
 Annual 
 Average 
 
 152 
 
 65 
 
 3S 
 
 204 
 
 28 
 
 487 
 
 Annual 
 Average 
 
 174 
 
 68 
 
 41 
 
 260 
 
 32 
 
 575 
 
 Under Schedule A all Lands, Tenements, &c., are assessed. 
 
 ,, ,, E all Profits from the Occupation of Lands, &c. , are 
 
 assessed. 
 ,, ,, C all Dividends, &c., payable out of the Public 
 
 Revenue are assessed. 
 ,, ,, D all Gains from Professions, Trades, Railways, 
 
 Canals, &c., are assessed. 
 ,, ,, E all Licomes, Pensions, &c. , payable out of the 
 
 Public Revenue, and by Corporate Bodies, &c., 
 
 are assessed. 
 
 • ;t 6,000,000 are added to Totals of earlier years in respect of gross assessments 
 in Irel.-iiid, so as to make the figures comparable with those in later years, 
 t Partly estimated.
 
 32 
 
 APPENDIX. 
 
 Table VI. — Showing the amount of traffic on railways of the 
 United Kingdom in the six years, 1869 — 74, and 1875 — 80, compared: — ' 
 
 A. — Total Keceii'TS. 
 
 •,-._, Goods Passenger 
 1 ears. Receipts. Receipts. 
 
 Total. 
 
 Years. 
 
 Goods Passenger 
 iieceipts. Receipts. 
 
 Total. 
 
 
 £. £ 
 
 £ 
 
 
 £ I 
 
 £ 
 
 
 .Millions. Millions. 
 
 Millions. 
 
 
 Millions. Millions. 
 
 Million 'i 
 
 1869 ... 
 
 22 ... 19 .. 
 
 41 
 
 1875 .. 
 
 33 ... 26 .. 
 
 • 59 
 
 1870 ... 
 
 24 ... 19 .. 
 
 43 
 
 1876 .. 
 
 34 .. 26 .. 
 
 . 60 
 
 1871 ... 
 
 26 ... 21 .. 
 
 47 
 
 1877 .. 
 
 34 ... 27 .. 
 
 . 61 
 
 1872 ... 
 
 29 ... 22 .. 
 
 51 
 
 1878 .. 
 
 33 ... 27 .. 
 
 . 60 
 
 1873 ... 
 
 32 ... 24 .. 
 
 56 
 
 1879 .. 
 
 33 ■■• 26 .. 
 
 • 59 
 
 1874 ... 
 
 32 ... 25 .. 
 
 57 
 
 1880 .. 
 
 Annual ') 
 Average ) 
 
 36 ... 27 . 
 34 ... 26 
 
 • 63 
 
 Annual ) 
 Average y 
 
 27 ... 22 
 
 49 
 
 . 60 
 
 13. 
 
 —Receipts from Thiri 
 
 D Class Passengers onl\ 
 
 
 Years. 
 
 
 Millions. 
 
 Years. 
 
 
 £ 
 
 Millions 
 
 1869 
 
 
 7 
 
 1875 
 
 
 • 13 
 
 1870 
 
 
 7 
 
 1876 
 
 
 14 
 
 1871 
 
 
 8 
 
 1877 
 
 
 . 14 
 
 1872 
 
 
 10 
 
 1878 
 
 
 . 14 
 
 1873 
 
 
 12 
 
 1879 
 
 
 14 
 
 1874 
 
 
 12 
 
 1880 
 
 
 . 15 
 
 Annual ) 
 
 
 
 Annual ) 
 
 
 • 14 
 
 Average f 
 
 
 9 
 
 Average )' 
 
 
 Table VII. — Amount of Clearing in the London Bankers' Clearing 
 House in the si.x years, 1869 to 1874, and 1875 to 1880, compared— in 
 millions : — 
 
 Years. 
 
 £ 
 
 Years. 
 
 £ 
 
 1S69 
 
 ... 3,602 
 
 1S75... 
 
 ... 5,647 
 
 1870 
 
 ... 3.905 
 
 1876... 
 
 4.959 
 
 1871 
 
 ... 4.787 
 
 1877... 
 
 5,018 
 
 1872 
 
 - 5.993 
 
 1878... 
 
 5.007 
 
 1873 
 
 ... 6,182 
 
 1879... 
 
 4.959 
 
 1874 
 
 - 5.917 
 
 1880... 
 
 5.718 
 
 Annual ) 
 Average > 
 
 ... 5,064 
 
 Annual ) 
 Average ) 
 
 S.218
 
 A PPENDIX. 
 
 33 
 
 Table VIII. — Showing the consumption of the following Articles 
 per head of the Population of the United Kingdom in each of the years 
 1840, 1850, i860, and from 1869 to 1880. 
 
 
 Suc;ar. 
 
 Tea. 
 
 Coffee. 
 
 Toliacco. 
 
 S .ir;t.« 
 
 'ears. 
 
 lbs.. 
 
 lbs. 
 
 , lbs. 
 
 lbs. 
 
 gills. 
 
 1840 
 
 15-20 
 
 1-22 
 
 1-08 
 
 0-86 
 
 0-97 
 
 1850 
 
 25-26 
 
 1-86 
 
 I-I3 
 
 I -00 
 
 1-04 
 
 i860 
 
 34T4 
 
 2-67 
 
 1-23 
 
 1-22 
 
 0-93 
 
 1869 
 
 42-56 
 
 3-63 
 
 0-94 
 
 1-35 
 
 0-98 
 
 1870 
 
 47-23 
 
 3-81 
 
 0-98 
 
 I '34 
 
 I -01 
 
 1871 
 
 46-80 
 
 3-92 
 
 0-97 
 
 1-36 
 
 I 06 
 
 1872 
 
 47-37 
 
 4-01 
 
 0-98 
 
 1-37 
 
 I-I5 
 
 1873 
 
 51-59 
 
 4-11 
 
 0-99 
 
 i-^i 
 
 1-23 
 
 1874 
 
 56-37 
 
 4-23 
 
 0-96 
 
 1-/4 
 
 1-27 
 
 1875 
 
 62-85 
 
 4-44 
 
 0-98 
 
 1-46 
 
 1-30 
 
 1876 
 
 58-95 
 
 4-50 
 
 0-99 
 
 1-47 
 
 1-27 
 
 1877 
 
 64-96 
 
 4-52 
 
 0-96 
 
 1-49 
 
 1-23 
 
 1878 
 
 58-83 
 
 4-66 
 
 0-97 
 
 1-45 
 
 I-I9 
 
 1879 
 
 66-24 
 
 4-70 
 
 I -00 
 
 1-41 
 
 III 
 
 1880 
 
 63 -68 
 
 4-59 
 
 092 
 
 1-43 
 
 I -09 
 
 Table IX.- Showing the average number of Paupers in receipt 
 of relief in the United Kingdom in i860, and in each year from 1869 
 to 18S0 — years ended Lady-day in England and Wales and Ireland, 
 and Whitsunday in Scotland. 
 
 Number of Paupers 
 
 per 1,000 
 
 of Population. 
 
 35 
 
 40 
 40 
 39 
 37 
 33 
 31 
 30 
 28 
 27 
 27 
 28 
 29 
 
 Years. 
 
 Average Number 
 of Paupers. 
 
 1S60 
 
 1,006,993 
 
 1869 
 
 1,225,171 
 
 1870 
 
 1,235,006 
 
 1871 
 
 f-237>353 
 
 1872 
 
 1,172,655 
 
 1873 
 
 1,075,887 
 
 1874 
 
 1,016,551 
 
 1875 
 
 986,797 
 
 1S76 
 
 929,128 
 
 1877 
 
 897,052 
 
 1878 
 
 909,197 
 
 1879 
 
 952,924 
 
 1880 
 
 *i, 002,000 
 
 
 Partly estimated.
 
 3 + 
 
 APPENDIX. 
 
 Table X. — Statement showing the proportion to the population of 
 the Emigration from the United Kingdom of Tenons of British Origin 
 only, for each year from 1869 to 1S74, and from 1S75 to 1880, with the 
 averages for each period. 
 
 Emifjration of each Proportion 
 
 V'ear, and averapc of Emigration 
 
 Annual Emicralion to Population 
 
 of Period. per cent. 
 
 186,300 ... o'6o 
 
 202,511 ... 0*65 
 192,751 ... 0"6l 
 210,494 ... 0"66 
 
 228,345 ... 071 
 
 197,272 ... 001 
 
 Year 
 
 or 
 
 Period. 
 
 Estimated Population 
 at Middle of eacli 
 Year and Period. 
 
 1869 
 1870 
 1871 
 1872 
 1873 
 1874 
 Six yejrs, iS6g \ 
 to 1874 
 
 1875 
 1876 
 1877 
 1878 
 1879 
 1880 
 Six years, iSj^ ) 
 to iSSo ...\ 
 
 30.913.513 
 31.205,444 
 31.513.442 
 31.835,757 
 32,124,598 
 32,426.369 
 
 3i,66g,8s4 
 32,749,167 
 33.093.439 
 33.446,9.30 
 33.799.386 
 34,155,126 
 34.505,043 
 
 33,624,849 
 
 202,943 
 
 140,675 
 109.46;) 
 
 95.195 
 112,902 
 164.271 
 227,542 
 
 141,676 
 
 o'64 
 
 0-43 
 0-33 
 
 0-28 
 
 0-3^ 
 048 
 066 
 
 o '42 
 
 Table XI. — Showing the deposits of the Savings' Banks of the 
 United Kingdom in each of the years 1S69 to 18S0 {in Million!:). 
 
 Post Office Banks. 
 
 Trustees' Banks. 
 
 Total. 
 
 Millions. 
 
 Millions. 
 
 Millions 
 
 1869 £iz 
 
 /38 
 
 £iy 
 
 1870 IS 
 
 38 
 
 53 
 
 I87I 17 
 
 l) 
 
 56 
 
 1872 19 
 
 40 
 
 59 
 
 1873 21 
 
 41 
 
 62 
 
 1874 23 
 
 41 
 
 I64 
 
 1875 25 
 
 42 
 
 67 
 
 1876 27 
 
 43 
 
 70 
 
 1877 29 
 
 44 
 
 73 
 
 1878 30 
 
 44 
 
 74 
 
 1879 32 
 
 44 
 
 76 
 
 1880 34 
 
 44 
 
 78
 
 APPENDIX. 
 
 35 
 
 Table XII. — Statement of the per-centage of the foreign trade of 
 the United Kingdom carried on in British ships compared (in thousands 
 of tons). 
 
 
 Total Foreign 
 
 Total Carried in 
 
 Proportion of 
 Total Trade 
 
 Average of 
 
 Trade. 
 
 British Ships. 
 
 
 Three Years. 
 
 (Thousands of 
 
 (Thousands of 
 
 British Ships. 
 
 
 Tons.) 
 
 Tons.) 
 
 (Per cent.) 
 
 1854-6 
 
 19,582 
 
 11,537 
 
 59 
 
 1857-9 
 
 22,798 
 
 13,299 
 
 .. 58 
 
 1860-2 
 
 25,940 
 
 15,094 
 
 .. 58 
 
 1863-5 . 
 
 27,613 
 
 18,193 
 
 66 
 
 1866-8 
 
 32,566 
 
 22,095 
 
 68 
 
 1869-71 
 
 37,699 
 
 25,632 
 
 68 
 
 .1872-4 
 
 44,123 
 
 29,485 
 
 .. 67 
 
 1875-7 . 
 
 49,531 
 
 33-051 
 
 .. 67 
 
 1878-80 . 
 
 54,349 
 
 38,025 
 
 70 
 
 Table XIII. — Statement showing the proportion of the tonnage 
 of the United Kingdom to the tonnage of certain foreign countries at 
 different dates, multiplying steam tonnage by four, to reduce it to a 
 common denominator with sailing tonnage (in thousands of tons). 
 
 United Kingdom. 
 
 Foreign Countries. 
 
 (Thousands 
 of Tons.) 
 
 5,942 
 
 8,950 
 
 14,679 
 
 Per cent, of 
 Total. 
 
 .. 42 .. 
 
 .. 49 .. 
 
 ■ 55 •• 
 
 (Thousands 
 of Tons.) 
 
 8,143 
 
 9,217 
 
 11,992 
 
 Per cent, of 
 Total. 
 
 .. 58 .. 
 .. 51 
 
 .. 45 •■ 
 
 Total. 
 
 (Thousands 
 
 of Tons. ) 
 
 14,085 
 18,167 
 26,671 
 
 Year. 
 
 i860 
 1870 
 1880 
 
 • The Foreign Countries included are : France, Germany, Holland, Belgium, 
 Austria Hungary, Italy Sweden and Norway, Denmark, Greece, and the United 
 States (oversea tonnage).
 
 36 
 
 APPENDIX. 
 
 Table XIV. — Showinijthe Shipping Trade (jf the United Kingd<jm 
 at the date of the Repeal of the Navigation Laws, and in the six years 
 1869 — 74 and 1875 — 80, compared {in millions). 
 
 A.— Kntriks and Clearances at 1'orts in the United 
 Kingdom in the Foreign Trade. 
 
 1850 (the date of the Repeal of the Navigation Laws), 15 million tons. 
 
 i'ears. 
 
 Millions 
 of Tons. 
 
 Years. 
 
 Millions 
 'ions. 
 
 1S69 
 
 35 
 
 I?75 
 
 46 
 
 1S7O 
 
 37 
 
 1876 
 
 51 
 
 187I 
 
 42 
 
 1877 
 
 52 
 
 1S72 
 
 43 
 
 1878 
 
 52 
 
 1873 
 
 44 
 
 1879 
 
 53 
 
 1874 
 
 45 
 
 1880 
 
 59 
 
 Annual Average 
 
 4t 
 
 Annual Average 
 
 52 
 
 B.— Tonnage belonging to the United Kingdom. 
 
 
 
 
 
 
 
 Thousand 
 
 s 
 
 
 
 
 In Tliousands of Tons.) 
 
 of Tons. 
 
 
 
 
 
 
 
 
 ( 3,397 
 
 .Sailing. 
 
 1S50 (The date 
 
 jf the Repeal of tht 
 
 Navigation Laws 
 
 \ ) ^68 
 
 Steam. 
 
 
 
 
 
 
 
 ( 3.565 
 
 Total. 
 
 Years. 
 
 Sailing. 
 
 Steam. 
 
 Total. 
 
 Vc.irs. 
 
 Sailing. 
 
 Steam. 
 
 Total. 
 
 1869 
 
 4,765 
 
 948 
 
 5,7'3 
 
 1S75 
 
 4,207 
 
 1.945 
 
 6,152 
 
 1870 
 
 4,578 
 
 1,113 
 
 5.691 
 
 1876 
 
 4.258 
 
 2,005 
 
 6,263 
 
 1871 
 
 4.374 
 
 1,320 
 
 5.694 
 
 1877 
 
 4,261 
 
 2,139 
 
 6,400 
 
 1872 
 
 4.213 
 
 1,538 
 
 5,751 
 
 1878 
 
 4,239 
 
 2,316 
 
 6,555 
 
 1873 
 
 4,091 
 
 i,7'4 
 
 5,So5 
 
 1879 
 
 4,069 
 
 2,511 
 
 6,580 
 
 1874 
 
 4,108 
 
 1,871 
 
 5.979 
 
 1880 
 
 3.851 
 
 2,723 
 
 6,574 
 
 Annual 
 Average 
 
 ■ 4.355 
 
 1,417 
 
 5.772 
 
 Annual ) 
 Average j 
 
 4,148 
 
 2,273 
 
 6,421 
 
 Note. — It seems important tu notice that while the aggregate of 
 sailing and steam tonnage has increased, the increase is exclusively 
 in steam tonnage, which is more effective than sailing tonnage as 
 three or four to one.
 
 APPENDIX. 
 
 37 
 
 Table XV. — Showing the vakie of Exports of Articles of Food, 
 Raw Produce, and Manufactured Goods of British and Irish Produce, 
 from the United Kingdom to the United States in iSSo, stated in 
 thousands of pounds sterHng : — 
 
 Articles 
 
 Raw 
 
 Manufd. 
 
 of Food. 
 
 Produce. 
 
 Good.s. 
 
 £. 
 
 115 
 ... 
 
 946 
 2,287 
 
 "76 
 27 
 
 635 
 
 1,205 
 
 561 
 214 
 
 131 
 
 "5 
 202 
 279 
 62 
 436 
 
 55 
 
 1.749 
 
 1,894 
 
 62 
 
 904 
 
 188 
 
 494 
 
 135 
 
 2.735 
 
 296 
 
 975 
 
 439 
 
 6,814 
 5 
 
 122 
 
 35 
 87 
 
 183 
 
 984 
 620 
 
 225 
 
 74 
 28 
 
 2.531 
 83 
 
 12 
 
 362 
 
 1.472' 
 
 195 
 
 6,052 
 
 24,607 
 
 Alkali 
 
 Apparel and Haberdashery ... 
 
 Arms, Ammunition, and Military Stori 
 
 Bags and Sacks, empty 
 
 Beer and Ale ... 
 
 Bleaching Alaterials ... 
 
 Books, printed... 
 
 Caoutchouc Manufactures ... 
 
 Chemical Products and Preparations 
 
 Coals, Cinders, and Fuel 
 
 Cotton Yarn 
 
 Cottons, entered by the yard 
 ,, ,, at value 
 
 Drugs and Medicinal Preparations ... 
 
 Earthern and China Ware 
 
 Glass Manufactures 
 
 Hardware and Cutlery, unenumerated 
 
 Leather, wrought and uiiwrought ... 
 
 Linens, entered by the yard ... 
 ,> >. at value 
 
 ,, Jute Manufactures ... 
 
 Machinery and Mill Work ... 
 
 Metals : 
 Iron, old 
 
 Pin- 
 
 ,, Wrought 
 
 Lead, Pig, Pipe, and Sheet 
 
 Tin, unwrought 
 
 Oil Seed 
 
 Painters' Colours and Materials 
 Paper of all sorts (including hangings) 
 Pickles, Vinegar, and Sauces 
 Pags and other Materials for making 
 
 S«lt 
 
 Silk Manufactures 
 Skins and Furs of all sorts ... 
 Stationery, other than paper... 
 Sugar, refined, and Candy ... 
 Wool, Sheep and Lambs' 
 Woollens, entered by the yard 
 
 „ at value 
 
 A lother articles 
 
 Total 
 
 Paper
 
 38 
 
 APPENDIX, 
 
 Taiu.f. XVI. — Showing the value of Food, Raw Material, and Manu- 
 factured Cloods (in thousands of pounds sterling) IniporleJ from the 
 United States of America into the United Kingdom in i8i>o. 
 
 Articles of Food. 
 
 Raw Produc 
 
 K. Manufactured 
 
 Goods. 
 
 
 £, 
 
 
 £. ' 
 
 ~~/r 
 
 Animals : — 
 
 
 Animals: — 
 
 Clocks. . . 
 
 ' 154 
 
 Oxen & Bulls 
 
 3,68 1 
 
 Horses . . 
 
 35 Cotton Manufac 
 
 
 Sheep & Lambs 
 
 i6i 
 
 Caoutchouc. . 
 
 48 j tures. . . 
 
 592 
 
 Swine .... 
 
 ?3 
 
 Copper : — 
 
 1 Hides, tanned 
 
 
 Bacon and Hams . 
 
 9*650 
 
 1 Ore 
 
 12 
 
 tawed, curried 
 
 
 Beef:— 
 
 
 ! Kegulus . . . 
 
 II 
 
 or dressed . 
 
 ^.195 
 
 Fresh .... 
 
 1,881 
 
 Unwrought anc 
 
 
 1 Iron and Stee 
 
 
 Salted. . . . 
 
 526 
 1,341 
 
 j partly wrought 
 
 10 
 
 ' manufactured. 
 
 
 Butter .... 
 
 Cotton :— 
 
 ! unenumeraled 
 
 213 
 
 Cheese .... 
 
 3,412 
 
 Raw . . . . 
 
 31,785 Oil :- 
 
 
 Coffee .... 
 
 168 
 
 Hides not in any 
 
 Chemical, Es- 
 
 
 Corn : — 
 
 
 way dressed . . 
 
 47 sential, or 
 
 
 Wheat . . . 
 
 20, 1 77 
 
 Manures unenu- 
 
 Perfumed . 
 
 16 
 
 Barley. . . . 
 
 169 
 
 merated . . . 
 
 153 Sugar:— 
 
 
 Oats .... 
 
 22 
 
 Naphtha, Crude . 
 
 60 
 
 1 Refined. . . 
 
 161 
 
 Pease .... 
 
 192 
 
 Oil:- 
 
 
 Tobacco, manu- 
 
 
 Maize . . . 
 
 9,290 
 
 Speimaceti or 
 
 
 factured, and 
 
 
 Wheaimeal and 
 
 
 Head matter . 
 
 86 
 
 Cigars . . . 
 
 95 
 
 . Flour . . . 
 
 5-435 
 
 Train or Blubber 
 
 9 
 
 Wood : — 
 
 
 Oatmeal . . . 
 
 312 
 
 Animal 
 
 273 
 
 House Frames, 
 
 
 Fish 
 
 453 
 
 Turpentine (or 
 
 
 Fittings, and 
 
 
 Fruit raw, unenu- 
 
 
 Spirit of) . . 
 
 366 
 
 Joiners' work 
 
 106 
 
 merated . . . 
 
 665 
 
 Oil-seed Cake . . 
 
 1,694 
 
 Other Articles . 
 
 46 
 
 Hops 
 
 2 to 
 
 Petroleum . . . 
 
 1,276 
 
 
 
 Lard 
 
 1. 741 
 
 Rosin . . . . 
 
 3^3 
 
 
 
 Meat, unenume- 
 
 
 Seeds, Clover, and 
 
 
 
 
 raled : — 
 
 
 Grass .... 
 
 ■239 
 
 
 
 Salted or Fresh . 
 
 148 
 
 Silver Ore . ■ . . 
 
 9 
 
 
 
 Preserved other- 
 
 
 Skins and Furs of 
 
 
 
 
 wise than by 
 
 
 all sorts . . . 
 
 662 
 
 
 
 salting . . . 
 
 1,281 
 
 Sugar :— 
 
 
 
 
 Pork salted . . . 
 
 545j 
 1,420 
 
 Unrefined . . 
 
 14 
 
 
 
 Other Articles . . 
 
 Molasses . . . 
 
 40 
 
 
 
 
 
 Tallow and Stear- 
 
 
 
 
 
 
 rine 
 
 5-13 
 
 
 
 
 
 Tar 
 
 7 
 
 1 
 
 
 
 
 Tobacco, unmanu- 
 
 
 
 
 
 
 factured . . . 
 
 1,259 
 
 
 
 
 
 Wax 
 
 51 
 
 
 
 
 
 Wood & Timber : 
 
 
 
 
 
 
 Hewn .... 
 
 461 
 
 
 
 
 
 Sawn or split . 
 
 584 
 
 
 
 
 
 Staves. . . . 
 
 75 
 
 
 
 
 
 Furniture and 
 
 
 
 
 
 
 Hardwoods . 
 
 97 
 
 
 
 
 
 Wool, Mieep, and 
 
 
 
 
 
 
 Lambs. . . . 
 
 35 
 
 
 
 
 
 Other Articles . . 
 
 954 
 
 
 
 Total . . .'< 
 
 1 
 
 }2,9i6 
 
 Total . . .. 
 
 Ji,588 
 
 Toi.d. . . 
 
 -,57i^
 
 (;^i. 
 
 )^^f' 
 
 <: 
 
 IMPORTS, EXPORTS, 
 
 AND 
 
 THE FRENCH TREATY. 
 
 BY 
 
 J. K. CROSS, Esq., M.P. 
 — — —'-^iz 
 
 IN 
 
 THE HOUSE OF COMMONS, 12TH AUGUST, 1881. 
 
 Cassell, Petter, Galpin & Co.: 
 
 LOXDOy, PARIS # NEW YORK.
 
 I
 
 IMPORTS, EXPORTS, 
 
 AND 
 
 THE FRENCH TREATY. 
 
 speech by J. K. Cross, Esq., j\I.P., 
 On Motion of Mr. Ritchie, M.P., 12th August, 1881. 
 
 I HEARTILY agree with a good deal that has fallen from 
 the noble lord (Sandon), and with some of the remarks 
 of the hon. member for the Tower Hamlets, and so far as 
 their recommendations to the Government go, as to the 
 making of a treaty with France, which shall be better than 
 the present convention, the noble lord and the hon. member, 
 will have the support of almost every member on this side 
 of the House. But it seems to me, sir, that there is a 
 good deal of misapprehension as to the bearings of this 
 question, as to our trade with France, and also as to our 
 trade with many foreign countries ; and a good deal of the 
 opposition to the negotiation of a new treaty is based upon 
 ignorance of fact. There are certainly objections to any 
 treaty of commerce from a Free Trade standpoint 3 the 
 greatest, to my mind, being, that we give colour to the 
 fallacy, that in reducing or abolishing import duties, it is 
 not the nation which abolishes the duty, that is chiefly 
 benefited ; that it is not the nation which adopts Free Trade, 
 that gains the most. Then why have a treaty at all ? For 
 this reason, sir, that without treaty, our goods will be subject 
 to the general tariff, a tariff which before i860 was prohibitive, 
 and which is largely prohibitive now ; but with which we 
 have no more right to interfere, than we have to interfere 
 with the tariffs of the United States or Germany. We have
 
 IMPORTS, EXPORTS, AND 
 
 house, for the modest sum of ;^3 7,000. Of course, there 
 may be poor sugar refiners, but in such cases as these I do 
 not think much sympathy is needed. There are a great 
 many people outside the House, who oppose a new treaty 
 with France on very difterent grounds ; but the question is 
 really, whether the resolution brought forward to-night is not 
 an unfurling of the old flag of Protection. I am glad to 
 hear hon. members say that nothing is further from their 
 intention, but what are the reasons alleged for the great 
 opposition to this treaty. It has been stated over and over 
 again by members outside this House, and inside too, and 
 in the public Press, that our trade is in a decaying state. 
 There was a meeting the other night in a great hall in 
 London, at which many members of Parliament were pre- 
 sent. It was there stated that the effect of commercial 
 treaties had been disastrous to this country ; that France 
 was now in the van of commerce, America second, and 
 England a bad third. There were a good many members of 
 Parliament present, but not one of them had the grace, nay, 
 I may say not one of them had the common honesty, to 
 protest against such a statement. A little time ago, I ven- 
 tured to move for a return, showing the exports of France 
 and England, in their home manufactures of cotton, 
 woollen, linen, and silk. That return, presented on the 
 first July, showed that the exports of England were in 
 1849 ;^40,ooo,ooo ; in 1859, ;^73,ooo,ooo ; in 1869, 
 ;3^i 07, 000,000; in 1879, ;^94, 000, 000 ; and in 1880 they 
 were ;^io9, 000, 000. The French exports of the same manu- 
 factures were in 1849 ;i^i 6,000,000 ; in 1859^^32,000,000; 
 in 1869 p{^3 5,000,000 ; in 1879 ;3^28,ooo,ooo ; and in 1880 
 they were ;J29, 000,000; showing an increase in the English 
 exports between 1859 and 1879 of 32 per cent., against a 
 decrease in the French exports in the same period of 1 1 per 
 cent. ; and carrying the comparison on to the year 1880, we 
 find that whilst the English exports of these four staple 
 articles had, between 1859 and 1880, increased 50 per cent., 
 the French exports, of her own production of these articles, 
 had decreased 10 per cent. How then can it be said, that 
 France is beating us out of the markets of the world ? 
 
 But I shall be asked, why do I not compare the inter-
 
 THE FRE.XCH TREATY. 
 
 national exports and imports of the two countries ? Is it 
 not a fact, that France sends to us much more than we send 
 to her ? Yes, she sends to us direct, much more than we 
 send to her direct, but what does it matter to us, if she takes 
 caUco from Manchester in return for butter, or she takes 
 silk from China, or coffee from Ceylon ; the goods sent from 
 here to those countries, really discharge our debt to France. 
 A good deal of stress is laid on the fact, that according to the 
 returns, France appears to be sending to us some ;,^ 15,000,000 
 a year more merchandise than we send to her; and we are 
 asked if this will not cause a drain of bullion, and if this is 
 not the sign of a losing trade. Well, sir, how stands the 
 bullion account ? I have as much right to judge the state 
 of trade by the bullion account, as any one else has to judge 
 it by the trade account ; and if I find, that we get much more 
 bullion from France than we send to her, I might point to 
 that, as a proof of a profitable trade. What are the facts ? 
 In the last two years we have received from France 
 ;^9,437,ooo in gold and silver coin and buUion, and we 
 have sent to her ;^2, 19 2,000, showing a balance in our 
 favour of ;^7, 245,000; and I have just as much right to 
 quote this as a proof of profitable trade, as hon. members 
 have to quote their figures as a proof of unprofitable trade. 
 But, sir, such comparisons are worthless. Then, an exact com- 
 parison is impossible for another reason : our Board of Trade 
 returns do not discriminate between goods going into France 
 through foreign countries, and those which are sent for home 
 consumption to those countries. In connection with the 
 Treaty Commission, I had occasion to try to obtain accurate 
 information. Finding that the export of English yarn to 
 France, appeared in the export tables as ;;/^47 8,000, and not 
 thinking this correct, I made inquiries from half-a-dozen 
 merchants in Manchester, and found that they alone sent 
 more yarns to France, than the export tables showed, but 
 that the greater part of their sendings went through 
 Antwerp, and did not appear in the exports to France at 
 all. I found also that many goods coming to this country 
 from Switzerland and some from Italy were entered among 
 the French imports, making it impossible to compare the 
 items of international trade.
 
 8 IMPORTS, EXPORTS, AND 
 
 But really these returns matter nothing. These matters 
 may be well left to our merchants. What our merchants 
 have to do is this : they have to take care that they get 
 more than they give. What are our Board of Trade returns ? 
 They are a record of the sum total of the national business ; 
 a record of the aggregate of the individual transactions of 
 our merchants ; but I am afraid they are something which 
 many hon. members do not understand, for when it is stated 
 that our imports are ;^i 20,000,000 a year more than our 
 exports, I hear hon. members say, shaking their heads, 
 "What nation on earth can stand such a drain?" Well, 
 sir, the drain has been going on for a long while. In the 
 last 23 years we have imported ;,^i, 600,000,000 more mer- 
 chandise, and some ;;^7o,ooo,ooo more coin and bullion, 
 than we have e.xported ; we have at the same time increased 
 our foreign investments in a marvellous manner. We have 
 more railways, more shipping, more mines and manufac- 
 tories, and more comforts of all kinds ; and I venture to 
 think that even if, in the course of a few years, our imports 
 should exceed our exports by ;!^2oo, 000,000 annually, we 
 shall not be ruined. I may mention one article, which does 
 not appear in the Board of Trade returns at all. \\^e do a 
 large business as manufacturers and exporters of ships, but 
 " shipping " does not appear among our many exports. 
 May I say a few words, as to the meaning of the great 
 figures put before us by the Board of Trade ? Hon. 
 members cannot quite understand, how it is we get home 
 ;!{^ 1 20,000,000 a year more than we send out. It arises to 
 a great extent from the fact, that our merchants know 
 e.xceedingly well what they are doing. When they send a 
 commodity abroad, they must get more for it than they give 
 at home. 
 
 If the House will allow me, I will give in detail, three 
 instances of our export and import trade. 
 
 In the first place I will take the shij)ment of ^1,000 
 worth of cotton goods to Bombay, the returns coming home 
 in raw cotton ; in the second, I will take the shipment of 
 ;!^i,ooo worth of pig iron to Calcutta, the returns coming 
 home in jute ; and in the third, the shipment of ;!£'i,ooo 
 worth of coal from Cardiff to San Francisco, the returns
 
 THE FRENCH TREATY 
 
 coming home in wheat. I give the gross returns in order 
 to avoid confusion in detail. In the shipment of;!^i,ooo 
 worth of cotton goods to Bombay, the freight will be ^1^50 ; 
 on arrival, the goods will have to fetch ^1,050 to clear 
 expenses ; the merchant or his agent will have the cash in 
 hand ; he might send it home, but this is the last thing he 
 thinks of, and he invests his ^^1,050 in cotton, freighting it 
 to Liverpool or London at a cost of ;£to. This cotton 
 will require to be sold for ^1,120 to clear expenses. There 
 will appear in the export table an "export" of ^1,000 of 
 cotton goods, there will appear in the import table an 
 "import" of ^^1,120 of raw cotton, and no one will suffer 
 loss by excess of import. 
 
 In the second instance, ;^ 1,000 spent in pig iron will, 
 at very low prices, buy 500 tons ; the freight of this by 
 steamer to Calcutta will be ;j^5oo ; the iron must realise 
 p^ 1,500, which sum invested in jute, will purchase 100 tons ; 
 the freight to Dundee will be ^300, and the value of the 
 jute on arrival ;!^i,8oo. There will appear in the Board 
 of Trade return an "export" of ^1,000 of iron, and an 
 " import " of ;^i,8oo of jute, and no one will be damnified 
 thereby. 
 
 The next instance is more startling. ;^ 1,000 will buy 
 2,000 tons of coal, free on board at Cardiff; the freight of 
 this coal to San Francisco will be ;!^i,5oo ; the amount 
 realised for it in San Francisco will be ;,£"2,5oo, which sum 
 invested in wheat, will purchase 2,000 quarters. The con- 
 veyance of this wheat to Liverpool will cost ^1^1,500, and it 
 will require to be sold at ;2{^4,ooo in Liverpool, to cover cost 
 and expenses. In the import tables there will be an entry 
 of ^4,000 wheat ; in the export tables there will be an 
 entry of ;^i,ooo coal ; the one exchanges for the other. Is 
 any one poorer for this transaction ? 
 
 But it may be said these are ideal figures. ("Hear, 
 hear," from Mr. Newdegate.) Does the hon. member for 
 North Warwickshire not accept them ? ^Vell, I will quote 
 from the Board of Trade returns themselves. Last year 
 (1880) 587,000 tons of coal were sent from this country to 
 India. They were valued here at ^265,000, and appear 
 at this figure in our export tables ; in the Indian import
 
 TO IMPORTS, E A PORTS, AND 
 
 tables they are valued at 11,380,000 rupees, or a little 
 over ;^9oo,ooo sterling money. This sum purchased 
 60,000 tons of jute, the value of which on arrival here was 
 ^r, 080,000. The coal left this country valued at jQ26^,ooo, 
 its equivalent, the jute, came home valued at ;;(£" 1,080, 000, 
 and I don't know that any one is worse oft" for the ex- 
 change. But it is said to be unpatriotic to export our 
 coal in exchange for wheat; that we had better grow 
 our corn at home, and engage more English labour. But 
 would that be the result? Will any hon. member say 
 that on imported wheat we spend less in labour than on 
 home-grown wheat ? What is the cost of the labour employed 
 in the production of a quarter of wheat m England ? I ask 
 the hon. member for Mid-Lincoln (Mr. Chaplin), who is an 
 authority on such matters. He will, I hope, correct me if 
 I am wrong. From what I can learn, I believe that in 
 quoting los. as the labour cost of the production of a 
 quarter of wheat in England, I am in excess of the average. 
 Well, what is spent on the getting of a ton of coal in this 
 country, sending it to San Francisco, exchanging it there 
 for a quarter of wheat, and bringing the wheat home ? The 
 getting of the coal will cost nearly 4s. in labour ; it will be 
 put on the railway and on ship-board by Englishmen, and 
 sent across the ocean in a ship built by Englishmen, with 
 English capital. On arrival at San Francisco it is exchanged 
 for wheat, the sending of which home again employs 
 English shipping, labour, and capital. When the wheat 
 arrives here, how much of its cost is represented by British 
 labour ? There is the labour spent on sinking the pit, on 
 getting the coal, on transferring it to the port, on building 
 ihe ship and manning it ; and there is the labour employed 
 in taking out the coal and bringing home the wheat. I do 
 not know how I can assess the labour, on a quarter of coal- 
 won wheat, at less than 30s. ; or probably three times as 
 much as is spent on a quarter of home-grown corn. But 
 what is the advantage to the nation? A merchant buys 
 500 or 1,000 tons of coal, sends it abroad and exchanges 
 it for wheat He brings home a quarter of wheat in ex- 
 change for a ton of coal. A ton of coal in England at the 
 present time is not worth more than 8s. ; in many cases not 
 
 k
 
 THE FRENCH TREATY. II 
 
 nearly so much. If we get in exchange for coal something 
 which, in this country, is worth five times as much as the 
 coal, is not this an advantage to the nation ? I do not see 
 that we are worse off through entering into transactions such 
 as these. 
 
 Well, sir, what is to be the autumn campaign of gentle- 
 men opposite ? Is the flag of Protection again to be un- 
 furled ? Are we to lose that freedom of action we have 
 enjoyed so long ? Are we to accept trammels which hon. 
 gentlemen are not bold enough to support in this House, 
 but which when outside these walls they do not hesitate to 
 advocate ? I do not think their programme will succeed. 
 I suppose that hon. gentlemen opposite will allow that if 
 foreign nations imposed no duties on our exports, our trade 
 would be very flourishing. Well, there is one great trade 
 not hampered by foreign tariffs, the greatest industry in this 
 country except agriculture, the coal trade ; the trade which 
 really is the key to the commerce of the world. Every 
 nation is ready to receive our coal, yet the coal trade was 
 never in a condition so depressed as it is now, notwith- 
 standing that the production of last year was the greatest on 
 record. What will be the result of Protection if you try it ? 
 You must take heed from Germany. She is not now 
 pointed at, as a nation in the van of commerce. She was so 
 a little while ago, but the blighting breath of Protection has 
 passed over her, and she is falling behind. Some hon. 
 members wish to place a differential duty on wheat. They 
 have such duties in Germany, and they are very moderate, 
 not more than 5 per cent. Yet it is calculated that the 
 difference in the price of rye bread, through the action of 
 this duty, is such that a man will find himself short of a 
 month's provisions during the year. If the price of food be 
 advanced ten per cent., as some propose, the purchasing 
 power of the workman, and of every one, would be corres- 
 pondingly reduced unless wages were raised ; but there is 
 no record, so far as I know, in the history of mankind where 
 a tax upon food has raised the rate of wages ; and in Ger- 
 many the question now is not whether wages shall be raised, 
 but whether the workman can have as much work and 
 wages as before. Manufactories are going on to shorter
 
 12 I iV PORTS, EAJOKTS, AXD THE IREXCH TREAT V. 
 
 hours, and discharging workmen to emigrate, until it appears 
 that no less than 145,000 emigrants have left the shores of 
 Germany during the last six months, and it is said that 
 during the current year, the export of humanity from that 
 country will be a quarter of a million. Perhaps, sir, I may 
 be excused if I speak earnestly on this subject. My earliest 
 days were passed in the shade of Protection. I do not 
 want those times to come again. May I quote a short de- 
 scription of those times, written, not by a Radical, not even 
 by an enthusiast for Free Trade, but written by the French 
 historian, M. Guizot ? The quotation refers to my native 
 town, and he says, speaking of the time from 1836 to 
 1840 : — 
 
 " Bolton, a town of the second-class in Lancashire, near 
 Manchester, containing about 50,000 people, had been 
 thro^vn by the commercial crisis into a condition of utter 
 misery. Out of 50 manufactories 30 were closed, more than 
 5,000 operatives knew not where to seek or to obtain the 
 means of sustenance. Disorder and crime, as well as 
 misery, increased with awful rapidity ; nearly half the houses 
 were tenantless ; the prisons overflowed, infants died in 
 their mothers' arms, fathers deserted their wives and families, 
 striving to forget those whom they could no longer maintain. 
 But the evil continued ; no succour came." 
 
 Then it was, sir, that the agitation in favour of Free 
 Trade began. Do hon. members opposite wish for a return 
 qI those times ? (*' Oh, oh," and "Hear, hear.") My right 
 hon. friend the Chancellor of the Duchy no doubt remembers 
 the condition of Bolton then, and I don't think that any 
 one will wish to exchange our present experience for a 
 return of those old days. 
 
 In regard to this resolution, I am most anxious that our 
 Government should have the power to make reasonable 
 treaties with foreign nations, in the interest of commerce. 
 I have the fullest confidence that the Government will carry 
 out the best arrangements that can be made, not only with 
 France, but with other countries also ; and I sincerely hope 
 that nothing may ever be done by our statesmen to en- 
 danger that most precious privilege of Englishmen — the 
 right to buy what we most want where we best can. 
 
 {
 
 "?.,>*><^""' 
 
 THE 
 
 RECIPROCITY CRAZE. 
 
 31 Cract for tf)e Cimed> 
 
 GEORGE W. MEDLEY. 
 
 Cassell, Petter, Galpin & Co. 
 
 LONDON, PARIS i- NEW YORK. 
 1881.
 
 CONTENTS 
 
 PAGE 
 
 I. Introduction 5 
 
 II. Imports and Exports [_" Pons Ash/orum ") . . , 6 
 
 III. One-sided Free Trade 14 
 
 IV. "Reciprocity or Retaliation" 24 
 
 V. Two Neo-Protectionists 26 
 
 1. A Quarterly Reviewer. 
 
 2. Sir Edward Sullivaiij Bart., Nineteentli Century . 
 
 VI. Conclusion 35
 
 THE RECIPROCITY CRAZE. 
 
 I. 
 
 INTRODUCTION. 
 
 For some time past incessant attacks have been made on 
 our Free Trade policy. At first these attacks were made 
 doubtingly, hesitatingly ; but lately, speakers and writers 
 have become emboldened, the banner of " Protection to 
 Native Industry " has once more been unfurled, and the air 
 resounds with cries for " Reciprocity or Retaliation." This 
 is an astonishing phenomenon to those who understand and 
 appreciate what Free Trade has done, and is doing, for this 
 country. The most striking feature about the agitation is, 
 to their minds, its extraordinary inopportuneness ; the time 
 chosen for it being just that moment when the clouds of 
 depression are dispersing, and we seem to be once more 
 floating on the rising wave of prosperity. We have now had 
 thirty-five years' experience of Free Trade, with their ups and 
 downs of inflation and depression. In the course of these 
 years we have witnessed all sorts of political and social 
 changes. We have seen the overthrow of dynasties, the up- 
 rising of peoples, and wars waged on an unprecedented scale. 
 Railways and telegraphs have obviated to a great extent 
 the inconveniences of distance and time. Great perturba- 
 tions in the standard of value have occurred, the gold 
 discoveries at first causing a general rise in prices. Of late 
 years, however, an increasing demand for the metal, and a 
 diminishing supply, accompanied by a partial demonetisation 
 of silver, have caused a disturbance of values in the opposite 
 direction of a general fall in prices. During all these years, 
 England alone among the nations has maintained a system 
 of free ports, the only changes in her fiscal policy being in 
 the direction of greater freedom, wliile other nations, such 
 as the United States, France, and Germany, have raised 
 round themselves the barriers of prohibitory tariffs. With
 
 THE RECIPROCITY CRAZE. 
 
 one exception, every conceivable economical condition that 
 could constitute a test of the principles and ])ractice of 
 Free Trade has occurred, the one condition untried being 
 universal Free Trade. In these circumstances, and with all 
 this varied experience, one would suppose that there was not 
 much room for differences oi opinion as to the results 
 achieved, and as to our national condition at the end of the 
 ordeal. Yet, from what is i)assing around, we cannot but 
 see that extreme divergences exist. While, on the one 
 hand, the Free Trader contemplates with satisfaction the 
 position which his country has attained by her commercial 
 policy, and appeals with confidence to the facts which 
 abound on every side, and which, to his mind, verify to the 
 fullest the theories he has embraced ; on the other we find 
 a school of neo-protectionists lamenting what seems to them 
 to be the decadence of their country, and appealing also to 
 facts which appear to them to bear out their views. But, 
 tlie most astounding thing is, that some of the very same 
 facts which are appealed to by one party as evidence of our 
 abounding prosperity, are held up by the other as the 
 certain j^roofs of our decay ! A crucial example of this is 
 to be found in the various conclusions drawn from the 
 figures which appear in our Board of Trade Returns under 
 the head of " Imports and Exports." The views of the 
 writer upon this and other cognate subjects are, of course, 
 those of the Free Trader. They are set forth in the following 
 chapters in a manner which, it is hoped, will be sufficiently 
 clear. They may perhaps aid the candid inquirer in a 
 search for the truth, and tend to dissipate the " craze." 
 
 II. 
 IMPORTS AND EXPORTS. 
 
 "Pons Asinoj-um." 
 
 The fact that year after year the money value of our im- 
 ports vastly exceeds the money value of our exports, and that 
 this excess tends to increase is, to many minds, not only a
 
 IMPORTS AND EXPORTS. 
 
 puzzle, but a rock of offence, and a cause of alarm. To 
 those, however, who are acquainted with the facts and 
 circumstances which cause this excess, nothing can seem 
 more absurd than the feeling which has been aroused, and 
 the conclusions which have been drawn. The absurdity will 
 be made abundantly clear as we proceed. 
 
 But, I must here warn the reader that he will have to 
 master what I have to say under this head, for it constitutes 
 the " Pons Asinorum " of the Free Trade question. It he 
 passes this " pons," he will find himself among the Free 
 Traders on the other side. If not, he mustbe numbered among 
 the Neo-Protectionists, who seem to be utterly unable to 
 pass over it. This is what they cannot get over : — They point 
 to the Board of Trade returns for 1880, which show that we 
 imported ;^4i 1,000,000 worth of commodities, and exported 
 only ;^286,ooo,ooo worth ; and this they call a balance of 
 trade against us of ;^i 25,000,000 ; and from this fact they 
 draw such deductions as these : that this balance is a loss 
 to the country; that John Bull buys ;^4i 1,000,000 of goods 
 from the foreigner, and sells him only ^286,000,000 worth ; 
 that, consequently, the foreigner has the best of the trade ; 
 that he is draining away all John Bull's wealth ; that the 
 latter is getting poorer and poorer ; that if the system goes 
 on it must end in his ruin ; and that this is the outcome ot 
 the one-sided Free Trade now existing. And then they give 
 vent in their agony to such cries as " Protection to Native 
 Industry," " Reciprocity or Retaliation." Here are some 
 of their utterances : — 
 
 T/ie Quarterly Jieriew, July 1881, p. 293. — "In 1846 
 our imports amounted to little more than 74 millions ; in 
 1850, when Sir Robert Peel died, they reached looi 
 millions. Last year they were valued at 410 millions. Did 
 Sir Robert Peel ever dream of such an import trade as 
 this ? If he did, it is most probable he saw in his dreams 
 our exports approaching the same standard if not exceed- 
 ing it, and that such a balance sheet as the following never 
 rose up before his mind's eye : — 
 
 " Imports in 1880 ;if409,990,056 
 
 "Exports ,, ,, 222,810,526 
 
 Excess of Imports 187,179,530
 
 8 THE RECJPKOCITY CRAZE. 
 
 This excess, according to the writers we have quoted, 
 represents the sum by which we have grown more wealthy 
 in 1880 than we were in 1879. Is it possible that any 
 one with a mind capable of comprehending facts and their 
 meaning can really believe it?" 
 
 lb. p. 288. — To buy more than we sell, and to make 
 that not a mere accident of our trade but its permanent 
 condition — the end above all others to be sought for and 
 desired — this, according to the economists is a most excel- 
 lent thing for the country. Practical men who look at such 
 matters from a strictly-business point of view, come to a 
 different conclusion. They hold that we cannot persevere 
 in this system without plunging the country into disaster. 
 . . . . As one authority (Mr. Shaw-Lefevre, M.P., 
 27th June, 1878) puts it, 'the magnitude of our import 
 trade, so far from being a matter for alarm, is evidence 
 of the greatness of our resources and the stability of 
 our position.' This is one of the most blundering and 
 most mischievous of the delusions which have helped to 
 blind a portion of the people to the true state of their 
 affairs." 
 
 Sir Edward Sullivan, Bart., Nineteenth Cetituty, August, 
 1881, p. 171. — " It [Isolated Free Trade] has enabled 
 foreigners to flood our markets with cheap, and often 
 nasty manufactured goods." " It has increased the balance 
 of trade against us, till it has reached the alarming figure 
 of ^136,000,000." P. 176. — •' In the face of these facts we 
 are warranted in again asking our economic philosophers 
 how we are to continue to find money to purchase foreign 
 food. The food question is at the bottom of our com- 
 mercial troubles ; we are buying food from abroad faster 
 than we are making money to pay for it. But of course 
 this cannot last. Until the immense and increasing excess 
 of imports over exports, is considerably diminished, there 
 can be no return of general prosperity. We may for a 
 time draw upon our capital and our accumulated wealth, 
 but for how long ? If we cannot get as much for our goods 
 as we are compelled to pay for foreign food, the deluge 
 must be at hand." 
 
 Nothing can be more clear and distinct than the issues
 
 IMPORTS AND EXPORTS. 
 
 which these statements raise. I shall at once address 
 myself to them, merely remarking, in passing, that under 
 the head of " Two Neo-Protectionists," I shall have to 
 make further reference to the articles from which I have 
 quoted. 
 
 The first thing that strikes one regarding these utterances 
 is this — that the bare fact of our imports being larger than 
 our exports is held by these writers to constitute in itself a 
 great and growing evil. According to them it is a self- 
 evident proposition, the mere propounding of which ought 
 to carry conviction to every mind. And on this idea their 
 whole argument seems to be based. They leave out of 
 account everything but the bare fact that our imports 
 exceed our exports ! They leave out of account such 
 matters as the following: — Our shipping receipts, in- 
 surance, interest, merchants' profits, and, last not least, 
 the income we derive from our foreign investments ! Let 
 us try to make a rough estimate of these " unconsidered 
 trifles." 
 
 As regards shipping, we possessed in i8So 56 per cent, of 
 the world's ocean carrying power ; assuming that the average 
 of freight is about 10 per cent, ad valorem, and our combined 
 export and import trade is about 700 millions, our receipts 
 under this head may be put down at 40 millions ; but to this 
 must be added the receipts for our inter-foreign and inter- 
 colonial trade, and the receipts from passenger traffic. I do 
 not think 45 millions a high figure to set down as our total 
 shipping receipts. Mulhall, in his " Balance Sheet of the 
 World," p. 44, puts them down at ;^5 1,920,000. 
 
 Then comes insurance. An average of h per cent, on 
 our total trade gives ^3,500,000. 
 
 Next comes interest. If we take the moderate sum of 
 100 millions as employed in our foreign trade, 5 per cent, 
 gives us 5 millions. 
 
 Next come merchants' profits. Say 2| per cent, on the 
 700 millions : this gives us 17^ millions. 
 
 Lastly, take foreign investments. The Economist, of 
 March 5th last, quoting from the " liankers' Magazine," puts 
 these down as yielding over 55 millions per annum. 
 
 What is the total of !;hese iteni^?
 
 lO THE RECIPROCITY CRAZE. 
 
 Ocean carrying trade ^'45,000,000 
 
 Insurance ... ... ... 3,500,000 
 
 Interest on capital ... ... ... 5,000,000 
 
 Merchants' profits ... ... ... 17,500,000 
 
 Income from foreign investmcnls ... 55,000,000 
 
 ;/^ I 26, 000, 000 
 
 Which means simply this — that before England has to ex- 
 change a pound's worth of her own products for a pound's 
 worth of foreign products, she has to receive annually, in some 
 shape or other, over 100 million pounds from the foreigner! 
 
 And thus bursts the bubble of our adverse balance 
 of trade ! The balance, if there be such a thing, seems 
 to be the other way ! And it must be the other way. 
 
 It is a matter of common knowledge, or ought to be, 
 that year by year, on the whole, the world grows more 
 and more indebted to us. Year by year we have more 
 and more of the world's obligations in our strong box. 
 
 The fallacy under which our Neo-Protectionists labour 
 lies in the terms " buying of the foreigner," " selling to the 
 foreigner." 
 
 They fancy that our imports are what we " buy " and our 
 exports what we " sell ; " and, that as there is an excess 
 of the former there is a balance of trade against us, 
 which, somehow or other, out of our wealth, we have to 
 liquidate, and that this process impoverishes the country. 
 
 But, as I have shown, there is no balance to liquidate, 
 so there can be no impoverishment ; and so their argument 
 is exploded. 
 
 But, let us for a moment look at their supposition in 
 another light. Why should the bare fact of our importing 
 411 mi lions of commodities in exchange for 286 millions be 
 held, i/'so facto, to involve a loss? 
 
 To get in more than one gives out seems, prima Jaae, 
 to ordinary minds, the only way of making a profit ! It 
 cannot be pretended that Great Britain stood indebted at 
 the end of 1880 for the excess of imports. There can be 
 no doubt that at that period the world was as much, if not 
 more, indebted to her than at the end of 1879. 
 
 But 18S0 does not stand alone in its excess of imports. 
 The same thing has gone on for the last thirty-five years.
 
 IMPORTS AND EXPORTS. 
 
 In 1856 the excess was 43 millions ; in 1880 this figure, 
 with interruptions, had risen to 125 milUons. Let me ask, 
 out of what fund have we Hquidated all these supposed ad- 
 verse balances ? 
 
 Then let me ask, what would our Neo-Protectionists say 
 if the products of our industry were annually exported to 
 the extent of 411 millions, and we received back from the 
 foreigner only 286 millions worth in exchange? 
 
 Look at the question in yet another light. How can it 
 be otherwise than that our imports should exceed in value 
 our exports? If a merchant export ^100 worth of goods, 
 and in exchange for them imports goods worth only ;^ioo, 
 he must make a dead loss under the heads of freight, insur- 
 ance, interest, and profits. 
 
 How can it be otherwise ? 
 
 Let us suppose the goods cost him ^^ 100 at Liverpool. 
 He exports them to some foreign country, and, of course, 
 has to pay freight and insurance. Let us say this comes to 
 ID per cent. On arrival at the foreign market the goods 
 must therefore be worth ;£iio. They must be sold, of 
 course, and let us suppose the proceeds re-invested in goods 
 for importation here. Again comes in the charge for 
 freight, another 10 per cent., which, added to the p^iio, 
 makes the goods worth ;;^ 121 on arrival at our ports, inde- 
 pendently of interest on the money used, and what the 
 merchant may lay on as profit. 
 
 And so the ;^ioo of exports comes back as ;^i2i 
 at least, of imports, and must do so as long as trade is 
 carried on. 
 
 And, on this showing, what becomes of complaints 
 founded on the bare fact of our imports exceeding our 
 exports, such as — 
 
 That the balance of trade is against us ! 
 
 That we are being ruined ! 
 
 That Free Trade is a complete failure ! 
 
 And now, with reference to this last assertion, let us for 
 a few moments contemplate some of the facts and figures 
 which the records of the last quarter of a century afford us. 
 
 I will first take the figures of the years i<S7o to 1880, 
 as comprising the latest periods of inflation and depression ;
 
 12 THE RECIPROCITV CRAZE. 
 
 then I will take in the whole period from 1854 to 1880, 
 1854 being the earliest year for which 1 possess the statistics. 
 Now, what have we done between 1870 and 1880 ? 
 The Board of Trade returns record our 
 
 Imports for these eleven years as ... ;^4,oi6,842 814 
 And our exports as .. 3)022,305,973 
 
 Lea\'ing an excess of imports ... ;^994,536,84i 
 
 Did we pay away any gold for this excess ? Let us see. 
 The returns show that in these years 
 
 We imported of gold and silver . . . . ^'34 1,487, 134 
 And exported 305,820,304 
 
 Leaving a balance in our hands of . . ^35,666,830 
 
 A result achieved during an unprecedented demand for 
 gold throughout the world, owing to the currency require- 
 ments of the United States, Germany, Holland, and other 
 states. 
 
 This ought to stagger our Neo-Protectionists ; but if not 
 I have yet another factor to bring into our calculation, and 
 that is our foreign loan and investment account. 
 
 Having no official records to refer to, 1 can only make 
 a rough estimate as to the probable balance of our trans- 
 actions in this respect during the period in question. 
 
 In this time probably 500 millions of foreign loans were 
 floated in London ; and supposing that we took one-half of 
 these, besides purchasing enormous amounts of United 
 States securities, and investing in all sorts of industrial 
 enterprises abroad, I do not think we should be \txy far 
 from the mark if we put down the figure at which we have 
 made the world our debtor during these eleven years as 
 350 millions. How will John Bull's external balance-sheet 
 for these years then stand ? 
 
 He has imported and appropriated ot the 
 
 world's products, on balance ... ... ;^994,536>84I 
 
 lie has pocketed in bullion, on balance ... 35,666,830 
 
 lie has lent creation, <?// /'fl/awr^ 350,000,000 
 
 1,380,203,671
 
 IMPORTS AND EXPORTS. 1 3 
 
 And in the face of these facts we are asked to beHeve that 
 we are plunging yearly into disaster ! 
 
 The figures of the last twenty-seven years are still more 
 startling. 
 
 In 1854 our imports amounted to ... ... ... ^152,389,053 
 
 In 1880, with interraptions, they had mounted to 411,229,565 
 
 In 1854 our exports amounted to ... ... ... 115,821,092 
 
 In l88o, with interruptions, they had mounted to 286,414,466 
 
 The totals for these twenty-seven years are : — 
 
 Imports ... ... ... ^{^7,626, 503,082 
 
 Exports 5,883,766,072 
 
 Excess of imports ... ... 1,742,737,010 
 
 The bullion records before me show that from i860 to 1880 
 inclusive, we imported, on balance, ^83,000,000, or at the 
 rate of about four millions a year. I have no figures for 
 previous years, but we may reckon, from common know- 
 ledge, that as from 1854 to 1859 gold flowed into this 
 country in greater quantities, and remained here in larger 
 quantities than since, probably eight millions a year re- 
 mained here on balance ; so that for the whole twenty- 
 seven years we probably retained ;!^i 3 1,000,000 of it. 
 
 We will now look at the foreign loan and investment 
 account for this period. 
 
 As before stated, we receive by way ot interest an 
 annual sum of fifty-five millions. 
 
 This capitalised at 4^ per cent, makes over 1,200 
 millions. And assuming that during the period in question 
 we acquired only one-half of these bonds, &c., the account 
 will stand thus for J ohn Bull : — 
 
 He has imported and appropriated of the 
 
 world's products, on balance .. ... ;^i,742,737>OiO 
 
 He has pocketed in bullion, on balance ... 131,000,000 
 He has made Creation his debtor on balance 600,000,000 
 
 2,473.737,010 
 
 In the course of these twenty-seven years, therefore, we 
 seem to have got hold of the world's products to the amount
 
 14 THE RECIPROCITY CRAZE. 
 
 Stated for less than nothing ; for, besides getting these 
 products, we have actually acquired a vast sum in money, 
 and have also induced every civilised nation on earth to 
 give us I O U's., amounting in the aggregate to at 
 least 600 millions sterling ! And, with these facts in our 
 possession, we cannot but see that all the talk we hear 
 about " buying more than we sell " and " our adverse 
 balance of trade " is nothing but arrant nonsense ; and that 
 it is not the Free Traders, but the Neo-Protectionists, who 
 cherish " blundering and mischievous delusions." 
 
 III. 
 
 ONE-SIDED FREE TRADE. 
 
 Having safely passed our " pons " we mil now, by the 
 help of what this has taught us, examine what our Neo- 
 Protectionists call One-sided Free Trade. 
 
 I hold it to mean that while every nation has a free 
 sale for its products in our home markets, we are excluded 
 more or less from some of the great markets of the world 
 by hostile and prohibitory tariffs. This is the truth, biit 
 the inferences and conclusions drawn therefrom by our 
 Neo-Protectionists are as false and absurd as their notions 
 about our adverse balance of trade. 
 
 They suppose that Great Britain is the principal if not 
 the only sufferer from this state ot things ; and they assert 
 that while Protection is advancing the prosperity of other 
 countries, Free Trade is destroying ours. 
 
 Free Traders deny these propositions, and, on the con- 
 trary, affirm that Free Trade has been, and is, a source of 
 vast prosperity, and an unmitigated blessing to the country, 
 and that Protection has been, and is, a source of loss to 
 those countries which have established it. 
 
 Let us now see what we, as a nation, have done under 
 our one-sided Free Trade. 
 
 First, let us try and understand the meaning of the com- 
 plaint that every nation has a free sale for its products in 
 our home markets. From the terras used, it must be evi- 
 dent that every nation which produces anything, and wishes
 
 ONE-SIDED FREE TRADE. 1 5 
 
 lo sell it to US, has to compete with every other nation 
 wisliing to do the same thing. It is therefore impossible 
 for us to get the commodities we want cheajDcr than we do 
 through this universal competition. 
 
 No other nation enjoys the advantages which flow from 
 this state of things. We find constantly that commoditie 
 are cheaper here than in the countries which produce them. 
 The poor among us are thus enabled to fight the battle of 
 life on the most favourable terms possible. Our labourers 
 are thus fed, housed, and clothed, as cheaply as possible. 
 I'hey are thus enabled to produce cheaply, more cheaply 
 than any other workers ; so cheaply that they have become 
 the dread of every Protectionist nation : — so cheaply thai 
 ad valorem duties of 50 to 200 per cent, on their productions 
 are inadequate to keep them out of Protectionist markets ; 
 so chea])ly, that we almost monopolise, as a matter of 
 cheapness, every neutral market ; so cheaply that we have 
 managed to obtain nearly five-eighths of the world's ocean 
 carrying trade, and are daily driving out of employment such 
 of the remaining vessels as belong to Protectionist nations. 
 
 Our one-sided Free Trade has done all this for us, at all 
 events. And no Protectionist nation can divest us of what 
 we have thus got. And of the advantages we enjoy we 
 cannot be deprived except in one way — by other nations 
 becoming also Free Traders. 
 
 It must be clear, that so far as our one side goes, it is a 
 very good side, and cannot be improved. Ought we not to 
 be extremely careful how we touch it ? I am going to ask 
 presently why we should touch it ? The Neo-Protectionist 
 ^vould probably say, " because we want to get the other 
 side also." 
 
 Are we quite sure this other side will be as good as that 
 we have ? I doubt it. 
 
 The complaint is that by hostile tariffs, our productions 
 are excluded from the principal markets of the world. 
 This is true, and on cosmopolitan grounds, and in the 
 interests of humanity, this state of things is to be regretted. 
 r>ut we are not now considering the interests of humanity, 
 we are trying to see how we can advance the particular 
 interests of Great Britain.
 
 I6 THE HECIPROCITV CRAZE. 
 
 There are good reasons for supposing that the existing 
 state of things is not to be regretted by us from the selfish 
 national point of view. 
 
 I am not sure, as some are, tliat Great Britain would in 
 the long run be a gainer by universal Free Trade, and I 
 now start this as a question worthy of calm discussion. 
 
 If universal Free Trade existed, its vital and energetic 
 principle, division of labour, would, of course, have full 
 play, and mankind would by its means achieve the maxi- 
 mum of production at the minimum of cost. 
 
 I am not quite certain that, as a nation, we should, under 
 it, be absolutely, or comparatively, as well off as we are now. 
 
 Let us for a moment imagine all hostile tariffs sud- 
 denly abolished. 
 
 Has any one ever seriously considered the possible 
 effects, immediate, and remote, which might arise ? 
 
 Among them would be : — 
 
 1. A sudden and vast demand for labour at home. 
 
 2. A sudden and a great increase in wages. 
 
 3. A rapid increase in the number of our factories, work- 
 shops, mills, furnaces, &c. 
 
 4. A rampant speculation in everything connected with 
 trade and manufactures. 
 
 5. A general rise in prices distressful to those with fixed 
 incomes. 
 
 6. A rush of population from home and abroad to our 
 manufacturing centres. 
 
 7. A stimulus given to marriage and population. 
 
 8. A demoralisation of our labouring classes. 
 
 9. Strikes for an increase of wages. 
 
 10. The culmination of the foregoing. 
 
 11. The beginning of a reaction owing to the com- 
 mencement of foreign competition. 
 
 12. The commencement of a fall in prices. 
 
 13. Labour disputes, and strikes against the fall. 
 
 14. Progress of the fall in prices. 
 
 15. Failures of niillowners and manufacturers ; closing of 
 mills and factories, and blowing out of furnaces. 
 
 16. Labourers thrown out of employment, and conse- 
 quent increase of pauperism and crime.
 
 ONE-SIDED FREE TRADE. 1 7 
 
 17. Extreme depression takes place. 
 
 18. The usual healing courses have to be followed. 
 
 19. After some years of suffering things settle down 
 pretty much as they were. 
 
 All this is based on the sudden opening of foreign ports. 
 A gradual opening would, of course, modify the process, but 
 the ultimate result would not be different. One of the 
 results which would most probably happen is, that our 
 population might be increased by two or three millions 
 more than it otherwise would be. But then several 
 questions arise, such as : — " Would the nation then be 
 absolutely or comparatively better off? " 
 
 Free Trade introduced into Protectionist countries would 
 disorganise their industries — ruin some of them — and cause 
 a general displacement of capital and labour. Effects the 
 converse of those described as happening with us would 
 take place with them. At last a basis would be found. 
 Then would arise everywhere a real and keen competition 
 with us. Is it quite certain we should come out of it 
 victorious ? Take such industries as these : Our cotton 
 and wool manufactures, our iron manufactures, our ocean- 
 carrying trade. 
 
 The United States grow cotton, and in Alabama this 
 cotton is adjacent to the iron and coal which are produced 
 there and in the neighbouring states. Would our cotton 
 lords and ironmasters view with equanimity the contest 
 with our cousins which would commence on the morrow of 
 the opening of their ports ? It might turn out that these 
 cousins might find out some way of making cotton goods 
 and iron as cheap as, or cheaper than, we can. If the 
 competition of foreigners be keen now, notwithstanding the 
 weight theycaiTy in the shape of enhanced cost of production, 
 arising out of Protectionist tariffs, what would it be should 
 the weight be removed ? What would become of our ship- 
 building and ocean-carrying trade ? What would become 
 of our trade with the States ? What would become of us in 
 neutral markets ? What would become of us in our own 
 markets ? 
 
 At present, as regards cheapness of production, we stand 
 supreme everywhere in all these things. Protection, in this
 
 i8 
 
 THE RECIPIWCITY CRAZE. 
 
 respect, handicaps and kills our competitors. Free Trade 
 would breathe life into them. I say, therefore, speaking 
 selfishly as an Englishman, we had better remain as we arc, 
 and " let sleeping dogs lie." 
 
 But I want to know wliat it is our Neo-Protectionists 
 have to lay at the door of Free Trade, even one-sided 
 Free Trade. 
 
 Let us do a little more national stock-taking, for there is 
 no other way of seeing how we get on. 
 
 Under the head " Imports and Exports," I gave figures 
 which show the grand external results of our one-sided free 
 trade. Let us now look at our internal condition, and see 
 whether we can recognise any moral and material progress. 
 
 Let us take — i. Population. 2. Pauperism. 3. Crime. 
 4. Education. 5. Thrift. 6. Bankruptcy. 7. Taxation. 8. 
 National Debt. 9. Banking. 10. Railways. 11. Agriculture. 
 
 I. — Population. 
 
 In 1850 the United Kingdom numbered 27,523,694 
 
 „ i860 „ ,, „ 28,778,411 
 
 .. 1870 „ ,, „ 31,205,444 
 
 „ i88o „ ,, „ 34,468,552 
 
 M 1881 ,, ,, ,, 34,788,814 
 
 There is nothing discouraging here, surely. During the 
 last ten years 3,275,000 persons, nearly 900 a day, have 
 been added to our population, notwithstanding emigration, 
 and a protracted agricultural and trade depression. 
 
 What is the economical condition of this population ? 
 
 The following tables will indicate this : — 
 
 Years. 
 
 Exports. 
 
 Per head 
 
 of 
 
 Population. 
 
 Imports. 
 
 Per head 
 
 of _ 
 
 Population. 
 
 Excess ot 
 Imports 
 per head. 
 
 1854 
 i860 
 1870 
 1880 
 
 115,821,092 
 164.521,351 
 244,080,577 
 
 28t),4i4,466 
 
 £, s. d. 
 
 4 3 7 
 
 5 H 4 
 
 7 16 5 
 
 8 6 I 
 
 152,389,053 
 210,530,873 
 303,257,493 
 411,229,565 
 
 £. s. d 
 5 10 2 
 770 
 
 9 14 4 
 II 18 7 
 
 jC s. d 
 I 6 7 
 I 12 8 
 
 I 17 II 
 3 12 6
 
 ONE-SIDED FREE TRADE. 
 
 19 
 
 Bearing in mind what was said under " Imports and 
 Exports," a glance at this table shows that, fast as 
 our population has increased, its command of wealth, and 
 purchasing power in the world's markets has increased still 
 faster ; and that they exercised this power may be seen by 
 the following table, which shows tlie consumption per head 
 of population of some of those articles which our working 
 classes consume most : — 
 
 Consumption per Head of Population of Imported 
 and exciseable articles. 
 
 /Bacon lbs, 
 
 I Butter ,, 
 
 I Cheese ,, 
 
 Potatoes ,, 
 
 IWheat 
 
 Rice ,, 
 
 Sugar (raw) „ 
 Sugar (refined) ,, 
 Tea „ 
 
 Spirits imported ) 
 and excisable \ 
 
 gals. 
 
 Malt (British) bushels 
 
 1870. 
 1-98 .. 
 
 1875- 
 
 8-26 . 
 
 18S0. 
 ■ 15-96 
 
 4-15 •• 
 3-67 •• 
 
 2-8o .. 
 
 . 4-92 . 
 
 5-46 . 
 
 16-05 . 
 
 .. 7-42 
 .. 5-66 
 • • 31-63 
 
 122-90 .. 
 
 674 .. 
 
 197 'oS . 
 11-68 . 
 
 .. 210-42 
 . 14-14 
 
 41-40 .. 
 
 5-83 •• 
 
 53-97 . 
 8-88 . 
 
 .. 54-22 
 
 .. 9-46 
 
 381 .. 
 
 4-44 . 
 
 •■ 4-59 
 
 i-oi .. 
 
 1-30 . 
 
 1-09 
 
 I 84 .. 
 
 1-95 . 
 
 . I -65(1879) 
 
 Now let us take pauperism. 
 
 
 2. — Pauperism. 
 
 
 
 Ireland. 
 
 
 ( 
 
 Number of Paupers 
 
 J 
 
 1870 j 
 
 First weeks in January 
 
 j 73,921 
 
 1873 
 
 >> » 
 
 79,649 
 
 1878 
 
 >> >> 
 
 85,530 
 
 1879 
 
 
 91,807 
 
 1880 
 
 ,> M 
 
 100,856 
 
 I88I 
 
 ,> >> 
 
 Scotland. 
 
 109,655 
 
 1870 
 
 I.fh 'Mny 
 
 126,187 
 
 1873 
 
 ,, ... 
 
 111,096 
 
 1878 
 
 ,, ••• 
 
 94,671 
 
 1879 
 
 ,, ... 
 
 97,676 
 
 I8S0 
 
 .. 
 
 98,608
 
 20 
 
 THE RECIPROCITY CRAZE. 
 
 
 England and Wales. 
 
 
 Year. 
 
 Population. 
 
 No. OP Pauhrks 
 January i. 
 
 1850 
 
 17,773,324 
 
 920,543 
 
 i860 
 
 19,902,713 
 
 851,020 
 
 1870 
 
 22,457,366 
 
 1,079,391 
 
 1877 
 
 24,547,309 
 
 728,350 
 
 1878 
 
 24,854,397 
 
 742,703 
 
 1879 
 
 25,165,336 
 
 800,426 
 
 1S80 
 
 25,480,161 
 
 837,940 
 
 1881 
 
 25,798,922 
 
 803,126 
 
 These tables also tell their own tale, we see : — 
 I. That while agriculture remains depressed, trade 
 is reviving, the figures for 18S0 and 1881 for England 
 and Wales bringing the fact into strong relief; 2, that 
 as while in 1870 this part of the kingdom had a million 
 of paupers to support, in 1881 it has only 800,00c. 
 although the population has in the meantime increased 
 3,340,000, a marvellous proof of progress ; 3, that we 
 appear to_ be once more embarked on the rising wave of 
 prosperity as a trading and manufacturing nation. 
 Let us now turn to our criminal statistics. 
 
 
 3. — Crime. 
 
 
 
 Untied Kingdom. 
 
 
 Year. 
 
 PoPL-LATION. 
 
 Convictions. 
 
 1S40 
 
 26,487,026 
 
 34, ©30 
 
 1850 
 
 27,523,694 
 
 41,008 
 
 i860 
 
 28,778,411 
 
 17,461 
 
 1870 
 
 31,205,444 
 
 18,401 
 
 1879 
 
 34,155,126 
 
 16,823 
 
 1880 
 
 34,468,552 
 
 15,643 
 
 Do these 
 
 figures require a word of comment ? 
 
 Let us now turn to the matter of education. 
 
 
 4. — EdUCxVTIGN. 
 
 
 
 Untied Kingdom. 
 
 
 Year, 
 
 T ?*^"°°'"'L Accommodation. 
 
 AVERAGB 
 
 
 Inspectfd. 
 
 Attendance 
 
 1863 
 
 7,739 ... 1,512,782 
 
 1,008,925 
 
 1869 
 
 10,337 ... 2,076,344 
 
 1,332,786 
 
 1874 
 
 15.671 - 3.344,071 
 
 1,985,394 
 
 1879 
 
 20,169 ... 4,727,853 
 
 2,980,104 
 
 iSSo 
 
 20,670 ... 4,842,807 
 
 3,iSS,53<i
 
 ONE-SIDED FREE TRADE. 
 
 21 
 
 We thus see that while the material condition of our 
 population has steadily improved, their moral and in- 
 tellectual condition has also advanced in a remarkable 
 degree. 
 
 One of the signs of improvement is in the matter of 
 thrift. Take the Savings' Bank figures : — 
 
 5. — Thrift. 
 
 
 In 1S41 the deposits were 
 
 ... ^24,474,689 
 
 ,, 1S51 „ ., 
 
 ... 30,277,654 
 
 „ 1S61 
 
 ... 41,546,475 
 
 .= 1871 „ „ 
 
 ... 55,844,667 
 
 „ 1^79 :, -r 
 
 - 75.809,994 
 
 ,, 1S80 ,, ,, 
 
 ... 77,721,084 
 
 6. — Bankruptcy. 
 
 In 1879 ^'^^ insolvencies were in number 13,132, and 
 in amount ^29,678,000. 
 
 In 1880 the insolvencies were in number 10,298, and 
 in amount ;^i 6, 188,000. 
 
 
 7. Taxation, 
 
 
 
 Year. 
 
 Population. 
 
 Amount Raised. 
 
 Per 
 
 Head. 
 
 1865 . 
 
 29,861,908 
 
 • ;^7o,3i3.436 
 
 .. £^ 
 
 7 I 
 
 1870 . 
 
 . 31,205,444 . 
 
 • 75,434,252 
 
 2 
 
 8 4 
 
 1875 .. 
 
 • 32,749,167 . 
 
 . 74,921,873 
 
 2 
 
 5 9 
 
 1878 . 
 
 . 33.799,386 . 
 
 . 79,763,298 
 
 2 
 
 7 2 
 
 1880 . 
 
 . 34,468,552 . 
 
 . 81,265,055 
 
 2 
 
 7 I 
 
 1S81 . 
 
 . 34.788,814 . 
 
 84,041,288 
 
 2 
 
 8 4 
 
 INCOME TAX. 
 
 1869 Gross value of property and profits assessed ^^434,804,000 
 1874 ,, ,, ,, 543,026,000 
 
 1879 ., ., ,. 578,046,000 
 
 8. — National Debt. 
 
 In 1870 this was ... 
 
 „ 1874 „ 
 
 „ 1880 ,, 
 
 ,, 1881 ,, 
 
 ;C797,943,66o 
 
 776,107,783 
 
 774.044.23s 
 
 768,703,692 
 
 Let us now take Banking and the Clearing House 
 returns : — 
 
 9. — Banking. 
 June, 1880, Deposits at principal London Banks 
 
 and Discount Companies ... ;^ 105, 000, 000 
 
 June, 1881 ,, „ „ 118,500.000
 
 22 THE RECirROCITY CRAZE. 
 
 bankers' clearing house. 
 
 In 1870-71 the total Clcaiing was ;i^4,oi8,464,ooo 
 
 „ 1878-79 ,, ,, ,, 4,885,091,000 
 
 ,, 1879-80 ,, ,, ,, 5,265,976,000 
 
 ,. 1880-81 ,, ,, ,, 5,909,989,000 
 
 Do any of these figures give one an idea of decay ? 
 Let us now look at our Railway traffics : — 
 
 Year. 
 1870 
 1S75 
 1879 
 1880 
 
 Here again we have to notice the effects of the 
 depression, and the indication of a fresh start, which the 
 figures of 1880 afford. There is one thing, however, to be 
 noted. Considering that since 1S75 some 1,300 miles of 
 comparatively unproductive lines have been built, we 
 cannot but see that an enormous advance in the general 
 prosperity has taken place in this department also. 
 
 Let us now take a few figures from our agricultural 
 statistics : — 
 
 II. — Agriculture. 
 
 
 10. — Railways. 
 
 
 Miles 
 
 No. OF Total 
 
 Pkr 
 
 OPEN. 
 
 Passengers. Receipts. 
 
 Mile. 
 
 15,537 • 
 
 .. 330,004,398 ...;^45,o78,l43 
 
 ■■;^2,794 
 
 16,658 . 
 
 .. 506,975,234 ... 58,982,753 
 
 ■• 3,541 
 
 17,696 . 
 
 .. 562,732,890 ... 59,395,282 
 
 •• 3,356 
 
 17,945 • 
 
 .. 603,884,752 ... 61,958,754 
 
 •• 3,453 
 
 
 Acres under 
 
 Average price 
 
 No. OF 
 
 Ko. OF 
 
 'ear. 
 
 Corn Crops. 
 
 OF Wheat. 
 
 Cattle. 
 
 Sheep. 
 
 1870 . 
 
 •• 11,755,053 
 
 .. 46s. lOd. .. 
 
 9,235.052 . 
 
 • 32,786,783 
 
 1877 . 
 
 .. 11,103,196 
 
 ... 56s. 9d. .. 
 
 9,731,537 ■ 
 
 . 32,220,067 
 
 1878 . 
 
 .. 11,030,175 
 
 ... 46s, 5cl. .. 
 
 9,761,28s . 
 
 . 32,571,018 
 
 1879 . 
 
 .. 10,777,459 
 
 ... 43s. lOd. .. 
 
 9,961,536 • 
 
 • 32,237,958 
 
 1880 . 
 
 .. 10,672,086 
 
 ... 44s. 4d. .. 
 
 9,871,153 • 
 
 . 30,239,620 
 
 Here is the one bad exhibit in the national balance- 
 sheet. Bad as these figures are, however, they do not, at 
 first sight, convey any idea of the disastrous years, 1877, 
 1878, and 1879. 
 
 To obtain anything like a correct notion of the circum 
 stances, it must be borne in mind that an almost total 
 failure of crops, especially in 1879, was accompanied ly 
 very low market prices. The result was disastrous to the 
 agricultural interest, and to every other interest which de- 
 pended on it.
 
 ONE-SIDED FREE TRADE. 23 
 
 Landlords had to forego their rents. Farmers lost a 
 great portion of their capital. Manufacturers lost the home 
 markets. All this constituted our agricultural, and helped 
 to constitute our commercial, depression. 
 
 Our working classes, however, owing to the bountiful 
 harvests of America, were fed more cheaply than ever. 
 And this has been, commercially and economically speaking, 
 the salvation of the country. 
 
 I speak, of course, of the nation as a whole. Certain 
 interests have suffered, and are suffering. The agricultural 
 interest, and the manufacturing and commercial interests 
 which depend on it, have suffered, and are still suffering, 
 from the combined influences of bad harvests and low 
 prices. But, large and important as these interests are, 
 they cannot be allowed to outweigh the interests of the 
 whole community. 
 
 As we have seen from all these facts and figures, it is 
 quite possible that important interests may suffer, and yet 
 that the community as a whole may be prospering. No 
 Free Trader denies, or wishes to deny, that certain interests 
 have suffered. 
 
 What the Free Trader asserts is that the nation as a 
 whole is prosperous and thriving, and that the proofs 
 abound on every side. The Neo-Protectionists deny this ; 
 but, in seeking to prove their case, they do not appeal to 
 facts as a whole, but pick and choose those which appear 
 to bear out their contention. 
 
 The facts, however, which they bring forward never do 
 more than show that some particular interest or class is 
 suffering, and this no one is concerned to deny; their 
 facts never prove that the nation, as a whole, is suffering. 
 In truth, every fact proves that the nation, as a whole, 
 is very prosperous. 
 
 As a matter of course, the classes which suffer call out 
 for relief. Agriculturists agitate for " Protection." Manu- 
 facturers clamour for " Reciprocity." I will discuss these 
 matters in the following chapter.
 
 24 THE RECIPROCITY CRAZE. 
 
 IV. 
 
 "RECIPROCITY OR RETALIATION." 
 
 This is now the battle-cry of our Neo-Protectionists. They 
 
 maintain tliat if foreigners keep out our products by hostile 
 
 taritfs, we should threaten to do the same with theirs. 
 
 One of two things must happen : they will either open 
 their ports, and we shall then have Reciprocity, or we shall 
 close ours, and we shall then have Retaliation. 
 
 I have already discussed what might be the outcome 
 of Reciprocity, that is free trade, to ourselves as a nation. 
 
 As regards the world at large, all are agreed upon the 
 benefits that would ensue from an adoption of Free Trade. 
 But, we might be driven to Retaliation, and that involves 
 many important considerations which our Neo-Protectionists 
 steadily keej) out of view. 
 
 Let us look at some of these. 
 
 Let us assume that all the difficulties which might arise 
 from " the most favoured nation " clause in existing treaties 
 are obviated, and Retaliation i)ure and simple set up. 
 
 We should find ourselves in a most absurd and anoma- 
 lous position. 
 
 Pray obser\'e that when I use the terms " we," " us," 
 "our," I mean the nation, the community, and not any par- 
 ticular class composing it. The distinction is an important 
 one, but our Neo-Protectionists steadily ignore it. In dis- 
 cussing these questions it is found convenient by them, 
 according to the exigencies of their argument, to use 
 ambiguously the terms " we," and " us," and " our." When 
 they use these terms, what is in their minds is, some class 
 atid its supposed particular interests ; which they would have 
 you identify with the nation and its general interests — two 
 things which may be diametrically opposed. 
 
 For this purpose "we" and ''our" are convenient 
 ambiguities. 
 
 The absurd and anomalous position in which we — that 
 is the nation— should find ourselves is this : — The facts and 
 figures I have adduced prove to demonstration that under 
 the existing system of what our Neo-Protectionists are 
 pleased to call one-sided Free Trade, and by means of
 
 ^^RECIPROCITY OR RETALIATION.^' 2% 
 
 it we, as manufacturers, and traders, have attained a posi- 
 tion in the world which is at once the admiration, the 
 envy, and, commercially speaking, the terror of competing 
 nations ; yet, because some of our interests suffer from time 
 to time in the fierce competition which has been engen- 
 dered; and without pausing for a moment to estimate what 
 benefits this same competition may in other respects have 
 conferred on these very interests, they call in question our 
 Free Trade policy ; they deny or ignore the results which it 
 has attained for us ; and the nation is counselled to reverse 
 that policy. 
 
 Each suffering interest has its noisy organs, its irre- 
 sponsible chatterers. The agriculturist organs suggest 
 duties on grain, but never hint at duties on other products. 
 l"he manufacturing organs clamour for protective duties on 
 the foreign products which compete with their own, but 
 scout the notion of taxes on the food of the people, or on 
 the raw material they use. Each one wants his own 
 industry protected, while anxious that freedom shall rule in 
 every other department. 
 
 It never seems to strike them that if Protection be once 
 started, it must be extended to all commodities, and embrace 
 all interests. It never seems to strike them that to protect 
 one interest to the exclusion of the rest, is to commit a 
 gross injustice. It never seems to occur to them that the 
 interests, or supposed interests, of a class may be incom- 
 patible with, or opposed to, the interests of the community ; 
 and that when this is the case, it is just and politic that the 
 latter should prevail. They never seem to truly estimate 
 such an elementary proposition as this : that however large 
 and numerous a class may be, it forms only a part, and is 
 not the whole of a nation. 
 
 Tried by these tests, what becomes of the cries which 
 occasionally arise from some interest which may from time to 
 time suffer from the universal competition, while the general 
 progress of the nation is one onward march in the path of 
 wealth and prosperity ? 
 
 The largest, the most important interest among us is 
 agriculture. If any interest could claim protection as a 
 matter of justice or policy, it is this. But, it was seen that
 
 26 THE RECIPROCITY CRAZE. 
 
 to protect agriculture would be injurious to the general 
 interest, and on this ground the Corn Laws were abolished. 
 
 The reasons which hold against Protection to agriculture 
 apply with tenfold force to other and minor interests. 
 If these interests clash with those of the community 
 they must give way. There is no other possible method of 
 attaining to the greatest happiness of the greatest number. 
 And on no other ground can a Free Trader argue the question 
 as regards Retaliation, or whatever form Protection may 
 take ; whatever net gain it might bring to a class, the loss 
 to the community would be much larger. 
 
 It must be contrary to the general interest that the price 
 of any commodity should be artificially raised. To raise 
 prices is, on the one hand, injurious to producers by check- 
 ing consumi)tion, and thus diminishing the demand for the 
 article produced, and for the labour which produces it ; while 
 on the other hand, it is injurious to the consumer, in forcing 
 him either to pay more for, or to consume less of, the 
 article of which he stands in need. 
 
 To diminish production is to diminish our industry^, our 
 trade, and our commerce, and thus to impoverish ourselves 
 and the rest of the world. 
 
 It is the interest of the community that the keenest com- 
 petition should reign, so that energy, enterprise, and inven- 
 tion shall have full play, and shall work for the benefit of 
 ourselves and the rest of mankind. Protection dulls and 
 stifles these beneficent forces, and its inevitable tendency is 
 to bring about the mimimum of production at the maximum 
 of cost. And on this ground it stands utterly condemned. 
 
 TWO NEO-PROTECTIONISTS. 
 
 1. A Quarterly Reviewer, July, i8Si. 
 
 2. Sir Edward Sullivan, Bart., Altuieculh Century, August, l88l. 
 
 Under the head of " Imports and Exports " I have given a 
 few extracts from two of the latest Protectionist utterances. 
 I here take the opportunity of making a few comments on 
 some of the facts relied on, and the conclusions drawn, in 
 these two dintribes against Free Trade.
 
 TIVO NEO-PROTECTIONISTS. 27 
 
 Let the reader turn to p. 7, supra; let him note the 
 figures there given in a Httle calculation of three lines, and let 
 him attentively consider the deductions which the Quarterly 
 Reviewer draws from them, and the idea which he would give 
 us of Sir Robert Peel's possible " dreams." First, as to his 
 figures. What can be the writer's qualifications for discoursing 
 on British Trade ? He does not seem to know or compre- 
 hend the meaning of " re-exports of foreign and colonial 
 produce." If he did, he would not have made the egregious 
 blunder of leaving out this item, which amounts to 63 
 millions. He makes out that the excess of our imports last 
 year was 187 millions, but as he has taken no account ot 
 commodities merely passing through our ports, he overstates 
 this excess by 63 millions ! Next, as to what Sir Robert 
 Peel would have thought of a state of affairs which does not 
 exist. If Sir Robert had lived in our day, and were as igno- 
 rant as this writer is, he might express alarm as this writer 
 does, at the magnitude of our import trade. But Sir Robert 
 had some acquaintance with the subject, and would 
 not have been oblivious, or regardless, as this writer is, of 
 the fact that Great Britain does more than half the 
 world's ocean carrying trade, and that she has interest 
 to receive on her foreign investments besides other trifles 
 of this sort ; and that before she need do any bargaining 
 as to her exports or imports, she has to receive from 
 creation, by way of interest on loans, &c., and for work and 
 labour done, in money, or in kind, considerably over 100 
 millions of pounds sterling a year ! No wonder a writer in 
 The Times money article cites this blunder as " a measure 
 of the intelligence of the new reciprocitarians." 
 
 Now for an instance of "hopeless muddle." In p. 291 
 of his article, the Quarterly Reviewer makes a kind of eff"ort 
 to explain how poor indebted England discharges this (ac- 
 cording to him and his school) annually increasing adverse 
 balance of trade. He says: — "We have about 2,000 
 millions invested in American and other foreign bonds, 
 and with this we are paying for a large part of the difference 
 between our imports and our exports. We are constantly 
 told that gold is disappearing, and we know that instead 
 of being an importer of the precious metal we are now
 
 2 8 THE RECIPROCITY CRAZE. 
 
 obliged to export it. The theorists who uphold the 
 wonderful dogma just referred to are lost in wonder over 
 the ' drain of gold/ and are always asking some one to tell 
 them what becomes of it. It goes towards the payment 
 of our debts — that is the heart of the mystery. But this 
 explanation does not satisfy the economists, and we find 
 them, in despite of all evidence and reason, clinging hard 
 and fast to an exploded delusion of an effete school, con- 
 cocted during a period essentially different in all respects 
 from the present." These are strong words. Let us look 
 at them a little closer. He says we are paying our debts 
 by selling our American and other foreign bonds. Indeed ! 
 If so, when did the process commence ? There is not a 
 single year, for the last twenty years, in which our imports 
 have not e.xceeded our exports by at least 50 millions, the 
 amount of the excess in the aggregate being something 
 like 1,500 millions. And yet, at the end of this period, 
 which comprises more than half the Free Trade epoch, and 
 during which the country is said to have been getting 
 rapidly impoverished, he makes out that we have in our 
 strong box 2,000 millions of the world's obligations ! What 
 can be this writer's idea of " evidence and reason ?" Both 
 flatly contradict him. How did we get these 2,000 millions 
 of bonds ? We must have got at least half of them during 
 the last twenty years. But during this time we had im- 
 ported on balance over 100 millions of bullion ! How can 
 we be getting in goods, bonds, and bullion from the rest of 
 the world, owing nobody anything, and at one and the 
 same time be impoverishing ourselves ? But, he makes 
 some obscure reference to a " drain of gold." Coupling 
 this with his idea of our paying away our American and 
 other bonds, I think I can pluck out what he calls " the 
 heart of the mystery." It is matter of common knowledge 
 that from 1877 to 1879, three years, European harvests were 
 deficient and American harvests plentiful. The harvest of 
 Europe in 1879 was about the worst ever known. This 
 state of things was good for the United States, and bad for 
 Europe. The demand for corn was enormous ; and as the 
 United States had it to sell, they were enabled to turn it 
 into money, and with the proceeds to do two most ira-
 
 TWO NEO-PROTECTIONISTS. 29 
 
 portant things. They had outstanding a debt on which 
 they were paying 5 and 6 per cent, and they were sufifering 
 under an inconvertible currency. During the nine years 
 1 87 1 — 9 they had exported on balance ^^76, 084,000 
 in gold. Trade and commerce from 1873 to 1877 were 
 extremely depressed, more depressed than with us ; 
 but in a moment all was changed. By means of the 
 vast supphes of grain they exported and sold to Europe, 
 they were enabled to pay off a considerable portion of 
 their debt, to reduce the interest on the remainder, and 
 to establish their currency on a metallic basis. The 
 process adopted was to call in their bonds ; and to buy gold 
 in the markets of the world, as Italy, for a similar object, 
 is now doing. Some of these bonds were held by us, some 
 by other nations ; we paid for them when we bought them 
 years before, and we got money or money's worth when we 
 parted with them. As to the gold, some gold went away — 
 not more than we could easily spare, seeing that with an 
 increased volume of business money remains at from 2 to 
 2^ per cent. In 1 880-1 the United States imported on 
 balance p^i8, 500,000 in gold; but while Free Trading 
 England exported it to the extent of two to three milUons 
 Protectionist France exported six or seven millions. I 
 attach no importance to this fact, however, I only use it as 
 an argumentiim ad hominem ; for gold, like everything else, 
 is a commodity, and tends to go where it is most wanted, and 
 can be paid for. All that happened amounted to this, that 
 America, by the extraordinary coincidence of her possessing 
 three abundant harvests, while Europe suffered under three 
 deficient ones, was enabled to pay off some of her debt, 
 to reduce the interest on the remainder, and to put her 
 currency on a metallic basis. All this should have been 
 within the ken of a writer who lays claim to " a mind 
 capable of comprehending facts," and who sets himself up 
 as an instructor on the Free Trade question. But, all is 
 ignored, and we are made to carry away a dim sort 
 of idea that, in order to pay our way under our Free 
 Trade system, we are selling our bonds, and are being 
 drained of our gold ; a state of things which only exists in 
 the minds of such writers as this Quarterly Reviewer.
 
 3° THE RECIPROCITY CRAZE. 
 
 And now for another passage of his, p. 289: — "Again, 
 if we look at the United States where Mr. Bright has so 
 often told us to look, we shall find that their exports for 
 the year ending June, 1881, exceeded their imports by 
 ^^54,000,000. This ought to mean that the Americans are 
 getting poorer, if they are not actually aijproaching bank- 
 ruptcy ; but they by no means regard it in that light. They 
 like Mr. Bright's praises of their countrj^, at the expense 
 of his own, but they will not have his teaching at any 
 price, and consequently they will go on exporting more 
 than they import as long as good fortune enables them to 
 do so. Then there is France, she also should have been 
 sinking deeper and deeper in the slough of despond, for 
 in her case also the exports exceed the imports." 
 
 This statement about France is astounding ! It is abso- 
 lutely contrarj' to fact. In 1880 France, according to the 
 returns, imported in excess 63 millions; in 1879, 57 mil- 
 lions ; and in 1878, 43 millions. France is now, and has 
 been for the last five years, an importer on balance, and 
 her annual excess imi)orts are rapidly mounting. 
 
 Very severe things might be said of such a blunder as 
 this, but I pass on to his notions about the United States 
 excess of exports, which, by the way, was not 54 millions 
 but 52 millions, for the year ending in June last. His 
 notion that the wealth of the United States, and the virtues 
 of protection, are proved by this excess of exports is one 
 •A'orthy of the Neo-Protectionist school, and " a measure of 
 their intelligence." Is our Quarterly Reviewer ignorant, or 
 is he oblivious, of the fact that the United States are largely 
 indebted to Europe, and have to pay a large annual tribute 
 to Europe, in money, or in kind, by way of interest on 
 that debt ; and that they have scarcely any ocean-carrying 
 trade ? Is he ignorant, or oblivious, of the fact that thousands 
 of absentees, and travellers, who come over here from the 
 States, have to remit to Europe, in one shape or other, the 
 expenses which they incur? Let us endeavour roughly to 
 estimate what these three items amount to. i. Indebted- 
 ness. — Let us say the States owe Europe 500 millions; 
 5 per cent on this makes 25 millions a year for them to pay 
 annually. 2. Shipping. — Owing to blessed Protection — poor
 
 rjn? NEO-PROTECTIONISTS, 3 1 
 
 one-sided Free Trading England does most of this business 
 for them. They had not a smgle ocean grain-ship floating 
 last year, and they carried only 17^- per cent, of their 
 foreign commerce. Their export and import trade 
 amounted to 309 milUons, Let us suppose for a 
 moment that on Ssi per cent, of this they paid 5 per 
 cent, for freight; this would make i2| millions more 
 to pay. Then there is the item of passenger fares 
 across the Atlantic, to and fro. Let us say half a 
 million for this. 3. What shall we put down for the 
 10,000 absentees, and travellers, who flock to Europe 
 every year, and some of whom are among the richest men 
 in the world ? Shall we say an average of ^300 ? This 
 would give us 3 millions more. There may be other items 
 for works of art, jewellery, &c., but of them I will take no 
 account, so we will now sum up. 
 
 United States Annual Foreign Indebtedness, 
 
 interest payable abroad ... ... ... ^{[['25,000,000 
 
 Ocean shipping charges ... ... ... 12,750,000 
 
 Absentees and travellers ... ... ... 3,000,000 
 
 40,750,000 
 
 So that before the States can commence to talk about 
 exchanging a dollar's worth of their own products for a 
 dollar's worth of foreign products, they have to pay over 
 to Europe, in money or in kind, no less a sum than 
 40 miUions sterling ! 
 
 No wonder their exports exceed their imports ! What 
 ignorance, what folly, does it not betray, therefore, to build 
 up an argument in favour 01 Protection, and against Free 
 Trade, on the bare figures which appear in trade returns ! 
 In the next chapter the reader will find the true deductions 
 which may be drawn from them. 
 
 Now for Sir Edward Sullivan in the Nineteenth 
 Century. On page 8, supra, will be found two passages 
 from his article, " Isolated Free Trade," to which I 
 would again refer the reader. They, and some further 
 extracts which I shall make, betray the fatuous igno- 
 rance concerning "imports and exports," which is the 
 characteristic of the whole school of Neo-Protectionists,
 
 32 THE RECIPROCITY CRAZE. 
 
 They all have the same notions about " foreigners 
 flooding our markets with cheap and often nasty manu- 
 factured goods ; " the same idea of " Free Trade increasing 
 the balance of trade against us till it has reached the alarm- 
 ing figure of ;;^i 36,000, coo; " the same notion that we are 
 "drawing upon our capital and our accumulated wealth." 
 
 But, there are other choice morsels which I must trans- 
 cribe verbatim : — " The cloud that threatens the industrial 
 existence of England has been gathering and intensifying 
 for six years. * Who,' asks Mr. Bright triumphantly, ' dare 
 now propose a return to Protection ? ' * Who,' it may be 
 asked in return, 'amongst all the wise and acute and 
 thoughtful men in enlightened Europe and America, dare 
 now propose the adoption of Free Trade ? ' Not one ; 
 absolutely not one. After carefully watching the working 
 of 'isolated' free trade in England for thirty years, they 
 have unanimously, without a dissentient voice, rejected it 
 as belonging to the puerile doctrines and illusions of 
 mankind." " Practical thoughtful men are beginning to 
 compare the prophecies and theories of free trade with the 
 practical results, and they are aghast." " England is the 
 only country in the world that has adopted what is called 
 free trade, and England is the only country in the world 
 that is retrograding in industrial prosperity." " Under 
 protection America is accumulating annually ;^i 65,000,000. 
 Under protection France is accumulating annually 
 ;^7 5,000,000. Under Free Trade England is accumulating 
 annually ;j£"65, 000,000. Many experts maintain that since 
 1875 — 1876 she was losing money instead of accumulating. 
 Protective America now exports more than she imports. 
 Protective France imports annually ;^4, 000,000 more than 
 she exports. (The balance against her is ;j^4o,ooo,ooo 
 in ten years). Free trade England imports annually 
 ;^i 30,000,000 more than she exports !" 
 
 Very few remarks are necessary on this farrago of reck- 
 less assertion and false inference. 
 
 It is not true that any cloud threatens the industrial 
 existence of England, or that she is retrograding in indus- 
 trial prosperity ; facts abounding on every side point to the 
 very opposite conclusion.
 
 TU^O NEO-PROTECTIONISTS. 33 
 
 It is not trae that wise, acute, and thoughtful men in 
 Europe and America have unanimously, without a dissen- 
 tient voice rejected Free Trade. I deny that any single 
 " wise " man has done so, whatever any acute or thought- 
 ful men — they are not necessarily wise — may have done. 
 I deny that any but the merest sciolists are aghast at the 
 practical results of Free Trade, for the simple reason that 
 there is nothing in these results at which to be aghast. 
 While, as to the prophecies which have been made as to the 
 general acceptance of Free Trade by the nations within a 
 certain limited time, it may be conceded that the generous 
 forecasts of its advocates have hitherto been unfulfilled. 
 This, however, does not arise from the falsity of their 
 doctrines, as the Protectionists would have it, but be- 
 cause of the prejudices and ignorance or men— such pre- 
 judices and ignorance for instance as these writers dis- 
 play — because of the existence of the self-same spirit 
 which placed Galileo in prison for maintaining that the earth 
 went round the sun ; and which consigned Giordano Bruno 
 to the flames for asserting that the world was round. 
 
 And now I have to ask Sir Edward Sullivan for his autho- 
 rity for the figures given by him as to the respective annual 
 " accumulations " of America, France, and England, in which 
 England with ;^65, 000,000 is placed at the bottom of the 
 list with the remark that " many experts maintain that since 
 1875-1876 she was losing money instead of accumulating." 
 
 I ask: who is his authority for such a statement? 
 
 Mr. Giffen, in one of his " Essays on Finance," 
 1878, puts down our "accumulations" for 1865 — 75 as 
 p{^2, 400,000,000, or ;^24o,ooo,ooo annually, and there is 
 no reason for supposing that they have decreased since ; 
 the figures given under " One-Sided Free Trade " proving 
 the contrary. It there be any " expert " to set against 
 the chief of the Statistical Department of the Board of 
 Trade, I should like to know who he is, and on what 
 factors he bases his calculation. 
 
 Then I have to ask him who is his authority for the 
 statement that " Protective France imports annually, 
 ;;^4,ooo,ooo uiorc than she exports ;" and that "the balance 
 against her is ;!^4o,ooo,ooo in ten years ? "
 
 34 THE RECIPROCITY CRAZE. 
 
 On taking up Martin's "Statesman's Year Book for 1881," 
 I find that, for the ten years ending 1879 — ^^ ^^^t year 
 given — the figures stand thus for her Imports and Exports :— 
 
 Imports for Home Consumption ... ... /" 1, 494, 7 13, 400 
 
 Exports of Home Produce ... 1,387,392,480 
 
 Excess of Imports 107,320,920 
 But, there is last year, 1880, and I find that Mulhall in his 
 " Balance Sheet of the World " puts down France's excess 
 of imports for that year as 63 millions, which brings up 
 the total excess for eleven years to 170 millions! In 
 1870, however. France exported on balance 3 millions, so 
 that the fact is that France for the last ten years has im- 
 ported on balance, on the average, 1 7 millions, not 4 millions ! 
 But, to stop here would be to give a very inadequate notion 
 of what France is doing in the way of imports and exports, 
 for I find that 
 
 In 1876 her excess imports were ... ... ;[f 16,500,000 
 
 ,, 1877 ,, ,, 10,800,000 
 
 ,, 1878 ,, ,, 43,600,000 
 
 „ 1879 ,, „ 57.200,000 
 
 ,, 1880 ,, ,, 63,000,000 
 
 So that France, though Protectionist, is actually, according 
 to our new school of writers, going down hill along with 
 free trading England ! 
 
 But does it not seem extraordinary that in the face of 
 these figures we should be given to understand that France 
 imports annually only ;,^4, 000,000 more than she exports? 
 
 At all events, he admits that France imports more than 
 she exports. But, this is in direct contradiction to his fellow 
 in the Quarterly, who, as we have seen, asserts that France 
 exports more than she imports ! These two Neo-Protec- 
 tionists, therefore, are at direct variance with each other on 
 a matter of fact forming the very basis of their argument ! 
 
 " Arcades am bo 
 El cantare pares el responJcre parati." 
 The only thing on which they are agreed is praise ot 
 Protection and vilification of Free Trade. 
 
 Here I leave them, commending to them Mr. Glad- 
 stone's recent advice to Lord Randolph Churchill, to " avoid 
 facts and logic, and stick to rhetoric and declamation."
 
 CONCLUSION. 35 
 
 VI. 
 
 CONCLUSION. 
 
 And now let us endeavour to draw a few practical de- 
 ductions from the foregoing discussion : — 
 
 1. That the fact of a nation's imports exceeding in 
 value the exports, indicates, other things being equal, that 
 this nation is a creditor of some other country. 
 
 2. And, conversely, that an excess of exports, other things 
 being equal, indicates that the nation is an indebted nation. 
 
 3. That, among the older States, those who are advancing 
 in wealth are gradually increasing their excess of imports, 
 while in those which are economically decaying, there exists 
 either an excess of exports, or a gradual decrease in excess 
 of imports ; and that in proof of this we have only to 
 examine the following figures, and to apply them to what 
 is within common knowledge concerning the countries 
 named : — 
 
 Great Britain, excess of imports, 1870, 59,000,000; 1880, 125,000,000. 
 
 France ,, ,, 1869, 3,000,000; ,, 63,000,000. 
 
 Holland ,, ,, 1870, 7,000,000; ,, 20,000,000. 
 
 Belgium ,, ,, 1870, 10,000,000; ,, 13,000,000. 
 
 Germany ,, ,, 1869, 12,000,000; ,, 6,000,000. 
 
 Russia ,, exports, 1870, 4,000,000 ; 1878, 3,000,000. 
 
 4. That, among the younger nations, the United States 
 stands out, at the present moment, as a great exporter on 
 balance ; but that, as she is a heavily indebted nation, she 
 cannot avoid exporting on balance until she has redeemed 
 her obligations, and has recovered her share of the ocean- 
 carrying trade ; and that, consequently, to point, as Pro- 
 tectionists do, to her 52 millions of excess exports as, ipso 
 facto, a proof of the virtues of their system, is to draw an 
 unwarranted and mischievous conclusion. 
 
 5. That the term "Balance of Trade," as commonly 
 used, is a misleading expression, calculated to give rise to 
 the most absurd fallacies. 
 
 6. That the " Balance of Trade," if there be such a 
 thing, is In favour of, and not adverse to, Great Britain. 
 
 7. That this " Balance " is likely to be more and more 
 in our favour.
 
 36 THE RECIPROCITY CRAZE. 
 
 8. That the world is likely to become more and more 
 indebted to us, and to pay us an annually increasing tribute 
 in money, or money's worth. 
 
 9. That this state of things took its rise with the advent 
 of Free Trade, and is distinctly traceable to it as a great 
 efficient cause. 
 
 10. That the secret of our wealth lies in this, that our 
 free imports give us an unmistakable advantage, as regards 
 the element of cheapness, in the universal competition, and 
 that the only way in which we can be deprived of this ad- 
 vantage is by other nations becoming Free Traders. 
 
 11. That it would be a very unwise thing, looking at it 
 from a selfish point of view, to disturb this state of affairs 
 by threatening other nations with hostile tariffs in retaliation 
 for their prohibitory duties. 
 
 12. That if our threats were effective, other nations 
 would immediately be put on the same basis as ourselves as 
 regards cheapness of production, with a result, probably, 
 anything but pleasant to us as traders, carriers, and 
 manufacturers. 
 
 13. That if our threats were non-eftective, we should, in 
 this way, also put ourselves on a level with our competitors, 
 with such accompaniments, however, as the following : — We 
 should raise prices all round, and so diminish general con- 
 sumption, and, consequently, production ; we should dimi- 
 nish our industry, our trade, and our commerce, and thus im- 
 poverish ourselves and the rest of the world, and, in doing so, 
 we should imitate the very policy we condemn in foreigners. 
 
 14. That Free Trade is the best, nay, the only possible 
 policy for us as a nation. 
 
 15. That some time or other, as sure as the day succeeds 
 the night, the nations will discover that in establishing Free 
 Trade, they secure the greatest happiness of the greatest 
 number, and thus make a practical advance to a realisation 
 of the benevolent motto of the Cobden Club — 
 
 "Peace and Goodwill among Nations." 
 AKgust 15///, iSSl.
 
 ■ "ENGLAND 
 
 UNDER FREE TRADE. 
 
 AN ADDRESS 
 
 DELIVERED TO THE SHEFFIELD JUNIOR LIBERAL 
 ASSOCIATION, Wi NOVEMBER, 1881. 
 
 BY 
 
 GEORGE W. MEDLEY. 
 
 Cassell, Petter, Galpin & Co 
 
 LONDON, PARIS ,{■ NEl]' YORK.
 
 ENGLAND UNDER FREE TRADE. 
 
 I HAVE the honour of appealing before you this evening for 
 the purpose of deUvering to you an address, which I have 
 entitled "England under Free Trade." 
 
 Now, these are very wide terms. In their full meaning 
 they cover a vast field of inquiry, and, if I were to attempt 
 to traverse that field throughout, I should have to take in 
 political, social, agricultural, commercial, artistic, literary, and 
 other matters, which I have no intention of doing, for which 
 there is no time, and for which I certainly have not the 
 requisite ability. With your permission, therefore, I propose 
 to confine myself to the one great subject indicated by my 
 title, Free Trade, only touching on some of the others by 
 way of argument or illustration. 
 
 In fact, our inquiry will resolve itself into a chapter oi 
 what is termed the Fair Trade Controversy. 
 
 That controversy turns, as you are aware, on the question 
 whether the commercial policy we have adopted for the last 
 thirty-five years has or has not contributed to the public 
 welfare ; and, consequently, whether we ought or ought not 
 to maintain that policy. 
 
 The question may be put shortly thus : — Is Free Trade a 
 success or a failure ? 
 
 But, before we proceed further, let us define what we 
 mean by the term Free Trade as just used. In the abstract, 
 Free Trade may be defined as that state of affairs in which 
 tlie nations exchange with each other their various products 
 untrammelled by hostile and prohibitory tariffs. Protection, 
 on the other hand, is that state of affairs in which the nations 
 are hindered from this free exchange by tariffs imposed for 
 that special purpose.
 
 ENGLAND UNDER FREE TRADE. 
 
 Well, we all know that Free Trade as thus defined does 
 not exist. We arc said to be living under Free Trade, but 
 in a strict sense that is not so. We are living under a 
 system in which our imports alone are free ; our exports to 
 some of the principal markets not being free. It is only as 
 regards our imports that we enjoy perfect freedom ; and it is 
 for this reason that the present regime has been called One- 
 sided Free Trade. It will now be our task to inquire 
 whether this has been, as regards our national welfare, a 
 success or a failure. 
 
 Now, all parties to the controversy are agreed as to the 
 benefits Universal Free Trade would confer on mankind. 
 So far as I can make out, no one whose opinion is of any 
 scientific value denies that if Free Trade were universal, it 
 would be of infinite advantage to the human race. There 
 are some among us, however, who maintain that partial Free 
 Trade — such as that under which we now live — is prejudicial 
 to the country which opens its ports to foreign productions, 
 and beneficial to the country which, on the other hand, shuts 
 out, as far as it can, by prohibitory duties, the commodities 
 of other nations. And this is just the point of the discussion. 
 Let us call to mind why it is that Universal Free Trade is so 
 beneficial. It is because a vital and energetic principle 
 which political economists call " Co-operation of Labour " is 
 brought into most efficient play. Free Trade in a natural 
 manner causes each nation to produce those commodities 
 which are most suitable to its soil, and to the circumstances 
 and the genius of the inhabitants of the particular region ; 
 and to exchange the commodities thus produced for the pro- 
 ducts of other nations, who, in like manner, have their own 
 peculiar advantages and industries. In such happy circum- 
 stances energy, invention, and enterprise are allowed full 
 play, and, as regards wealth, there is a constant tendency, by 
 means of more extended division of labour, and improve- 
 ment of processes, towards the maximum of production at the 
 minimum of cost. " IJut," as Mill says, speaking under the 
 head of " International Trade," " the economical advantages 
 of commerce are surpassed in importance by those of its 
 effects, which are intellectual and moral." " Finally," a little
 
 ENGLAND UNDER FREE TRADE. 5 
 
 further on he says, "commerce first taught nations to see with 
 goodwill the wealth and prosperity of one another. Before, 
 the patriot — unless sufficiently advanced in culture to feel the 
 world his country — wished all countries weak, poor, and ill- 
 governed but his own ; he now sees in their wealth and pro- 
 gress a direct source of wealth and progress to his own 
 country. It is commerce which is rapidly rendering war 
 obsolete, by strengthening and multiplying the personal 
 interests which are in opposition to it. And it may be said 
 without exaggeration that the great extent and rapid increase 
 of international trade, in being the principal guarantee of the 
 peace of the world, is the great permanent security for the 
 uninterrupted progress of the ideas, the institutions, and the 
 character of the human race." 
 
 As I have before remarked, all parties are agreed as 
 to the economic advantages of Universal Free Trade, but 
 there are some who, while admitting to the fullest the 
 economical, or jQ s. d. side of the Free Trade doctrine, 
 maintain that it has also a political side. They admit that 
 Free Trade tends to achieve the maximum of production at 
 the minimum of cost, but they say that there are other things 
 to be considered besides the accumulation of the greatest 
 possible amount of wealth. One of the things to be considered, 
 they say, is the necessity of educating a community in such 
 arts and manufactures as its resources are naturally fitted for, 
 but of which, except for Protection, it would remain ignorant. 
 And another thing to be considered, they say, is this : — tliat 
 so long as human nature is what it is, and nations are liable 
 to go to war, it is not only prudent and statesmanlike, but 
 absolutely necessary, in view of such a contingency, to 
 endeavour to render their country as far as possible 
 independent of the foreigner. And thus, according to this 
 school, the doctrine of Protection may be reasonably 
 maintained. 
 
 Now, I have two remarks to make concerning this 
 doctrine. As regards the education of a people in an 
 industrial art by means of Protection, it may safely be 
 conceded that if the protection be withdrawn when the 
 lesson is learnt, no great harm would be done, and a great
 
 ENGLAND UNDER FREE TRADE. 
 
 benefit might be conferred. But, we know from experience 
 that this is most unHkely to happen ; and that wlien once 
 Protection lias been admitted into a conunercial system it 
 becomes the most difficult thing in the world to get rid of 
 it. Then, with regard to the contingency of war, how 
 different are the views of the school of which I s[)eak from 
 those held by that association to which I have the honour 
 to belong — the Cobden Club ! While the school referred to 
 seems to be always contemplating and preparing for the 
 contingency of war by means of hostile tariffs, we are striving 
 might and main to render war impossible, by preaching our 
 commercial gospel of peace ! 
 
 As you are all aware, Great Britain stands alone among 
 the nations as a free-trading country. It is natural to 
 inquire how this is the case, how it is that people, acute, 
 thoughtful, and intelligent, as, for instance, the French, the 
 Germans, and the Americans, cling to the doctrines of 
 Protection, while we alone adhere to those of Free Trade ? 
 A full answer to that question, gentlemen, would occupy 
 more time than we have at command this evening. I must 
 content myself with just indicating the direction in which I 
 believe the causes of this phenomenon are to be traced. I 
 cannot help thinking that most of the evil is to be laid to 
 the account of wars. Their cost necessitates the imposidon 
 of heavy taxation. The persons who impose that taxation 
 are for the most part ignorant of political economy. They 
 take the first impost that occurs to them, and they lay it on 
 the people they misgovern. They know nothing of the 
 possible consequences, in an economic point of view, 
 of what they do. One of these consequences is the creation 
 of interests which would never have existed but for this 
 cause, which grow up, and which gradually acquire sufficient 
 influence and power to render it extremely difficult to get 
 rid of them. This difficulty I hold to be the great 
 economic problem of the immediate future. 
 
 At the present moment we may see these causes in 
 operation in France, Germany, and the United States ; what 
 is ) taking place there affording apt illustrations. We our- 
 selves have suffered in times past from these causes, but
 
 ENGLAND UNDER FREE TRADE. 
 
 thirty-five years ago, we embraced Free Trade, and during 
 that period we have been gradually emancipating ourselves 
 from their baneful influence. The countries I have named, 
 however, still cling to Protection, and there seems to be no 
 immediate probability of their changing their creed. If I 
 be asked — Is this not an astonishing fact ? I should 
 answer — Not at all. England has been ahead of the rest or 
 the world in other things before now. We had our revolu 
 tion, and settled matters with our king, a hundred years 
 before France did ; in the matter of the abolition of slavery 
 we were thirty-five years before the Americans ; while as to 
 Germany, the Cassarism, the militarism, the despotism which 
 reign there, and which impoverish her, place her in some 
 respects a hundred years behind us in the march oi 
 civilisation. 
 
 The ground is now sufficiently cleared, I trust, for us 
 to take a survey of our position under what is called 
 our one-sided Free Trade. The first thing to which I 
 shall call your attention is the Board of Trade returns, 
 which, as you know, give the particulars of our trade with 
 the rest of the world under the heads of Imports and 
 Exports. The totals of these, as you are aware, have been 
 growing, with slight interruptions, ever larger and larger year 
 by year, until last year the sum total of our foreign trade 
 amounted to the stupendous figure of 697 millions, which 
 figure seems likely to be eclipsed by that of the year which 
 is now drawing to its close. Of this trade our imports 
 amounted to 411 millions, and our exports to 286 millions, 
 leaving an excess of imports of 125 millions. Now, let me 
 remind you that it is in regard to this excess of imports over 
 exports that the Fair Trade battle most hotly rages. The 
 Fair Traders maintain that this excess of 125 millions is the 
 measure of our national loss for 1880; while the Free Trader 
 ridicules this view, and maintains, on the contrary, that 
 it may more justly be considered a measure of our national 
 gain. 
 
 In a little pamphlet call " The Reciprocity Craze," which 
 I had the honour of writing for the Cobden Club, I made the 
 assertion that this question of imports and exports consti-
 
 8 ENGLAND UNDER FREE TRADE. 
 
 tuted the ports asinortitn, or " asses' bridge " of the Fair Trade 
 controversy. Gentlemen, I reiterate that assertion, and, 
 with your permission, we will endeavour to pass over this 
 bridge, hand in hand, as it were. 
 
 The Fair Traders say something like this : — John Bull 
 buys of the foreigner 41 1 million pounds' worth of goods, and 
 sells him only 286 million pounds' worth, and they deduce 
 from this that there is a balance of trade against him of 125 
 millions, which is a loss to him, by which he is so much the 
 poorer ; and that he is thus losing his wealth to the benefit 
 of the foreigner, who has the best of the trade. And they 
 maintain further that John Bull is getting poorer and poorer ; 
 that if the system goes on it must end in his ruin ; and that 
 all this is the genuine and unavoidable outcome of one-sided 
 Free Trade. The Free Trader, as I have said, ridicules this 
 view. He asks, in the first place, why the bare fact of our 
 imjiorting more than we export should be held to involve a 
 loss — seeing that to get in more than one gives out appears 
 to ordinary minds the only way of realising a profit. 
 
 And for the following reasons : — 
 
 In my pamphlet I asked this question — If a merchant 
 export ;^ioo worth of goods, and in exchange for them, 
 imports goods worth only p^ioo, how can he do otherwise 
 than make a dead loss under the heads of freight, insurance, 
 interest, and profits ? Let us suppose the goods cost him 
 ;^ioo at Liverpool. He exports them to some foreign 
 country, and, of course, has to pay freight and insurance. 
 Let us say this comes to 10 per cent. On arrival at the 
 foreign market the goods must therefore be worth ;^iio. 
 They must be sold, of course, and let us suppose the pro- 
 ceeds re-invested in goods for importation here. Again 
 comes in the charge for freight, another 10 per cent., which, 
 added to the ^i 10, makes the goods worth ^121 on arrival 
 at our ports, independently of interest on the money used, 
 and what our merchant may lay on as profit. 
 
 And so the ;^ioo of exports comes back as jQi2i, at 
 least, of imports, and must do so as long as trade is carried on. 
 
 In further illustration, let me quote from Mr. J. K. 
 Cross's speech in the House on the 12th of August. He
 
 ENGLAND UNDER FREE TRADE. 
 
 says, ";!^i,ooo will buy 2,000 tons of coal free on board at 
 Cardiff; the freight of this coal to San Francisco will be 
 ;;!^r',5oo; the amount realised for it in San Francisco will be 
 ;^2,5oo, which sum, invested in wheat, will purchase 2,000 
 quarters. The conveyance of this wheat to Liverpool will 
 cost ^1,500, and it will require to be sold at ;^4,ooo in 
 Liverpool to cover cost and expenses. In the import tables 
 there will be an entry of ^4,000 of wheat; in the export 
 tables there will be an entry of;^i,ooo coal; the one ex- 
 changes for the other." 
 
 The Fair Trader, however, regardless of all such con- 
 siderations, persists in asserting that e\ery year we buy of the 
 foreigner more than we sell him. The fallacy under which 
 he labours arises, of course, from the use of the terms buy — 
 sell. The Free Trader, with a more just appreciation of 
 what takes place, discards these terms in the sense thus 
 implied, and rightly says : — So far as commodities are con- 
 cerned, we got in 411 millions of them, and gave out only 
 286 millions, and if that were all to be considered, it seems 
 to be a mighty fine business. 
 
 But, there are a great many things to be considered, as we 
 shall soon see. One great thing to be considered is, whether 
 John Bull at the end of each year owes anything to anybody 
 for his excess of imports. Everything turns upon this ; so 
 we will at once proceed to put the matter to the test. Now, 
 in order to assist us in the investigation, let me lay down this 
 proposition, which I consider an axiom : — That in inter- 
 national commerce there are three, and only three, modes of 
 squaring accounts — namely, by commodities, bullion, or 
 securities ; in other words, that between nation and nation, 
 debts can only be settled and liquidated in some one or 
 more of these three modes. Let us apply this axiom to the 
 facts of our commerce as recorded in our official returns. I 
 will first take the figures of the last eleven years, because, as 
 they comprise the latest periods of inflation and depression 
 of trade, they are calculated to give us a correct notion as to 
 what has been going on. Now, what do these records say as 
 to commodities ? 1 find that during this period our imports 
 in round numbers were 4,016 millions, and our exports 3,022
 
 10 ENGLAND UNDER FREE TRADE. 
 
 millions, leaving an excess of imports of 994 millions — 994 
 millions ! How in the name of fortune, one is inclined to 
 ask, was this excess settled for ? How much gold and silver 
 went out of the country to pay for these 994 miUions of com- 
 modities ? Let us see. Again we turn to the records, and 
 we find that during the period in question our imports of the 
 precious metals were in round numbers 341 millions, and our 
 exports 306 millions, leaving in our hands 35 millions. It 
 actually turns out, therefore, that we have not only got these 
 commodities, but have, in addition, pocketed this large sum 
 on balance, notwithstanding the fight for gold which has 
 been going on in the world for currency purposes. But 
 surely, some one will say, it cannot be possible for us to have 
 got in all these goods, and all this cash, without parting with 
 our securities ? We shall see. We have no Board of Trade 
 returns for our foreign loan and investments account, so we 
 must be content with an approximate estimate. You have all 
 heard of foreign loans, many good, some bad. Well, during 
 these eleven years, probably 500 millions of these were 
 floated in London. Let us say we took one half of them, that 
 is 250 millions. Then, for purchases of American and other 
 securities, and for investments in all sorts of foreign indus- 
 trial enterprises, and for commercial advances, let us put 
 down a balance of 100 millions. These two amounts give 
 us a total of 350 millions, for which John Bull has made the 
 world his debtor during these eleven years. We thus see 
 that what with the goods, cash, and securities, John Bull, who 
 is supposed all this while to have been going to the dogs, has 
 managed to appropriate on balance no less a sum than 1,380 
 millions sterling. I think you will admit that this is not a 
 bad result for a nation which is said to have been going to 
 ruin fast during the last few years. The idea of ruin is 
 ridiculous, farcical ! Mark, there is no possible esca])e from 
 the conclusion. I have shown that as a nation we, in this 
 series of years, have managed to acquire on balance all these 
 three things — commodities, bullion, and securities ; and that, 
 as there is no other mode of settling international accounts 
 but by means of one or other of these three, the proof I give 
 amounts to mathematical demonstration.
 
 ENGLAND UNDER FREE TRADE. 
 
 A similar result is found whether we take ten, or twenty, 
 or any series of years during the Free Trade epoch. I have 
 before me the figures for the. last twenty-seven years, that is, 
 going back to 1854, and from them I find that in those 
 twenty-seven years, our excess of commodities imported was 
 1,742 millions, our excess of bullion imported was 131 
 millions, and our excess of securities imported was 600 
 millions, making a grand total of 2,473 millions as profit on 
 our last twenty-seven years' foreign trade. 
 
 There can be no question, therefore, that as a nation 
 we have become richer and richer. But, while I assert and 
 prove this, I do not mean to assert that there has been at all 
 times, andamong all classes, an equal distribution of the wealth 
 acquired. That is another and a totally different question. 
 During the American Civil AVar, for instance, when there was 
 a cotton famine, our manufacturing interests suffered great 
 losses and privations. Then, during the last few years, the 
 agricultural interest, and the interests which depend on it, 
 have suffered most severely. I do not for one moment 
 deny that some of our interests have suffered. With those 
 sufferings I warmly sympathise, but while I acknowledge 
 them, and condole respecting them, I cannot be driven from 
 the position I take up that the nation, as a whole, is pro- 
 sperous, the mathematical proof of this being found in the , 
 fact that year by year, on the whole, we get in on balance 
 commodities, bullion, and securities. 
 
 Let me illustrate this by what is said of space, namely, 
 that it has three, and only three, dimensions — length, 
 breadth, and thickness. Now, no one has ever seriously 
 propounded the existence of a fourth dimension, and I say 
 that, until the existence of this fourth dimension has 
 been proved, and until the existence of a fourth mode of 
 settUng international transactions has been discovered — so 
 long as we get in on balance, in a series of years, the three 
 things I have named — we may depend upon it we arc getting 
 richer and not poorer as regards our foreign commerce. 
 
 From what you have heard you will be able easily to 
 understand how mistakes and fallacies are sure to crop up 
 by doing what the Fair Traders do with the bare figures
 
 12 ENGLAND UNDER FREE TRADE. 
 
 of trade returns, that is to say, by looking at them without 
 taking into account, or consideration, a number of other 
 facts and circumstances without which they are not only 
 useless, but arc absolutely misleading and mischievous. No 
 one can get anything like a correct notion of what is going 
 on between nation and nation until he has taken such 
 matters as the following into account : — He must not only 
 look at the bare figures of imports and exports, he must 
 know the rules by which they are computed ; and the rules 
 differ in different countries. He must find out whether 
 country A is lending capital to or buying the securities 
 of country B, or whether the contrary is taking place ; 
 or whether A is paying off debt, or paying interest on loans 
 and other securities to B ; or whether B is doing all that to 
 A. And, further, he must take into account the great ocean- 
 carrying trade, and allow for freights and insurance ; and 
 he must see who provides the capital for this international 
 trade, and whose merchants and bankers do the business, 
 and thus earn the profits, and the commissions ; and he 
 must also take into account such matters as payments 
 for war indemnities, alterations of currency, and the 
 complications arising out of fluctuations of prices, and out 
 of changes in the standard of value. I say, that in order to 
 obtain a perfectly accurate knowledge of what a nation 
 is doing, the inquirer must know, and properly work in, 
 all these various factors. But, as besides the figures in the 
 trade returns we have no official figures, we can only 
 roughly estimate other factors from such sources as are 
 available, and arrive as nearly as we can at a correct 
 conclusion. 
 
 Well now, let me ask, did you ever know or hear ot 
 a Fair Trader doing anything of that kind ? I venture 
 to say there is not one of them Avho, until lately, has had 
 the faintest notion of what is required, and that the faint 
 notion, such as it is, which they possess, has been instilled 
 into them by their opponents during this discussion. 
 
 Bearing in mind these considerations, let us now 
 examine some of the facts and arguments relied on by 
 our friends the Fair Traders.
 
 ENGLAND UNDER FREE TRADE. I3 
 
 One of the facts relied on, is that our markets are 
 flooded by foreign goods, to the detriment of the native 
 workman ; and the argument founded on this supposed 
 flict is, that we ought to tax foreign manufactures, so that we 
 may, by this means, either reduce these importations, and so 
 increase our corresponding home productions, or, on the 
 other hand, induce or compel foreign nations to reduce 
 their high tariffs, and thus enable us to export more to 
 them. Let us first see how the fact stands as regards 
 the flooding of our markets. Our exports of manufactured 
 goods amount to between 200 and 220 millions, and our 
 imports to 45 millions. For every pounds' worth, therefore, 
 that we import, we export nearly five pounds' worth, and this 
 is what is called flooding our markets. The truth is, that 
 the flooding is the other way, that Protectionist nations are 
 straining every nerve to keep out our productions, and are 
 utterly unable to do so. So much for the fact relied on. 
 Let us see how their argument works respecting the 
 45 millions of manufactures which we import — one-ninth 
 only of our whole importation — the other eight-ninths being 
 food and raw materials, which we get from all nations 
 put together. We are told that we ought to tax, and 
 possibly keep out, most of these 45 millions. But the 
 consequences of doing so might be very awkward for us. 
 
 Foreigners might do one of three things, i. They 
 might turn Free Traders in consequence of our action. 
 2. They might retaliate by fiirther taxing our exports to 
 them. 3. They might submit to our imposts, and do the 
 best they could in the circumstances. As to their turning 
 Free Traders, I cannot for a moment believe that at all 
 likely to happen in consequence of our action. Their 
 policy drifts more and more towards Protection, and is 
 intended, apparently, not so much to extend exports as 
 to restrict imports, and they most likely would retaliate on 
 us by a war of tariffs, which would be most damaging to us, 
 seeing that they have a field of taxation of our exports 
 of 200 to 220 millions, while we could tax them on 
 only 45 millions. Surely that is not a pleasant contingency 
 to contemplate ! Then comes the third alternative, of their
 
 14 ENGLAND UNDER FREE TRADE. 
 
 submitting to our imjjosts, and selling us as much as 
 we should be able to take under the circumstances. And 
 what would be the circumstances ? Prices would of course 
 be raised, and the consumer of these foreign goods would 
 either buy less of them, or he would have to pay more 
 for what he wants of them. In the first case, production on 
 the part of the foreigner is checked, and he either gives up 
 his manufacture, and thus loses his purchasing power in the 
 world's markets, and you lose him as a customer — directly 
 or indirectly, as I shall show you presently ; or else, being 
 baffled in your market, he turns his attention to neutral 
 markets, competes with and injures you there, and perhaps 
 drives you out of them. Anyhow, you impoverish both 
 yourself and him. In the second case, where our home 
 consumer consents to pay more for the article he wants, it 
 is clear that, whatever the increased price may be, by 
 so much is he directly impoverished — by so much is he less 
 able to buy other commodities. There is less production ; 
 less demand for goods, and for labour ; less trade ; less 
 shipping ; less everything which contributes to make up the 
 moral and material well-being of mankind. 
 
 And now let me explain practically what I meant when I 
 spoke just now about our losing a customer directly or 
 indirectly. Let us take French silks and French wines. It 
 is a favourite idea with Fair Traders to tax these pro- 
 ductions, because, as they urge, France does not buy of us 
 anything like what she sells to us, and they arrive at the 
 conclusion from this bare fact, that this is a state of 
 things favourable to French commerce and detrimental to 
 English commerce, in fine, a one-sided Free Trade 
 extremely hurtful to us. Now, I wish particularly to draw 
 your attention to this view of theirs, because in it is 
 wrapped up one of the grossest fallacies of our opponents. 
 This is what they overlook : — 
 
 By buying silks and wines of France, we give her so 
 much purchasing power in the world's markets, a power 
 which, as her trade returns show — she is a large importer 
 upon balance — she fully exercises. Well, if she spends the 
 money she receives from you in those products of foreign
 
 ENGLAND UNDER FREE TRADE. 1 5 
 
 countries which she requires, as we know she does, she 
 thereby, in turn, confers on those countries a corresponding 
 purchasing power, and they, in their turn, lay out the money 
 so received among other nations, and, as we are the principal 
 manufacturers, we get the principal share in the business. 
 
 So that by this indirect and roundabout way, everything 
 England buys of France, even in the way of wines and silks, 
 enables England to sell her products to other nations, and 
 thus to pay for those silks and wines ; England all the while, 
 as the great carrying and trading nation, getting a tremen- 
 dous pull by way of freights, insurance, and commissions, 
 all of which are created by this all-round trade. 
 
 AV^hat were the figures of our trade with France last year ? 
 
 I see that our imports from her were about 42 millions, 
 while our exports to her were only about 15^ millions; 
 leaving, apparently, a balance against us of about 26^ mil- 
 lions. Did we pay away any cash for this ? Not a bit ot 
 it. Instead of paying anything, we received from France 
 last year in gold and silver no less a sum than ^3,411,000. 
 You are now, however, in a position not to be in the least 
 astonished at what appears at first sight an absurd result. It 
 would appear, if we only looked at the Board of Trade 
 returns, and at nothing else, that last year France made 
 this country a present of 26^ millions of goods, and 3^ mil- 
 lions of money ! But we know that this is impossible, and 
 that France, in some shape or other, has received full value, 
 and it affords a good illustration of the necessity which 
 exists for taking other things into account besides the bare 
 figures of trade returns. I do wish our friends the Fair 
 Traders would consider fairly and honestly this crucial 
 example of France, and make their theory of the so-called 
 adverse English balance of trade square with the facts as 
 they stand. Whether they recognise the necessity or not, 
 they are bound to show how we settled accounts with 
 France last year, a country from which, in the course of a 
 t^velvemonth, we got in money and in goods, and apparently 
 for nothing, no less a sum than 30 millions sterling ! Of 
 course, gentlemen, you and I know now how it was done, 
 and in time perhaps the more intelligent of our Fair Traders
 
 1 6 ENGLAND UNDER FREE TRADE. 
 
 will also find out. When they find it out, however, their 
 occupation will be gone. And now I will tell them some- 
 thing which they may perhaps not know, and which may 
 console them from their point of view. It is this : that the 
 balance in favour of France in 1880 was not as large as it 
 appears, as Mr, Chamberlain pointed out in his speech on 
 the French treaty. Fie tells us, " The returns of the Board 
 of Trade must be taken with qualifications, and applied 
 with knowledge. The figures for the French im])orts must 
 be reduced by what is re-exported to the United States and 
 our Colonies ; and for those textiles of different kinds which 
 come from Switzerland through France, and which are inex- 
 tricably mixed up with our French imports. With regard to 
 our exports, on the other hand, they have to be increased 
 by the amounts due for yarns intended for French manufac- 
 tures in the Vosges, which go by way of Antwerp, and 
 which, therefore, do not appear in the exports to France." 
 The consequence is, that the balance against us is not 26^ 
 millions, but something considerably less, and this will pro- 
 bably console our Fair Trade friends. We must not, how- 
 ever, reduce this balance too much, for if we do, we shall 
 demolish entirely that grievance of theirs about France ; 
 and from their point of view that would be a great calamity ! 
 But I have not done yet by a long way with our friends. 
 I mean to pursue to the bitter end their argument as to 
 taxing foreign manufactures. 
 
 The ruling idea of the Fair Trader is, apparently, to ac- 
 complish one of two things. If the foreigner taxes our 
 manufactures, we are to tax his; if he admits our goods 
 free, we are to admit his goods free. He contends that if 
 we are compelled, in the first case, to keep out foreign 
 goods, our workmen will step into the place thus left vacant, 
 and supply our home market with these or similar goods. 
 But, there are goods with which we cannot be supplied at 
 home owing to disabilities of soil and climate, to say no- 
 thing of race, but which it is of actual necessity, or prime 
 convenience, for us to obtain. After what I have said, it 
 must be clear that by taxing these, so far from helping the 
 British workman, we should only impoverish him. There
 
 ENGLAND UNDER FREE TRADE. ' 1 7 
 
 are other commodities, however, which the Fair Trader 
 thinks would be supplied by the home workman instead of 
 the foreigner. But, to be of any advantage to the British 
 manufacturer, the British workman, and the British con- 
 sumer, the following impossible state of things must occur. 
 In addition to the goods which we now make for the 
 foreigner, we must be ready to supply our home market 
 with much of which the foreigner now supplies us, but of 
 • which we now are to cut him out. He is to sit down 
 quietly under this, and buy of you just as much as he did 
 before, although you have taken away so much of his pur- 
 chasing power by cutting him out ! At present, the foreigner 
 makes certain goods better and cheaper than we can. 
 When he is cut out, our consumers will consent, cheerfully 
 as a matter of course, to pay higher prices for these same 
 goods ! Then, on account of the new home business which 
 is to spring up, there is to be no fresh capital required, no 
 fresh plant, no additional workers, or, if there are, there is 
 to be no increased cost in these respects, there is to be no 
 change in any respect whatever, except that our manufac- 
 turers will have cut out the foreigner and got the home 
 market in addition to the foreign market ! 
 
 But, gentlemen, this is all most absurd, and I am sure I 
 need say nothing more respecting it. I would rather pro- 
 ceed to inquire how it is our own people cannot supply us 
 with certain things which now come to us from abroad ; for 
 instance, French silks and French woollens. The simple 
 fact is, of course, that from a variety of causes our manu- 
 facturers and workmen either cannot, or will not, supply us 
 with these things. Whatever be the cause, I am not here to- 
 night to point out the remedy, but, whatever that may ulti- 
 mately turn out to be, no Free Trader will allow that it is to 
 be found in taxing the foreign product. If, for instance, foreign 
 silks and foreign woollens were to be driven out of this 
 country by hostile tariffs, it is certain that, over and above 
 the actual loss to us as traders, which, as I have shown, 
 would be involved by these trades being killed, our con- 
 sumers, that is, the bulk of this nation, would be driven to 
 take up with fabrics of a kind and quality which they
 
 1 8 ENGLAND UNDER FREE TRADE. 
 
 do not want. There is not much fear of such an eventuality, 
 however, for I do not believe the people of this country 
 would put up with such intolerable tyranny. 
 
 As you know, complaints have been heard of the 
 woollen manufactures of Bradford having passed away to 
 their French rivals. But what are the facts ? As I gather 
 them, they stand thus. We find that British alpaca or lustre 
 has been superseded by French merino. Some years ago 
 alpaca was in high favour. Now it is neglected, and the 
 soft woollen worsteds of France have superseded it. How 
 was this ? As I read it, it was because, when alpaca was 
 formerly made of pure fine lustrous wools only, it was in 
 favour ; but when manufacturers, aiming at cheap produc- 
 tion and high profits, mixed the new wool with cotton, they 
 produced nothing but a shoddy, which soon lost favour. 
 Our French competitors, it appears, saw t'eir opportunity ; 
 they bought their wools in our own market in London, they 
 took it to France, adopted for it new machinery, and every 
 process which promised improvement, sought for and found 
 new dyes, inventing soft half-tints and subdued shades of 
 colour, and then brought it back to us made up into those 
 fabrics which are now so much in vogue, and which are 
 known by the name of French merinos and cashmeres. 
 Now, I wish to ask whether this is creditable to us as manu- 
 facturers ? There can be no question that, from some cause 
 or other, our manufacturers have allowed the French to steal 
 a march on them. Let them meet the modern demand by 
 doing as the French have done ; let them adapt their 
 machinery, and study new processes, and, depend upon it, 
 we shall then hear very little about French competition in 
 this department. 
 
 Now. having thus disposed of the Fair Trader's argu- 
 ment for taxing foreign manufactures, let me say a few words 
 respecting his assertion that our excess of imports is to be 
 considered the measure of our national loss. We now, on 
 the average, import more than we export considerably over 
 ICO millions' worth of commodities annually. We Free 
 Traders say that instead of its being a loss to us, it is a profit 
 to us, and that if we did not get in this excess of value we
 
 ENGLAND UNDER FREE TRADE. 1 9 
 
 should be doing a very bad business indeed. I want to 
 know, in the first place, why the shipowners of Great 
 Britain, who possess one-half of the world's effective ocean 
 tonnage, are not to receive what is due to them for the 
 freights they carry, and if so, how they are to be paid ? I 
 want to know, in the second place, why those among us who 
 hold foreign bonds, shares, and investments of every kind, are 
 not to be paid the interest which is due to them, and if so, 
 now they are to be paid ? I want to know, in the third place, ' 
 why our shipbuilders, who last year built 90 iron, and 160 
 wooden ships for the foreigner, are not to receive the price 
 of those ships, and if so, how they are to be paid? I want 
 to know, in the fourth place, why our merchants and bankers, 
 who advance the capital by which our 700 millions of foreign 
 commerce is put in motion, are not to receive the interest on 
 their capital, and if so, how they are to be paid ? And in 
 the fifth place, I want to know if our merchants and brokers, 
 who carry on this 700 millions of foreign trade, are to earn 
 any commission thereon, and if so, how they are to be paid ? 
 There are other items which might be brought into the 
 account, but they are suflScient for my purpose ; let us try 
 and roughly estimate them. I cannot put down the gross 
 receipts of our ocean carrying trade at less than 45 millions. 
 With regard to the interest on our foreign investments, they 
 are variously estimated by the best authorities at from 55 to 
 60 millions. I will take the smaller figure. Then the price 
 of those 250 ships we sold last year cannot, at a moderate 
 computation, be put down at less than li million. Then, 
 as to interest on capital, let us take 100 millions as constantly 
 employed in moving our 700 millions of commerce, and say 
 five per cent, this gives us 5 millions ; and lastly, what are 
 we to put down by way of commissions? 2 J per cent, on 
 700 millions give us 17^ millions. Let us now add up. 
 
 Shipping receipts ... ... ... ^^45, 000,000 
 
 Interest on investments ... ... ... 55,000,000 
 
 250 ships sold 1,500,000 
 
 Interest on capital ... ... ... 5,000,000 
 
 Merchants' commissions ... ... 17,500,000 
 
 ;i^ 1 24, 000, 000
 
 ENGLAND UNDER FREE TRADE. 
 
 From this sum, however, must be deducted what we may 
 have to pay the foreigner on so much of our foreign com- 
 merce as he carries for us, and for the balance between what 
 we have to pay him, and what we have to receive from 
 him, in respect of suppUes, port dues, &c., and if for 
 these items we take off, roughly, 14 millions, there remains 
 no millions to receive from the foreigner annually by 
 way of interest on loans, and for work and labour done 
 for him. In other words, before we have to send away a 
 pound's w^orth of goods with the view of getting a pound's 
 worth in exchange, we have to receive in some shape or other 
 from the foreigner no less a sum annually than no millions 
 sterling. In the name of political economy and common 
 sense, how can this be a bad thing for this country ? 
 
 Anyhow, and after making all possible deductions, you 
 must see that we can import over 100 millions worth of 
 commodities without trenching on our capital, and that is 
 the great point. But, it may be asked, why do we take goods 
 and not cash ? 
 
 The answer to that is, that in some years we take part 
 goods, and part cash, some years all goods, never all cash. 
 To be paid entirely in cash is about the last thing we should 
 want, but if we did want it, we could not get it ; 100 millions 
 loose cash in the world does not exist. 
 
 But let us suppose for a moment that we could get cash 
 by some impossible process. What should we do v,-ith it ? 
 We could not eat it. We should not want to pile it up in 
 vaults. We should have to send it abroad again in exchange 
 for commodities, and, if in the end you have to do that, you 
 may as well take commodities at once, and so save the 
 expense and loss of two voyages of your cash. The fact is, 
 that it is only in commodities that one nation can discharge 
 the bulk of its debts to another nation, and that if the world 
 owes us money, and makes us its carrier and its general 
 merchant, we must take payment in commodities. And thus 
 you see, at a stroke we get rid of that bugbear to some 
 people, the thing commonly called the Balance of Trade, 
 and which, as commonly understood, is a fallacious and mis- 
 leading expression.
 
 ENGLAND UNDER FREE TRADE. 
 
 There is one country which at the present moment stands 
 in marked contrast to us as regards the balance of her imports 
 and exports. I mean the United States. She of late years 
 has been a large exporter on balance, and our Fair Traders 
 have often pointed to this excess ot exports as a proof oi 
 her prosperity, and of the virtues of her Protective system. 
 When, however, we call to mind the fact that while we are 
 a lending nation, with an excess of capital, and do more 
 than half the ocean carrying trade of the world, and that the 
 United States are a borrowing nation, requiring capital, and 
 ready to pay for the use of it \ and that owing to her Pro- 
 tectionist policy foreigners carry more than 80 per cent, of 
 her foreign commerce ; it is easy to see that, other things 
 being equal, while we have to import on balance, she has 
 to export. Now, it is impossible to estimate with any 
 approach to accuracy what the States have to send abroad 
 each year by way 01 interest oii tlieir indebtedness, and 
 for freight, and for other things. I cannot put it down 
 at less than 20 millions, and it is most likely a great deal 
 more, probably nearer 40 millions. Whatever the amount 
 may be, however, it has to be allowed the foreigner in 
 account, and, therefore, any argument in favour of Pro- 
 tection, and against Free Trade, built up out of the bare 
 figures of her trade returns, and without regard to the 
 considerations to which I have called your attention, must 
 necessarily be most fallacious. 
 
 If we turn to France, we shall find in her trade returns a 
 curious exemplification of the truth of the principles on 
 which I am insisting. As you are aware, the Franco- 
 German war broke out in 1870 and closed in 187 1. Well, 
 just before that war, that is in 1869 and 1870, her imports 
 and exports, according to Martin's " Statesman's Year Book," 
 balanced each other almost exactly. You also know that in 
 187 1 France had to pay an indemnity of 200 millions 
 to Germany, and that she appealed abroad for a large 
 loan to aid her to pay that indemnity. Well, in 187 1 she 
 imported on balance 21 millions. In 1872, however, and 
 during the three following years she exported on balance 
 39 millions. Howls this to be accounted for.? By simply
 
 ENGLAND UNDER FREE TRADE. 
 
 recalling to mind what everj'body knows, that France was 
 during those four years repaying what she had borrowed 
 abroad ; and that at the end of 1875 ^^^ ^'^^ probably 
 repaid the bulk of it, and had recovered from the terrible 
 losses she had incurred. What are her trade figures since 
 then ? 
 
 In 1876 her excess imp<->its were ... ... ;^i6, 500,000 
 
 In 1S77 ,, ., io,8uo,ooo 
 
 In 1878 ,, ,, 43,600,000 
 
 In 1879 ,, ,, 57,200,000 
 
 In 1880 ,, ,, 63,000,000 
 
 and I see by a paragraph in the Times of the i6th 
 September that her excess imports for the first eight months 
 of 188 1 amount to 1,097 millions of francs, or 43 millions 
 sterling, so that Protectionist France, according to our 
 Fair Trade friends, must be going down-hill rapidly 
 along with Free-Trading England, for she has been rapidly 
 and unprecedentedly increasing her excess of imports ! And 
 now I ask Fair Traders how they reconcile these trade 
 figures of France with their theories ? 
 
 The trade figures of Germany tell the same story. 
 While she was receiving the French indemnity she was 
 a large importer on balance. When this operation was 
 completed, this excess of imports began to diminish. If 
 we take 1869 and 1880, I find in "Mulhall" that while in 
 1869 -that excess was 12 millions, in 1880 it was only 
 6 millions. This is anything but a reassuring commercial 
 sign for her. Indeed, when we couple this fact with 
 others which crop up, such a."?,, for instance, the falling 
 off of savings' bank deposits in Saxony, the increase of 
 emigration, the increased cost of living, the decreasing 
 earnings per head of her population, we cannot be surprised 
 when we hear that protests against her fiscal system have 
 been made by an overwhelming majority of her Chambers 
 of Commerce, and that in the late elections a majority has 
 been returned pledged to oppose the Protectionist policy of 
 Prince Bismarck. The fact is, that the vaunted system of 
 Protection has utterly broken down in Germany, and that, 
 as she is the poorest of our rivals, and consequently, the
 
 ENGLAND UNDER FREE TRADE. 23 
 
 weakest financially, she is the first to show the disastrous 
 effects of the policy she has so unwisely chosen. That this 
 is so, may be gathered also fi-om this little fact, that our 
 Fair Trading friends no longer allude to Germany. " Oh, no ! 
 we never mention JierT 
 
 Now, gentlemen, let us take a comparative survey of 
 ourselves, and our great rivals, France, Germany, and the 
 United States. 
 
 Let us first take population. In 187 1 the United 
 Kingdom numbered 31,500,000; and in 1881, 34,800,000; 
 an increase in lo years of 3,300,000. As to France, the 
 population in 1872, after the cession of Alsace and Lorraine, 
 was 36,100,000, and this year it is probably 38,000,000, 
 not more ; an increase in 9 years of 1,900,000. As regards 
 Germany, the population in 1871 was 41,000,000, in 1875 
 it was 42,700,000, and in 1881 it is probably 45,000,000, 
 an increase in 10 years of 4,000,000. As regards the 
 United States, in 1870 their population was 38,550,000, and 
 in 1880 it was 50,150,000, an increase during these 10 years 
 of 11,600,000. 
 
 The percentage of increase is thus : — 
 
 For the United Kingdom ... ... ... ICO 
 
 France... ... ... ... ... ... 5'3 
 
 Germany ... ... ... ... ... 9'7 
 
 United States 30-0 
 
 You thus see that the United States lead the way in this 
 respect. The conditions which exist there, and which cause 
 this enormous increase, are so well known and understood 
 that I need not refer to them further. And you will notice 
 that France is far behind ourselves and Germany, a fact 
 which gives rise to many considerations, into which it is 
 impossible to enter now. Great Britain and Germany have 
 progressed very evenly during this period ; whether they will 
 do so during the next ten years, remains to be seen. The con- 
 solidation of the Empire drew many into Germany, but the 
 cost of that Empire becomes more and more onerous, and 
 there are signs that the tide of emigration is rising. Any-
 
 24 ENGLAND UNDER FREE TRADE. 
 
 how, as regards population, we stand well in comparison 
 with the older States. 
 
 Now, let us consider some oi the facts bearing on the 
 economic condition of these four great nations. I find on 
 referring to Mulhall's "Balance-sheet of the World, 1870 — 
 18S0," that in a table of the world's industries, under the 
 heads of commerce, manufactures, mining, agriculture, 
 carrying and banking, he gives us the following totals : — 
 
 
 1870. 
 
 Per 
 
 He.\d. 
 
 1880. 
 
 Per He.\d. 
 
 
 Millions. 
 
 £, 
 
 s. d. 
 
 Millions. 
 
 C s. d. 
 
 Great Britain 
 
 ... 1,687 . 
 
 •• ■:>7> 
 
 13 . 
 
 . . 2,024 
 
 58 II 
 
 France 
 
 ... 1,181 . 
 
 •• 31 
 
 . 
 
 •• 1,325 • 
 
 • • 35 12 
 
 Germany ... 
 
 ... 1,002 . 
 
 .. 26 
 
 7 . 
 
 .. 1,269 ■ 
 
 .. 28 I 
 
 United States 
 
 ... 1,479 ■ 
 
 .. 38 
 
 9 . 
 
 .. 2,004 ■ 
 
 .. 40 I 
 
 Taking man for man, therefore, we are far ahead of the 
 world in industry, and, instead of going back, are actually 
 improving our position. 
 
 Now let us see what Mulhall says of the earnings of the 
 nations free of taxes per head of population : — 
 
 
 1870. 
 
 1880. 
 
 Great Britain ... 
 
 ... ;^26 17 I ... 
 
 ... £2^ 10 7 
 
 France ... 
 
 17 12 2 ... 
 
 18 12 5 
 
 Germany 
 
 16 16 6 ... 
 
 16 9 8 
 
 United States ... 
 
 21 17 10 ... 
 
 ... 25 5 
 
 Man for man we thus, as regards our earnings, not only 
 stand at the head of the list, but have gained on our com 
 i:>etitors. 
 
 Let us now look at what is said under the head of 
 manufactures : — 
 
 IManufactures : — Textiles, Hardware, Sundries. 
 
 
 1870. 
 
 Pki; Head. 
 
 1880. 
 
 Per Head 
 
 
 Millions. 
 
 £, ... d. 
 
 Millions. 
 
 I s. d 
 
 Great Britain... 
 
 ... 642 .. 
 
 . 20 8 , 
 
 ,.. 758 .. 
 
 . 22 
 
 France 
 
 ... 439 .. 
 
 II II 
 
 ... 485 .. 
 
 . 13 2 
 
 Gennnr.y 
 
 ... 341 .. 
 
 900. 
 
 ... 427 .. 
 
 990 
 
 United States 
 
 ... 682 .. 
 
 . 17 14 , 
 
 ,.. 888 .. 
 
 • 17 15
 
 ENGLAND UNDER FREE TRADE. 2^ 
 
 Once more we see that we not only suind at the head 
 of the list, but are far ahead of Germany and the United 
 States, France making the best show against us. 
 
 Let us now examine the figures concernmg ocean ship- 
 ping. What is shown is the effective tonnage, arrived at by 
 multiplying steam tonnage by 5 in order to get a common 
 denominator : — 
 
 1869. 1879. 
 
 Tons. Tons. 
 
 Great Eritain .. ... 9,520,000 16,630,000 
 
 France ... ... ... 1,598,000 ... ... 1,960,000 
 
 Germany... ... ... 1,310,000 ... ... 1,950,000 
 
 United States ... ... 2,454,000 2,315,000 
 
 We thus see that while in these ten years we have in- 
 creased our effective tonnage by 7 millions, the United 
 States have lost 140,000 tons ! 
 
 Gentlemen, these shipping figures are conclusive. Pro- 
 tectionist nations may, by hocus focus, conceal the losses 
 they internally suffer from their system, but they cannot 
 conceal the facts which these figures show. 
 
 And lastly, let us see how it fares with us all as regards 
 foreign commerce. Take the totals : — 
 
 
 1870. 
 
 Per 
 
 Head. 
 
 1880. 
 
 Pkk 
 
 Head. 
 
 
 £. 
 
 £ 
 
 J. (/. 
 
 £ 
 
 £ 
 
 .?. d. 
 
 Great Britain . 
 
 .. 547,338,070 . 
 
 ..17 
 
 10 10 ., 
 
 .697,644,031 
 
 ...20 
 
 4 10 
 
 France ... 
 
 .. 249,000,000 . 
 
 .. 6 
 
 9 0.. 
 
 ,. 332,000,000 
 
 ... 8 
 
 17 
 
 Germany 
 
 .. 270,000,000 . 
 
 •• 7 
 
 2 .. 
 
 , . 384,000,000 
 
 ... 8 
 
 10 
 
 United States . 
 
 .. 172,000,000 . 
 
 •• 4 
 
 9 0., 
 
 , 301,000,000 
 
 ... 6 
 
 
 
 The above figures are taken from IMulhall's " Balance- 
 sheet of the World," as I have said, and they speak for 
 themselves. 
 
 I will now quote from an admirably written article in 
 the October number of the Nineteenth Century, written l)y 
 Mr. Thomas P. Whittaker : — 
 
 " The following are the amounts of the exports of Great 
 Britain and the United States to the five divisions of the 
 globe for the year 1S78, as given by the Americans 
 themselves (excluding the trade between the two coun- 
 tries) : —
 
 26 ENGLAND UNDER FREE TRADE. 
 
 Exports from thk^ Exports from 
 
 Unitf.i) States. Grkat Britain. 
 
 Africa 4,468,040 59,503,000 
 
 Asia 12,519,000 226,590,000 
 
 America (excluding U.S.) 93, 152,000 140,100,000 
 
 Australasia 6,771,000 104,611,000 
 
 Europe (excluding G.B.) 260,927,000 556,554,000 
 
 $377.837,040 $1,087,358,000 
 
 Or ... £lS,S(>7AO0 ;^2i7,47i,6oo 
 
 "Where are the United States as an exporting nation in 
 the neutral markets of Africa, Asia, and Australasia ? To 
 those three divisions of the globe they send ;^4,75i,ooo 
 worth of goods, while we send ;!^78,i4o,8oo worth ! Even 
 to the peoples of North and South America, at their very 
 doors, our exports are one-half more than theirs, and theirs 
 are mainly food." 
 
 Well, gentlemen, besides being Englishmen, you are 
 Shcfifield men ; and having heard what I have had to say 
 concerning our common country and her commercial posi- 
 tion, and having, I hope, come to the conclusion that 
 England is prospering, you are probably ready to hear 
 what I have to say about Sheffield, and Sheffield trade in 
 particular. 
 
 With your permission we will follow a line of inquiry 
 similar to that taken with regard to the nation at large. We 
 will first take population. I find that in 187 1 the popula- 
 tion was 239,946, and in 1881, 284,464, an increase of 18 
 per cent. Well, there is no indication of decay in these 
 figures ; but before we can form a con-ect idea of the pro- 
 gress of your town, we must look at other factors. Let us 
 take pauperism. In 187 1, your paupers numbered on the 
 I St of January, 7,560; in 1881, 7,126; decrease, 434. So 
 that with 44,000 more inhabitants you have 400 less 
 paupers ! If you had kept to the same ratio as in 187 1, 
 you would have had 9,000 and not 7,126. 
 
 That, at all events, is a satisfactory indication. Let us 
 now, from the Savings Bank returns, see how Sheffield fares 
 in the matter of thrift. As you are aware, there are two
 
 ENGLAND UNDER FREE TRADE. 27 
 
 kinds of Savings Banks, the old Trustee Banks, and the 
 new Post Ofilice Banks. AVith regard to the former, I find 
 that in 1870 the number of accounts open was 21,533, ''^'''d 
 the deposits, ^^493, 998 ; while in 18S0 the number of ac- 
 counts open was 29,254, and the deposits, ;!^759,427 ; an 
 increase of ^265,430. 
 
 As regards the Tost Office Banks, I have only the figures 
 from 1873 to 1879. In 1873 the number of depositors was 
 6,639, ^^d the amount deposited, ;^5 9,008. In 1879 the 
 number of depositors was 7,884, and the amount deposited, 
 ;^78,i25. Now, we know that in 1880 there was a great 
 accession of deposits, and we may safely reckon that on the 
 31st December, 1880, there was ;^8o,ooo in these banks. 
 Taking these last eight years, therefore, of both descriptions 
 of banks, we find that whereas in 1873 the deposits were 
 ;z{^688,79i, in 1880 they were ^,^839, 427 ; which, considering 
 the times tlirough which you have passed, may be considered 
 a most satisfactory result. 
 
 We will now look at the statistics of crime : — • 
 
 
 
 Convictions and 
 
 Year. 
 
 Population. 
 
 Committals. 
 
 1870 
 
 235,500 
 
 2,162 
 
 1871 
 
 239,946 
 
 2,102 
 
 1880 
 
 280,000 
 
 2,075 
 
 This again is highly satisfactory. 
 
 We will now take elementary education : — 
 
 Return of the Numbers of Children attending efficient 
 Elementary Schools, from the period at which the 
 Sheffield School Board commenced operations to 
 October, 1880. 
 
 Year. 
 
 1871 
 
 1872 
 
 1873 •■■ 
 1876 
 
 1879 ... 
 1880 
 
 Average Yearly 
 
 No. on Rolls 
 
 Attendance. 
 
 October. 
 
 11,985 
 
 No return. 
 
 14,052 
 
 ditto. 
 
 18,820 
 
 35.073 
 
 26,713 
 
 42,736 
 
 31,522 
 
 47,422 
 
 32,817 
 
 50,319
 
 28 ENGLAND UNDER FREE TRADE. 
 
 Here we see that while in 1873 there was an average 
 attendance of 537 per cent, of the children on the rolls ; in 
 1 88 1 that average had risen to 65-2 per cent. 
 
 Now, so far as these figures go, they indicate that 
 materially, morally, and intellectually, Sheffield is in a far 
 better position than she occupied ten years ago. 
 
 But, what these figures teach us is corroborated by what 
 is to be ascertained from our Board of Trade Returns. 
 Your town is interested in iron, steel, and all kinds of hard- 
 ware. Let us compare the figures of 1870 and 1871 with 
 those of 1879 ^'"'•^^ 1880. 
 
 Let me draw your attention in the first instance to 
 the following table of our exports of all sorts of ironwork : — 
 
 VUAK. 
 
 TON.S. 
 
 Value. 
 
 1870 ... 
 
 I87I 
 
 IS79 ... 
 
 1880 ... 
 
 ... 2,825,575 ... 
 ... 3,169,219 .-. 
 ... 2,883,484 ... 
 ... 3,792,993 ••• 
 
 24,038,090 
 26,124,134 
 
 ... 19,417,363 
 ... 28,390,316 
 
 Great Britain, therefore, did much better in her iron and 
 steel in 18S0 than in 1879, and, as a matter of course, 
 Sheffield participated largely in the benefit. This is shown 
 in certain figures which I find in the Sheffield Independent, 
 to which paper I am indebted for them as well as for many 
 other valuable ones on the subject. 
 
 I see that the exports of Sheffield to x^merica in 1877 
 were ^450,000 ; in 1879, ^560,000 ; in 1880, ;^i,o66,ooo ; 
 and that the total for the twelve months ending 30th 
 September, 1881, was ;^i,223,83o, being ^^157. 419 over 
 the total for the twelve months ending 30th September, 
 1880. 
 
 The prices of 1880, however, are not equal to those of 
 1870, and, of course, so far as this goes, there is not so much 
 profit, but, inasmuch as there has been a general fall in 
 prices during this period, the difference is not all loss, and 
 what is gained by the fall in all other products has to be set 
 off against this loss, so that, in the end, I suspect there 
 would not be much to complain of in this respect. I have 
 not time now to enter into the questions arising out of the
 
 ENGLAND UNDER FREE TRADE. 29 
 
 fall in prices. It is, however, a most important and 
 interesting subject. Anyhow, the prices of 1880 are better 
 than the prices of 1879, ^^""^ the prices of 1881 are, I 
 believe, exceeding those of 1880. 
 
 Let us now see what Sheffield is dohig in 1881 in all 
 foreign markets. We have the Board of Trade returns for 
 September. They show that the total value of hardware 
 and cutlery exported for that month was ^340,362, against 
 ^{^298, 069 for September, 1880; and that the total for the 
 nine months was ;^2,776,38o, against ;^2,547,267 for the 
 corresponding nine months of 1880. So far all is satis- 
 factory, but, before I have done with statistics, I should like 
 to give you another view of Sheffield trade by instituting a 
 comparison of our iron, steel, and hardware trade with 
 France, Germany, and the United States respectively. The 
 figures I shall quote come direct from the Board of Trade. 
 
 Those referring to the United States are printed in the 
 Appendix to Mr. Chamberlain's speech on the French 
 Treaty in the House on the 12th August, as published by 
 the Cobden Club. Those which refer to France and 
 Germany have been forwarded to me on my application. 
 
 I find that as regards France, our importations of iron 
 and steel manufactures for 1880 amounted to ;!^i 18,000, 
 while our exports to France for the same period were of 
 partly manufactured articles of iron, wrought and un- 
 wrought, ^^^789,000; of manufactured articles — fire-arms, 
 ^5,000; other kinds, ;^3,ooo; hardware and cutlery, 
 ^^174,000; steam-engines, _;i{^i29,ooo ; other machinery, 
 ;^ 5 6 7, 000 ; total ^1,667,000. As regards (jermany, during 
 1880, our exports of hardware to her were as follows :- — Iron, 
 wrought and unwrought, p^i, 145,000 ; manufactured goods — 
 hardware and cutlery, ^182,000; implements and tools, 
 ;i^i 3,000 ; steam-engines, ;^228,ooo; other machinery, 
 ;^843,ooo; total ^2,411,000 ; while as to our imports of 
 iron and steel, on searching for this item I find literally ;///; 
 there is no entry whatever under this head in the paper 
 which I hold in my hand, which I have received from the 
 Board of Trade, and which is open to the inspection of any 
 one !
 
 30 ENGLAND UNDER FREE TRADE. 
 
 Let US now turn to the United States. Our exports to 
 tlicm in 1880 were— pig-iron and old iron, J'z^'^ZZfOOo; 
 wrought iron, ;^6,8i4,ooo; machinery, ;({^439,ooo ; hard- 
 ware and cutlery, ^494,000 ; total, ^£"10,980,000 ; while our 
 imports from tliem of iron and steel manufactured goods 
 came to ;^2 13,000. 
 
 So far, therefore, as Sheffield is concerned, we export to 
 these three countries whom we are taught to consider our 
 rivals, and successful rivals, these countries which are said to 
 be flooding us with their goods, we exported, I say, to them 
 in 1880 no less a value in iron and steel, and hardware goods, 
 than ^15,058,000, while we imported from them of like 
 goods only ^341,000. 
 
 Gentlemen, I think that we may gather from these figures 
 that Sheffield is tolerably safe. Yet, as you know, there have 
 been complaints that American iron, steel, and hardware 
 are flooding our home markets. Well, this flooding, as you 
 have se^n, amounts to the stupendous figure of ;,{^2 13,000. 
 It consisted probably of novelties, clever adaptations, 
 ingenious appliances, in the way of scythes, scissors, saws, 
 sewing machines, hay-forks, and such like trifles. Well now, 
 as to hay-forks. I have never seen an American one, but a 
 friftid of mine told me the other day that an American hay- 
 fork was something quite different from an English one, that 
 it was easy and pleasant to handle, and that with it he could 
 do twice as much work as with an English one. Now, this is 
 not creditable to us, I think. I want to know why I am to be 
 compelled to work with an obsolete hay-fork when I can get 
 one so superior? Is there no enterprising Sheffield man 
 here present who will deliver us from this flood of hay-forks ? 
 A year hence such a thing as an American hay-fork ought 
 not to be seen in this country except as a curiosity. I do 
 wish somebody would seize on this idea, which I freely offer 
 him, would carry it out, and succeed with it, for then my 
 visit to Sheffield will not have been in vain. 
 
 Well, gentlemen, I trust that by this time you have been 
 able to form a pretty accurate notion of our condition as a 
 nation of manufocturers, trades, and carriers, and that you 
 can come to no other conclusion than that our position is an
 
 ENGLAND UNDER FREE TRADE. 3 1 
 
 excellent one, and one which is principally due to Free 
 Trade as its great efficient cause. Yet, as you know, you 
 have been called upon, and are being called upon, to disturb 
 this satisfactory condition of things. Two associations, one 
 of them called the National League, and the other the 
 National Fair Trade League, have organised themselves with 
 the view, among other objects, of procuring an alteration in 
 our commercial policy. 
 
 I am happy to say that as regards Free Trade, these 
 efforts have met with but little success, and that as time 
 rolls on there is every reason to expect they will meet 
 with still less. As, day by day, we get over one by one our 
 commercial troubles, and, little by little, find ourselves emerg- 
 ing from a long protracted depression, it will be harder and 
 harder for the advocates of Fair Trade, alias Protection, to 
 delude the people into taxing tlieir right hands a shilling, for 
 the slender chance of getting back sixpence with their left. 
 That little game is just two years too late ! Had they begun 
 their agitation two years ago, when depression was at its 
 worst, they would have made more disciples, and have given 
 us Free Traders much more trouble to expose their shallow 
 sophistries. Unfortunately for them now, they hardly ever 
 commit themselves to a statement, or venture on an argu- 
 ment, but the next day some most inconvenient fact turns up 
 in the news of the day to confound them. The time they 
 have chosen for galvanising the mummy of Protection is 
 about the worst they could have selected. It is as if 
 some man, undertaking to prove the extinction of the sun, 
 were to choose as the best time for making his assertions 
 and giving his proofs, not the midnight hour — when dark- 
 ness reigns and seems to lend confirmation to ' his state- 
 ments — but the dawn, just when the orb of day begins to 
 brighten creation, and every moment brings with it an acces- 
 sion of light and heat, and serves to prove him either a 
 cunning knave or the victim of a craze. 
 
 And now, by way of contrast to our present condition 
 under Free Trade — One-sided Free Trade — let us for a few 
 moments take a glance back to that state of things which 
 existed in the days of Protection, and to which we should
 
 32 ENGLAND UNDER FREE TRADE. 
 
 most assuredly revert, were we to follow the counsels of our 
 friends the Fair Traders. From what they tell us, one would 
 suppose that such things as agricultural and commercial 
 depression were unknown in those hai)py da)s, and that 
 they only came into being with the advent of Free Trade in 
 1846. I will now quote to you, by way of illustration, a few 
 passages from the article in the October number of the Nine- 
 teenth Century, entitled " The Proposals of the Fair Trade 
 League," from the pen of Mr. T. P. Whittaker, to which I 
 have already referred. 
 
 " In 1 81 6 the poor rates at Hinckley, Leicester, were 52s. 
 in the pound. 
 
 " It was stated in the House of Commons in 18 17 that at 
 Langdon in Dorsetshire, a parish containing 575 inhabitants,, 
 409 were receiving relief. And at Ely three-fourths of the 
 people were in receipt of relief. 
 
 "In 1817 wheat averaged 94s. 9d. a quarter. In 1822 
 wheat fell to 43s. 4d. a quarter. In 1819, 1820, and 1822, 
 agriculture was in a state of universal distress, bordering on 
 bankruptcy, and petitions for relief were presented to Parlia- 
 ment from all parts of the country. In 1822 a Parliamentary 
 Committee was appointed to inquire into the cause of the 
 distress. Farmers were ruined by thousands. One news- 
 paper in Norwich advertised 1 20 sales of stock in one day. 
 Tliis was when the Corn Laws were in full force, and the price 
 fixed by law for importing corn was 80s. a quarter. 
 
 " Again, ten years later, agricultural distress was great. 
 The Marquis of Stafford used to take his rents in the value 
 of corn, and in 1827 he abated 30 per cent, and in 1828, 26 
 per cent. In 1829, the workhouses in some parts of the 
 country were so crowded, that at times four, five, or six people 
 had to sleep in one bed. 
 
 "In 1829, families in Yorkshire were reduced to live on 
 bran, and in Huddersfield 13,226 were reduced to semi- 
 starvation. 
 
 "Sir Richard Phillips, in his "Facts" (published 1832), 
 says : — ' The dear corn years, from 1S09 to 18 18, swelled the 
 list of crimes from 5,350 in 1809 to 14,254 in 1818. In 
 1839 wheat went up to 70s. 8d. a quarter, and averaged 67s.
 
 ENGLAND UNDER FREE TRADE. 33 
 
 from then to 1841, and the distress m manufacturing districts 
 was heartrending.' 
 
 "In 1839-42 Stockport was ahiiost desolate, one-half of 
 the factories were shut up ; 3,000 dwellings were unoccupied, 
 artizans were breaking stones on the roads, and the poor 
 rate was los. in the pound. 
 
 "In Bolton, in 1842, the Poor Protection Society had 
 6,995 applicants for relief, whose earnings only averaged 
 13d. per head ; 5,305 persons were visited, and they had only 
 466 blankets amongst them, or about one blanket to every 
 eleven persons. 
 
 " In one district in Manchester it was found that there 
 were 2,000 families without a bed. In Glasgow, in 1842, 
 12,000 people were on the relief funds. 
 
 " In Accrington, out of a population of 9,000 people, 
 only 100 were fully employed. 
 
 "In 1842, the reports of the factory inspectors showed 
 that 10 per cent, of the cotton mills and 12 per cent, of all 
 the woollen mills of Lancashire and Yorkshire were standing 
 idle, and that of the rest only one-fourth were working full 
 time." 
 
 And, in further illustration, I will quote from a speech 
 made in the House of Commons by Cobden, in answer to 
 Sir Robert Peel, as set out in Morley's "Life" of the great 
 Free Trade Apostle : — 
 
 "Cobden, in answer to Sir Robert Peel, out of the 
 fulness of his knowledge, showed that the stocking frames 
 of Nottingham were as idle as the looms of Stockport, that 
 the glass-cutters of Stourbridge and the glovers of Yeovil 
 were undergoing the same privation as the potters of Stoke 
 and the miners of Staffordshire, where 25,000 men were 
 destitute of employment. He knew of a place where 100 
 wedding-rings had been pawned in a single week to provide 
 bread, and of another place where men and women sub- 
 sisted on boiled nePtles, and dug up the decayed carcase of 
 a cow rather than perish of hunger." 
 
 Well, gentlemen, it is only necessary to compare the 
 state of affairs when these horrors took place, with that 
 which now exists, to see that in wealth, morals, and intelli-
 
 34 ENGL AX D UNDER FREE TRADE. 
 
 gence, we have made, a prodigious advance during the last 
 forty years. In 1841, under rrotection, the United King- 
 dom numbered 26.^ miUions; in 1881, under Free Trade, 
 wc number 34^ millions. In 1881, under Free Trade, there 
 is not a man, woman, or child of these 34I millions — 8 mil- 
 lions more than existed under Protection — who is not better 
 off than he or she would have been under the old starvation 
 laws. There is no class of labourers that I know of who 
 do not command higher money wages now than they could 
 then ; and who with these wages cannot command more of 
 the necessaries, the conveniences, and the luxuries of life 
 than they could then, and who are thus enabled to get the 
 utmost possible return for their labour. If it be not presump- 
 tuous in me to give a word of advice to our artizans and 
 labourers, I would take the opportunity to say this : Endeavour, 
 if possible, to master some of the first principles of Political 
 Economy. Acquaint yourselves, for instance, with the mean- 
 ing of the word Capital. Recognise in Capital that portion 
 of wealth which is devoted to reproductive purposes, and that, 
 as one of its chief purposes is the payment of wages, it should 
 be treated as a friend, to be cultivated and encouraged, not 
 as an enemy, to be plundered or destroyed. These things, 
 however, are now, I am happy to say, better understood 
 than they were. Trades Unions and Co-operative Companies 
 are doing good service in the way of education respecting 
 them, and are, I trust, preparing the way for the abolition 
 of those disgraces to civilisation, those trade wars called 
 strikes and lock-outs, which are as barbarous in their way 
 as international war is in its way, and are much more 
 nexcusable. 
 
 And, now, let me in conclusion say this : I hold it to 
 be scientifically provable, mathematically demonstrable, that 
 as a nation, that is, that taking the nation as a whole, we 
 are in an excellent commercial position, and that the great 
 efficient cause thereof is Free Trade — that One-sided Free 
 Trade which our Fair Trading friends exclaim against. 
 Under our system of free imports we get here everything 
 that the globe produces on the cheapest possible terms, 
 'iliis advantage no Protectionist nation enjoys. The poor
 
 ENGLAND UNDER FREE TRADE. ' 35 
 
 among us are thus enabled to fight the battle of life on the 
 most favourable terms possible. Our labourers are thus fed, 
 housed, and clothed as cheaply as possible, and are thus 
 enabled to produce more cheaply than any other workers. 
 This has given us an unmistakable advantage in the world's 
 competition, and of that advantage we cannot be deprived 
 except in one way — by other nations becoming also Free 
 Traders. This being so, we need not be anxious, from a purely 
 selfish national point of view, that Protectionist nations 
 should throw off the fetters which now cramp their energies, 
 but should calmly await the time when the scales shall fall 
 from their eyes. That time may come sooner than some 
 of us expect. 
 
 CASSBLL, PETTER, GALPIN & CO., BELLE SAUVAGE WORKS', LONDON E.C
 
 Free Trade 
 
 versus 
 
 Fair Trade, 
 
 BY 
 
 T. H. FARRER. 
 
 Casset.l, Petter, Galpin & Co. 
 
 LONDON, PARIS & NEW YORK. 
 1SS2.
 
 PEEFACE. 
 
 For the following pages I am alone responsible. 
 They contain an attempt to illustrate established 
 truths, and to expose exploded though not obsolete 
 fallacies ; but they trench so closely on the politics 
 of the day that I should have scarcely felt justified 
 in writing them for publication without the encourage- 
 ment of the President of the Board of Trade. 
 
 For the Tables appended I am indebted to Mr. 
 E. J. Pearson and Mr. G. IT. Simmonds, of the 
 Statistical Department of the Board of Trade. They 
 will be found to contain useful and interesting 
 information, whatever may be thought of the in- 
 ferences I have drawn from them. Those who have 
 had much to do with statistics will know how difficult 
 it is to use them properly, and how easy and how 
 mischievous it is to use them carelessly and impro- 
 perly. 
 
 T. H. FARRER. 
 
 Board of Trade, 
 
 December, 1 88 1.
 
 CO^TEISTTS. 
 
 Prcltminarp, 
 
 CHAPTER I. PAGE 
 
 Difficulty of knowing what to answer . ...... I 
 
 CHAPTER H. 
 
 Proposals of the Fair Trade League : their ambiguity ... 7 
 
 Two Principles involved: — 
 
 1. To favour Colonies at expense of Foreign Nations . . 7 
 
 2. To place retaliatory Duties on Foreign Manufactures . . 7 
 Assumptions of Decay made by Fair Trade League answered already , 8 
 
 Part I.— Bfto Colonial Poltcp. 
 
 CHAPTER HL 
 General observations : Suspicious Character of New Policy . . 9 
 
 CHAPTER IV. 
 
 Assumptions that our Colonial Trade increases more, and is more steady 
 
 than our Foreign Trade, considered ...... 10 
 
 Customs Report . . . . . . . . . .13 
 
 Criticism on this Report . . . . . . . . .15 
 
 Proportions of Colonial, Indian, and Foreign Exports in 1840, i860, 
 
 1872, and 1880 16 
 
 Proportions of aggregate Colonial and Foreign Trades for each year 
 
 1856 to 1880 17 
 
 Proportions of Trade with each separate Foreign Country and Colony 
 
 for fifteen years . . . . . . . . . .18 
 
 Proportion of Exports to each separate Foreign Country and Colony 
 
 for fifteen years .......... 19 
 
 Points deserving notice in our Trade with — 
 
 Russia ........... 22 
 
 Germany and Holland — Effects of French Indemnity . . 23 
 Belgium .......... 24 
 
 France ........... 24 
 
 Italy ........... 25 
 
 Turkey 25 
 
 Egypt 25 
 
 United States 26 
 
 Brazil , . . .26
 
 CON'TF.NTS. 
 
 Cliili and I'oiii ......... 27 
 
 China 27 
 
 Ja]ian ........... 27 
 
 JJiitisli North America ........ 28 
 
 West Indies .......... 28 
 
 Australia .......... 2S 
 
 South Africa .......... 29 
 
 India, Circui'ou.s Trade of ....... 29 
 
 Foreign and Colonial Trades equally increasing and steady ; inter- 
 mingled ; and influenced by many temporary causes . , -32 
 
 CHAPTER V. 
 Protection in Foreign Countries, Increase or Diminution of . -32 
 
 CHAPTER VI. 
 
 Protection in the Colonies, Increase or Diminution of . . . 
 
 Tendency to I'lotection as great in Colonies as in Foreign Countries . 
 
 CHAPTER VH. 
 
 Dismissing the unfounded Assumptions of Fair Traders, Is a Customs 
 Union of the British Empire jiossible? . . . . . 
 
 CHAPTER VHI. 
 
 Proposals of Fair Traders for encouraging Colonial Trade are 
 Proposals to resta'ict Trade ........ 
 
 CHAITER IX. 
 
 Proposed Ta.\ on Foreign Food ....... 
 
 \Vhere does our food come from? 
 
 36 
 38 
 
 3S 
 
 41 
 
 42 
 43 
 
 CHAPTER X. 
 
 Why is a Tax on Foreign Food objectionable ? 
 
 Not only because it raises the price of food, but because it 
 hampers manufacture ........ 
 
 Connection between food, wages, and profits; Cobden misquoted . 
 
 CHAPTER XI. 
 
 Fallacy of supposing that Colonial Markets will compensate us for loss 
 of Foreign Markets ......... 
 
 CHAPTER XII. 
 
 Effects which an English Tax on American Corn would have on 
 American Competition with English Manufactures 
 
 CHAPTER XIII. 
 
 Objection that we are paying for American Corn by sending back 
 
 Investments 
 
 If true, nihil ad rem 
 
 44 
 
 45 
 46 
 
 48 
 
 51 
 
 52 
 52
 
 CONTENTS. Vll 
 
 PAGE 
 
 Absurdity of suggestion that the payment of Interest on American 
 
 Investments goes to find Luxuries for the Rich . . . • 5^ 
 
 Tlie recent Depression has hit the Rich and spared the Poor . . 54 
 
 Transfer of Trade to Colonies will not prevent Investments abroad . 55 
 
 CHAPTER XIV. 
 Assuming that we are to drive a Tariff bargain with the Colonies, in 
 return for our Tax on Foreign Food, wh.at would be the result ? 
 
 1. What should we give and get ? . . , . . . 56 
 
 2. What would the Colonies get and give? . , . • 5^ 
 What would be their position afterwards ? , . . -59 
 
 CHAPTER XV. 
 Can we make Commercial Treaties such as the French Treaty with the 
 
 Colonies ........... 61 
 
 WHiat have we to give ? . . . . . . . .63 
 
 Difliculties of a " most favoured nation " clause . . .66 
 
 Conclusion of Part I. — Governments can do much to hinder Trade ; 
 they can do little to promote it. Our Government can do little or 
 nothing to promote Trade with the Colonies, except to leave it 
 alone ........... 6S 
 
 Part II.— Hetaliation. 
 
 CHAPTER XVI. 
 Retaliation on Manufactured Goods, as proposed by the Fair Traders, 
 
 is for England impotent and suicidal ...... 69 
 
 CHAPTER XVII. 
 Proposal to Tax Manufactures, and leave Raw Material free. Difliculty 
 
 of the distinction 70 
 
 CHAPTER XVIII. 
 
 Other Proposals for Retaliation — 72 
 
 Lord Salisbury ......... 73 
 
 ''X:' in i\ie Pall Mail Gazette 76 
 
 Misrepresentation in other quarters of the Policy of Mr. Ricardo 
 
 and the Free Traders of 1840-60 . . . . .76 
 
 Origin of Policy of fighting hostile Tariffs by Free Imports . 77 
 
 CHAPTER XIX. 
 Is there anything in one-sided Free Trade which makes a case for 
 
 Retaliation ? — .......... 78 
 
 Fallacy in thinking of Protective Tariffs as complete barriers . 79 
 Effect of Protective Duties on one and on both sides in the Trade 
 
 between two Nations 79 
 
 Effect of similar Duties on Trade between three or more Nations 81 
 The Nation which remains P'ree will get the largest share of 
 the Trade ^t^
 
 VUl CONTENTS. 
 
 CHAPTER XX. PACB 
 
 Ilhislialion from iMiglish Trade before i860 84 
 
 CHAPTER XXr. 
 English Trade since i860 — Alleged Change of Conditions . . . 85 
 
 CHAPTER XXH. 
 What Free Trade mcaivs, and what it cannot do . . . .86 
 
 CHAPTER XXHI. 
 
 Relation of the Prosperity of other Nations to our own . . -87 
 
 CHAPTER XXIV. 
 Recent Commercial Depression ....... 89 
 
 CHAPTER XXV. 
 Effect of bad Harvests 92 
 
 CHAPTER XXVI. 
 
 Excess of Imports .......... 95 
 
 Investments Al:)road .......... 96 
 
 Outgoings on Shipping ......... 96 
 
 CHAPTER XXVII. 
 
 Points to bear in mind in comparing Statistics of Trade of different 
 
 Nations' ........... loo 
 
 Statistics of English Exports, 1870 and 1S80, analysed into Food, 
 
 Raw Materials, and Manufactures ...... loi 
 
 CHAPTER XXVIII. 
 
 Recent French Trade loi 
 
 Exports and Imports before and since the Treaty . . . lOi 
 
 Exports in 1S69 and 1879 analysed into Food, Raw Materials, 
 
 and Manufactures . .102 
 
 CHAPTER XXIX. 
 
 Recent German Trade ......... 103 
 
 Effect of Prince Bismarck's Protective Policy on . . . 104 
 
 CHAPTER XXX. 
 
 United States' Trade 106 
 
 Exports in 1870 and iSSo analysed into Food, Raw Materials, 
 
 and Manufactures . . . . . . . .106 
 
 Exports of United States and United Kingdom in each decade 
 
 since 1840, in the aggregate and per heail .... 107 
 Causes of United States Prosperity, and Nature of their Exports . 108
 
 CONTENTS. IX 
 
 CHAPTER XXXI. .age 
 
 Trade of Canada and Australia 109 
 
 Canada — Protective Tariff and subsequent Trade .... 109 
 Trade of Victoria and New South Wales compared . . . .110 
 
 CHAPTER XXXH. 
 
 Special instances of the Effect of Duties on Production — . . .111 
 Leather . . . . . . . . . . 112 
 
 'Sugar 113 
 
 Salt 114 
 
 Silk 114 
 
 CHAPTER XXXHI. 
 
 Shipping 115 
 
 Statistics of English . . . . . . . -115 
 
 Statistics of French . . . . . . . .116 
 
 Statistics of American . . , . . . . .116 
 
 De Tocqueville's Prophecy 117 
 
 CHAPTER XXXIV. 
 
 Bad consequences of Retaliation, supposing it possible, and supposing 
 
 a case could be made for it — . . . . . . .119 
 
 1. We should get inferior English instead of superior ioreign 
 
 goods .......,,. 120 
 
 2. The sale of English Goods would suffer .... I20 
 
 3. We should lose Material for Manufacture .... 120 
 
 4. Our Manufacturers would lose the stimulus of Foreign Com- 
 
 petition .......... 121 
 
 5. We should nurse Protected Interests, which would be sacri- 
 
 ficed hereafter, or be powerful an'] mischievous . .121 
 
 6. We should revive Differential Duties, and all the practical 
 
 confusion they cause . . . . . . .121 
 
 CHAPTER XXXV. 
 
 Practical application of the above to Retaliatory Duties on French Silk 
 
 and French Wine 122 
 
 CHAPTER XXXVI. 
 
 Retaliation on Protective Duties which are imposed for the purpose of 
 checking a too exclusive Development of Agriculture . . . 125 
 
 CHAPTER XXXVII. 
 
 PvCtaliation does not only not effect its object, but has a contrary efiect 125 
 It shows Mistrust in our own Principles . . . .126 
 
 It arouses Antagonism . 126 
 
 Strength of protected Interests ...... 126 
 
 Experience of its Failure . . . • • . .126 
 
 Negotiations of 1S40 ........ 127 
 
 Dr. Franklin 127 
 
 Canada and United States 128
 
 X CONTENTS. 
 
 CHAPTER XXXVIII. PAGE 
 
 TIic French Trcily of i860 130 
 
 It gives no countenance to Retaliation . . . . .130 
 We did notliing we .should not have done without a Treaty . 130 
 Wine the solo exception — if an exception .... 130 
 
 Danger of Retaliation illustrated by the present state of things . 131 
 Treaty of 1S60 not to be judged by economical results alone . 132 
 Result of Treaty not altogether successful . . . • '33 
 
 Real Objection to it, that it leads to Retaliation . . .134 
 
 Conclusions of Part II. as to Retaliation 135 
 
 Retaliation is an impotent weapon in our hands . . • '35 
 There is no case made, either by the slate of our own Trade or 
 
 that of our Neighbours, for a change of our own Policy . 135 
 
 Retaliation \\oukl injure us, and defeat its own object . .136 
 
 Final Conclusions 137 
 
 As to New Colonial Policy. Object may be good : all means 
 suggested bad and impracticable ; Governments can check 
 but not create Trade , . . . . . . .137 
 
 As to Retaliation, Bad in Spirit as in EfTect . . . .137 
 
 Hopeful Tendencies ........ 138 
 
 Appendix, wiih Tables of Statistics 139 
 
 For List and Description of these Tables, see Appendix . 139 — 141
 
 FREE TRADE .. FAIR TRADE. 
 
 prelimmari). 
 
 CHAPTER I . 
 
 DIFFICULTY OF KNOWING WHAT TO ANSWER. 
 
 When I was asked by the president of the Cobden Club to Recognised 
 write something in defence of Free Trade, it seemed to me — Principles, 
 recollecting as I did the instruction in politics which I had 
 received from the Corn Law Controversy — as if I had been 
 asked to prove Euclid, or give a reason for the rules of 
 Grammar. That governments can by protective or prohibitory 
 duties prevent and diminish, but cannot create or increase 
 trade ; that every tax on trade is a diminution of the produce 
 of industry, felt most certainly and probably most severely by 
 the country which imposes it; that it is just as unwise and 
 unrighteous to prevent the number of men who make up a 
 nation from buying their food and their clothes where they can 
 get them best and cheapest as it would be to compel me to 
 buy my bread from the nearest farmer or my coat from the 
 nearest tailor ; that a law which prevents the people of England 
 from buying in France or America is in no essential respect 
 different from a law which prevents the people of Middlesex 
 from buying in Surrey or Lancashire ; that every innocent 
 operation of trade is necessarily an advantage to both parties 
 concerned in it, and that to stop it by law is necessarily an evil 
 to both ; — all these, with the numerous consequences derived 
 from them, appeared to me to be such elementary truths that I 
 did not know where to begin. 
 
 Nor did I find much help when I looked into the public Vagueness 
 speeches and articles of Protectionists, Fair Traders, and °*^ at'acks 
 Reciprocitarians. Loud assertions that the British workman princfplls. 
 is disgusted with Free Trade, and a convert to Protection ;
 
 2 FREE TRADE V. FAIR TRADE. 
 
 appeals to the prejudices and self-interest of special classes ; 
 allegations of national ruin, which every one knows to be false ; 
 misstatements of historical facts which have happened within 
 my own recollection ; suggestions of the superior wisdom of 
 Prince Bismarck or M. Thiers ; imaginations of the grand 
 imperial policy which Mr. Pitt or Mr. Huskisson would have 
 followed had they been in the place of Sir R. Peel and 
 Mr. Cobden ; attacks on Cosmopolitanism and praise of Im- 
 perialism ; denunciations of political economy, in which the 
 ignorance of the writers was as conspicuous as the violence of 
 their language ; and general philippics against Radicals, Philo- 
 sophers, and members of the Cobden Club ; — in all this I could 
 find little to answer, though much to grieve at. 
 Allegations As to evidence of facts, I could find little or none. Appeals 
 decay.*'°"^ indeed there have been — e.g., in the October number of the 
 Quarterly — from the general experience which is conveyed by 
 the National statistics, to special cases founded on the one- 
 sided observations of a single prejudiced observer. 
 
 To such evidence I might oppose the statement that I too 
 have spent my holiday in visiting various parts of England ; 
 that I have seen business everywhere active, if not everywhere 
 as profitable as it has at some times been ; shipping on the in- 
 crease and fully employed; magnificent docks, harbours and 
 factories, where, within my own recollection, there were only 
 muddy creeks ; streets of palaces, where I remember hovels ; 
 coasts, a few years since solitary, or inhabited only by a few 
 fishermen, now lined with watering-places, and alive with 
 crowds from inland towns — crowds of the middle and lower 
 classes, who, by the increase of their own incomes and by the 
 development of railways and of steamers, are enabled to enjoy 
 comforts and luxuries formerly confined to the richer classes ; — 
 all this, and more, I and most of us have seen, and might with 
 confidence oppose to the individual cases of alleged depression 
 and suffering on which the Quarterly reviewer relies. But it so 
 happens that I am able to test one or two of his statements, 
 and can from these form some opinion of the value of the rest. 
 Coventry. Coventry is, of course, one of his test cases. The depression 
 of the Coventry ribbon trade, under the influence of French 
 and Swiss competition, is with him, as it has been with others 
 of his stamp for years, a favourite grievance. No doubt that 
 whilst Coventry is prospering with other businesses, the ribbon 
 trade is a weak trade, and has suffered, and is likely to suffer,
 
 PRELIMINARY. 3 
 
 unless the Coventry weavers can meet the tastes of our ladies 
 as skilfully and well as their competitors at Basle and Lyons. 
 But the reviewer has chosen an unfortunate moment to parade 
 the grievance of the Coventry operatives, for it is a fact that 
 the Coventry manufacturers have recently applied to the Home 
 Secretary for leave to extend the hours of labour to which they 
 are limited under the Factory Acts, on the ground that the 
 labour at their disposal would not, without such extension of time, 
 enable them to get through their orders. A Government Inspector 
 was sent down to inquire into the facts ; he confirmed the repre- 
 sentations of the manufacturers, and the time has been extended. 
 
 Again, the reviewer selects Birmingham as a special in- Birming- 
 stance of suffering, discontent, and decay. He alleges that the '^^'"■ 
 artisans complain that their houses are pulled down, and that 
 they are driven to live at a distance from their work. They 
 are doing nothing of the kind. Very few, probably not more 
 than twenty, of their houses have been pulled down, and many 
 of their houses have been much improved. The banks in 
 Birmingham have not, as the reviewer says, been making 
 smaller, but larger, profits in the last seven years. The Bir- 
 mingham Small Arms Company, who supply Government only, 
 owe their bad trade to the competition of Enfield. I might go 
 on to other statements of his' with similar results. But the 
 great and convincing proof of Birmingham's decay is what the 
 reviewer alleges to be the enormous number of unlet houses ; 
 this is his strongest point, and he recurs to it again and again. 
 Now what are the facts? In the year 187 1, the population of 
 Birmingham was 343,000, and it is now 400,000. In the year 
 1871, the number of empty houses was 5,884; since then 
 16,626 houses have been built, of which 12,226 have been 
 built in the last seven years ; and in 188 1 there are only 6,958 
 empty houses. Such is the value of the reviewer's principal 
 proof of the decay of Birmingham, when brought to the test of 
 certain and specific facts ; and from it we may judge of the 
 value of all the other alleged facts which he parades as instances 
 of depression and decay at Birmingham and elsewhere. 
 
 Let me take another favourite allegation of the Protec- Demorali- 
 tionists — it is made by Mr. Farrer Ecroyd as well as by the nation of 
 reviewer — to the efltect that " it is the race for cheapness caused iu^e"by "^' 
 by foreign competition which has demoralised so many of our Foreign 
 own industries, and brought English goods into disrepute in Competi- 
 once valuable markets." I need scarcely say that proof or
 
 4 FREE TRADE P. FAIR TRADE. 
 
 facts to substantiate this charge are, as usual, wholly \vanting. 
 Nor will I pause to ask whether the evil, if it exists, is to be 
 remedied by making English goods dear, which would be the 
 inevitable effect of Protection here, as it is now the effect of 
 Protection in Germany ; but I will quote a passage I have just 
 come across in a letter from Josiah Wedgwood, dated 21st 
 April, 177 1, more than a hundred years ago : — 
 
 " The potters seem sensible of their situation, and are quite 
 in a panic for their trade, and indeed with great reason, for low 
 prices must beget a low quality in the manufacture, which will 
 beget contempt, which will beget neglect and disuse, and there 
 is an end of the trade. But if any one warehouse distinguished 
 from the rest will continue to keep up the quality of the manu- 
 facture, or improve it, that house may perhaps keep up its 
 ])rices, and the general evil will work a particular good, and 
 they may continue to sell ware at the usual prices when the 
 rest of the trade can scarcely give it away." 
 
 We may see from this that the apprehension of competition 
 begetting cheapness, of cheapness begetting badness, and bad- 
 ness destruction of our trade, is not confined to the present 
 generation, and existed when there was no foreign competition 
 and abundant protection. We may also see what the clear- 
 headed, stout-hearted Josiah Wedgwood thought to be the true 
 way of meeting such competition ; and we may judge from the 
 subsequent history of the potteries what the ultimate effects of 
 his mode of meeting it have been — results wider, probably, than 
 he ever contemplated. 
 
 But since the time of the Corn Law controversy there has 
 no doubt arisen a new generation, to whom much that was 
 burnt into the minds of their fathers by a mortal struggle has 
 become merely an accepted tradition. There have been 
 downs as well as ups in trade, and these have — not without 
 fault on the part of Free Trade advocates — been attributed 
 to our Free Trade policy. There has been a wave of National, 
 as opposed to Cosmopolitan, sentiment passing over the world ; 
 which, if it has produced its good effects in the consolidation ot 
 a Free American Union, and in the unification of Italy and Ger- 
 many (effects, it must be remembered, odious to many of our own 
 Imperialists) ; has also produced its bad effects in the Franco- 
 German war, in the Pan-Slavonic movement against Turkey, in 
 the tide of Imperialism which swept over ourselves, in the 
 French troubles in Africa, in the adoption of American protec-
 
 PRELIMINARY, 5 
 
 tive policy by the United States, and in the partial relapse into 
 a similar policy evinced by some of the nations of Europe and 
 by some of our own colonies. 
 
 It is not amiss, under such circumstances, that we should be Pious 
 reminded that there is no such thing in politics as an " in- *-^P'"' '^ 
 fallible dogma ; " that every one has a right to a " pious 
 opinion;" that a great political party and its leaders have a 
 perfect right to advocate Retaliation or Reciprocity or Fair 
 Trade, or whatever other name or form a reversal of our 
 existing policy may assume ; and that that policy cannot exist, 
 and ought not to exist, unless it is able to justify itself. 
 
 There are, moreover, certain questions emerging out Questions 
 of the chaos of wild assertions, to which sensible and dis- 'Reserving 
 interested people, even though they may be resolute Free 
 Traders, may justly require an answer, and which, perhaps, have 
 not been as completely answered as they ought to be; such, 
 for instance, as the following, viz. : — 
 
 How is it that a period of excessive export, such as 
 1870-1875, is a period of undoubted prosperity; whilst a 
 period of excessive import, like the late five years, has been a 
 period of comparative depression ? 
 
 If the French Treaty was right, and was followed by enor- 
 mous increase of trade, is it not right to put ourselves in a 
 position to make similar bargains by putting on duties which 
 we can afterwards take off? 
 
 How is it that the trade of Protectionist or half-Protectionist 
 nations, such as America and France, have advanced as quickly 
 as or more quickly than that of Free Trade England ? 
 
 Does not the present attitude of the world towards Free 
 Trade prove that the anticipations, and consequently the 
 reasoning, of the Free Traders was wrong ? 
 
 Can we do anything to promote Trade with our Colonies ? 
 Questions such as these, taken by themselves, form detached 
 parts of a great subject, and do not afford a satisfactory oppor- 
 tunity of dealing with the merits of Free Trade or of the 
 objections which have been made to it. I was, therefore, very 
 glad when an association was formed, comprising most of the 
 persons who have been putting forward such objections, and 
 when that association placed before the world a programme in 
 which its authors not only professed to state in short terms 
 their reasons for departing from Free Trade, but placed before 
 the world an outline of the new policy which they would have us
 
 6 FRI:E trade 7'. FAIR TRADE, 
 
 Tro- substitute for the commercial policy of the last 40 years. Such 
 
 FaTrradc ^ programme, however worthless in itself, affords a definite sub- 
 l^cafiue. ject for discussion, in the course of which we have the great 
 advantage of considering not only whether our present policy is 
 absolutely good, a question which in this incomplete world it is 
 seldom possible to answer with perfect satisfaction, but whether 
 it is, or is not, better tlian other possible policies. I propose, 
 then, first to state the effect of the programme of the Fair Trade 
 League ; to point out shortly the assumptions on which their 
 proposal for a change of policy is founded; to show the ground- 
 lessness of those assumptions ; and then to criticise at some 
 greater length the two main propositions contained in their 
 programme. In doing this, we shall have the opportunity ot 
 treating the incidental questions which I have mentioned above. 
 
 CHAPTER II. 
 
 PROPOSALS OF THE FAIR TRADE LEAGUE. 
 
 The programme of the Fair Trade League is not definite in 
 its particulars, but its principal features arc as follows : — 
 '^'^"^ T'^u''^ ^- -^^^^ materials of manufacture to be admitted free. 
 
 2. Food to be taxed when coming from foreign countries ; 
 
 to be admitted free when coming from our colonies 
 and possessions. This taxation to be maintained for 
 a considerable term, in order to give the colonies 
 time to develop their products. 
 
 3. Tea, coffee, fruit, tobacco, wine, and spirits to be taxed 
 
 10 per cent, higher when coming from foreign coun- 
 tries than from our own colonies. It is not clear 
 whether it is intended that they or some of them are 
 to be free from taxation altogether, when coming from 
 the colonies. 
 
 4. Import duties to be levied upon the manufactures of 
 
 foreign countries which now impose prohibitory or pro- 
 tective duties on our manufactures ; such duties are 
 to be removed in the case of any nation which will 
 agree to take our manufactures duty free.
 
 PRELIMINARY. 7 
 
 Before dealing with this as a practical proposal, several Their 
 questions would have to be asked and answered, e.g., vagueness. 
 
 1. What is meant by raw materials, and what is meant by 
 
 manufactures, and what is the economical disdnction 
 between the two ? This is a question which has not 
 always received the attention it deserves, even at the 
 hands of economists. 
 
 2. What would be the effect on the revenue of the prac- 
 
 tical abolition of the duties on tea, and coffee, and 
 fruit ? As a measure of economical and social reform, 
 it would, of course, if the revenue admits of it, be 
 welcome to every Free Trader. 
 
 3. Is it intended that food shall be admitted free from 
 
 all our colonies, even where they levy protective or 
 prohibitory duties on the produce and manufactures 
 of the United Kingdom ? And if not, is there to be a 
 tariff bargain in each case ? 
 
 4. Are the manufactures of the colonies to be admitted 
 
 free, even where they place a protective or prohibitive 
 duty on the manufactures of the United Kingdom ? 
 
 These questions raise serious questions of principle and Two great 
 practice, the discussion of which might prove awkward to the Principles. 
 Fair Traders, and which are, probably from this reason, pur- 
 posely left obscure. But there is sufficient intimation of two 
 general principles, viz. : — 
 
 First, that we should depart from our present principle of Encourage- 
 neutrality, and that our Trade with our own colonies and ^oi"qjj,°*i 
 possessions should be artificially encouraged by means of an Trade, 
 artificial discouragement of our Foreign Trade. 
 
 Secondly, that we should place retaliatory duties on the Retaliation 
 
 manufactures of all countries which place duties on our manu- °" . 
 
 . ^ Y oreigners. 
 
 flictures. 
 
 These principles I propose to discuss in the present paper. 
 
 There is one preliminary difficulty : The advocates of this Assump- 
 new policy, like the other writers and speakers to whom I ^o"? *^^ 
 have referred above, instead of prefacing and supporting their decay, 
 proposals for so great a change by an appeal to evidence which 
 it might be possible to sift, content themselves with general 
 assumptions, which may be denied by those who disbelieve 
 them, but which it is difficult to disprove without a wearisome 
 array of facts and figures. Thus it is assumed that our 
 industries are permanently depressed and decaying \ that the
 
 8 FREE TRADE :-. FAIR TRADE. 
 
 These ^\5- excess of imports above exports is a sign of tliis decay; that the 
 aoMvered^ French Treaty has been a faikire ; and that we are losing our 
 already. position as manufacturers in the markets of the world. These 
 assumptions have been dealt with already in the speeches of 
 Mr. Gladstone, Mr. Chamberlain, Mr. Cross, and Mr. Slagg ; 
 in Mr. Whittaker's article in the October number of the 
 Nineteenth Century ; in many articles of the Times, in the Statist, 
 Economist, and other newspapers, and have been conclusively 
 disproved. 
 
 It has also been shown that, taking all the usual tests of 
 national prosperity — die returns of trade, of shipping, of the 
 income tax, of banking, of pauperism, of crime, of the general 
 consumption of articles of food and luxury — the progress of the 
 country as a whole is, beyond doubt, great and continuous, and 
 that any recent depressions and fluctuations are such as have 
 taken place at all times, and as can be easily explained by 
 special causes, to some of which I shall have to recur below. 
 No answer has been given to these figures, except such refer- 
 ence to the well-known depressions in certain businesses, and 
 such appeals from the general experience they contain to the 
 particular evidence of special observers in particular cases, as I 
 have sufiiciently referred to already. 
 
 It would, therefore, be superfluous to enter upon any general 
 examination of the state of the country, and we may proceed 
 at once to examine on their merits the two leading principles 
 of the Fair Traders, viz., a new Colonial Policy, and Retaliation 
 upon Foreign Nations. In doing so I shall have occa 
 sion to touch again on some of the above topics. In dis- 
 cussing these principles, I shall not confine myself to the actual 
 proposals of the Fair Trade League, but shall endeavour to see 
 whether the principles they advocate, which are not devoid of 
 a certain superficial ])lausibility, are capable of any practical 
 application, even though that application is not contained in 
 the Fair Trade programme.
 
 part h 
 
 NEW COLONIAL rOLICY. 
 CHAPTER in. 
 
 GENERAL OBSERVATIONS. 
 
 The Fair Trade League propose their new policy not only 
 as a measure of economical reform, by which, as they say, 
 . Freedom of Trade would be in substance promoted, and our 
 production and wealth increased, but as a " Great national A great 
 policy which, while stimulating trade at home and pro- ^'^f'on-'i' 
 moting the prosperity of all classes, would bind together ^°"^^' 
 more closely by the ties of a common interest, the mother- 
 country and her scattered populations, strengthening the 
 foundations and consolidating the power and greatness of the 
 empire." 
 
 To some of us these words may appear not a little suspicious. Imperidl- 
 They are not ill calculated to attract those who think that the '^'"• 
 glory of England consists in the extent of territory subject to 
 her imperial sway, in domination over subject peoples, in 
 superiority of strength, and in her power to inspire fear in the 
 other nations of the world. But they are capable of a more 
 innocent construction ; they may mean only that whilst free 
 and peaceful intercourse is to be desired amongst all mankind, 
 it is especially to be desired and promoted amongst those who 
 liave sprung from the same origin, who have the same history, 
 who speak the same language, whose lives are ordered by the 
 same laws and customs, and who are subject to the same form 
 of government. If this is their true meaning, it is not for the 
 Cobden Club, whose motto is " Free Trade, peace, good-will 
 amongst nations," to object to such a policy, nor would I say 
 one word against it. To improve and render more cordial 
 the relations between the United Kingdom and our great 
 English-speaking and self-governing colonies would, indeed, be
 
 10 FREE TRADE 7'. FAIR TRADE. 
 
 Suspicious a labour worthy of a statesman. But the British Empire is 
 of tiii's^'*^"^ made up of very different elements. To deal with Canada or 
 roiicy. Australia, on the one hand, and with India or Ceylon on the 
 other, as united with us by the same relation, and capable of 
 being dealt with in the same manner, is to confound things 
 which are really distinct. Even in our purely commercial 
 relations with these different countries, there are, as will be 
 seen below, great differences ; and in all the political relations 
 by and through which the proposed new commercial policy is 
 to be carried out, the differences are still greater. There is, 
 therefore, great reason to view with suspicion any plan which 
 proposes to apply one and the same policy, and that an entirely 
 new and experimental policy, to all these different commmiitics, 
 and it is, at any rate, necessary to subject it to the strictest 
 examination. If, upon such examination, it can be shown that 
 the policy in question is founded on a misapprehension of 
 existing facts, that its economical consequences to the colonists 
 and to the mother country will not only not be what its advo- 
 cates anticipate, but will be injurious to them both, and that, 
 so far from strengthening the friendly relations of the colonies 
 to the mother countr)', such a policy is calculated to cause 
 ill-will and to precipitate disruption, then we may, without 
 hesitation, discard this latest product of Protection and Im- 
 perialism, as we have discarded other follies of the kind. 
 
 CHAPTER IV. 
 
 ASSUMPTION THAT OUR COLONIAL TRADE IS MORE STEADILY 
 INCREASING AND LESS FLUCTUATING THAN OUR TRADE 
 WITH FOREIGN COUNTRIES. 
 
 Superior At the bottom of the new Colonial j)olicy lie two assumptions, 
 and"* which, though stated with the vagueness which characterises 
 steadiness all the Pair Trade arguments, are no doubt to be implied from 
 of Colonial their programme. These are, first, that whilst our profitable 
 assumed, trade with foreign countries is both unsteady and declining, 
 our profitable trade with our own colonies is steadily increas-
 
 PART I. — NEW COLONIAL POLICY. II 
 
 ing ; and, secondly, that our own colonies are more and more 
 ready and willing to receive our goods, whilst foreign nations 
 are more and more disposed to reject them. 
 
 I propose to deal with these two assumptions successively, 
 and shall be able to show that neither of them can be accepted 
 as true. Those who are satisfied already that these assumptions 
 are unfounded ; that our trade with foreign countries is as 
 valuable to us as our trade with our colonies, and that the trade 
 of all countries is so bound up together that to limit one branch 
 is to limit others also, may pass over the long array of facts 
 and figures contained in this and the two following chapters, 
 and go on to Chapter VII. 
 
 Let us see what the Fair Trade League say in favour Allegations 
 of the first of these assumptions. They give, in this pro- o^ superior 
 gramme, as the chief reason for the proposal to tax foreign coion'^ai°*^ 
 food, and admit colonial food free, that it will " transfer the Trade, 
 great food-growing industries we employ from Protective foreign 
 nations, who refuse to give us their custom in return, to our 
 own colonies and dependencies, where our goods will be taken, 
 if not duty free, yet subject only to -revenue duties almost 
 unavoidable in newly-settled countries, and probably not equal 
 to one-third of the Protective duties levied by the United 
 States, Spain, Russia, &c. ;" and to this is appended the 
 following amazing note : — " Even at the present time every 
 quarter of wheat imported from Australia affords us in return 
 sixteen times as much trade and employment as a quarter of 
 wheat imported from the United States, and every quarter 
 of Avheat imported from Canada thirty-five times as much as 
 one imported from Russia " !! 
 
 Mr. Farrer Ecroyd, again, who, in his article in the October 
 number of the Nineteenth Century, has made himself the 
 expositor of the Fair Trade programme, says : — " Had it (viz., 
 the ;^3o, 000,000 of produce which he assumes to have been 
 lost by our bad harvests) been purchased from our own 
 colonists, the money would have come round again, and have 
 given employment to all our industries, as an immensely- 
 increased export of our manufactures would have paid the 
 bill ; • ' and again — " Our experience teaches us that in buying 
 food from our colonies, y\e enjoy a return trade in our manu- 
 factures at least twenty times larger per head than with the 
 Americans and Russians;" and again — "Assuming that we 
 shall purchase food produced in our ow^n dominions as cheaply
 
 12 
 
 FREE TRADE V. FAIR TRADE. 
 
 Pair Trade 
 
 evidence 
 
 that 
 
 Colonial 
 
 Trade is 
 
 more 
 
 valuable 
 
 than 
 
 I-'oreign 
 
 Trade. 
 
 as it now is purchased in the United States or in Russia, 
 experience assures us that we shall obtain in exchange for the 
 purchase of it a dozen or twenty times more employment for 
 home industries than we now do." 
 
 It is really difficult to get at what is in the brains of men 
 who make such statements. It would seem that they think 
 that the simple export of British goods without payment is 
 />er sc a good to this country ; that Australia gets (say) sixteen 
 or twenty times as much of our manufactures in payment for 
 a quarter of wheat as Russia or the United States get ; and 
 that, therefore, it is of the utmost importance to us to transfer 
 our custom from Russia and the United States, to whom we 
 l^ay so little, to Australia, to whom we pay so much. But it is 
 the facts, not the reasoning, of these passages with which I 
 have now to do. Mr. Farrer Ecroyd continues : — " In con- 
 nection with this subject, let anyone carefully study not only 
 the very large value of British manufactures purchased annually 
 per head by the inhabitants of our colonies as compared with 
 the Americans, but also the remarkable steadiness of the 
 colonial demand as compared with the violent fluctuations in 
 that of the United States. And, further, let him examine the 
 expansion during the past twenty-five years of the outlet for 
 our manufactures in India and our colonies, compared with the 
 stunted growth, or positive decline, of the trade to foreign 
 high- tarift' markets. He will then be able to form some idea 
 of the demand upon our industries that would accompany the 
 gradual transference to India and the colonies of the growing 
 of fifty million pounds' worth of food, now annually imported 
 from the United States and Russia ; and, bearing in mind that 
 the economic gain from that increase of employment, however 
 great, would probably be of far less value than the moral and 
 social results of its superior steadiness, he will begin to appre- 
 ciate more fully the importance of this great question to our 
 labouring population." 
 
 It is difficult to subject statements so vague as this to any 
 satisfactory test ; but the impression which they convey con- 
 cerning the facts of the colonial trade is shared by many 
 persons who are not members of the Fair Trade League, 
 and there is some evidence which may be fairly quoted in 
 favour of it. There is, especially, one passage much quoted 
 and relied on, which is both specific and accurate, and 
 which, therefore, it is worth while to give at length. Jt is
 
 PART t. — NEW COLONIAL POLICY. 
 
 13 
 
 from the last official report of the Board of Customs,* and is as 
 follows : — 
 
 Exports. 
 
 Produce and Manufactures of the United Kingdom. 
 
 " The value of the produce and manufactures of the United Customs 
 Kingdom exported to foreign countries and British possessions 1881?'^ 
 in the year 18S0 was as follows, namely : — 
 
 Foreign Countries 147,806,267 
 
 British Possessions 75,254,179 
 
 Total 223,060,446 
 
 showing an increase of ^31,528,688 upon the value of similar 
 exports in the year 1879, o^* ^^\ V^^ cent., and by assigning to 
 each of those divisions its proportion of the increase, we find 
 that the value of the goods exported to foreign -countries ex- 
 ceeded that of 1879 by ;Q\'],2'](i,()2o, or 13^ per cent, and 
 that the value of goods sent to our colonies and dependencies 
 was greater by ^^14,252, 068, or 23^ per cent, than in 1879. 
 
 " The following table shows the percentage of difference in 
 a series of ten years between the value of the export trade in 
 goods of home manufacture to foreign countries and British 
 possessions respectively, on a comparison of the figures of a 
 given year, with those of the year preceding, namely : — 
 
 
 
 Value of 
 
 Value of 
 
 Proportion 
 
 Proportion 
 
 Vc-ir. 
 
 Total Value of 
 
 Exports to 
 
 Exports to 
 
 of Foreign 
 
 of British 
 
 Exports. 
 
 Foreign 
 
 British 
 
 Countries 
 
 Possessions 
 
 
 
 Countries. 
 
 Possessions. 
 
 to Total. 
 
 to Total. 
 
 
 £. 
 
 I 
 
 £. 
 
 Per Cent. 
 
 Per Cent. 
 
 1871 
 
 223,066,162 
 
 171,815,949 
 
 51,250,213 
 
 77-0 
 
 23 "O 
 
 1872 
 
 256,257,347 
 
 195,701,350 
 
 60,555,997 
 
 76-4 
 
 236 
 
 1873 
 
 255,164,603 
 
 188,836,132 
 
 66,328,471 
 
 74-0 
 
 260 
 
 1874 
 
 239,558,121 
 
 167,278,029 
 
 72,280,092 
 
 69-8 
 
 30-2 
 
 1875 
 
 223,465,963 
 
 152,373,800 
 
 71,092,163 
 
 68-2 
 
 31-8 
 
 1876 
 
 200,639,204 
 
 135,779,980 
 
 64,859,224 
 
 677 
 
 32-3 
 
 1877 
 
 198,893,065 
 
 128,969,715 
 
 69,923,350 
 
 64-8 
 
 35-2 
 
 1878 
 
 192,848,914 
 
 126,611,428 
 
 66,237,486 
 
 657 
 
 34*3 
 
 1879 
 
 191,531.758 
 
 130,529,647 
 
 61,002, in 
 
 68-2 
 
 31-8 
 
 1880 
 
 223,060,446 
 
 147,806,267 
 
 75.254,179 
 
 66-3 
 
 337 
 
 Taking the extreme limits embraced by the table, we find that 
 • Parliamentary Paper, No. 2953, 1881, p. 19.
 
 M 
 
 FREE TRADE V. FAIR TRADE. 
 
 in 1871, when the total export value was almost identical with 
 that of 1880, the proportion of the goods that found their way 
 to our colonies was represented in value by ^51,250,213, or 
 23 per cent, of the total sum of ^^2 23,066,1 62, whilst in 1880 
 the proportion was^75,2 54, 179, out of a total of ;:^2 23,060,446, 
 or 337 per cent. 
 
 "Exports to British Colonies.'^ 
 
 " We give below a list of the principal articles, with their 
 values, that make up the aggregate of our trade with the 
 colonies, with the view of showing in what respect the increase 
 of 24 millions, which has accrued in the same period of ten 
 years, is chiefly exhibited." 
 
 Articles.! 
 
 Value in the 
 Year 187 1. 
 
 Apparel and slops \ 1,538,370 
 
 Arms, ammunition, and mill-' 
 
 tary stores "• 356,845 
 
 Beer and ale 1,195,663 
 
 Coals, cinders, and patent fuel] 881,418 
 
 Copper, unwrouglu and wrought 817,063 
 
 Cotton yarn 2,258,368 
 
 Cotton manufactures .... 19,166,944 
 Iron and steel, unwrought and 
 
 wrought 4,591,917 
 
 Leather, unwrought and wrought' i, 133,988 
 
 Machinery and mill work , .' 999,401 
 
 Paper of all kinds 486,084 
 
 Silk manufactures 1 320,787 
 
 Woollen manufactures . . .j 3,172,110 
 
 Other articles ' 14,331,255 
 
 Total 51,250,213 
 
 Value in the 
 Year i88o. 
 
 2,675,766 
 
 565,904 
 1,209,733 
 1,224,315 
 1,206,888 
 3,789.685 
 27,349.975 
 
 8,222,146 
 
 1,362,581 
 
 2,065,995 
 
 959,378 
 
 878,089 
 
 4,414,763 
 19.328,961 
 
 Increase in 1880 
 
 as compared 
 
 with 1871. 
 
 75,254,179 
 
 £. 
 1,137,396 
 
 209,059 
 14,070 
 
 342,897 
 389,825 
 
 1,531.317 
 8,183,031 
 
 3,630,229 
 228,593 
 
 1,066,594 
 473.294 
 557.302 
 
 1,242,653 
 
 4.997,706 
 
 24,003,966 
 
 " The above-mentioned twenty-four millions represent an 
 increase of nearly 47 per cent, in ten years in regard to our 
 trade with the colonies, but, on the other hand, the value of 
 our trade with foreign countries has decreased in the same 
 period from ^171,815,949 to ^^147,806,267, or 14 per cent, 
 the total export trade for 1871 and 1880 being, as we have 
 said, almost identical in amount, although showing such wide 
 differences when classified under ' Foreign Countries ' and 
 * British Possessions ' respectively."
 
 PART I. — NEW COLONIAL POLICY. 1 5 
 
 Now, this passage is, as I have said, perfectly accurate ; the Customs 
 misfortune is that it does not give a complete account of the ^'^fj^^^g' 
 case ; that it is capable of being misused, and has been misused {^^^ incom- 
 accordingly. piete. 
 
 In the first place, ten years is far too short a time by which 
 to measure the progress and value of different branches of trade. 
 
 In the second place, this table only professes to give the 
 exports of British produce from the United Kingdom ; it does 
 not give the imports, and without this it is useless as an index 
 to the comparative values of the foreign .and colonial trades, 
 except, indeed, in the opinion of those who think that the 
 value of our trade depends solely on what we give, and not 
 also on what we get. 
 
 In the third place, by lumping all foreign countries on the 
 one side, and all the different British possessions on the other, 
 an impression is produced that there is some general law 
 governing each class, which produces results differing for the 
 two classes, but identical for all the cases within each class ; 
 and this impression is made use of with great effect by those 
 who contend that the whole object of Trade is to export, and 
 that, since the colonies take more exports than foreign countries, 
 it is our business to encourage the one at the expense of the 
 other. I have already pointed out how different are the 
 circumstances of the different parts of the British Empire, and 
 how much our relations to our self-governing colonies differ 
 from our relations to India. Now, it is not a little remarkable 
 that if we analyse the above comparison of 1880 with 187 1 we 
 shall find that the greatest increase in exports to the colonies, 
 on which the Customs report lays stress, is due to India. Our 
 exports of British produce to India were — 
 
 In 1871 . . ;/^i8,o53,478, or St per cent, of the total. 
 „ 1880. . 30,451,314, or 137 ,, „ 
 
 The exports to the Australian Colonies were : — 
 
 In 1871 . . ^^10,051, 982, or 4-5 per cent, of the total. 
 „ 1880. . 16,930,935, or 7-6 „ ,, 
 
 The exports to British North America were : — 
 
 In 1871 . . ^8,257,126, or 37 per cent, of the total. 
 „ 1880 . . 7,708,870, or 3-5 
 
 Further, in 1880 the exports to British India were 
 ;^9,ooo,ooo more than in 1879, thus accounting for three-fifths 
 of the increased colonial export for that year ; so that, whilst the
 
 i6 
 
 FREE TRADE V. FAIR TRADE, 
 
 Exports to 
 
 Colonies 
 
 and 
 
 Foreign 
 
 Countries 
 
 since 1840. 
 
 exports to India and to Australia have very largely increased in 
 the decade, those to British North America have diminished. 
 
 Similar differences might be pointed out in the exports to 
 foreign countries. When investigated, they are often very in- 
 structive, as I hope to show below. I mention this now only to 
 prove, even within the narrow limits of the Customs table, how 
 fallacious it is to draw from figures of this description any such 
 general results as Mr. Ecroyd and the Fair Traders have done. 
 
 It is difiicult to give, except in figures so long and minute 
 as to be unreadable, any general view of the comparative 
 results of our trade with the different countries of the world, 
 but I will try to do so as briefly as I can, relegating the more 
 cumbrous tables to an Appendix. 
 
 First, assuming the position held by the Fair Traders, that 
 what Ave give, and not what we get, is the standard by which 
 to judge of the profits of trade, let us see what our exports of 
 British produce have been since 1840. 
 
 Statement s}ioivi7is;the Total Exports of British and Irish rroducc fioin the 
 United Kingdotii to the tmdermentioned Countries in caeh of the Years 
 1840, i860, 1872, and 1880. 
 
 
 1 840. 
 
 i860. 
 
 1872. 
 
 1880. 
 
 
 ^ 
 
 £. 
 
 £. 
 
 To Colonies . . 
 
 11,886,167 
 
 26,699,543 
 
 42,084,603 
 
 44,802,865 
 
 ,, British India . 
 
 S.212,839 
 
 16,965,292 
 
 18,471,394 
 
 30,451.314 
 
 ,, Europe : 
 
 1 
 
 
 
 
 Russia . . 
 
 1,602,742 
 
 3.269,079 
 
 6,609,224 
 
 7,952,226 
 
 Germany . . 
 
 5.579,669 
 
 13.491,513 
 
 31,618,749 
 
 16,943,70a 
 
 Holland . . 
 
 3,416,190 
 
 6,114,862 
 
 16,211,775 
 
 9,246,682 
 
 Belgium . . 
 
 880,286 
 
 1,610,144 
 
 6,499,062 
 
 5.796,024 
 
 France . . 
 
 2,378,149 
 
 5,249,980 
 
 17,268,839 
 
 15,594.499 
 
 Spain . . . 
 
 404,252 
 
 2,471.447 
 
 3,614,448 
 
 3,222,022 
 
 Italy . . . 
 
 2,162,931 ! 
 
 4,514,287 
 
 6,557,538 
 
 5,432,908 
 
 Turkey . . 
 
 1,387,416* 
 
 5,064,233 
 
 7,639.143 
 
 6.765,966 
 
 Ot. Countries 
 
 
 
 
 
 in Europe . 
 
 2,006,555 
 
 4,984,956 
 
 10,987.309 
 
 9,727,887 
 
 United States 
 
 
 
 
 
 of America . 
 
 5,283,020 
 
 25,101,210 1 
 
 9,108,524 1 
 
 21,667,065 
 
 40,736,597 
 
 30,855,871 
 
 Total . . 
 
 68,437,566 
 
 147,742,684 
 
 111,537.785 
 
 ,, Othr.Coimtries 
 
 23,788,826 
 
 47,958,666 
 
 36,268,482 
 
 Total Foreign 
 
 34.209,734 1 
 
 92,226,392 
 
 195.701,350 
 256,257,347 
 
 147,806,267 
 
 Total . . 
 
 51,308,740 ' 
 
 135,891,227 
 
 223,060,446 
 
 ♦ Including Greece, Wallacliia, and Moldavia in 1S40.
 
 PART I. — NEW COLONIAL POLICY. I 7 
 
 Putting these figures in the form of percentages, they are as 
 follows : — 
 
 
 To Colonies. 
 
 To 
 
 India. 
 
 To Fore 
 
 gn Countries. 
 
 1840 . 
 
 23 
 
 10 
 
 
 67 
 
 100 
 
 i860 . 
 
 I9i • . 
 
 I2| 
 
 
 68 
 
 100 
 
 1872 . 
 
 i6i .. 
 
 7 
 
 
 76h 
 
 100 
 
 1880 . 
 
 20 
 
 i3h 
 
 
 66| 
 
 100 
 
 There is here no symptom of any permanent increase in 
 the percentage of the colonial exports, but rather the reverse. 
 The percentage of the foreign exports, which rose rapidly with 
 the loans and inflation of 1872, has otherwise remained 
 steady, and there have been great fluctuations in the per- 
 centage of the Indian trade. There is certainly nothing 
 in these figures to lead one to suppose that we should 
 sacrifice tlie trade with foreign countries in order to nurse 
 the colonial trade. 
 
 But no view of trade is complete which deals with exports 
 alone, nor is a comparison of one single year at one period with 
 another single year at another sufficient to show the general 
 course of trade. I have therefore annexed to this paper* four Trade with 
 tables, showing for each of the last twenty-five years the amount Colonies 
 and proportions of our trade with foreign countries and with our poreign 
 own colonies and possessions respectively. The first of these Countries' 
 tables gives the exports of produce of the United Kingdom ; '" ^^^^ ^^ 
 the second gives the total exports, including re-exports of 25 years, 
 foreign and colonial produce ; the third gives the total im- 
 ports ; and the fourth gives the total of the imports and 
 exports. For each year is given the percentage of the foreign 
 and colonial trades respectively. From these tables it is 
 clear that whether we take, as the Fair Traders do, the 
 exports of British produce only, or the total exports, or the 
 total imports, or, which is the fairest test, the whole of the trade 
 exports and imports together, there is not the least ground for 
 the assertion that the whole of our trade with our own posses- 
 sions has grown faster than our trade with foreign nations, 
 or that it is subject to fewer fluctuations. Taking the exports 
 of the produce of the United Kingdom, the exports to the 
 colonies were ^;^ millions in 1856, rose to nearly 54 millions in 
 1866, sank to 48 millions in 1869, rose to 72 millions in 1874, 
 and fell to 61 millions in 1879. Of the imports, the colonial 
 
 * See Tables I., IL, III., and IV., in Appendi.x.
 
 lis FRKE TRADE V. FAIR TRADE. 
 
 share is smaller, but equally fluctuating. It was 43 millions 
 in 1856, 38 millions in 1858, 93 millions in 1864, since which 
 time it has on the whole declined, being as low as 73 millions 
 in 187 1, and 78 millions in 1878, rising again to 92 millions 
 in 1880. Taking the whole of the trade of the United King- 
 dom — imports and exports together — which is by far the fairest 
 test, the colonial share of the trade was 80 millions in 1856, 
 149 millions in 1864, 114 millions in 1867, 165 millions in 
 1877, 145 millions in 1879, and 174 millions in 1880. If we 
 turn to the tables, we shall see that these fluctuations are as 
 great as those Avhich have taken place in the trade with foreign 
 countries. The proportion which our colonial trade bears to 
 our whole trade has varied between 31 "3 per cent., at which 
 it stood in 1863, to 20*9 per cent, at which it stood in 
 187 1 ; it stood at 25 "6 per cent, in 1856, and stands at 24*9 
 per cent. now. It has kept pace with our foreign trade, 
 and forms about a quarter of it. But it fluctuates as much 
 as our foreign trade, and forms no larger a proportion of it 
 now than it did fifteen years ago. 
 
 But even these figures, whilst amply sufficient to show that 
 there is no ground whatever for supposing that our foreign 
 trade, as a whole, is either more precarious or less profitable 
 than our colonial trade, lump all foreign countries and all 
 colonies together, and fail to show how different has been 
 the course of trade with different colonies and different 
 countries, and how fallacious it is to include in one and 
 the same class either the one or the other. I have there- 
 fore added to the Appendix some tables,* showing what has 
 been the course of trade with each foreign country and 
 with each colony or group of colonies for the last fifteen 
 years, giving for each country and for each year the exports 
 and imi)orts separately, and the percentage which they con- 
 eac'h'of last stitutc of the aggregate imports and exports. I have also 
 15 years, added a tablet giving a summary of the whole, .showing, in the 
 form of percentages, what has been the proportion which 
 our trade with each country and each colony in each year, and 
 in each period of five years, has borne to our whole trade. 
 
 The following summary shows at a glance what jjroportion 
 of our whole trade has been carried on with each foreign 
 
 * See Tables V. and VI., in Appendi.x. 
 + See Table VII., in Appendi.x,
 
 PART I. — NEW COLONIAL POLICV. 
 
 19 
 
 country and each colony for each of the three last periods 
 of five years. 
 
 Foreign Countries. 
 
 Slatenicnt of the proportion Per Cent, of our whole Foreign Trade carried on 
 with each Foreign Country. 
 
 1 Russia 
 
 man';. Holland; Belgium 
 
 France 
 
 Italy 
 
 Turkey 
 
 Egypt 
 
 1 Pr. Ct. 
 5 Years \ 
 ending I 5-3 
 1870. J 1 
 
 Pr. Ct. 
 
 9-0 
 
 Pr. Ct. Pr. Ct. 
 
 5-4 I 3-2 
 
 Pr. Ct. 
 11-2 
 
 Pr. Ct. 
 19 
 
 Pr. Ct. 
 
 2-6 
 
 Pr. Ct. 
 
 4-5 
 
 5 Years ] i 
 ending \\ 5'° 
 
 1875- J ! 
 
 8-8 
 
 5-5 i 4-1 
 
 IO-8 
 
 1-8 
 
 21 
 
 2-9 
 
 5 Years "j 
 ending I 4*2 
 1880. J 
 
 8-2 
 
 5-8 
 
 3-8 
 
 10-9 
 
 1-6 
 
 1-9 
 
 19 
 
 Average for ) ! .-g 
 whole Period. ) j 
 
 8-6 
 
 5'6 
 
 3-8 
 
 no 
 
 1-8 
 
 2-2 
 
 30 
 
 Foreign Countries [continued). 
 
 
 United 
 States 
 
 Brazil 
 
 1*1 1 
 Chili Peru China Japan 
 
 Other 
 entries 
 
 Total 
 
 5 Years "1 
 
 ending \ 
 
 1870. J 
 
 Pr. Ct. 
 137 
 
 Pr. Ct. 
 25 
 
 Pr. Ct. ! Pr. Ct. 1 Pr. Ct. j Pr. Ct. 
 
 ! i ' 
 
 1-2 10 ■ 3-0 i 0-3 
 
 Pr. Ct. 
 I2"2 
 
 Pr. Ct. 
 
 77 -o 
 
 5 Years 1 
 ending 
 1875. J 
 
 15-5 
 
 17-6 
 
 23 
 
 II 
 
 I-I 2-S 0-4 
 
 13-1 
 
 77-3 
 
 5 Years "1 
 
 ending I 
 
 1880. J 
 
 1-8 
 
 1 i 
 
 0-8 1 0-8 28 0-5 
 
 1 
 
 12-8 
 12-6 
 
 75-4 
 
 Average for ) 
 whole Period, f 
 
 157 
 
 2-2 I-O j I*0 2-8 0-4 
 
 76-5
 
 20 
 
 FREE TRADE V. FAIR TRADE. 
 
 Colonies and Uritisii Possessions. 
 
 Stalcnicut of the f'lo/'ortioii Per Cent, of our whole Foreign Trade carried on 
 ti'ith each Colony. 
 
 5 Years 
 
 ending 
 
 1870. 
 
 IJritish liritish 
 
 North I West 
 
 America' Indies 
 
 Australian 
 
 Pr. Ct. Pr. Ct. 
 
 27 ■ 17 
 
 South J^'h." 
 ■ - - ■ I British 
 
 Possessions 
 
 Total 
 
 Percent. Pr. Ct. Pr. Ct. Per Cent. Per Cent. 
 
 5 Years ) 
 ending > 
 1875- ) 1 
 
 31 15 
 
 5-3 
 
 5 Yeirs \ • 
 
 ending ! 2"9 r5 
 1880. : 
 
 6-6 
 
 97 I 09 
 
 81 
 
 8-5 
 
 1-6 
 
 Average for ) 2-9! 16 \ 5 "6 | 87! 1-3 
 whole Period. ( ' ^ ' -^ ' ' "^ 
 
 3-2 
 
 3-5 
 
 3-5 
 
 3 '4 
 
 23-0 
 
 227 
 
 Exports to 
 each 
 Foreijjn 
 Country 
 and each 
 Colony 
 for J5 
 years. 
 
 In order that I may not appear to overlook the facts reHed 
 on by the Fair Traders, I give the following summary, in a 
 similar form, of the course of our export trade to each country. 
 The following percentages are the percentages of the total 
 exports, including re-exports of foreign and colonial produce. 
 But the percentages are much the same as they would be if the 
 exports of the produce of the United Kingdom alone were 
 included, and in the tables appended the figures for both kinds 
 of export are given fully. But, whilst I give these figures in 
 deference to the weaknesses of the Fair Traders, I protest 
 against the notion that exports are more important than 
 imports, and also against the notion that the direct trade to or 
 from each country and colony shows the whole character of 
 the transaction. Trade is circuitous, and the debt which 
 accrues to us in consequence of an export to a colony is often 
 repaid to us by our imports from some foreign country. More- 
 over, as we shall see below, temporary causes have an immense 
 effect both on our exports and imports ; and although in the 
 long run trade balances itself, the exports to any one country 
 for any given year, or short term of years, or even the exports 
 and imports together, are often a most imperfect index of the 
 nature of our whole trade with that country.
 
 PART I.— N£VV COLONIAL POLICY. 
 
 21 
 
 Exports to Foreicn Countries. 
 
 Statcinint of the proportion Per Cent, oj Exports from United Kingdom, 
 including Re-exports, to each of the undermentioned Foreign Count lics. 
 
 
 Russia. 
 
 Ger- 
 many 
 
 Holland 
 
 Belgium 
 
 France 
 
 Italy 
 
 Turkey 
 
 Egjpt 
 
 Pr, Ct. 
 5 Years | 
 ending \ 3-5 
 1870. J i 
 
 Pr. Ct. Pr. Ct. 
 
 12-6 6-9 
 
 Pr. Ct. 
 3 '4 
 
 Pr. Ct. 
 IQ-I 
 
 Pr. Ct. 
 
 2-8 
 
 Pr. Ct. 
 3-2 
 
 Pr. Ct. 
 
 3 '3 
 
 5 Years ] 
 ending \\ I'o 
 1875- .) 
 
 12-6 
 
 7-6 
 
 4-5 
 
 I0"0 
 
 27 
 
 2-5 
 
 1-8 
 
 5 Years 1 
 ending \ 3 "6 
 1880. J 
 
 II "4 
 
 6-2 
 
 47 
 
 10-5 
 
 27 
 
 2-8 
 
 I"0 
 
 Average for ) 
 whole Period, j 
 
 3-6 
 
 12-2 
 
 6-9 
 
 4-2 
 
 IO-2 27 
 
 2-8 
 
 20 
 
 Exports to P'oreign Countries [continued). 
 
 
 United 
 States 
 
 Brazil 
 
 Chili 
 
 Peru 
 
 China 
 
 Japan 
 
 Other 
 Foreign 
 Countries 
 
 Total 
 
 5 Years "] 
 ending I 
 1870. J 
 
 Pr. Ct. 
 
 117 
 
 Pr. Ct. 
 
 27 
 
 2-5 
 
 Pr. Ct. 
 10 
 
 Pr. Ct. 
 0-6 
 
 Pr. Ct. 
 26 
 
 Pr. Ct. 
 
 07 
 
 Per Cent. 
 II-8 
 
 Pr. Ct. 
 76-9 
 
 5 Years 1 
 ending I 
 1875. J 
 
 I2-0 
 
 0-9 
 
 08 
 
 1-9 
 
 07 
 
 1 2 '6 
 
 767 
 
 5 Years 1 
 
 ending I 
 
 1880. J 
 
 9 '4 
 
 2-5 
 
 0-6 
 
 0-4 
 
 1-9 
 
 I 'I 
 
 12-8 
 
 71-6 
 
 Av. for whole ) 
 Period. ) 
 
 III 
 
 2-5 
 
 0-8 
 
 06 
 
 2-1 
 
 0-8 
 
 12-6 
 
 75-1
 
 VKKli. TRADE 7'. FAIR-TRADE. 
 
 Colonies and British Possessions. 
 
 State/Noit of the proportion Per Cent, of Exports from United Kingdom, 
 including Ke-exports, to each of the iindennentionrd Colonics. 
 
 It would take more time and more knowledge than I possess 
 to explain in detail the figures contained in the aj^pended 
 tables. Each foreign country and each colony shows its own 
 fluctuations, both of imports and exports, and these fluctuations 
 have been as great in the Colonial as in the Foreign Trade. 
 It would be most instructive to trace these fluctuations to their 
 real causes. Protectionist tariffs have, no doubt, in some 
 cases, and to some extent, been causes of these fluctuations ; 
 but other causes, such as the cotton famine, the Franco- 
 German war, the French indemnity, English investments 
 abroad, bad harvests in Europe and good ones in America, 
 and the war in South Africa, have probably been still more 
 potent factors. To trace the eflect of these causes would 
 throw light on many a delusion, and it is in the hope that 
 some one may be tempted to do this, as much as for my 
 immediate purpose, that I annex these tables. At present I 
 will only call attention to one or two facts connected with the 
 different trades. 
 
 Our Trade with Russia. 
 
 The exports to Russia have, on the whole, increased during 
 the last fifteen years, and are much higher now than they were 
 in 1 866. On the other hand, the imports from Russia have
 
 PART I. — NEW COLONIAL POLICY. 23 
 
 diminished. In the five years ending 1S70, Russia sent us 
 6'8 of our whole imports, and took 3'5 of our whole exports; 
 and in the five years ending 1880 she sent us only 47 of our 
 whole imports, and took 3-6 of our whole exports. This ought 
 to gladden the hearts of the Fair Traders. And yet Russia is a 
 strictly Protectionist country, and has lately raised her tariff". 
 The reason for the decrease in her exports to us is, of course, 
 that America has beaten her in the supply of corn ; but this 
 does not account for the increase of our exports to her. 
 
 Our Trade ivith Germany and Holland. 
 
 These two countries may be taken together, since much Germany 
 German trade goes through Holland. Their proportion of our u^,| , 
 whole trade, including imports and exports, has remained 
 steady during the last fifteen years. The exports increased in 
 the five years ending 1875, especially in the years 1871 and 
 1872, and have decreased in the last five years. The exports 
 of British produce to Germany were, in 1870, 20 millions; in 
 1872, 31J millions; of which considerably more than one-half 
 consisted of cotton and woollen manufactures; and in 1880, 17 
 millions. The German tariff' may have been one cause of the dimi- 
 nution in 1880, and a real decline in the demand for English 
 woollen manufactures may have been another. But in comparing 
 the figures of cotton and woollen manufactures of different 
 periods, there are several circumstances to be taken into con- 
 sideration. There were errors in our Trade statistics up to 
 1872-73, making the value of woollen exports appear larger than 
 it really was. Further, the price of the raw material constitutes 
 a large part of the price of the manufactured article ; the 
 whole of the raw cotton and much of the raw wool come to us 
 from abroad, and have to be paid for ; and the prices of both 
 have fallen since 1872, that of raw cotton as much as 30 per 
 cent. The apparent loss on exports has, therefore, to be 
 diminished by the difference. But there was another tempo- Effects of 
 rary cause, independent of tariffs and of prices, which, no French 
 doubt, increased our exports to Germany in 187 1 and 1872. ^'^demmty. 
 The French indemnity of 200 millions was paid to Germany 
 partly in French cash, partly in French exports, but partly also 
 through England, so that a part, and probably no inconsiderable 
 part, of the large English exports of merchandise to Germany 
 in the period from 1871 to 1875 consisted, in fact, of advances 
 to Germany on French account, to be repaid to England
 
 24 FREE TRADE V. FAIR TRADE. 
 
 by France. This is confirmed by finding that the imports into 
 Germany from the prin(-i[)al European countries— viz., France, 
 Belgium, United Kingdom and India, Italy, and also from the 
 United States — during the five years 1871 to 1875, exceeded 
 the exports to those countries by 23 millions a year, an 
 excess which was reduced to eight millions in 1877.* It is 
 also confirmed by the French statistics,! which, after showing a 
 large excess of im])orts in 187 1, i)robably to make up losses 
 caused by the war and the defective imports of 1870, show 
 a large excess of exports, especially to Germany, Belgium, 
 England, Switzerland, and Italy, amounting to not less than 
 24 millions a year during the years 1872 to 1875. In 
 short, France borrowed to pay the indemnity; England and 
 other countries made advances in the shape of goods, and 
 France has since been repaying these advances, or the interest 
 upon them. There are, therefore, good reasons to explain the 
 increase of German trade in 1872-75, and its subsequent 
 decrease, without supposing that English industry is on the 
 decline, or that the demand for English manufactures, even in 
 Germany, is failing. 
 
 Our Trade with Belgium. 
 Our whole trade with Belgium is steady. Our export trade 
 to Belgium is, on the whole, increasing ; but the export of 
 British produce was rather more in the years 1872-75 than 
 in the subsequent years, probably for the same reasons as have 
 been shown to apply in the case of Germany. 
 
 Our Trade ivith France. 
 The proportion which our trade with France bears to our 
 whole trade has varied very little. It was rather less in 
 nominal value in the five years ending 1880 than in the 
 previous five years, but has been increasing since 1879. 
 Our exports to her increased very largely in 187 1, and 
 have maintained a high average since, being larger now 
 than they have been since 1876. Her exports to England 
 in common with her exports to other European countries, 
 liave increased still more largely, giving, as above stated, a 
 
 * See Table VIII., giving the Exports and Imports of Gennanyfrom i868 to 
 1877. These figures are taken from the statistics of the several countries. If 
 talcen from German statistics, the figures for the imports into Germany would, 
 no doubt, be increased, and those of exports from Germany diminished. 
 
 f See Tables IX. and X., French Imports and ExportF, 1868 to 1877.
 
 PART I. — New colonial policy, 25 
 
 surplus of exports over imports to these countries for the 
 five years ending 1875 of i8 millions a year, a surplus 
 probably due to the payment of the German indemnity. 
 Her exports to the United States have diminished ; whilst 
 her imports from the United States have increased. 
 
 Our Trade witJi Italy. 
 There has not been much change in the amount or proper- Italy, 
 tion of our trade with Italy. But one thing is remarkable. 
 Italy is one of the few countries where our exports exceed our 
 imports. 1'his they have done for the last fifteen years, at the 
 rate of two millions a year and upwards. Now it is impossible 
 to believe that we are doing trade with Italy at a loss. Nor is 
 it probable that Italy is lending us money and is exporting 
 goods to us. On the contrary, it is certain that we have 
 lent to Italy, and that interest must be owing to us. Is 
 it not more than probable that Italy pays her balance to 
 us in a circuitous way ? Looking to the French statistics 
 (see Table X.), we find that the imports from Italy into 
 France exceed the exports from France to Italy by an 
 amount averaging in the last ten years five millions sterling 
 a year ; and we hear, usque ad nauseam, that France sends us 
 many millions more than she takes from us. It is, therefore, 
 most likely the case that Italy sends us goods through France, 
 and thus pays her balance to us, and increases the apparent 
 French exports to England at the same time. 
 
 Our Trade with Turkey. 
 Our trade with Turkey has decreased largely, and the Turkey, 
 reasons are too obvious to dwell upon. 
 
 Our Trade with Egypt. 
 There has been a large diminution in our trade with Egypt- 
 Egypt, but some of it is nominal, because since the opening 
 of the Suez Canal many cargoes to and from the East, formerly 
 entered as to and from Egypt, have been entered as to and 
 from the countries of destination and of shipment in the East. 
 They may thus possibly swell the apparent increase of our 
 Indian and Colonial trade. In the comparative cessation of 
 the import of raw cotton from the East since the American 
 market has been re-opened, and in the cessation of loans to 
 Egypt after 1873, are to be found other reasons for the diminu- 
 tion of our trade with Egypt.
 
 26 FRKE TRADK 7'. FAIR TRADE. 
 
 Our Trade with the United States. 
 It is our trade with the United States wliich is the pons 
 asinorum of our Fair Traders, and 1 shall have occasion to refer 
 to it again in a subseciucnt part of this pai^er. Our whole 
 trade has increased very largely, both absolutely and propor- 
 tionately. It constituted 137 per cent, of our whole trade in the 
 five years ending 1870, and ij'G per cent, of our whole trade in 
 the five years ending 1 8S0. But our exports to the United States 
 were 117 per cent, of our whole exports in the former period, and 
 only 9-4 per cent, in the latter period ; and this diminution, 
 together with a considerable addition to the aggregate trade, is 
 made up by an increase of imports. It would be idle to repeat 
 what has been said so often already of our loans to the United 
 States made in the earlier period, and of the payment of interest 
 upon these loans which now appear in our imports. Nor is this 
 the place in which to attempt to disprove the assumption made 
 without the shadow of an argument, and, as I believe, without the 
 shadow of foundation, by Mr. Farrer Ecroyd, that we are now 
 calling back capital from the United States. This point is referred 
 to below in the chapter on exports and imports (Chap. XXVI.); 
 here I will only notice that, in speaking of the reasons for the 
 excess of imports, I have given some figures which, if they 
 approach the truth, show that we are increasing and not 
 diminishing our foreign investments ; that we are still lending 
 rather than recalling capital ; and, if this is so, the United 
 States is certainly one of the countries to which we are lending 
 most. One or two important facts I may point out which are 
 shown by these tables — viz., first, that our exports to the 
 United States have increased from 17^ millions, at which they 
 stood in 1878, to 38 millions in 1880 ; and, secondly, that 
 there are circumstances mentioned below, under the head of 
 Indian trade, which make it in the highest degree probable 
 that we pay for imports of corn from America by exporting 
 manufactures to our own possessions in the East. As an 
 illustration of the way in which this may take place, I may 
 quote a passage from the Economist in the week (I am writing 
 15th October, 1881) : — " Last week the steamer A ustra/ia, from 
 Sydney, landed over a million dollars in gold at San Francisco. 
 Australia, of course, pays this gold on English account." 
 
 Our Trade ivith Brazil. 
 Our trade with Brazil has declined, but the imports have
 
 PART I. — NEW COLONIAL POLICY. 2'J 
 
 decreased more, and are now considerably less, than the exports. 
 As we have lent money to Brazil and do much of the carrying 
 to her, it is clear that our imports from her ought very 
 largely to exceed our exports to her ; and as her exports to the 
 United States very largely exceed her imports from the United 
 States, there can be little doubt that we pay some of our debts 
 to the United States for corn and cotton, by exporting our 
 manufactures to Brazil. 
 
 Our Trade with Chili and Peru. 
 
 Both our aggregate trade and our exports to Chili and Peru Chili and 
 have considerably decreased in the last five years, and for this P^™- 
 the cessation of our loans to Peru, and the subsequent Peruvian 
 collapse, and afterwards the war between Chili and Peru, are 
 sufficient reasons. 
 
 Our Trade 7uith China. 
 
 Our imports from China have maintained their comparative China, 
 position ; our exports to China averaged six millions in the five 
 years ending 1870 ; nearly six millions in the five years ending 
 1875 ; and something less than five millions in the five years 
 ending 1880. This, however, is a case where nominal values 
 conceal the real facts. Three-fourths and more of our exports 
 to China consist of cotton and woollen manufactures. Now 
 the quantity of cotton goods exported to China during the latter 
 period was 2 "6 per cent, more than during the former period, 
 and of woollen goods 18 per cent. At the same time the 
 price of raw cotton, which forms a large proportion of the 
 cost of cotton goods, was 23 per cent, less in the latter than in 
 the former period, and the cost of raw wool also much less. 
 Consequently the real value of the exports of the produce of 
 British labour was considerably greater in the latter than 
 in the former period. Yet this increasing export trade is 
 what the Fair Traders desire to check, by placing a 
 differential duty on Chinese teas. It must also be remembered 
 that Hong Kong, the trade with which swells the lists of 
 colonial imports and exports, is really a depot for China, and 
 that in order to do justice to the trade of China, a great part of 
 our trade with Hong Kong should be added. 
 
 Our Trade ivith Japan. 
 The aggregate trade and the exports have both increased. Japan.
 
 28 
 
 FREE TRADE V. FAIR TRADE. 
 
 Our Trade 7c<il/i British North Aiiictica. 
 
 British North America is certainly one of the colonies to 
 which our Fair Traders would wish to show special favour. It is 
 Canada which is to j^rofit by their new policy, especially by a tax 
 on United States corn. Now our exports to Canada, so far from 
 increasing in i)roportion to our greatly increased imports from 
 her, were considerably lower in i8So than they had been in the 
 years 1S71 to 1S75. In 1874, they were ^10,210,985. In 
 1879, they had diminished to ;2^6,i 18,862. For the five years 
 ending 1875, t^^cy averaged 3'3 per cent, of our total exports ; 
 for the five years ending 18S0, they averaged only 2 "9 per cent. 
 
 Our Trade ivith the J Test Judies. 
 
 The British West Indian trade has been nearly stationary ; 
 but our exports to the West Indies have been slightly less in 
 nominal amount for the five years ending 18S0, than for the 
 five years ending 1875. 
 
 Our Trade ivith the Australian Colonies. 
 
 The imports from the Australian colonies have risen from 
 ;;^ii,423,268 in 1S66, to ;!£^25,663.334 in iSSo, and the rise 
 has been steady, except in the case of a great jump in 1880. 
 But our exports have not risen in nearly the same proportions, 
 nor so steadily; they were ;^i4, 620,779 in 1S66, and only 
 ^{^18,748, 092 in 1880. They were highest in 1874-78, when 
 they averaged about 2 1 millions annually. 
 
 Australia is, however, the one group of self-governing 
 colonies to which the Fair Trader will point as showing a steady 
 progressive increase in the whole trade, and a comparatively 
 large recent increase in the exports they take from this 
 country. But I am not sure that the Fair Trader will be much 
 comforted when he learns that one great reason for the in- 
 crease of exports, is the larger amount of the loans which 
 England has been making to Australia. The amount of her 
 l)ublic debt has increased from 27^ millions in 1867, to 78 
 millions in 1879. It is estimated* that our loans made to 
 Australia in 1880 amounted to 10 millions, and that her 
 aggregate debt to us is not less than 120 millions. The 
 
 * See the Econumist, Aug, 27, 1881.
 
 PART I. — NEW COLONIAL POLICY. 29 
 
 advance of the principal probably accounts for a large 
 part of the increase of our exports. But I fear that the 
 Fair Traders, who are so much alarmed at the imports 
 which the United States send us in payment of the in- 
 terest on their debt to us, will at no distant time have to 
 groan over a similar excess of imports from Australia, arising 
 from a similar cause. And if the authority to whom I have 
 referred, is right in supposing that Australia becomes in- 
 debted to us every year, for freight earned by our shipowners, 
 to the extent of many millions, they will have an addi- 
 tional source of alarm, for we shall get that amount of imports 
 from them without giving them any visible exports whatever in 
 return. Another thing to be remarked concerning Australia, 
 as concerning India, is that she exports to the United States 
 more than she imports from them. I have already mentioned 
 an instance of the way in which she makes payment to the 
 United States on English account, and there are probably many 
 more ; if we check our imports from the United States, we shall 
 check our exports to Australia as well as to India. 
 
 Our Trade zvith South Africa. 
 
 The imports have risen steadily in fifteen years, from South 
 ;^2,7oo,ooo to ^5,640,000. In our exports, there was a A^ric^. 
 rise till 1876, when there was a drop of nearly a million, viz.. 
 from ;^5,35o,4i2 in 1875 to ^4,502,739 in 1877. In 1879 
 and 1880, owing probably to the war, and not to legitimate 
 trade, there was a great rise, and they amounted to ^7,206,000. 
 
 Our Trade with India. 
 
 The imports from India have on the whole decreased during India, 
 the last fifteen years. The aggregate for the five years ending 
 1870, was 150 millions; for the five years ending 1880, 143 
 millions. The highest year was 1866, 37 millions; and the 
 lowest 1879, 24^- millions. 
 
 Our exports to India have been steady, ranging from 18 to 
 25 millions, and increasing slightly in each succeeding period 
 of five years. But in 1880 there was a great jump from 
 ^22,714,682 to ^32,028,055. 
 
 With such figures as these, and others given above, it is 
 nonsense to say that our colonial trade is free from fluctua- 
 tions; that the demands for our exports is steadily and constantly
 
 30 FREE IRAnE 7: FAIR I RADK. 
 
 on the increase, or that it bears in each case a fixed proportion 
 to our imports, 
 
 Hut there is something further to he learnt from the Indian 
 trade. Whilst the exports to India were in 1880, 37 millions, 
 the imports from India were only 30 millions, a very remark- 
 able fact in itself, when we remember that in addition to the 
 freight, charges, and profits, which we ought to receive over 
 CounTries. and above the value of our exports, India has to pay us about 
 20 millions annually in the form of tribute, for which she gets 
 no return in goods. If this fact stood alone, it might warm 
 the heart of a Fair Trader, but it would be an embarrassment to 
 the political economist. Let us see if it is capable of explana- 
 tion. Omitting the year 1880, for which the Indian statistics are 
 not yet published, we find that for the ten years ending 1879, ac- 
 cording to the English statistics, our exports to India were 286 
 millions, and our imports from India 303 millions, or an annual 
 average of over 28 millions of exports to 30 millions of imports. 
 This, though more intelligible than the figures for 1880, still 
 leaves much to be explained. Two millions a year is far short 
 of what India ought to send us. Turning to the Indian statis- 
 tics, we find that for the same ten years, the imports into 
 India from the United Kingdom, were 351 million pounds, or 
 an average of 35 million pounds a year ; and that her exports 
 to the United Kingdom were 294 million pounds, or an 
 average of 29 million pounds a year; leaving an aggregate sur- 
 plus of imports of 57 million pounds, and an annual average 
 surplus of imports of more than five million pounds. The 
 difference between these statistics and our own is accounted 
 for partly by the fact that though the rupee has fallen in value 
 it is converted in the Indian statistics at the rate of 2s., and 
 partly by the difference between the value of goods at 
 the port of shipment, and their value at the port of arrival, but 
 the Indian figures make it still more diflficult to understand how 
 India manages to pay her tribute to us, more especially since 
 in the case of India there cannot be the transfer of securities 
 by which in many other cases the balance of trade is settled. 
 L The exports of railway material to India, which were in fact loans 
 
 p to India, will account for a part, but only a small part, of the 
 
 difference. But if we turn to another page of Indian statistics we 
 shall find the explanation. There are many countries to which 
 India, according to her own statistics, exports much more than 
 she receives from them, viz. : France, Austria, Italy, the United
 
 PART I. — NEW COLONIAL POLICY. 31 
 
 States, China, and Ceylon. Appended is a table* giving her trade 
 with these countries for the same years — 1870 to 1879. From 
 this table it appears that the aggregate imports into India from 
 these countries during that period was 57 millions, and the 
 annual average nearly six millions ; whilst the aggregate export 
 to them from India was 243 millions, and the annual 
 average above 24 millions ; leaving an aggregate surplus export 
 of 186 millions, and an average annual surplus export of 
 nearly 19 millions; which, curiously enough, is about the amount 
 of the English tribute. This coincidence is, no doubt, ac- 
 cidental, and the real value of the exported goods when they 
 reach the place of exportation must, of course, be much higher. 
 
 Now all these countries, except Italy, to which I have 
 referred before, are countries to which, according to our own 
 statistics, England exports much less than she receives from 
 them, to the great sorrow of the Fair Traders. Perhaps they 
 will be comforted when they see that the balance is redressed 
 by means of that Indian trade which they are so desirous to 
 encourage. England buys Avhat she needs from America, from 
 France, and from other countries ; India buys from England ; 
 and America, France, &c., in their turn buy from India and the 
 East. The process may be more circuitous still. For instance, 
 India exports to China much more than she receives from China, 
 averaging for the last ten years nearly 10 millions a year; 
 China sends to America, as well as to England, more than she 
 receives from them ; England no doubt sends manufactures to 
 India ; India sends opium, &c., to China ; China sends tea to 
 America; America sends corn to England, and thus the 
 accounts are balanced. But however numerous the steps of 
 the process, and however circuitous the channels, trade will 
 find its way and its level. 
 
 I have dwelt on this case because it is a good illustration of 
 the folly of supposing that the statistics of the direct trade be- 
 tween any two countries give a complete account of their 
 respective dealings, and of the consequent difficulty of fore- 
 seeing the ultimate effect of anything which promotes or 
 impedes a particular branch of trade. In this case it is quite 
 possible that the European demand on America for corn may 
 have stimulated the export trade of India, which, as we have 
 seen, has largely increased in the last year or two. And it is 
 
 * See Table XII., in Appendix.
 
 32 
 
 FREF. TRADE 
 
 FAIR TRADE. 
 
 I Conclusion 
 thnl Colo- 
 
 ; ni;il Trade 
 
 ; does not 
 
 I increase 
 more or 
 fluctuate 
 less than 
 Foreign 
 Trade ; 
 that the 
 two are 
 alike, are 
 mixed ; and 
 influenced 
 by many 
 temporary 
 causes. 
 
 also possible that if our Fair Traders could have their way in 
 checking the supply of American corn to England they might 
 be injuring that Indian trade which they are so anxious to 
 promote. 
 
 From all the above figures it is abundantly clear, first, that our 
 direct trade with the colonies is not in the aggregate increasing 
 faster than our trade with other countries ; and secondly, that 
 it fluctuates as much as our direct trade with other countries. 
 
 Some other things are also made obvious by them ; for 
 instance — 
 
 The direct trade with our different colonies and possessions 
 has no uniform character making it to differ from the direct 
 trade with foreign countries. 
 
 The direct trade either with foreign countries or with the 
 colonies is no complete or real indication of the whole character 
 of the trade. It is often circuitous, and the flow and return 
 of our trade with any given country is often only completed by 
 a roundabout route through one or more other countries. To 
 restrict our trade with a foreign country may be to restrict the 
 trade of a colony, and vice versa. 
 
 The amount of our exports to and imports from each 
 foreign country and colony is at different times influenced by a 
 large number of causes altogether independent of the perma- 
 nent demand for our manufactures in that country, e.i^. by such 
 things as the Franco-Cierman war, the French indemnity, the 
 cotton famine, the Indian tribute, and perhaps, above all, by the 
 character and quantity of British investments abroad. 
 
 CHAPTER V. 
 
 Assump- 
 tion thit 
 Colonies 
 have less 
 tendency 
 to Protec- 
 tion than 
 Foreign 
 Countries. 
 
 PROTECTION IN FOREIGN COUNTRIES, WHETHER INCREASING 
 OR DIMINISHING. 
 
 I PROCEED to consider another assumption of the Fair Trade 
 League — the assumption, namely, that the colonies will receive 
 our goods on better terms than foreign countries ; that they 
 are, so far at any rate as we are concerned, less commercially 
 hostile and less Protectionist. 
 
 It is not easy to follow the history in the changes of any 
 one tariff, to compare specific with ad valorem duties, and to
 
 PART I. — NEW COI.ONIAI. POLICY. 33 
 
 ascertain their several effects on our principal manufactures. Protection 
 Still less easy is it to compare the history of the tariffs of JU Foreign 
 different countries and their several effects on our trade. But °"" "^^' 
 before any assumption such as I have mentioned was made, 
 this ought to have been done. That it has not been done I 
 need not say. 
 
 In Mr. Ecroyd's paper there is not a fact given. In the 
 programme of the Fair Trade League it is simply asserted that 
 in our own colonies " our goods will be taken if not duty 
 free, yet subject only to revenue duties almost unavoidable 
 in newly-settled countries, and probably not equal to one-third 
 the Protective duties levied by the United States, Spain, 
 Russia, &c," 
 
 From this and similar expressions it might be supposed 
 that the tendency of foreign countries generally was to increase 
 their Protective duties, and the tendency of our colonies to 
 diminish them. It is desirable to see what the facts really are. 
 In 1879 two returns* were obtained by Mr. Talbot, giving Returns of 
 the duties levied on the principal English manufactures in the Duties, 
 colonies and in foreign countries in 1859 and in 1879 respec- Jsyg.^" 
 lively ; and a return has recently been moved for by Lord 
 Sandon, giving the duties levied on the principal English Lord 
 manufactures in all foreign countries and in each of the fe^jujn" ^ 
 colonies. One part only of this return has been issued.! I 
 have also appended to this paper two tables, J the one giving 
 the actual rates of duty levied on our manufactures in the Present 
 different countries and colonies at the present time, the other Rates of 
 giving the same reduced, so far as possible, into ad valorem po^Jign 
 duties, for the purpose of comparison. The figures in both are Countries 
 probably accurate enough for the purpose of the present argu- ^^^ ^°'°" 
 ment, but it must be borne in mind that every statement of an 
 ad valorem duty is necessarily uncertain. The price of the 
 article at the time, the place at which the value is taken, the 
 modes of estimating it, are all varying and uncertain factors, so 
 that in comparing ad valorem duties with one another, and in 
 reducing specific duties into ad valorem duties, there is always 
 large room for doubt and inaccuracy. Taking the different 
 
 * See Pari. P.apers, Nos. 200 and 218, of 1879. 
 
 t See Pari. Paper, No. 333, of 1881. 
 
 X See Tables XIII. and XIV. For these and other tables and information 
 1 am indebted to Mr. E. J. Pearson, of the Statistical Department of the Board 
 of Trade. 
 D
 
 FREE TRADE V. FAIR TRADE. 
 
 rrotection countries in succession, tlie general features of change seem to 
 
 in Foreign i follow; •— 
 
 Countrks. ^^^ '^^ lOHOWS . — 
 
 Russia. 
 
 Russia. Russia made large diminutions in her heavy duties between 
 
 1S59 and 1879. From the ist January, 18S1, they have been 
 raised 10 per cent. ; but not to the extent by which they had 
 previously been diminished. As, however, the duties are now 
 l)aid in gold, the difference in value between paper and gold 
 makes the duties in many cases as high as or higlier than in 
 i860. 
 
 Germatiy. 
 
 Germany. In Germany there were very great reductions between i860 
 
 and 1870, so that the tarift" previous to the late increase was a 
 very moderate one. In 1879 came Prince Bismarck's well- 
 known Protectionist measures, and the duties on many articles 
 of manufacture, as well as on food and raw materials, were 
 largely increased. On some few articles the German duties are 
 now higher than in i860, but in most instances they are much 
 lower; and, high as they are, they are not now on the whole 
 nearly so high as the duties imposed at the same time by 
 Canada. 
 
 Holland. 
 
 Holland. In Holland there has never been an increase, and the 
 
 reductions have been frequent and steady. Her tariff is now 
 one of the lowest in the world, as low in fact as the tariffs of 
 our Free Trading colonies. 
 
 Belgium. 
 Pelgium. In Belgium, again, there has been no increase, but many 
 
 reductions. Her tariff, though not so low as that of Holland, 
 is on the whole lower than that of France. It will compare 
 favourably with that of Canada, if not with that of Victoria. 
 
 France. 
 
 Denmark. 
 
 France. 
 
 In France there have been several diminutions of duty since 
 i860. 'J'he duty on woollen yarns has been increased. Except 
 in the case of iron, the duties are far lower than those of 
 Canada. 
 
 Denmark. 
 
 The duties are, with a few exceptions, the same as or lower 
 than in i860.
 
 PART I. — NEW COLONIAL POLICY. 35 
 
 Sweden and Nonvay. 
 
 The duties have been generally reduced since i860, and in Sweden, 
 no case increased, except on spirits and sugar. 
 
 Italy. 
 
 Between 1859 and 1879 there were large reductions. The Italy, 
 duties have been lately increased, but not to the extent of the 
 previous reductions. They are, on the whole, lower now than 
 in i860, but on some important articles of British produce they 
 are higher. The tariff is now rather less favourable than that 
 of France, but much more favourable than that of Canada. 
 
 A iistro- Hungary. 
 
 The reductions between i860 and 1870 were very large Austro- 
 indeed. A considerable increase has since been made on silk, Hungary, 
 cotton and woollen goods, and on leather, but the recent 
 increases are nothing like the previous reductions. The 
 Austrian tariff is, on the whole, except in the matter of iron, 
 considerably more favourable than that of Canada. 
 
 Spain. 
 
 Spain is not yet given in Lord Sandon's return. She Spain, 
 reduced her enormous duties between 1859 and 1879, but has 
 since placed differential charges on English goods in return for 
 what she considers our differential duties on Spanish wines. 
 The present state of things in Spain, however, holds out a 
 prospect of reduction, if we can satisfy her that we do not deal 
 unfairly with her wines. It is to be hoped that in reforming 
 her tariff, the abuses of her Custom House system will also be 
 reformed, for they are quite as great impediments to trade as 
 her tariff. 
 
 Portugal. 
 
 Portugal also made some reductions in her heavy duties Portugal, 
 between 1859 and 1879; but her present duties are not yet 
 given in Lord Sandon's return. 
 
 United States. 
 
 The United States are, among foreign countries, the one United 
 great exception to the rule that duties are, on the whole. States. 
 lower than before i860. Their present tariff, varying from 
 35 to 100 per cent, ad valorem, is not only much higher than
 
 36 
 
 FREE TRADE V. FAIR TRADE. 
 
 Protcclion 
 in Foreign 
 Countries. 
 
 it had ever been in previous years, but is much higher than 
 any other of the tariffs I have referred to, and is probably as 
 near prohibition as a working tariff can be ; and yet such are 
 the beneficent laws of Providence, that in spite of the folly of 
 man the United States do an enormous trade with us and with 
 other countries, and have, no doubt at an immense and need- 
 less cost to themselves, the use of a large share of the good 
 things of other countries. 
 
 CHAPTER VI. 
 
 New South 
 Wales. 
 
 \'ictoria. 
 
 PROTECTION IN T}IE COLONIES, WHETHER INCREASING OR 
 DIMINISHING. 
 
 rrotection Let US now consider the case of our own colonies. Lord 
 Colonics Sandon's return of colonial tariffs is not yet presented ; but the 
 following appear to be the facts : — 
 
 Nciv South Wales. 
 
 The tariff here always has been and still remains very low — 
 lower, except in one or two particulars, than any European 
 tariff. New South "\\'ales is, par excellence^ a Free Trading colony. 
 
 Victoria. 
 
 Victoria, which had in 1859 a tariff as low as New South 
 Wales, had raised her duties considerably in 1879, and has 
 raised them still more sinte. They are now considerable, and 
 are, on many important articles, as high as those of France, 
 Italy, or Austria, and higher than those of Holland or 
 Norway. 
 
 South Australia. 
 
 There were no import duties in 1859 ; in 1879 ^he had 
 imposed considerable duties on various articles of British 
 manufacture, and these still remain. 
 
 ] f ' ester n A ustralia 
 
 Had duties of about 7 per cent, ad valorem in 1859; many 
 of them were increased to 10 per cent, by 1879, and they have 
 since been still further raised. They are now as high as, or 
 higher than, those of Victoria. 
 
 South 
 Australia. 
 
 Western 
 Australia.
 
 PART I. — NEW COLONIAL POLICY. 37 
 
 Tixsiiiania. 
 
 There were no import duties in 1859 ; in 1879 considerable Tasmania, 
 duties had been imposed, which have since been raised. They 
 are now, on the whole, higher than those of Victoria. 
 
 Neio Zealand. 
 
 There were no import duties in 1859 ; in 1879, duties amount- N^^v 
 ing to 10 per cent, had been imposed on many English pro- ^^^1^"'^- 
 ducts. These duties have since been raised, and the tariff is 
 now as high, on the whole, as those of other Australian 
 colonies. Whilst writing this paper, I hear the good news that 
 she has just taken off her duty of 15 per cent, on cottons. 
 
 Queensland. 
 
 There were no import duties in 1859; since then duties Queens- 
 have been imposed, which, however, are not as high as those l^"'^- 
 of the last-named colonies, though higher than New South 
 Wales. 
 
 Canada 
 
 Has, as is well known, largely increased her duties by her Canadu 
 tariff of 1879. It is now considerably higher than those of 
 France, Italy or Austria, and of course much higher than those 
 of Holland or Belgium. It is thoroughly Protective, whatever 
 Mr. Goldwin Smith may say to the contrary. It was expressly 
 so intended by its authors, and bids fair, if the spirit in which 
 it was proposed continues to prevail in Canada, to rival the 
 monstrous tariff of the United States. 
 
 Cape of Good Hope. 
 
 In 1859 the duties were 7J per cent. In 1879 they had Cape, 
 been raised to 10 per cent., at which rate they now generally 
 stand. 
 
 West Indies. 
 
 In Jamaica there are duties of 12 J per cent., which have West 
 not been altered since 1859. ladies. 
 
 In Barbadoes duties of 3 per cent, have been raised to 
 4 per cent. 
 
 Mauritius. 
 
 Moderate duties exist, about 6f per cent., which have been Mauritius. 
 very slightly raised since 1859.
 
 38 FREE TRADE V. FAIR TRADE. 
 
 Cey/on. 
 Ceylon. Ii^ Ccylon there are moderate duties, about 5 per cent., 
 
 wliich have remained unchanged. 
 
 Ifidia. 
 India. In India the duties are moderate and few, and, as is well 
 
 known, have been recently lowered ; but this has been done 
 not by the people, or even by the Government of India, but by 
 English influence. 
 
 Conclu- From the figures given in this and the preceding chapter it 
 
 Protective ^^ Clear 
 
 tendencies First. That with the important exception of the United 
 
 are as great States no foreign country has since 18 c; 9 raised its duties to a 
 
 in Colonics . o y w • 
 
 as in pomt as high as that at which they then stood. 
 
 Foreign Secondly. That several European countries have gone on 
 
 Countries, continually reducing their duties. 
 
 Thirdly. That there is no one of the self-governing English- 
 speaking colonies, except New South Wales, which has not 
 increased its duties since 1859, and that some of them, and 
 those the most important, have increased them largely. 
 
 Fourthly. That the tariffs of several of the Australian colo- 
 nies are as high as, and that of Canada higher, than the tariffs 
 of France, Italy, Austria, or Germany, and much higher than 
 the tariffs of Holland, Belgium, or Norway. 
 
 Consequently, the assertion of the Fair Traders, that whilst 
 foreign nations are refusing our goods our colonies are ready 
 to take them duty free, or subject to moderate duties, is not 
 only not correct but is the contrary of the fact. If tendencies 
 are to be judged by experience, there is a greater tendency to 
 Protection in our colonies than in foreign countries. 
 
 CHAPTER VI I. 
 
 IS A CUSTOMS UNION OF THE BRITISH EMPIRE POSSIBLE? 
 
 I THINK that it has been satisfactorily proved that the special 
 assumptions on which the Fair Trade League have based 
 their demand for a differential treatment of the colonies, are 
 unfounded. 
 
 J
 
 i^ART I. — NEW COLONIAL TOLICY. 39 
 
 The direct trade with our colonies is about one quarter of Assump- 
 our trade with the world. _ ^l^j;'"^ 
 
 The direct trade with our colonies, and especially our •iraders no 
 export trade generally, has not increased faster than our trade ground fur 
 with foreign countries. i'oifcy. 
 
 Even where our exports to our colonies appear large, and 
 those to foreign countries appear small, in comparison to our 
 imports from them, there is good reason to believe that the 
 exports to the colonies depend upon, and are often caused by, 
 the imports from foreign countries. 
 
 Our trade with our colonies is subject to fluctuations no less 
 than that from foreign countries. 
 
 The colonies, or at any rate those with whom we must treat 
 as independent and self-governing communities, show at least 
 as great a tendency to Protection as foreign countries. 
 
 There is, therefore, nothing in the existing facts to call for 
 a reversal of our settled policy of non-interference with trade ; 
 nothing to justify an attempt to check trade with foreign 
 countries in order to divert it to our colonies. On the con- 
 trary, the trade of the mother country with the colonies, and 
 her trade with foreign countries, are both progressing in an 
 equally satisfactory manner, and they are so mingled that any 
 attempt to check foreign trade, whilst it would undoubtedly 
 diminish the whole bulk of our trade, would very probably 
 interfere with and diminish that very colonial trade which it was 
 intended to encourage. 
 
 But is it possible to do anything by legislation to encourage But is a 
 our trade with the colonies ? If so, by all means let it be done. ^'*^^ i^olicy 
 The motto of the Cobden Club, " Free Trade amongst all ^^ other 
 Nations," is entirely ^consistent with the earliest and utmost grounds? 
 possible development of Free Trade with our own fellow citizens. 
 If there is to be choice amongst those with whom we are to do 
 business, let us choose in the first instance to do it with those 
 with whom in other ways we have the closest relations. Only 
 let us be sure that we do not injure ourselves or them in so 
 doing, and that in seeking for a closer relation than that which 
 already exists, we do not strain the bonds which at present keep 
 us together. The Free Trader will not yield to the Fair 
 Trader in national pride, in jealousy for British greatness, and in 
 all that constitutes the glory of the British name and character ; 
 nay, he would be willing, where greater interests are at stake, 
 to sacrifice to them some portion of material prosperity ; but
 
 40 
 
 FREE TRADE 1'. FAIR TRADE. 
 
 when restrictions on commercial liberty arc proposed in the 
 interests of material prosperity, he requires to have it proved 
 that they will really promote that prosperity ; and when they 
 are proposed in the interests of imperial relations with our 
 colonies, he desires to be assured that they will not strain and 
 weaken those relations. 
 
 It would, indeed, be an object worthy of the ambition of 
 any statesman or generation of statesmen to fonn a perfect 
 Customs Union, embracing the whole British Empire. If it 
 were possible to have no duties whatever in any part of that 
 Empire on goods brought from any other part of it ; if, for 
 purposes of trade, India, Canada, Australia, the Cape, and the 
 West Indies were as much one country as Yorkshire and 
 Lancashire, it would be a consummation at least as welcome 
 to the members of the Cobden Club as to the most devoted 
 Imperialist. But such a consummation is a dream. It in- 
 volves the same fiscal system in countries differing widely as 
 the poles in climate, in government, in habits, and in political 
 opinions. It is contrary to the very principles of self-govern- 
 ment. It would prevent any change in taxation in one of the 
 countries constituting the J3ritish Empire, unless the same 
 change were made in all. Desirable as it is, it may be 
 dismissed at once from practical discussion. 
 
 It has, indeed, been said that such a thing was at 
 one time possible, and that it has been lost by want 
 of statesmanship ; that in giving our colonies self-govern- 
 ment, we missed the opportunity of reciuiring them to adopt 
 our tariff; and that what would now be impracticable as an 
 Imperial interference with their liberties, would then have been 
 willingly adopted as a condition upon which those liberties 
 might have been granted. Such an assertion raises no prac- 
 tical question ; but it is, I believe, a complete mistake. Self- 
 taxation is of the very essence of self-government. To have 
 required such colonies as Canada and Australia to adopt our 
 system of external taxation, and to model their own internal 
 taxation accordingly ; and to continue to insist on that require- 
 ment, whatever their own change of opinion or condition might 
 be, would have been to clog the grant of self government with 
 a condition which would have destroyed its value. Free Trade 
 is of extreme importance, but Freedom is still more important ; 
 and to force Free Trade on a free country is a breach of the 
 fundamental principle which includes Free Trade.
 
 PART r. — NEW COLONIAL POLICY. 41 
 
 CHAPTER VIII. 
 
 PROPOSALS OF THE FAIR TRADERS FOR ENCOURAGING COLONIAL 
 TRADE ARE PROPOSALS TO RESTRICT TRADE. 
 
 Dismissing the notion of an Imperial Customs Union to the Fair Trade 
 limbo of impracticable ideals, is it possible for anything to be proposals 
 done by the British Parliament to promote commercial inter- fgrential 
 course with the colonies ? Duties in 
 
 The course proposed by the Fair Traders and Mr. Ecroyd ^^'°"''. "^^ 
 is to place a differential tax on articles of food which come 
 from foreign countries, and to admit food from the colonies 
 free; to charge 10 per cent, more on articles of luxury, such as 
 tea and coffee, tobacco, wine and spirits, coming from foreign 
 countries than is charged on the same articles coming from the 
 colonies ; and to charge adequate import duties on the manu- 
 factures of foreign countries which do not admit our manufac- 
 tures free of duty, whilst allowing colonial manufactures to be 
 admitted free of duty. 
 
 I presume this to be the meaning of the Fair Trade 
 manifesto ; but I must admit that the document is hazy upon 
 the question whether the duty on colonial tea and other 
 luxuries is to be remitted altogether, and also upon the ques- 
 tion whether colonial manufactures are to be admitted free 
 unconditionally, or only on the condition that our manufactures 
 are admitted free into the colonies. 
 
 Now, the first observation on these proposals is tliat tliey They are 
 have for their object to divert trade by interrupting one of its proposals 
 natural channels, and therefore their effect must be to diminish and^^'"^' 
 the whole volume of trade. They are, consequently, open to diminish 
 the fatal objection which makes all Protection odious to Trade. 
 Free Traders — viz., that they hinder people from buying and 
 selling where they find it to their interest to buy and sell — that 
 they limit production by preventing people from using their 
 natural capacity to the utmost in making and selling the things 
 which they can make better than others. They are restraints 
 on trade and manufacture. And when it is alleged that 
 there will be no ultimate loss, because with due encouragement
 
 42 FREE TRADE V. FAIR TRADE. 
 
 Y^", the new market will be as productive as the old one, the answer 
 
 propose to '^ ^^^^^ ^^^^ burden of proof lies with those who make such 
 dimmish an improbable assertion. Take Canada as an instance, 
 Trade. since Canada is the colony to which the Fair Traders point 
 as able to supply us with corn. Now, so far as Protective 
 duties are concerned, Canada is, as I have shown, fast following 
 the Protectionist example -of the United States, though she 
 has a good way to go before her tariff is so obstructive to her 
 export trade as that of her great neighbour. Still, in spite of the 
 advantage Canada thus reaps from her lower tariff, she now sends 
 us only 6 "8 per cent, of our imported wheat, whilst the United 
 States send us 65 '9 per cent. British North America sends us 
 3 "8 per cent, of our total food supj)ly, whilst the United States 
 send us 3 5 '4. Is it conceivable, with the known advantages of 
 people, soil, and climate which the United States possess, 
 that any restriction on free production which the most 
 audacious of Fair Traders might advocate, would so far 
 change the natural condition of things as to enable Canada 
 to displace her gigantic rival, without diminution of the aggre- 
 gate produce, and without loss to the British customer ? 
 
 It is needless to follow this point any further. To shut out 
 our Foreign Trade must restrict production. Leaving this 
 general objection, let us consider the proposals of the Fair 
 Traders in detail. 
 
 CHAPTER IX. 
 
 PROPOSED TAX ON FOOD. 
 
 Differential Qf all the proposals of the Fair Traders, by far the most 
 Food"the i^'iportant is that which contemplates a tax on foreign food, 
 keystone of This proposal has been scouted by the working classes, 
 the Fair q^^kX is rejected by the Tory leaders, and it seems superfluous 
 proposals, to discuss it. Nevertheless, it is perhaps more defensible than 
 any other part of the scheme. It is the keystone of the edifice 
 of Fair Trade. It is the only bribe which offers a real tempta- 
 tion to the colonist : it is the only threat which has any terror 
 for the United States. And if there is any interest in this
 
 PART I. — NEW COLONIAL POLICY. 43 
 
 country which demands protection from the legislature, it is Tax on 
 that interest which is at once suffering from bad seasons and i"°°^- 
 from low prices, and which is deprived by foreign competition of 
 the compensation for bad seasons formerly found in high prices. 
 
 It is, therefore, difficult to discuss the scheme at all without 
 discussing the proposal to place a diff"erential tax on foreign 
 articles of food. 
 
 The big loaf and the little loaf are good electioneering 
 answers, but they do not exhaust or explain the question, and 
 they do not convey the whole truth. 
 
 It may be interesting, in the first instance, to see where our Where dres 
 supplies of food come from ; and I annex tables* which have °"'" ^°°^ , 
 been prepared, showing the proportions in which the different 
 countries of the world supply us with each of our principal 
 articles of food, and a summary showing what proportion of the 
 whole each country sends. The following are the general 
 results : — 
 
 Foreign countries send us 138 millions' worth, or 82-4 per Four-fifths 
 cent, of the whole; and our own possessions send us 29^^°"^.^ 
 millions' worth, or 17-6 per cent. The United States send us countries 
 35*4 per cent., or more than twice the whole amount sent to us and one- 
 by all our own colonies and possessions. France sends us 7 "6 ^^^^^ ^'P™ 
 per cent, and Germany, 8*3 per cent. ; whilst British North 
 America only sends us 3-8 per cent., and Australia only i'q per 
 cent. ; Russia sends us 3'i per cent. ; India sends as much as 
 5*8 per cent., which is a very little more than China, which 
 sends 5 -3 per cent. But India, which is of all our own possessions 
 far the largest purveyor, is beyond our present purpose, since 
 we already arrange her tariff as we think best. The above 
 figures include so-called luxuries, such as tea, tobacco, coffee, 
 Avines and spirits. But if we exclude these, and confine our 
 attention to articles of food which are not stimulants, the 
 results will be similar. Of wheat, British possessions send us 
 20"3 per cent. ; and foreign countries, 797 per cent. Of meat, 
 British possessions send 67, and foreign countries, 93*3 per 
 cent. Of animals for the butcher, British possessions send us 
 i2"4, and foreign countries, 87"6' per cent. France sends us 23-3 
 per cent., and Holland 33'6 per cent., of our aggregate impor- 
 tation of butter — equal to iii millions sterling — whilst British 
 North America only sends us 4-6 per cent. Of bacon and hams, 
 
 * See Tables XV. and XVI., in Appendi.x,
 
 44 FREE TRADE V. FAIR TRADE. 
 
 the United States send us 87 9 per cent., and of cheese, 67-0 
 per cent, whilst British North America — the only colony which 
 sends us any of these articles worth mentioning — sends only 
 i'2 per cent, of bacon, and i5"i per cent, of cheese. Eggs 
 come to us in large quantities from Germany, France, and 
 Belgium, but only in very small (juantities from the colonies. 
 Potatoes come to us in great abundance from France, and 
 in still greater quantities from Germany, but hardly any 
 from British America and none from Australia. Rice, 
 sugar, tea and coffee are almost the only articles of first- 
 rate importance of which large proportions come from our 
 own colonies ; and these come not from Canada or Aus- 
 tralia, with whom it is proposed to make tariff bargains, but 
 from India, Ceylon, Mauritius, and the West Indies, in all 
 of which there are at present moderate tariffs, and in which 
 — India, perhaps, excepted — the power of production, and 
 consequent market for our manufactures, is extremely limited. 
 
 Looking, then, to the amount of food we get from 
 foreigners, as compared with what we get from the colonies, 
 it is clear that to legislate with the view of changing our source 
 of supply from the one to the other, is a task not to be under- 
 taken lightly or without a clear view of the results. Let us see, 
 therefore, what are the objections to it. 
 
 CHAPTER X. 
 
 WHY IS A TAX ON FOOD OBJECTIONABLE? 
 
 The reason why it is not desirable to divert the purchase of 
 food from the cheaper to the dearer market is not simply that 
 it raises the price of food. It will probably do this, and the 
 result would be most serious. According to Mr. Caird's 
 calculations, made in 1878, our whole consumption of agri- 
 cultural produce was then worth about 370 millions; of which 
 260 were home produce and no foreign. The increase of 
 population requires an addition of about 4 millions annually ; 
 and the proportion of foreign produce consumed has increased 
 considerably since 1877. Assuming the consumption to be
 
 PART I. — NEW COLONIAL POLICY. 45 
 
 now 390 millions, and assuming, what is probably the case, that Effects of a , 
 
 two-thirds of this is home produce and one-third foreign, the p^g^j^" 
 
 effect of a general rise in price of 10 per cent, would be that 
 
 our population would have to pay 39 millions for their food 
 
 more than they now pay, of which 26 millions v/ould go to our 
 
 own landed interest and 13 millions to foreigners. This is by 
 
 itself a startling conclusion. But it is far from being all the 
 
 evil which would result from a compulsory change of market. 
 
 An equally important, if not more important, result will be 
 
 that it will prevent both the purchaser and seller from 
 
 getting the most they can with the means which Providence 
 
 has given them. 
 
 The buyer will have less to buy with, and the seller will It will also 
 have less to sell. If the English people are compelled to buy production 
 their food at home, they will spend on the production of food here and 
 an amount of energy and capital which, if employed in making abroad, 
 something else, would buy a much larger quantity of food from 
 America ; and they will compel the Americans to divert the 
 capital and energy they now spend in producing food to 
 making things which can be made much better and cheaper in 
 England. 
 
 The result will be just the same if our Parliament compels 
 English people to buy their food in Canada. If they are to be 
 deterred by a differential tax from buying the cheapest food in 
 the United States, and to be compelled to buy dearer food from 
 Canada, the result will be not only that England will pay more 
 for her food, but the Canadian producer of her food, having to 
 spend more labour and energy in producing it than the United 
 States farmer now spends on it, will have less to spend on 
 English manufactures. 
 
 To this the Fair Trader makes two answers. First, that Inconsis- 
 the price of food would not be raised, because America has a j5"5y?*^j 
 surplus which she must export, tax or no tax ; secondly, that a answers to 
 rise in the price of food in this country would be a cheap price this. 
 for the additional market for English goods which would be 
 acquired in the colonies by buying our food there. 
 
 It is obvious that these answers are inconsistent with each 
 other. If the price of corn is not raised in this country, and if 
 America is still to supply our market at present prices, there will 
 be no transfer of English purchases to the colonial market, and 
 the whole of the Fair Trade proposal will fail. It is only by 
 giving a higher price that we can encourage a greater growth of
 
 46 
 
 FREE TRADE V. FAIR TRADE. 
 
 Canadian corn. If the Fair Traders are consistent, and really 
 wish to effect their object ; if they wish to confine our custom 
 to those nations which buy freely from us, they must absolutely 
 prohibit all goods, food included, from those nations which do 
 not do so. To say we are to stop their selling, and still to 
 receive from them what wc now get from them, is blowing hot 
 and cold. But, in fact, the notion that the price of com would 
 not be raised by a tax is absurd. The United States farmers 
 are not under any spell to produce a certain fixed quantity of 
 corn. 1'hey produce corn because we want it, and will pay 
 them a remunerative price for it. If we check that demand by 
 a tax, they will reduce their supply. The Western farmer is 
 able to send wheat to Liverpool and London because, after 
 paying cost of cultivation and of transport, the price leaves him 
 a profit. If we increase these costs by adding a tax, it will 
 reduce his market, and in many cases destroy his profit. 
 He consequently will no longer produce, and will leave his 
 farm for something else, as we know too well that many emi- 
 grants have done. The result of any tax on American corn, 
 which is to transfer our custom to the Canadian market, jnusi 
 be to raise the price of corn in this country. But, say the Fair 
 Traders, " Even if this is the case, it is no great harm. Food is 
 not a raw material of manufacture ; to raise the price of food 
 will not necessarily raise wages, for, as Cobden said, wages do 
 not rise and fall with the price of food. Our manufacturers, 
 whatever happens to our workmen, will be able to produce as 
 cheaply as before ; and they will be able to sell much more, 
 because the colony will, in return for the corn, receive their 
 manufactures duty free ; whereas the United States, by placing 
 prohibitive duties on them, do their utmost to refuse them." 
 " Even at the present time," so runs this precious argument, 
 " every cjuarter of wheat imported from Australia aftbrds us in 
 return sixteen times as much trade and employment as a 
 quarter of wheat imported from the United States, and every 
 quarter of wheat imported from Canada thirty-five times as 
 much as one imported from Russia." 
 
 One really does not know where to begin in dealing with 
 such an argument as this ! 
 
 " Food is not a raw material of manufacture ; for Cobden 
 said that wages did not rise and fall with the price of food." 
 It is difiicult not to feel indignant at such a use of Cobden's 
 name. What was it that Cobden really did say? The Protec-
 
 PART I. — NEW COLONIAL POLICY. 47 
 
 tionists had accused him of wishing to lower wages for the manu- Effects of 
 facturers' benefit. They said, " You are doing no good to the ^^^ °" 
 workmen by lowering the price of corn, for wages will be 
 lowered as the price of corn falls, and that is your real object." 
 To this Cobden replied, " You are utterly wrong : wrong in 
 your imputations, wrong in your facts. Wages do not fall with 
 the price of food ; wages have been highest when corn has been 
 lowest. Nor am I seeking, nor shall I get, low wages. Low 
 wages do not mean cheap labour. Let us buy foreign corn 
 untaxed. The price of food will probably fall, but the demand 
 for our manufactures at home and abroad will certainly increase, 
 and the workmen's wages and the manufacturers' profits will 
 both rise." Cobden was right, as the workmen well know : 
 and they will no doubt understand the difference between 
 him and his mis-quoters. Cobden said, " Leave corn untaxed, 
 let food fall, and let wages rise." The Fair Traders say, *' Tax 
 corn, let food rise, and let wages fall." And they quote 
 Cobden as their authority ! 
 
 But let us consider a little what the effect of raising the Effect of 
 price of food to the workman himself really is, and let us '"^l^'^s 
 
 . . . pricG 01 
 
 omit for the present all consideration of the market for our food on 
 manufactures caused by the purchase of food abroad. The our 
 workman's wages will go less far than they did, and the "^^"" 
 
 comforts of his life will be reduced ; if the labour-market 
 admits of an increase in wages, he will demand and get it, 
 and the cost of production will be increased accordingly to 
 the manufacturer ; if it does not, the workman will be reduced 
 to the alternative of either living in less comfort than he has 
 done hitherto, or of emigrating. If he does the former, not 
 only will he and his family suffer, but he will be obliged to 
 spend more upon food and less upon clothing, and this in 
 itself will reduce the market for manufactures. If he emigrates, 
 so much productive labour is lost to the country. To the 
 manufacturer, employer, and workman alike, any artificial 
 increase in the price of food is per se an unmixed evil, even 
 without considering its effect upon the Foreign market for our 
 manufactures. Much more is it an evil to them when it is 
 remembered that the same measure which increases the price 
 of their food also prevents them from getting the full return for 
 their own expenditure of skill, capital, and labour.
 
 48 FREE TRADE 7', FAIR TRADE, 
 
 CHAPTER XI. 
 
 FALLACY OF SLTPOSING THAT COLONIAI, MARKETS WILL 
 COMPENSATE US. 
 
 .\bsurdity BuT then, Say the Fair Traders, this evil is to be compensated, 
 ing Co!o°^ and more than compensated, by the additional market for our 
 niai Market manufactures which will be opened to us in the colonies, 
 more ad- Now, in the first place, I have shown that the tendency of 
 ihan'^^^°"^ the colonies is to close, and not to open, their markets. 
 Foreign and that in Canada the duties recently imposed on our 
 Market. manufactures, though not yet equal to the enormous duties 
 of the United vStates, are approaching them, and are higher 
 than those of many, if not of most, foreign States. But let 
 us assume that the colonial duties on our goods are and 
 continue much lower than the foreign duties, where is the 
 new market to come from? Does the Fair Trader think that 
 the United States farmer sends us a shipload of corn for 
 nothing, and that if we get it instead from the colonial farmer, 
 we shall still give to the United States what we now give, 
 and also give to the colonial farmer, in exchange for his 
 shipload of corn, many shiploads of manufactures which we 
 now turn to some other beneficial use? If he does think 
 this, does he think that the second transaction is much 
 better for us than the first ? And if he does not think this 
 absurdity, what can be the meaning of the astonishing state- 
 ment I have quoted above from the Fair Trade League 
 circular? He apparently takes from the statistics of trade 
 the quantity of corn imported from Australia and the United 
 States, and the quantity of our manufactures exported to 
 those countries respectively, and, finding that for every 
 quarter of Australian wheat we export to Australia sixteen 
 times as much of our manufactures as we export to the 
 United States for every quarter of United States wheat, 
 comes to the conclusion that for each quarter of Australian 
 wheat we pay sixteen times as much of our cotton and cloth 
 as for an equal quantity of United States wheat, and that
 
 PART I. — NEW COLONIAL POLICY. 49 
 
 the transaction is consequently sixteen times as profitable, 
 not to Australia which receives, but to England which pays, 
 this wonderful price ! These are the new prophets who 
 are to subvert the doctrines of Cobden and Peel ! The 
 fact, of course, is that for every quarter we import, whether 
 from Australia, from Canada, from Russia, or from the 
 United States, we pay the market value — no less and no 
 more. Whether it is paid for by the export of an equal 
 value of English manufactures to the United States, by the 
 export of English manufactures to India, or to some foreign 
 country, and by a further export from that country to the 
 United States, or even by some route more circuitous still, 
 or by the remittance of bullion, or by a cancellation of 
 interest upon debt, it must be paid for by this country, and 
 the price paid for it will be the value of a quarter of wheat 
 in the English market. The United States farmer does not 
 give us his wheat for nothing ; he takes from us whatever 
 the competition of the English farmer, the Canadian farmer, 
 and the Russian farmer allows him to take. The Canadian 
 farmer does precisely the same. If they compete on equal 
 terms they obtain equal prices, and set going an equal 
 quantity of English labour to provide a return. If the 
 United States farmer is able to produce wheat more cheaply 
 and abundantly than the Canadian farmer, he can give us a 
 larger quantity in return for the same quantity of our labour ; 
 in other words, both his labour and our labour go farther ; 
 there is more production, and both benefit. If under these 
 circumstances we forcibly transfer the business from the United 
 States farmer to the Canadian farmer, we do not thereby get a 
 new purchaser for our goods, we only substitute a worse for a 
 better purchaser— a worse for a better supply. 
 
 But then, it is said, Canada, Protectionist as her tariff is, is 
 less Protectionist than the United States, and does less to keep 
 our goods out of the market. If this is the case, she and we 
 both get the benefit of it now. The Canadian farmer is so much 
 the better off, and so is our manufacturer. All the good we 
 can get by the lower tariff of Canada we are now getting. 
 We shall not increase that benefit one jot by adding to the 
 obstruction now caused by the United States tariff a new 
 obstruction of our own. The United States tariff is doing 
 serious injury both to the English manufacturer and consumer 
 of corn, and to the American farmer and consumer of English
 
 50 FREE TRADE V. FAIR TRADE. 
 
 goods ; to the former probably less harm than to the latter, 
 because the Englishman has the rest of the world to go to, 
 whilst the American cannot escape from his own tariff. But 
 the injury thus caused will not be diminished, but aggravated, 
 by interi)osing another obstruction of our own. 
 
 In short, if, under the existing Protectionist American tariff, 
 the American farmer can compete with all the world in the 
 English market, it is because what England has to pay him 
 with goes farther in the American market than it does else- 
 where. To transfer the custom forcibly to the Canadian 
 market is to make what England has to pay with worth less 
 than it now is. 
 Confusion I sometimes think that there is a fatal confusion in the 
 IndKidual '^""iiids of Fair Traders and Protectionists between a commercial 
 commercial treaty, or arrangement between nations, and the individual 
 dealings dealings of commerce. The Commercial Treaty assumes the 
 national " mischievous and delusive form of a bargain, in which we, as a 
 arrange- Free-trading nation, appear to give much and receive little, 
 ments. Hence people are misled into a hazy conclusion that the 
 individual bargains made under such a treaty, or under what 
 is called one-sided Free Trade, are in themselves one-sided 
 and unfair, and that in the dealings between the merchants of a 
 Free-trading nation like ourselves and those of a Protectionist 
 or semi-Protectionist nation like the United States or France, 
 the Protectionist tariff causes our merchants to have the worst 
 of the bargain. But this is pure delusion, and confusion of 
 thought. The American farmer is not enabled to drive a 
 better bargain with the English manufacturer by reason of the 
 Protectionist tariff; on the contrary, of the two he is the one 
 more hampered by it. The relaxation of that tariff would be 
 an immense boon to the Englishman, but it would be a still 
 greater boon to the American. The evil of Protection is not 
 that it benefits one party to a trade bargain at the expense of 
 the other, but that it injures both, and prevents trade bargains 
 from being made.
 
 PART 1.— NEW COLONIAL POLICY. 5I 
 
 CHAPTER XII. 
 
 EFFECTS OF AN ENGLISH TAX ON AMERICAN CORN ON 
 AMERICAN COMPETITION WITH ENGLISH MANUFACTURES. 
 
 But let us follow the consequences of a tax on American Tax on 
 food a little farther. America has an abundant supply of the American 
 most energetic and versatile labour in the world, and also an wouidddve 
 abundant supply of capital. At present this labour and capital America 
 are largely employed in providing Europe, and England es- 1.°*° Manu- 
 pecially, with food, because that is the most profitable way in competi- 
 which American labour and capital can be employed. But we tion. 
 are asked to make this employment less profitable for her, and to 
 deprive her of her present market for her enormous agricultural 
 produce. What would be the natural result of such a step ? Why, 
 to divert her energy and capital from providing the food we want 
 to buy from her, and to drive it into providing the manufactures 
 which we want to sell to her. At present, in spite of, possibly in 
 consequence of, her system of Protection, the sale of her highly 
 forced and highly priced manufactures is in a great measure 
 confined, or nearly confined, to her own subjects, and she is no 
 rival to England in our own markets, or in the markets of the 
 world ; whilst even in her own markets our manufacturers com- 
 pete with hers. In 1880, we exported to her 24^ millions of 
 manufactures, and imported from her 2^ millions. Out of her 
 total exports, 10 per cent, are manufactures, and 90 per cent, 
 food and raw materials, chiefly agricultural produce. But if we 
 deprive her of her market for agricultural produce, we shall 
 drive her into manufacture, and there is no saying how formid- 
 able a rival she may become. 
 
 At the time of the repeal of the Navigation Laws, all the 
 best judges thought that the carrying trade of the world must 
 pass into the hands of the Americans. It has passed into 
 our own, as I shall show below (Chapter XXXIIL). There 
 are probably several causes for this ; but the most important 
 to my mind is, that America has found in her internal 
 development, and especially in her farming, and in the 
 railways which farming creates and sustains, an industry more
 
 $i FRES trade 7'. FAIR TRAtJfi. 
 
 profitable to herself and to the world, than the ocean carrying 
 trade. To us the ocean carrying trade has been the more 
 profitable employment. She has done the farming, and we 
 have done the ocean carrying, to the great advantage of both. 
 If we cripple her farming, there is no saying that she may not 
 take from us our ocean carrying. 
 
 CHAPTER XIII. 
 
 Objection that we are paying for American corn by 
 receiving back investments. 
 
 If America " BuT," say Mr. Farrer Ecroyd and his friends, "granting that 
 nionevshe America must be paid in some way for the food she sends us, 
 must repay, she is paid not in goods, but by setting against it the loans we 
 whether we ii^yg made her. In this way she is not only paying interest upon 
 cornoTnot. them, butis repaying to us our capital, upon which consequently 
 we are living." The latter assumption, viz., that America is send- 
 ing back capital to us, is utterly without proof, and is probably 
 false, as I will show below (Chapter XXVI.). The statement 
 that she sends us food in payment of interest on what we have 
 lent her, is to a great extent true. But I am not concerned at 
 present with the truth or falsehood of these statements ; I only 
 mention them for the purpose of showing that they are ni7ii7 ad 
 rem. If America owes us money, which, or the interest on 
 which, she is now repaying in corn, she will equally owe us 
 this money if we transfer our custom for corn to Canada, and 
 if she does not repay us in corn, she must repay us in some- 
 thing else. That something else will be something which, ex 
 hypothesi, we want less than corn ; it may, as I have pointed out, 
 be manufactures or freight, which will compete with our own. 
 Absurdity And here I have to notice a so-called argument, which, so 
 
 ofsuppos- iQj^g ^g i(. ^y^g coufincd to certain anonymous writers, I was 
 Inferwt on disposed to pass over as too absurd to be refuted ; but which, 
 Poreign In- when appearing under the respectable name of the Member 
 ^"'"'ies'^ for Preston, calls for a passing notice. It is as follows : " But 
 luxuries even' if it could be proved, as it certainly cannot, that all this 
 to the rich, enormous disproportion of imports has been paid for out of our 
 income, and without any diminution of our investments, that
 
 PART I. — NEW COLONIAL POLICY, 53 
 
 would Still do nothing to reassure our working classes as 
 regards the interests of labour. They are concerned in the 
 acquisition of imports of food in exchange for the production 
 of their industry, rather than in payment of income due to us 
 from our foreign investments. For, suppose such investments 
 to be increased fivefold ; suppose England to contain multitudes 
 of well-to-do people who owned them, and lived upon the 
 income paid to them, let us say in the shape of food from 
 America, and clothing, furniture, and luxuries from France ; is 
 it not evident that the balance of trade might be satisfactorily 
 accounted for by financiers, while our agriculture and manu- 
 factures were alike languishing, and every year affording less 
 employment, and at lower wages, to fewer workmen ? English 
 land might he forced out of cultivation by American competi- 
 tion, or turned from arable to grass to such an extent as to 
 more than half depopulate our rural districts and country 
 towns, and drive the people into the larger cities and manufac- 
 turing districts, or to emigration. The demand for manufac- 
 tures in the agricultural districts would thus be seriously 
 reduced, whilst the free import of French manufactures and 
 luxuries — preferred by the ever-increasing class who lived on 
 foreign incomes — would curtail the employment of our artisans, 
 whose wages would be still further reduced by the competition 
 of the displaced agricultural labourers. 
 
 " In one word, our imports would be acquired more and 
 more in payment of interest or rents due from abroad to 
 owners of foreign investments living in this country, and less 
 and less in exchange for the handiwork of our industrial classes, 
 and so the former would increase whilst the latter would be 
 driven first to lower wages and diminished comforts, then to 
 destitution, and finally to emigration without resources and 
 under the most painful conditions." 
 
 I find it really difficult to understand this. What is it that 
 we are importing as interest on our investments, especially from 
 America? Food and raw materials constitute nine-tenths of 
 our imports. How does Mr. Ecroyd suppose that these are 
 consumed ? How much of them does he think the wealthy 
 and the idle put into their own stomachs or on their own backs? 
 And of the manufactures imported, how many are used by the 
 working classes ? Let any one cast his eye down the list of 
 British imports, and he will see that there is not one of the 
 a^rticles mentioned in the list which is not either ap article tg
 
 54 FREE TRADE V. FAIR TRADE, 
 
 he used in our own industries, or an article to be used by those 
 employed in our industries. Silk, woollen and cotton manu- 
 factures, gloves, dressed skins, and wine are almost the only 
 articles in our list of im[)orts which are not simple articles of 
 food or materials of manufacture. Assuming, which is a pre- 
 posterous assumption, that the whole of these arc articles of 
 luxury, neither used by nor giving employment to the working 
 class, how much do they amount to? To about 25 millions 
 out of 410 millions of imports. The question raised by Mr. 
 Farrer Ecroyd is not, it must be remembered, a question of 
 whether these imports are spent on reproductive employment, 
 but a question of whether they are used by workers or by idlers. 
 If he is right, they are used by idlers ; and our workers are to 
 be driven to destitution and emigration by the loss of wages 
 and employment. Now, even if employed in unproductive 
 labour, they will not be employed in support of idleness. But 
 can it be doubted that the great bulk of these enormous imports 
 is employed in supporting reproductive labour? Every pound 
 of raw material, every article which requires further labour to 
 complete it, is imported for the purpose of employing labour 
 upon it. The food, the clothing, the common luxuries, tea, 
 coffee, tobacco, sugar, are consumed in supporting and making 
 tolerable the lives of millions of artisans in our factories, of 
 labourers in our fields, of workmen who are erecting, extending, 
 and improving our railways, our docks, our mines, our ships, 
 our dwellings, our shops, our schools, our churches, our towns. 
 They are employed in extending our reproductive powers, and 
 in making life comparatively healthy and pleasant, not for the 
 wealthy few, but for the toiling many. The contrast between 
 wealth and poverty is sad enough, and the excesses of luxury 
 are lamentable. ]3ut the proportion of our national income or 
 of our imports which is consumed in luxuries is a mere trifle 
 compared with that which goes to support useful labour. The 
 fear that the payments which foreign countries are now making 
 us as a reward for former labour will make us poorer and 
 render future labour unproductive, is the wildest of many wild 
 chimeras. 
 
 The very contrary is notoriously the case. The recent depres- 
 sion in business has been markedly distinguished from earlier 
 commercial depressions by the fact that it has affected profits 
 the far more than it has affected employment, wages, or the well 
 being of the working classes. Millowners, coalowners, iron
 
 PART I. — NEW COLONIAL POLICY, 55 
 
 masters, landowners, and farmers have suffered more or less 
 severely. But the mill-hand, the miner, the workman, the 
 labourer, have suffered comparatively little, as is shown by a 
 comparison of the state of the country with its state at former 
 periods of depression, and by the infallible tests of pauperism 
 and of consumption. Capital has borne the brunt of the blow. 
 By the simple expedient of leaving things alone, and repealing 
 the wicked and pernicious laws which made scarce the food of 
 man, and curtailed the rights of labour, we have advanced one 
 step towards the millennium of the economist, the politician, 
 and the Christian philanthropist, viz., the more equal distribu- 
 tion of good things. The workmen are better off than they 
 were, and, as the action of the Trades Unions shows, they know 
 the reason why. 
 
 But even if investments abroad were the evil Mr. F.croyd Transfer of 
 imagines them to be, the transfer of our custom from foreign co^o^ies 
 countries to the colonies would do little to remove it. For we will not 
 are now masting (as the Fair Traders would say) our sur- prevent In- 
 plus earnings largely in the colonies ; we are lending to abroad. 
 Australia and Canada as we have in former years lent to 
 the United States. Our investments in Canada are said to 
 amount to 70 millions; our investments in Australia to 120 
 millions, and to be increasing at the rate of 10 millions a 
 year, a fact which accounts for the increase of exports to those 
 colonies. But the time must soon come when those colonies 
 will be doing as much to ruin us by paying us^ interest in the 
 shape of imports, as, in the opinion of Mr. Farrer Ecroyd 
 and his friends, the United States are now doing, and then 
 what is to become of us ? If such a conclusion drives Mr. 
 Farrer Ecroyd to despair, it is some consolation to think that 
 it will carry comfort to the heart of another great Imperialist, 
 Sir Julius Vogel, who also would like to see us exercise a large 
 control over the colonies, but who wishes us to do so in order, 
 inter alia, to encourage those investments of English capital 
 in them which are the terror of the Fair Traders.
 
 56 FREE TRADE Z'. FAIR TRADE. 
 
 CHAPTER XIV. 
 
 ASSUMING THAT WE MAKE A TARIFF liARGAIN WITH THE 
 COLONIES IN RETURN FOR THE TAX ON FOREIGN 
 CORN, WHAT WOULD BE THE RESULT? 
 
 Can we We have hitherto considered the effect of a differential tax on 
 dnve I anff fQ,-gjgn articles of food pure and simple, and without reference 
 with to any reciprocal benefit to be derived from action to be taken by 
 
 Colonies? the colonies. But it is possible, for the language of the P'air 
 Traders is very vague, that they mean colonial articles of food to 
 be admitted free only from those colonies and possessions which 
 admit our manufactures free, and that they mean to make the 
 differential duty a means for driving a tariff bargain with the 
 colonies. If so, an important question of principle arises, viz., 
 whether it can be worth our while at any time, or under any cir- 
 cumstances, to impose a duty on imports, which will do us an 
 immediate mjury, in order that we may have a weapon where- 
 with to fight foreign countries or British colonies in making 
 tariff bargains. This question is raised explicitly by the further 
 proposal of the Fair Traders to tax foreign manufactures, and I 
 propose to consider it when dealing with that proposal in the 
 Second Part of this pamphlet. If it is to be answered in the 
 negative, as I am sure that it is, the proposal to drive a tariff 
 bargain with the colonies by the bribe of a differential duty on 
 their competitors, must fail at once. But I do not propose to 
 argue this large question here, and will assume that it may be 
 answered in the affirmative. Making this assumption, let us 
 consider what sort of bargains we can possibly drive with the 
 colonies, and let us consider, first, what we must give and what 
 we can get ; and then, secondly, what they must give and 
 what they can get by such a bargain. 
 "What do First of all, then, as our foreign food supply is to be trans- 
 
 weGive? fen-ed to the colonies, and as they now only supply us with 
 one-sixth of it, we must cut off five-sixths of our present sources 
 of supply, and trust to their being made up by countries which 
 now only furnish one-sixth of it. What the effect of this may
 
 PART I.— NEW COLONIAL POLICV. 57 
 
 be on the quantity and price of food and the welfare of the Tariff bar. 
 people it is frightful to consider. S?'"^ .^'"'^ 
 
 Secondly, we shall lose the whole of the custom for our 
 own produce-arising out of purchases of food in foreign coun- 
 tries, and, as they amount to 138 millions a year, this is a 
 scarcely less serious consideration. 
 
 Thirdly, we shall cripple our powers of production by 
 making food dear, and be less able to compete for custom in 
 neutral markets. 
 
 Fourthly, we shall run a very serious risk of retaliation by 
 foreign countries. If we say to France, or to America, "We will 
 not buy corn, or meat, or butter, or cheese, or eggs from you," 
 they will retort by refusing to buy cotton, wool, silk, and iron 
 from us ; not only shall we ourselves cut off a very large pro- 
 portion of our foreign exports, but we shall tempt foreign 
 nations to cut off the remainder. 
 
 Taking the average of the last fifteen years, our trade with 
 foreign countries has been rather more than three-fourths of 
 our whole trade, and our trade with British colonies and 
 possessions has been less than one-fourth of it. 
 
 Our whole trade, imports and exports included, is 700 millions 
 a year. We are, therefore, asked to cripple and endanger 
 three-fourths of this, or a trade of more than 500 miUions a 
 year. 
 
 What are we to get in exchange ? What do 
 
 First, we shall get so much custom for our goods in the 
 colonies as arises from the additional purchases of food we 
 make in the colonies. But, as the colonial supply of food will 
 be much less than that which we now get from foreign countries, 
 and as its price will be much higher, this market must be much 
 less valuable than that which we give up. So far, therefore, we 
 are large and pure losers. But we shall get, in addition, what- 
 ever advantage is to be gained by the reduction our colonies 
 may make in their tarifls in return for Avhat we do for them. 
 
 What will this amount to ? 
 
 Now, in the first place, we may eliminate India. Ihe 
 Indian tariff we practically make ourselves. We have deter- 
 mined, rightly or wrongly, that she shall not levy duties on our 
 manufactures. Her consent is not asked ; we need no bargain 
 for the purpose. We may, for similar reasons, eliminate all the 
 Crown colonies. In short, the only colonies with which we can 
 make bargains are the self-governing colonies in British North 
 
 we Get ?
 
 58 FREE TRADE 7'. FAIR TRADE. 
 
 iVirifTbar- America, m Australasia, South Africa, and some of those in the 
 c oionles ^^^st Indies. But of tliese there are many which now levy 
 very small duties on our manufactures, and those by way of 
 Revenue rather than of Protective duties. With regard to these, 
 all that we can expect to get by way of a bargain, is that their 
 duties shall not be raised, and this is a prospective and con- 
 tingent, not a present and certain, benefit. In fact, the only 
 colonies in which any large reduction of duties'is possible, are 
 Canada, Victoria, Western and South Australia, Queensland, 
 Tasmania, and New Zealand. New South Wales, one of the 
 most important of the Australian group, is free, or nearly so, 
 already. But let us take the whole of our colonies in British 
 North America, in Australia, and in South Africa, and suppose 
 that throughout them all it were possible to get a reduction of 
 duties, what would this advantage amount to? The trade of 
 the United Kingdom with the whole of these colonies, taking, as 
 before, an average of fifteen years, is less than 10 per cent, of 
 our whole external trade; not more than our trade with 
 Germany ; not so much as our trade with France ; little more 
 than half as much as our trade with the United States ; abcut 
 one-eighth of our whole trade with foreign countries. If we 
 take those colonies alone which now levy considerable duties, 
 the trade with them will not be more than one-half this amount. 
 Consequently, it is only about 5 per cent, of our whole trade 
 for which we can expect any substantial benefit by a tariff 
 bargain with our colonies, whilst the trade which we shall injure 
 and cripple by such a bargain is 75 per cent, of that trade. 
 
 I think we may, then, draw two conclusions, that it is not 
 worth our while to make any such bargains; and, secondly, that 
 if we were to make any such bargains, it would be madness to 
 adhere to them, if foreign countries were to offer to reduce their 
 tarifts on condition of our repealing the differential dues on 
 their produce which such a bargain implies. 
 
 Now let us look at such a bargain from the colonial point 
 of view. ^Vhat would they gain and what would they lose ? 
 I think we must admit that if P^ngland gave them the mono- 
 poly of her market for food they would gain considerably. 
 Canada, Australia, and India would send us much more corn 
 if United States and Russian corn were excluded from our 
 ports. India would send us more tea if China were out of the 
 market, and the Cape and Australia would send us more 
 second-class wine if we could not get good wine from France
 
 PART I. — NEW COLONIAL POLICY. 59 
 
 or Spain. Even this would not be an unqualified advantage Tariff bar- 
 to them. The production of the world would be diminished, gains with 
 and they would bear some share of the loss ; their people '^° °"'"" 
 would be diverted from doing what they can do best, to the 
 providing of those things which the English market demands, 
 and India certainly would lose some of the trade which, as we 
 have seen, she now does directly or indirectly with the United 
 States. But it is idle to talk of such proposals as these. 
 England certainly will not contract her sources of supply to 
 such an extent. Nor will she make a sacrifice at all where she 
 gets nothing in return. She can only get a return from those 
 colonies which now impose restrictions on the import of English 
 goods. We may, therefore, as before, eliminate India and other 
 colonies or possessions which are governed from home. The 
 only colonies which can make a bargain are the self-governing 
 colonies, and those only amongst them which now levy duties 
 on English goods. That they might gain something imme- 
 diately by the bargain, I have admitted. ^Vhat will they hzxe What 
 to give up ? First of all, there are those colonies which only would they 
 levy a small duty, say 5 to 10 per cent, with the bo>ici fide^^^^' 
 object of raising revenue, and without any thought of Protec- 
 tion. To these colonies, with but little realised property, and 
 with an organisation very different from those of an old country, 
 it would probably be a very serious financial difficulty to raise 
 a revenue in any other way — a difficulty which might in itself 
 counterbalance any gain they might derive from our differential 
 tariff Those colonies, again, such as Canada and Victoria, 
 which levy heavier duties, and which levy them avowedly for 
 purposes of Protection, would have to make a serious surrender. 
 Tliey would, as Free Traders, be really benefitting themselves 
 by reducing their tarift" in our favour ; but in their own opinion, 
 and in the opinion of the Fair Traders, they would be doing 
 themselves harm. They might be tempted to do it, but in 
 doing it they would feel they had made a concession to us, and 
 we should be obliged to accept it as a concession. 
 
 But suppose the concession made and the bargain com- what 
 pleted. Suppose that we have excluded the United States would be 
 corn from our market, and that Canada has admitted English o^^thT'^'^" 
 goods freely to her market, what will be the condition of Colonies 
 things? The United States may leave things alone. In that ^^'^j.^"j'^^ 
 case, as I have shown above, England Avill find herself suffering made?" '^ 
 from insufficient supplies, from a contracted market for her
 
 6o FREE TRADE 7'. FAIR TRADE. 
 
 goods, and from the new competition in manufactures which 
 she will have forced upon the United States. She will be 
 discontented and disgusted with her bargain, and with the 
 other party to it. Or the United States may retaliate by pro 
 hil)iting English goods. In that case England will be still 
 more discontented and disgusted. Or the United States may 
 do that which it is the desire and object of every honest Fair 
 Trader and Reciprocitarian to make them do — they may offer 
 to throw open their market to English goods on condition that 
 England will again throw open her market to United Stales 
 corn. In that case England will be more than ever disgusted 
 if her bargain with Canada prevents her from accepting their 
 offer. Indeed, it is scarcely within the limits of possibility that 
 such a bargain could under such circumstances be kept. That 
 England, which now does a trade of 145 millions a year with 
 the United States, even under the present Protectionist tariff, 
 and of 22 millions with Canada, should refuse the proffered 
 trade of a countrj' which has 50 millions of people and the 
 finest soils and climates in the world, for the purpose of nursing 
 a trade with a countr)' which has only 4 millions of people and 
 a far inferior soil and climate, is too much to expect of human 
 nature. And if the bargain is not kept, or if the terms of the 
 bargain with Canada are such as to allow Elngland to accept 
 the United States' offer, what will be the position of Canada 
 when she is thrown over, and the United States are again 
 admitted to free competition in the English market? She will 
 have been misled into an unnatural course of industry and 
 expenditure, and she will be left to her own resources when it 
 suits the convenience of England so to leave her. The Fair 
 Traders have some hazy inkling of this difficulty, for they 
 propose that the fixed duties on foreign food are to be steadily 
 maintained for a term long enough to develop our own instead 
 of foreign territories. Puit do they really think that this is 
 possible ; that our own people would submit to years of priva- 
 tion in order to develop a possible future in Canada or Australia 
 when that privation might be at once changed into plenty by 
 admitting foreign produce ? Are any such arrangements as 
 these likely to stand ? Are they desirable in the true interests 
 of Imperial union, not to mention the commercial interests of 
 the parties concerned ? Are they likely in the end to promote 
 that good feeling between England and Canada which it is the 
 professed object of all of us to encourage ? Are they not much
 
 PARt I. — NEW COLONIAL POLICY. 6i 
 
 more likely to cause estrangement, recalcitration, and dis- 
 ruption? To such questions there can be but one answer. 
 We may be quite certain that any forced attempt at unnatural Any forced 
 union, any unbusiness-like sacrifice of interest to sentiment, will union^ ^^ 
 only destroy those feelings of kindness which it is the object of must lead 
 all to promote. ^. 
 
 I have taken the case of Canada as the most striking illus- 
 tration of the fatal difficulties which would attend any such 
 tariff" bargain as we have been considering. Similar argu- 
 ments apply to the other self-governing colonies, and it is 
 unnecessary to repeat them. It seems to me abundantly clear 
 that no tariff" bargain with any colony which has for its con- 
 dition a differential tax on foreign produce imported into 
 England is for a moment to be thought of. 
 
 CHAPTER XV. 
 
 CAN WE MAKE COMMERCIAL TREATIES WITH THE COLONIES 
 SUCH AS THOSE WE HAVE MADE WITH FRANCE AND OTHER 
 FOREIGN COUNTRIES ? 
 
 A CUSTOMS union of the empire is then impracticable. An Can we 
 attempt at a closer connection with the colonies, to be effected "^^^^, ^"om- 
 by imposing differential ta.xes on foreign produce, is not to the Treaties 
 real interest either of England or, in the end, of the colonies, with 
 and it is much more likely to lead to separation than to union, ^'o'^n'^^; 
 
 rr-i ■ 1-1 1 1 r • • ■ 1 1 • such as the 
 
 1 here is yet a third method of improvmg commercial relations French 
 with the colonies, which is scarcely suggested in the Fair Trade Treaty ? 
 programme, but which may deserve a few moments considera- 
 tion. It is that of a commercial treaty such as we have made 
 with France and other foreign nations ; a treaty in which we 
 impose no differential duties, but only reduce our own duties, 
 and reduce them for all equally. 
 
 Here, again, we may at once dismiss from consideration all Narrow 
 the colonies or possessions which are practically governed from |™{)^j^n 
 home ; and these, including India, will, so far as trade is con- which such 
 cerned, amount to one-half of the whole. Treaties 
 
 Our whole trade with our colonies is, as I have shown applicable.
 
 62 
 
 FREE TRADE V. KAiR TRADE, 
 
 Commer- 
 cial Trea- 
 ties with 
 Colonies. 
 
 No reason 
 against 
 such 
 Treaties 
 in existing 
 Imperial 
 relations, 
 for the self- 
 governing 
 Colonies 
 are inde- 
 pendent. 
 
 above, not one-fourth of our whole trade, and it is therefore 
 only one-eighth of our whole trade that can possibly be affected 
 by such a treaty. Practically it is much less ; because we do 
 not want commercial treaties, or, indeed, alterations of any 
 kind, except with those colonies which levy sensible duties on 
 our goods. The whole affair is, therefore, of less moment to 
 us than it might at first sight appear. Now, with respect to 
 the self-governing colonies, we have, in giving them self-govern- 
 ment, left them free to impose what duties they please, with 
 one restriction — viz., that they shall not make their duties 
 difterential ; that they shall, if they jilace Customs duties on 
 the produce of one country, place the same duties on the 
 produce of all. But even this restriction has been surrendered 
 on two special occasions. Canada, or rather the British 
 colonies in North America, were in 1854 allowed to make a 
 Reciprocity treaty with the United States,* by which a large 
 number of articles, the produce of Canada and of the United 
 States respectively, were admitted duty free into each of those 
 countries, although the same goods remained subject to duty 
 when imported into those colonies from the United Kingdom, 
 or from foreign countries other than the United States. The 
 denunciation of this treaty by the United States was one of the 
 causes that led to the present Protectionist tariff in Canada; 
 and the resumption by the United States of the policy which 
 dictated that treaty would, no doubt, lead to the resumption 
 of a similar policy by Canada. Another case, rather less 
 striking, because it was between different colonies, and not 
 between a colony and a foreign nation, was that of an arrange- 
 ment between New South Wales and Victoria concerning the 
 Customs duties levied on the boundary between the two 
 colonies in the basin of the river Murray, In these cases, 
 the principle of equal treatment gave way to the still more 
 important principle of self-government, and to the demands for 
 freedom caused by local contiguity. And, no doubt, a similar 
 course must and will be followed when similar cases occur 
 again, as they are sure to do. It may be all very well to say, 
 as a matter of theory, that when nations are divided by great 
 natural barriers, such as hundreds of leagues of sea or moun- 
 tain, there is all the more reason for abolishing artificial 
 barriers. But this is not the way in which the facts present 
 
 * Treaty ratified 9th September, 1854.
 
 PART 1. — NEW COLONIAL POLlCV. 63 
 
 themselves to the ordinary mind. I feel the need of dealing Commer- 
 freely with my neighbour across the street long before I under- ^}^^ ^^^^" 
 stand that the same need exists for freedom in my deahngs Colonies, 
 with an alien in China. It was by the obvious absurdity of an 
 artificial barrier between Surrey and Middlesex that Cobden 
 brought home to men's minds the much less obvious absurdity 
 of an artificial barrier between England and France. If, there- 
 fore, any strong case arises again, such as an approach to 
 commercial union between Canada and the United States, or 
 between any of the Australian colonies and their neighbours, 
 we may take it for granted that the one principle of equal 
 treatment, which we have hitherto maintained, will give way, 
 and that in this, as in other matters of taxation, the colonies 
 will exercise and enjoy complete self-government. 
 
 In short, the colonies in question are, so far as tariffs are 
 concerned, in as free and independent a position as foreign . 
 nations ; and if we are to make commercial treaties with 
 foreign nations, there seems to be no /r/w^ /rt-r/i? reason why 
 we should not make similar commercial treaties with our self- 
 governing colonies. In making such treaties we should, of 
 course, be governed by the same rules as have governed us in 
 making treaties with foreign countries. We should give no 
 such differential treatment as is suggested by the Fair leaders, 
 and we should make no reductions of duties which we do not 
 consider to be for our own advantage. 
 
 The question then arises, whether there are any duties which But are 
 we now levy on colonial produce which we could reduce ; Dutrer"on 
 remembering that if we reduce them for the colonies we must Colonial 
 reduce them for other countries also. Now, what are the r'joduce 
 products of the self-governing colonies which we tax ? The could give 
 only articles of this description in our tariff are cocoa, coffee, up ? 
 chicory, dried fruit, tea, tobacco, wine, beer and spirits. The 
 exports of these articles from the colonies, according to the 
 latest returns, are as shown on the following pages, 64, 65.
 
 64 
 
 FREE TRAt)E V. FAIR TRADE. 
 
 
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 PART I. — NEW COLONIAL POLICY. 
 
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 66 
 
 FREE TRADE 7'. FAIR TRADE. 
 
 Wine. 
 
 India and Ceylon may be excluded, for the reasons above 
 given. I may also remark that there arc large re-exports of 
 tea from New South Wales and "Victoria, which are, no doubt, 
 re-exports of Chinese or Indian imports, furnishing additional 
 evidence of the circuitous nature of the trade of the East, 
 to which I have adverted above. On spirits, England is not 
 likely to make any reduction. Omitting these, the striking 
 feature in this scanty list is the total absence of any article 
 imported from those colonies with whom we might wish and 
 be able to make a tariff bargain— viz., the North American and 
 Australian group. Indeed, the only article in the list which 
 affords any scope for an alteration, which the colonies would 
 accept as a boon, is wine. We know from the evidence before 
 the Wine Duties Committee that, both at the Cape and in 
 Australia, the high duty of 2S. 6d. per gallon on wines contain- 
 ing 26 degrees of spirit, when compared with the duty of one 
 shilling on French wines, is felt as a grievance. Whether much 
 Avine from these colonies would be imported if the duty were 
 reduced is doubtful, considering the cost of labour in the 
 colonies, and the preference in this country for French, Spanish 
 and Portuguese wine. Under these' circumstances, whilst ad- 
 mitting fully the expediency of removing any grievances which 
 these colonies may have in the matter of the wine duties, we 
 may conclude that these duties are not of sufficient impor- 
 tance to afford the means of making taritf bargains with them. 
 
 Putting wine aside, it is quite obvious, tlien, that we cannot 
 with our present tariff offer any reduction to the self-governing 
 colonies which they would accept as a boon, and that we 
 are unable, therefore, to make tariff bargains of any kind with 
 them. 
 
 But there is another consideration of some importance, since 
 it illustrates the peculiarity of our commercial relations with 
 our colonies. 
 
 It is not to be expected that we should conclude any such 
 tariff bargain with Canada without a most favoured nation 
 clause. That clause is the alpha and omega of all our 
 Diiiicuityin commercial treaties. It is the one point which we retain when 
 t'jCol'oifies. ^^^ others fail ; the feature on which their upholders mainly 
 rely ; the feature which redeems them in the eyes of those who 
 otherwise dislike them. To make a tariff bargain with Canada 
 without stipulating that we shall treat one another as well as we 
 treat the rest of the world, would be an admission that we are, 
 
 W'c have 
 
 nothing 
 lo f;ivf. 
 
 "Most 
 favoured 
 Xntion " 
 ( lause.
 
 PART I. — NEW COL'ONIAL POLICY. 67 
 
 or are likely to be, on less intimate terms with our own colony Commer- 
 than with any foreign nation. And yet such a clause might ^•'^^ . 
 give rise — nay, would be almost sure to give rise — to dangerous ^i,], 
 differences. Canada and England are separated by the Atlantic ; Colonies. 
 Canada and the United States are distinguished rather than 
 separated by a bridged and navigable river or by an imaginary 
 line. Trade between England and Canada has to overcome 
 natural difficulties ; trade between Canada and the United 
 States would be unchecked but for artificial difficulties. The 
 people of Canada and of the United States are similar in race, 
 in language, and in habits, and are becoming more so daily. 
 Temporary and accidental circumstances have made Canada 
 and the United States assume a hostile commercial attitude ; but 
 their disputes are the quarrels of lovers, and it is pretty certain 
 that sooner or later the people of the two countries will desire 
 to trade freely with one another, to the infinite advantage of 
 both. It has happened before, and it will happen again. When 
 it happened before, Canada made a treaty by which United 
 States goods were admitted into Canada on better terms than 
 English goods, and England allowed — indeed, could not help 
 allowing — the treaty. There is nothing to prevent such a thing 
 happening again. Indeed, it is of all things the most probable. 
 What, then, would be the feelings excited in Canada if a clause 
 in her tariff bargain with England prevented her from making 
 with the United States a bargain of ten times more importance 
 to her real interests than any bargain she could make with 
 England? Would not such a clause go far to make her seek 
 for complete separation ? 
 
 Similar difficulties might well arise in Australia, if we were 
 to attempt to get any one of her colonies to make a separate 
 bargain with us. Their closest natural commercial relations 
 are with one another, and these they will probably prefer to 
 relations with the mother country. Nay, there have been 
 suggestions of special treaties between some of these colonies 
 and countries in America. 
 
 I have dwelt upon these points, not because I wish to 
 exaggerate or anticipate difficulties which may never arise, but 
 to show how easy it may be, in trying to draw bonds closer, to 
 strain them to snapping. Let us by all means have the utmost 
 possible commercial connection with our colonies, but no such 
 tie as may be felt by either party as a grievance.
 
 68 
 
 FREE TRADE V. FAIR TRADE. 
 
 CONCLUSIONS OF PART I. AS '10 A NEW 
 COLONIAL POLICY. 
 
 The general conclusion to which these considerations lead 
 us is that there is little to be done by legislation or treaty to 
 bring us into closer commercial relations with the colonies. 
 Except, perhaps, in the trifling matter of the wine duties, 
 we have already done all that we can to clear the way on 
 our side. It is for the colonies to play their part. Many 
 of tliem are doing so fairly enough. The others will do so 
 when they feel it to be their interest, without being specially 
 bribed. It is not in our power to do more. Nor is this to be 
 wondered at, when we consider that all which a Government 
 can really do for trade and manufacture is not to impede it. 
 
 All that Fair Traders and Protectionists are urging as to the 
 duty of Governments in providing markets for their people, and 
 other nonsense of a like kind, really means, when it comes to 
 be sifted, that Governments are to check and prevent trade 
 under pretence of guiding it ; that they are not to allow mer- 
 chants and manufacturers to do that which is their interest to 
 do. Such a course it is contrary to our commercial interests 
 to enter upon, and it is much more likely to weaken than to 
 strengthen the political connections of the different parts of tlie 
 empire.
 
 i3art m 
 
 RETALIATION. 
 CHAPTER XVI. 
 
 RETALIATION ON MANUFACTURED GOODS, AS PROPOSED BY FAIR 
 TRADERS, IMPOTENT AND SUICIDAL. 
 
 The second of the two great principles of the Fair Traders is English 
 Retaliation. They desire to impose retaliatory duties on the Retaliation 
 goods of foreign countries which do not admit our goods duty Manufac-" 
 free. tures 
 
 These duties are not to apply to our food imports, which impotent 
 have been dealt with already, nor to imports of raw material, suicidal, 
 but to manufactures only. It is a sufficient practical answer to 
 a proposal of this kind that the weapon is in our hands 
 absolutely inefficacious. Of our imports, ninety per cent, are 
 estimated to be raw materials or food, and ten per cent, only 
 what are called manufactured articles. If we take particular 
 nations, the case is stronger. Our trade with the United States 
 is one-sixth of our whole trade, and their tariff is the most 
 hostile of any ; whilst the interest which is affected by their 
 competition is our most suffering interest. But out of their 
 imports into the United Kingdom, which exceed loo millions, 
 about 2h millions only are manufactures; whilst out of our 
 exports to them 24 J millions are manufactures. Will they not 
 laugh at us ? or, if not disposed to laugh, will they not treat us 
 as they have treated the Canadians, and place still further 
 obstacles on our imports ? 
 
 To France we exported in 1880 upwards of 12 millions' 
 worth of manufactured and half-manufactured goods ; 2^ 
 millions' worth of raw material; and one million's worth of food. 
 From France we imported 23 millions' worth of manufactured 
 and half-manufactured goods, 3 millions' worth of raw materials, 
 and nearly 15.^ millions' worth of food. Here there is more to
 
 70 FREE TRADE 7', FAIR TRADE, 
 
 Retaliation retaliate upon than in the case of the United States, but the 
 M.-\ni?fac^" proportion of manufactures wliich we send to France is greater 
 ti:ics. than the proportion whicli she sends to us. We send her little 
 
 but manufactures, whilst she supplies us largely with food. To 
 Germany we exported in 1880 nearly 14 millions' worth of 
 manufactured and half-manufactured goods, less than 2 millions' 
 Avorth of raw materials, and less than i^ million's worth of food. 
 From Germany we imported in 1880 a little over 4^ millions' 
 worth of manufactured goods ; 3^ millions' worth of raw 
 materials, and 16;^ millions' worth of food. If we are to play a 
 game at who can do most to stop each other's manufactures, it 
 is clear that Germany will have the best of the match. What 
 is true of these countries is true of others. We are par excellence 
 the manufacturing country, and for us to play the game of 
 who can best destroy manufacturing industry is simple suicide. 
 
 CHAPTER XVII. 
 
 PROPOSAL TO TAX MANUFACTURES AXD LEAVE " RAW 
 material" FREE— DIFFICULTY OF THE DISTINCTION. 
 
 But when we are told that raw material must be admitted free, 
 and that manufactures are to be taxed, I should like to ask what 
 distinction can be drawn between these two classes of goods 
 which would justify a difterent treatment ? When I look down 
 the list of so-called raw materials, I see nothing which is not 
 both the produce of some previous labour and the means or 
 material of some further labour ; and when I look down the list 
 of so-called manufactured articles, I find the same thing. I 
 am unable to draw any line between the two, or to find any 
 principle by which to distinguish them. 
 
 If the quantity of labour employed in producing the article is 
 to be the test, the labour employed to produce so-called raw 
 materials may, and often does, far exceed the labour necessary 
 to turn that raw material into a manufactured article. There 
 may be more labour in getting coal, or in growing wool, than 
 in spinning or weaving. If we are to be guided by the 
 operation of the article as a means or a stimulus towards further
 
 PART II. — RETALIATION. 7 1 
 
 production, I am unable to see how the raw produce of the soil Distinc- 
 operates for this purpose more directly or more effectually than [,'g("^,gj^ 
 the article into which it is subsequently converted by human Raw 
 labour. I do not see why the alkali out of which glass or Materials 
 chemicals are made is not as efficient a means of production as factures— "" 
 the salt out of which the alkali is made. Let us take any is it 
 list in which an attempt is made to distinguish between Tenable? 
 raw products and manufactures. We get into difficulties at 
 once. The alkali, for instance, to which I have referred, 
 heads one list of manufactured articles, but it is chiefly 
 useful as a material to be employed in subsequent manu- 
 factures. " Apparel and haberdashery," which come next, 
 are, no doubt, manufactures as complete as it is possible to 
 conceive ; but even here the boots of the 'navvy, the shirt and 
 apron of the operative, the blouse of the French labourer, the 
 jersey of the sailor, or even the neat cloth coat and shirt of the 
 clerk or manager, are as much the means and essential condi- 
 tions of further production as the stone, the iron, or the wool 
 which these persons are employed in manipulating or disposing 
 of. Horses come first in one list of " raw produce ; " but a 
 farm horse is at once the final product of skill in breeding for 
 generations, and is a direct instrument in further production. 
 " Clocks " come first in another list of manufactured articles, 
 and there is certainly no more finished article of human in- 
 genuity than a clock ; but is not a clock the sine qnCi 7ion of every 
 place where productive labour is at work ? Is it not the great 
 economist of time, which is the principal of all factors in pro- 
 duction ? I might go through the list in the same way, pointing 
 out how each article of large or general use is, on the one hand, 
 the result of previous labour, and the means for further labour. 
 Nay, the same thing is true of food also. Food is the means of 
 keeping the human machine going, without which there can be 
 no productive labour ; it is the most obvious, if not the most 
 important, of raw materials ; it is to the man and woman what 
 the coals are to the steam-engine. We admit this when we 
 class food and raw materials together as articles which are not 
 to be taxed, or which are to be taxed more sparingly and 
 cautiously than other things. But, like other raw materials, 
 food is not really more necessary to further production than 
 other articles of general human use. The house in which the 
 artisan lives, the clothes which he wears, the tools which he 
 uses, are no less means and instruments in making the articles
 
 72 FREE TRADE 7'. FAIR TRADF. 
 
 Distinc- which he produces for sale than the food which forms his 
 |io" blood and muscles, the coal which drives his steam-engine, or 
 
 Ra^ " the material of fibre, of wood, or of metal which he is converting 
 Materials into use. We may go farther, and say that the so-called 
 and Manu- luxuries, the tea, sugar, and tobacco, which make life 
 Is it tolerable to himself and his children, are also instruments by 
 
 Tenable? which his powers of production are increased. Nay, we may 
 assert, Avith the most exact truth, that the wine which refreshes 
 the brain of the man of science, the statesman, or the physician, 
 is in the highest degree conducive to the production of wealth. 
 All active and useful human life is one cycle of unintermitted 
 and contemporaneous production and consumption — of pro- 
 duction, in order to procure articles of consumption ; of con- 
 sumption, in order the more effectually to produce. There may, 
 of course, be useless and even mischievous consumption of exces- 
 sive or pernicious luxuries, but these are, economically speaking, 
 a trifle in the vast mass of human consumption ; and there may 
 also be foolish and ill-directed production. But, generally 
 speaking, all human consumption is a direct means of pro- 
 duction ; and this makes me doubt whether there is any real 
 sense in the commonly-received doctrine that it is better, on 
 economical grounds, to tax articles of consumption — that is, 
 articles which are in a fit state to be at once eaten, worn, or 
 otherwise used by man — than articles which he has to do some- 
 thing more to before he can use them. But this is, I am glad 
 to say, a controversy on which I need not enter ; from the Fair 
 Traders I am too glad to accept the admission that raw material 
 is not to be subject to a retaliatory duty ; and only mention 
 the point now, because, if we admit that manufactures are to be 
 taxed, we may find it difficult to stop there. 
 
 CHAPTER XVIII. 
 
 OTHER PROPOSALS FOR RETALIATION. 
 
 Arpments Xhe Retaliation of the Fair Trade League is, as we have seen, 
 
 RetaHa"'^ ° ridiculous from its impotency ; but this does not show that all 
 
 tion. Retaliation would be inefficient, or, if efficient, undesirable. 
 
 Proposals for Retaliation, if once adopted, will not stop where
 
 PART ir. — RETALIATION. 73 
 
 the Fair Traders leave them, and there are arguments in 
 favour of the principle of Retaliation which require a more com- 
 plete answer than is to be found in the impracticability of a given 
 plan. I do not know that these arguments have ever been more 
 fairly, clearly, and vigorously stated than by Lord Salisbury, in Lord 
 his recent speech at Newcastle, on the 12th October, 1881. Sahsbun-at 
 
 TT -J ^ Newcastle 
 
 He said : — 
 
 " I now only wish to say a word with respect to a matter 
 which, perhaps, through being exciting, occupies some con- 
 siderable portion of public attention at the present moment. 
 It has been said that we of the Conservative active party are 
 anxious to return to the state of things existing before 1840 in 
 respect to fiscal matters, and sundry terrible consequences 
 have been deduced from the assertion. I, for one, do not 
 possess the desire, nor do I think that such a return would 
 be for the public welfare ; but it does not do for the Government 
 to. ignore the commercial difficulties under which the country 
 labours by the simple device of accusing their opponents 
 of a desire to return to the state of things to which I 
 have referred. Whenever the evil of the present state of things 
 is pointed out to them, they, instead of replying, call us 
 lunatics, or beat the great tom-tom of Free Trade in order to 
 drown our voices. It is undoubtedly the fact, and I do not 
 think that any one can traverse the statement, that in one 
 respect the apostles of Free Trade thirty-five years ago made a 
 gigantic miscalculation when they said that if the country 
 adopted their principles the rest of the nations of the world 
 would follow their example. (Cheers.) It was repeatedly held 
 out, both by Mr. Cobden and Sir Robert Peel, and undoubt- 
 edly it influenced many minds at the time. I am very far from 
 stating that as their only reason. I do not mean to say that 
 their policy would have been difterent if they had had a 
 difterent belief; but they had the belief, and took every oppor- 
 tunity of communicating it to others, that our example would 
 be followed by other nations of the world. That, I take it, is 
 an undoubted fact in history. Well, that has not been the 
 case. The third of a century has passed by, and all the nations 
 by which we are surrounded have not only not become more 
 Free Trade, but on the whole have become more Protectionist. 
 America, I believe, is more Protectionist ; the Protectionist 
 feeling is rising in France. Both of them, mind you, are 
 complete democracies, so there is no pretence for saying that
 
 74 FREE TRADE 7'. FAIR TRADE. 
 
 this particular form of opinion has been imposed by the ruling 
 classes. They are countries where it is undoubtedly the senti- 
 ment of the people, and nothing else, which governs the 
 conduct of the Government ; and in both these countries the 
 feeling of Protection has increased, and is increasing. In 
 Russia, on the other hand, a despotism of the closest type, still 
 you have the same phenomenon. A feeling of Protection is in- 
 creasing, and the measures of Protection are multiplying. In a 
 kingdom like Germany, with certain constitutional liberties, 
 but ruled undoubtedly by the acutest brain that this century 
 has seen in Europe, you still see this remarkable phenomenon 
 — that the tendency towards Protection is increasing. In our 
 own colonies, where, if anywhere, we ought to have some 
 influence, there, too, unfortunately, the Protectionist feeling is 
 strong, and our own productions are shut out from the markets 
 of our own children. Now, that is a fact which I say it is idle 
 to ignore. It is childish to imagine that our example now, 
 after so many years, will alone have any effect upon these 
 nations. They have their own experience ; they have their 
 own philosophers to teach them. Many of them are, and 
 certainly believe themselves to be, as far advanced in intel- 
 lectual culture as ourselves. What is there to induce them to 
 defer to our judgment, and to follow our example in this 
 respect? If we intend to act upon them, we must find other 
 motives ; and I think we have a right to ask, without pledging 
 ourselves to any opinion until the fiicts are known, that there 
 should be a thorough investigation into the question whether we 
 are now pursuing the right course for the purpose of inducing 
 those other Governments in some degree to lower the terrible 
 wall of tariffs which is shutting out the productions of our 
 industry from the markets of the world. There is no reason 
 that we should pledge ourselves to any particular course until 
 the facts are known. Put if you make a suggestion of this kind, 
 you are immediately told, ' This is Reciprocity and Retaliation, 
 and behind it lurks the shadow of Protection.' Reciprocity 
 and Retaliation ! But what arc these commercial treaties, if 
 they do not involve the principle of Reciprocity ? Sir Charles 
 Dilke will very soon meet the French Minister of Commerce, 
 and they will be talking over the respective products of their 
 respective tariffs, and practically Sir Charles- Dilke will say to 
 the French Minister of Commerce, 'If you will give me this 
 relaxation of duty upon cotton, I will give you this relaxation of 
 
 i
 
 PART II. — RETALIATION. 75 
 
 duty upon wine.' But what is that but Reciprocity ? And Lord 
 when Sir Charles Dilke finds that the French Minister of ^^^^^^^""y- 
 Commerce is difficult to deal with, he will say, ' Well, but if 
 you do not give us this duty, if you do not give us this relaxa- 
 tion upon cotton, I will not give you a relaxation of duty upon 
 wine.' \\'hat is that but Retaliation ? 
 
 "Therefore I say, ever since you adopted the principle of 
 commercial treaties, ever since that memorable date, i860, the 
 principle of what- they are pleased in their own language to 
 term ' Reciprocity and Retaliation,' is conceded. 
 
 " It is merely a question of policy, arising upon the state of 
 facts in each particular case, whether you have the means of 
 any alteration of your tariff which you can with due considera- 
 tion for your own interests adopt, whether you can so do it in 
 the case of the tariff of your neighbour ; and it seems to me that 
 that is a sensible course of conduct to adopt. There is no doubt 
 that by abandoning duties which are useful to you for revenue 
 purposes you confer a great benefit upon foreign countries. Why 
 should you not ask for a price in exchange for that benefit ? 
 Why should you not obtain for your own industries a benefit 
 corresponding to that which you are conferring upon them ? 
 
 " I do not know, until inquiry has been made and oppor- 
 tunities gained of ascertaining, whether it presses either upon 
 the food of our people, or the raw material of our industry, both 
 of which must be held sacred. I do not know what oppor- 
 tunities we may have of exercising this salutary influence upon 
 foreign Powers ; but in spite of any formula, in spite of any cry 
 of Free Trade, if I saw that by raising a duty upon luxuries, or 
 by threatening to raise it, I could exercise a pressure upon foreign 
 Powers, and induce them to lower their tariffs, I should pitch 
 orthodoxy and formulas to the winds and exercise the pressure." 
 
 Now, if I wished to find a strong argument against all tariff 
 bargains, I should point to this speech of Lord Salisbury's. He 
 may exaggerate the sanguine views entertained by Sir R. Peel 
 and Mr. Cobden of the prospects of universal Free Trade ; he 
 may also exaggerate the present tendencies of other countries to 
 Protection ; and the Retaliation he suggests — viz., upon that 
 inappreciable part of our imports which consists of luxuries — 
 is, unless he means to include amongst luxuries the tea, sugar, 
 and tobacco which are the comforts of our working people — as 
 impotent as that of the Fair Traders. 
 
 But, unlike many of the Fair Traders, he states his
 
 76 FREE TRADE 7'. FAIR TRADE. 
 
 case fairly, and he puts in very clear terms the impression 
 which our commercial treaties have made, and are making, on 
 many minds besides his own — an impression from which it is 
 very difiicult to escape, especially for a diplomatist. Our 
 minister at a foreign court will tell you, " Don't trouble me 
 with your arguments ; tell me with what force you will back 
 them." If the Foreign Secretary is to make a bargain, he must 
 have something to bargain with. 
 
 Lord Salisbury may, however, be thought by Free Traders 
 to be a poor economist, and a diplomatist of a very suspicious 
 type ; but he has support where one would least expect it. I 
 have seen arguments not very different in character in a per- 
 fectly unsuspicious quarter. In the Fall Mall Gazette of the Sth 
 and 1 2th August, 1881, were some letters signed X., by an ardent 
 advocate of commercial treaties, in which, after pointing out, 
 first, that such a treaty as Cobden's, which only reduced duties 
 and gave no preferences, differs toto ccclo from such treaties as 
 the Methuen Treaty, which gave a distinct preference and stipu- 
 lated for the m.aintenance of differential duties ; and, secondly, 
 that exports are as important a factor in trade as imports — two 
 facts which no sound Free Trader would for a moment deny — the 
 writer proceeded to draw the conclusion that it is the business 
 of the Government of this, and of every other country, to do as 
 much for its exports as for its imports, and, after dismissing the 
 notion of differential duties of a i)rotective character, suggested 
 a differential duty on wines as a legitimate means of compelling 
 France to admit our exports. A large part of his letters con- 
 sists in the exposure of the fallacy which he supposes the 
 school of Ricardo to commit when they say, "Take care of the 
 imports and the exports will take care of themselves." He points 
 out with perfect truth that a limitation on our exports is as 
 much a limitation on our trade as a limitation on our imports, 
 and he implies that however free our ports may be to foreign 
 imports it will do us little or no good if the hostile tariffs of 
 foreign countries continue to limit our exports. 
 More reck- A notion similar in substance, but much more recklessly ex- 
 '''^*^j^.\'' c pressed, finds its utterance in the constant misrepresentations we 
 liation have lately heard of the views and objects of the authors of our 
 present policy. We are told that what Mr. Ricardo, Mr. Cobden, 
 Sir Robert Peel, and others had in view, as the principal object 
 and result of their Free Trade policy, was the abolition of 
 foreign restrictions on our exports ; that they believed them-
 
 PART II. RETALIATION. 77 
 
 selves, and prophesied to the people, that if we in England 
 would take off our duties, foreign nations would certainly take 
 off theirs ; that in this they deceived and were deceived ; that 
 foreign nations have not followed our example ; and that these 
 short-sighted politicians, were they now with us, would at once 
 admit their mistake and revise their policy. 
 
 Nothing can be more untrue. Certainly the one leading 
 figure amongst them who is still with us, and still vigorous — Lord 
 Grey — tells a very different story. What really happened was 
 this. When Sir Robert Peel had carried his first tariff, and had RealOri-in 
 postponed certain further changes on account, amongst other pj{^^y Qf 
 reasons, of commercial negotiations then in progress, Mr. Ricardo, fighting 
 in two successive years, 1843 ''•^'d 1844,''^ brought forward a fipstiie 
 motion urging the immediate remission of our own duties without -pree iV 
 waiting to see what other nations would do. In the very inter- ports, 
 esting debates upon these motions, some members defended 
 the principle of Reciprocity, and Mr. Disraeli in doing so talked 
 a good deal of characteristic nonsense about the dangers of a 
 drain of bullion, and about the expediency of frightening foreign 
 statesmen by a parade of our Oriental resources, t Sir R. Peel 
 and Mr. Gladstone clearly agreed with Mr. Ricardo in the 
 principle he advocated — a principle on which they subsequently 
 acted, and which Sir R. Peel expressly advocated in his speech 
 of 6th July, 1849 — but objected to its immediate applica- 
 tion, and to the abstract form in which his motion was couched. 
 Mr. Ricardo himself. Lord Grey (then Lord Howick), Mr. 
 Ewart, Mr. C. Villiers, and Mr. Cobden, supported the motion 
 on the ground, which was admitted on all hands to be true, 
 viz., that for 25 years we had been struggling by means of our 
 own duties to obtain reciprocal reductions from other nations, 
 and had failed entirely, a fact which is constantly and con- 
 veniently ignored by the present advocates of Reciprocity. They 
 said, further, that if the great object of this country were to 
 
 * See " Hansard," Vols. 68 of 1843, 73 of 1844. See also Sir R. Peel's 
 speech, 6th July, 1849 (" Hansard," Vol. 106, p. 1429), in which he maintains 
 against Mr. Disraeli that the true weapon with which to fight hostile tariffs is 
 " free imports." This speech is well worth reading now. 
 
 t Since writing the above passage I have read the eulogistic mention of this 
 speech of Mr. Disraeli, in Mr. Cobden's life. My sincere respect for anything 
 Mr. John Morley writes has made me read the speech again ; but having re-read 
 it carefully, I leave the passage as it stands. In differing on this, and subse- 
 quently on another trifling point, it would be ungracious not to express my 
 hearty admiration for the noble monument Mr. Morley has raised to the 
 memory of Cobden.
 
 78 FREE TRADE 7'. FAIR TRADE. 
 
 obtain reductions in foreign tariffs, the best way to effect it 
 would be to reduce our own, to show foreign nations that we 
 believed in our own principles, and to convince them by our 
 own consequent prosperity that our policy was the true one. In 
 their anticipationsof the wisdom of foreign nations, and in their 
 under-estimate of the strength of protected interests, they were 
 perhaps too sanguine. But this was not the only ground, or 
 indeed the real ground, on which they supported the motion. 
 That ground was the principle, true then as now, that whether 
 foreign nations maintain their own duties or not, it is for our 
 interest to abolish ours, and that if we would but do this in our 
 own interest our own trade must prosper, let foreign nations 
 do what they will. And they were right. Their policy was 
 adopted, and our trade did prosper. No one of these distin- 
 guished men doubted, as X. seems to suppose, that foreign pro- 
 tective tariffs are a great impediment to our trade, or that it is 
 most desirable that they should be reduced or repealed. What 
 they said was — "A foreign tariff is one impediment; over that you 
 have no power. Your own high tariff is another and a separate 
 impediment, with an additional and cumulative effect ; over this 
 you have power. Remove the impediment over which you have 
 power, and do not wait for the removal of the further impedi- 
 ment over which you have no power. You will gain much if 
 you do not gain all. Half a loaf is better than no bread." 
 But the consideration of this fundamental question deserves a 
 new chapter. 
 
 CHAPTER XIX. 
 
 IS THERE ANYTHING IN ONE-SIDED FREE TRADE WHICH 
 MAKES A CASE FOR RETALIATION? 
 
 Fallacies in TiiE fallacy by which X. and Lord Salisbury and many others 
 !^!„^o^"" ^^^ misled consists in thinking of a high tariff as a complete 
 barrier, a solid wall, a watertight sluice which allows of no 
 passage. If this were the case, it would be quite true that one high 
 tariff is just as great an impediment to trade as two, and that 
 there is no use in removing one unless you can remove both. 
 If every foreign country were to build an impervious wall round 
 itself, so that no trade could enter, it would not signify how
 
 PART II. — RETALIATION*. 79 
 
 much or how Httle of a wall there may be round England ; no 
 trade could pass either one way or the other. But even in the 
 pre-Huskisson days of absolute legal prohibition, the wall was 
 broken through by the smuggler ; and, in the present day, no 
 nation practises absolute prohibition, even on paper. The meta- 
 phor of a barrier-wall misleads, as metaphors constantly do. 
 If we are to have a metaphor, Lord Palmerston's metaphor of 
 two turnpikes, one at each end of a bridge, each of which offers 
 some obstacle to the traffic, is a much better one. At the present Protective 
 time every nation, however protective in its tendencies, does pe^'mems 
 what it thinks best calculated to promote its own exports, and not 
 therefore cannot destroy but only check its imports, which are barriers, 
 the necessary concomitants of exports. No existing tariff is 
 such as to keep out foreign goods altogether ; each tariff has its 
 weakest point, its lower and less protective duties. Moreover, 
 as a matter of fact, all nations are not protectionist. In many 
 tariffs protection is a secondary or partial object; and in other 
 countries importation is altogether free. There are, therefore, 
 abundant means of export ; there are even abundant channels, 
 often direct, often circuitous and indirect, by which, so long as 
 a protectionist country exports at all, the exports of a free 
 country can reach, and in the nature of things must reach it. 
 Trade will go on, and does go on, in spite of hostile tarififs, 
 although the number of transactions is, in consequence of such 
 tariffs, less than it otherwise might be; and each transaction is, 
 from its very nature, profitable to both parties engaged in it. 
 
 Let us, however, consider a little more carefully what the posi- Position of 
 tion of a nation is which opens its ports whilst other nations are ^^^f*^ 
 shutting theirs ; what our position would be, on the hypothesis country in 
 (which is untrue) that, whilst we retain a Free Trade tariff, all the midst 
 other nations put heavy duties on our goods. I think it can be [gctionist 
 proved that, though we shall not have as much trade absolutely countries. 
 as we should have if other nations were free like ourselves, we 
 shall be better off relatively ; the trade and the production of 
 the world will be less, but we shall have a larger share of it. 
 
 The point, though elementary, is so important that it is Effect of 
 worth while to consider it attentively. Let us first take the Protective 
 simplest case, that of barter between two merchants living beuveen^ 
 in two different countries, and let us think what would be the two 
 effect on their dealings of a tax, imposed in either country Countries 
 on the importation of the commodities in which they deal. °"^' 
 Suppose that A, a Frenchman, makes loo yards of silk in
 
 itriL's 
 
 So FREE TRADE T. FAIR TRAPE. 
 
 t of France, and B, an Englishman, makes loo yards of doth 
 icuvc jj^ England. They exchange these one for the other. Sup- 
 ,en pose that the French Government puts on the English cloth 
 a duty equal to the value of the cloth ; suppose, further, 
 that the cloth is a necessity to the Frenchman, and that 
 it is only to be got from England. The effect of the 
 French duty upon the Frenchman will be, that he will have to 
 l)ay twice as much for the same quantity of cloth as before ; in 
 other words, he will have to pay 200 yards of silk for his 100 
 yards of cloth. Then suppose that the English Government 
 puts on the French silk a duty equal to the value of the silk, 
 and suppose, as before, that the silk is a necessity to the 
 Englishman, and can only be got from France. The effect on 
 the Englishman will be that he will have to pay 200 yards of 
 cloth for his 100 yards of silk. The effect of the two duties 
 combined will be that the Frenchman will have to give 200 
 yards of silk for 100 yards of cloth, and the Englishman will 
 have to give 200 yards of cloth for 100 yards of silk — the extra 
 100 yards of silk and 100 yards of cloth going into the pockets 
 of the respective governments. 
 
 Of course, the real thing will be entirely different ; the 
 goods will not be either necessaries or monopolies ; and the 
 effect of the duties will be to transfer the industries, and, 
 in so doing, to reduce both consumption and production. 
 The effect of the French duty on the Frenchman will be 
 to make the Frenchman buy less English cloth, to make him 
 pay more for it, to make him buy inferior cloth from a French 
 maker, and to make him sell his silk to the French cloth- maker 
 for less than the Englishman would give for it. Its eftect 
 on the Englishman will be to deprive him of the best market 
 for a part of his cloth, to make him buy less French silk, and 
 to make him buy something with the rest of his cloth which is 
 of less value to him than the French silk. 
 
 The further consequence of the English duty on silk 
 to the Englishman will be to make him buy less French silk, 
 to make him pay more for it, to make him buy inferior 
 English silk instead, and to make him sell his cloth to the 
 English silk manufacturer at a less price than the Frenchman 
 would give for it. Its effect on the Frenchman will be to 
 deprive him of his best market for a part of his silk, to make 
 him buy less English cloth, and to make him buy French cloth 
 instead at a higher price.
 
 PART II. — RETALIATION. 8l 
 
 The effect of one duty, supposing the duties still to be Effect of 
 equal, will be as great as that of the other ; they will act Protective 
 cumulatively in transferring English and French industries from beuveen ' 
 what they do best to what they can do less well ; the French two Coun- 
 industry from silk-making to cloth-making, the English in- *"es only, 
 dustry from cloth-making to silk-making. 
 
 The aggregate production of the two parties will be 
 diminished equally by both duties ; and if one duty is taken 
 off, the mischief to both parties will be just one-half what 
 it would be whilst both duties are continued. 
 
 Let us now take the case of two nations who exchange 
 goods with one another ; and let us, after the manner of 
 Bastiat, call one of them Libera and the other Vincta. 
 
 Libera determines to put no duties on the goods of Vincta 
 — Vincta puts a duty of 20 per cent, ad valorem on the goods 
 of Libera. The result will be damaging alike to Libera and 
 Vincta ; Libera will be able to sell less to Vincta, and to buy 
 less from Vincta in return ; Vincta will be able to buy less from 
 Libera, and will be able to sell less to Libera in return. Now, 
 suppose that Libera, irritated by Vincta's conduct, determines 
 to retaliate, and to impose in her turn a tax of 20 per cent, 
 on the goods of Vincta. What will be the result ? Precisely 
 the same as before, only that it will be double and cumulative. 
 Vincta will be able to sell still less to Libera, and to buy less 
 from Libera in return ; Libera will be able to buy still less from 
 Vincta, and to sell still less to Vincta in return. Both duties 
 have had an equal effect in diminishing the buying and selling on 
 both sides. But their action has been cumulative ; the duties 
 imposed by Libera have doubled the loss to each originally 
 caused by the duties imposed by Vincta. Libera has done 
 herself no good, but has done equal mischief to herself and her 
 rival by retaliation. It will even, in this case, clearly be her 
 interest to cease following the example of Vincta, to revert 
 to her original policy, and become Libera again ; and it 
 will not be the less her interest to do so because she is 
 at the same time doing good to Vincta. 
 
 But now let us consider the case of three countries, which Effect of 
 we will call Libera and Vincta No. i and Vincta No. 2. Protective 
 Suppose that they have a triangular trade with one another, ^Jtweeir 
 and that these three trades (that of Libera with Vincta i, that three or 
 of Libera with Vincta 2, and that of Vincta i with Vincta 2) "lore 
 are each equal in amount, and that each of them is represented ^°'^"'"^^- 
 G
 
 82 
 
 FREE TRADE 7'. FAIR TRADK. 
 
 by 6. Then i8 will represent the aggregate trade of all three, 
 and each will possess an equal share of it, which will be repre- 
 sented by 6. Now suppose that Vincta i and Vincta 2 each 
 put equally heavy duties on their respective imports, Libera 
 remaining free as before. The trade between Libera and each 
 of the others will be subject to one set of duties, but the trade 
 of Vincta i and Vincta 2 with each other will be subject to 
 two sets of duties. The aggregate exchange, and with the 
 exchange the production of all three countries, will be diminished, 
 but not in equal proportions. The trade between Vincta No. i 
 and Vincta No. 2 will be diminished in a larger proportion 
 than the trade of each with Libera. If we suppose that each 
 set of duties has the effect of diminishing the trade on which it 
 is charged by an amount represented by i, the whole diminu- 
 tion will be equal to 4, and the aggregate trade of the three 
 countries will now be represented by 14 instead of 18. Of this 
 diminution, i will fall on the trade between Libera and Vincta 
 No. I, which will now be 5 instead of 6 ; i on the trade between 
 Libera and Vincta No. 2, which will also be 5 ; and two on the 
 trade between Vincta No. i and Vincta No. 2, which will now 
 be 4. Each country will, of course, have half the trade between 
 itself and each of its neighbours, and the whole trade will now 
 be divided as follows : — Libera will have 5 instead of 6 ; Vincta 
 No. I and Vincta No. 2 will each have 4 instead of 6. The 
 following diagram will make this clear : — 
 
 Before duties 
 
 V 2 
 
 V I 
 
 After duties 
 
 \ 2 
 
 In the same way it may be shown that if of three countries 
 trading with one another under three tariffs equally protective, 
 one does away with Protection, the production and trade of all 
 will be increased, but the largest share of the increased trade 
 will fall to the one which opens its ports. When she opens her 
 ports she must do good to her neighbours as well as to herself
 
 PART II. — RETALIATION. 83 
 
 though not SO much good — a thing which it is important to Effect of 
 remember in examining the consequences of adopting a Free Protective 
 Trade poHcy. Its adoption by one country is followed by an beuveen^ 
 increase of the trade of other countries as well as of her own, three or 
 though her own trade reaps the greatest benefit. "^o^e 
 
 I am not very fond of illustrations of this kind. They are °"" "^^' 
 apt to appear to be mathematical demonstrations, when they 
 are really only rude and abstract illustrations of one of the 
 many elements which go to make up the infinitely complex 
 and delicate conditions of human business. But taken merely 
 as an illustration, I believe the above formula represents a 
 general truth. So far as artificial restrictions are concerned, TheNation 
 and it is only with these we are now dealing, the country which "'^'.^h re- 
 keeps Its own ports open whilst the ports of other countries are will get the 
 shut will not do as much trade as if the ports of all were open, largest 
 but of the reduced trade which is left by the restrictions it wilj fu^^^j 
 do a larger share. If England keeps her ports open whilst the 
 United States, France, Germany, Italy, and other countries 
 shut theirs, the aggregate trade of all of them, and even the 
 actual amount of England's share, will be less than if all of 
 them were open, but her share of what is left will be greater 
 than that of the others. It is to her open markets rather than 
 to those of the closed countries that each foreign country will 
 prefer to export, and return trade is apt to follow in the same 
 channel. To her will come raw materials, half-manufactured 
 goods, food, clothing, everything which aids production directly 
 or indirectly. No market is likely to be so closed against her 
 but that she will be able to get something into it, and in doing 
 so she will, by her command of the materials and instruments 
 of production, be better able to compete than her rivals, who 
 have made the materials and instruments of production dear. 
 To all open neutral markets, and they are many, she will have 
 full access. In all neutral markets, open or closed by duties, 
 she will have an advantage. Her open market will attract 
 imports; her command of all that is needed for production will 
 give comparative cheapness to her exports. She will lose 
 absolutely some of the direct trade with her Protectionist rivals 
 which she might have had if it were not for their duties, but they 
 will lose that trade also, and she will have advantages in com- 
 peting with them in other markets which they will not have.
 
 S4 
 
 FREE TRADE V. FAIR TRADE. 
 
 CHAPTER XX. 
 
 ENGLISH TRADE BEFORE i860. 
 
 It is not an easy thing to prove any truth of this kind from 
 statistics of actual facts, for it is very difficult to find a test-case in 
 which all the facts are known, and from which all foreign elements 
 can be eliminated, but in the facts so often cited by Free Traders 
 we find an approach to an illustration if not to a proof 
 
 From the time of the end of the great war in 1815 to the 
 time of Sir R. Peel's tariff reforms, England was first a Prohibi- 
 tive and afterwards a Protectionist country. In 1842 the first 
 great reductions of duty were made. In 1845 followed a great 
 further reduction. In 1846 the Corn-law Bill was passed, and 
 the corn duties came to an end in 1849. ^^ ^^'^^ same year the 
 navigation laws were repealed. In 1853 Mr. Gladstone's first 
 budget made large additional reductions, which were continued 
 more or less in each successive year until i860, when the 
 reductions incidental to the French treaty brought our tariff to 
 its present simple condition, with the exception of the repeal 
 of the sugar duty, which took place in 1874. 
 
 If, therefore, we can compare the period of Protection in 
 England with the period of Free Trade which immediately 
 followed Sir R. Peel's reforms, and if we find that after these 
 reforms had taken effect, and before i860, when the French 
 treaty was made, there was a great burst of activity in England, 
 we have some evidence that reduction of Protective duties in 
 England alone, and without reduction on the part of other 
 nations, resulted in a great increase of English trade, the effects 
 of which are seen in the statistics of our exports. 
 
 Our statistics of exports of domestic produce, which are the 
 only statistics on which we can rely for the earlier years of the 
 century, afford such a test. These averaged per annum from 
 
 1821 to 1825 
 
 
 . about 37 millions. 
 
 1826 to 1830 
 
 
 • .. 36 „ 
 
 183 1 to 1835 
 
 
 
 , 40 
 
 1836 to 1840 
 
 
 
 , 50 
 
 1841 to 1845 
 
 
 
 . 54 
 
 1846 to 1850 
 
 
 
 , 61 
 
 1851 to 1855 
 
 
 
 . 89 .. 
 
 1856 to i860 
 
 
 
 , 124
 
 PART II. — RETALIATION. 85 
 
 thus showing a large and continuous increase as the successive 
 instalments of Free Trade came into full operation. I am aware 
 that there were other factors at work during this period, and 
 those who wish to see what can be said about them should turn 
 to Mr. Gladstone's article in the Nitieteenth Century of February, 
 1880. But the above figures show conclusively that an out- 
 burst of successful exportation was concurrent with the installa- 
 tion of a Free Trade policy in England, and with the mainte- 
 nance of restrictive tariffs abroad. 
 
 CHAPTER XXI. 
 
 ENGLISH TRADE SINCE 1860. 
 
 But it will be said in reply, " All this happened long ago, and Alleged 
 many things have happened since then. Foreign nations have cjlcum- 
 learned from us to manufacture and to rival us not only in their stances 
 own markets but in the markets of the world. Protective tariffs since i860, 
 in this state of things will be more dangerous to us than they 
 ever were before, for we have not only the barriers of hostile 
 tariffs to cross, but shall find within them rivals whom we 
 cannot expect to beat. As a matter of fact, the trade of other 
 nations has progressed as fast or faster than our own. The 
 United States have the most Protective tariff" in the world ; but 
 their trade, as measured by their exports and imports, and their 
 general prosperity, has grow^n faster than our own. France, 
 with her tariff less Protectionist than the United States, but 
 still Protective in a high degree, is the marvel of the world in 
 the way she has recovered from the crushing blows of the 
 German war. Germany has not found her Protective tariff' 
 destroy her trade. The imports and exports of Canada have 
 increased since she adopted her high duties, and Protectionist 
 Victoria runs a fair race with Free-trade New South Wales, 
 Above all, are not our exports diminishing while our imports are 
 increasing? Have we not had the longest period of com- 
 mercial depression ever known ? and is there any reason for 
 supposing that we shall so far recover from it as to attain again 
 our former prosperity ? "
 
 86 FREE TRADE 7'. FAIR TRADE. 
 
 I h(- Woriii Tq (\{i^ I propose to reply at length in the following 
 I {^',,,*° ^^*j[ cluiptcrs. Uut in the first instance I wish to observe 
 1 \ -i^. that it is a mistake to suppose that the world is, on the 
 
 whole, more protective than or even as protective as it was. 
 ! In the earlier part of this century, nations were prohibi- 
 
 tive where they are now Protectionist. Prohibition pure 
 and simple, common enough before i860, scarcely exists 
 now. Many countries — e.g., Holland, Belgium, Norway and 
 Sweden — have since i860 adopted a policy approaching our 
 own. Nowhere in Europe are tariffs now as higii as they were 
 before i860. The United Slates and some of our own 
 Colonies are the only countries where they are higher. But, 
 secondly, be the tariffs what they may, our freedom still gives 
 us an advantage. We can and do export, even to the most 
 Protectionist countries, manufactures which they are trying to 
 keep out, and we must do so as long as they burden their own 
 industries by a Protective system, and seek at the same time to 
 sell their raw produce to us. In neutral markets, of which 
 there must always be many, we have enormous advantages in 
 our free tariff. Our materials come to us free, and our people 
 live on untaxed food. 
 
 CHAPTER XXII. 
 
 rf WHAT FREE TRADE MEANS, AND WHAT Ff CANNOT DO. 
 
 Free Trade ^-j- ii^q same time it must be remembered what Free Trade 
 create ; it ^^i ^^^"-^ what are its limits. It is merely the unshackling of 
 can only powers which have an independent existence. It can produce 
 1^,^^'^ nothing ; it can create no material substance in nature ; it can 
 
 -Man free, beget no positive qualities in man. All it can do, and that all 
 is much, is to leave the powers of nature and of man to pro- 
 duce whatever it is in them to produce unchecked by human 
 restrictions. Free Trade cannot make the maize and the 
 vine grow in t^ngland ; it cannot make our sands and clays 
 yield wheat as freely as the virgin soil of the prairies ; it cannot 
 endow the negro and the Hindoo with the ingenuity and thrift 
 of the Frenchman, or the brain and arm of the Anglo-Saxon ; 
 but it can ensure that each shall be allowed to yield and
 
 PART II, — RETALIATION. 87 
 
 do whatever it is best fitted for yielding and doing. Free 
 Traders have been much to blame for attributing to Free Trade 
 consequences which have probably arisen from many causes, 
 and they are now paying the penalty of their exaggerations. 
 It is idle to expect that England shall produce everything, 
 or even that she shall have a monopoly of manufactures. 
 Other countries have their own special advantages of soil, 
 of climate, and character, which will enable them to do many 
 things better than England. The true test of the value of True test 
 Free Trade to England, or to any other country, is not whether ^^^^l^ 
 she is progressing faster, or even doing a larger trade than 
 another, but whether she is doing better herself with Free 
 Trade than she would do without it ; and whether, in her 
 relation to other nations which are not Free Traders, she or 
 they derive the greater benefit from their respective com- 
 mercial systems. Tried by these tests, we need not fear the 
 comjDarison. 
 
 CHAPTER XXIII. 
 
 RELATION OF THE PROSPERITV OF OTHER NATIONS TO 
 OUR OWN. 
 
 Before attempting to prove anything by facts and figures, Our Trade 
 let us be on our guard against a mistake, by which our ^^^ °"'y 
 Protectionist friends arc constantly leading us into pitfalls, making^the 
 It is a very important and a very dangerous mistake, for it Trade of 
 involves the very principle which lies at the bottom of the ?}^^F 
 Free Trade controversy. To read Protectionist literature, one grow too. 
 would imagine that no nation could thrive except at the 
 expense of another; that trade, at any rate between nations, 
 is a sort of betting or gambling game, where the gain of one is 
 the loss of another. If the list of French exports grows as ours 
 grows, still more if it increases by a percentage faster than 
 our own, we are in danger. If the American export account 
 appears to exceed our own, we are lost, and so on. Unless 
 our sale list keeps far ahead of and grows faster than that of all 
 other nations, we are losing our position, and dwindling among 
 the races of mankind. But the truth is, that trade is reciprocal :
 
 88 FREE TRADE V. FAIR TRADE. 
 
 '• Our Trade our trade cannot grow witliout making the trade of other 
 can only nations grow too. Every act of trade is a sale by one man 
 maidn/tiie ^"^^ ^ purchase by another, and every such a sale and purchase 
 Tracic^of involves a second purchase by the first man and sale by the last. 
 Every act of trade is an act of barter — or, rather, one-half of an 
 act of barter. Except in the case of transfers of goods made to 
 pay existing debts, every sale by an Englishman to a Frenchman 
 involves a sale direct or indirect by a Frenchman to an English- 
 man. ICvery English export to France involves a French import 
 from England, a French export on account of England and an 
 English import on account of France. And the whole transac- 
 tion is equally a gain to both traders and to both countries. 
 An increase in the English export list, arising from the removal 
 of our own restrictions, necessitates an equal and corresponding 
 increase in the French export list ; and the increase in the 
 French exports, which follows the removal of our restrictions, 
 is the proof and consequence of an increase in English trade. 
 We cannot do good to ourselves without doing good to our 
 neighbour. Nay, if we are doing much the larger trade of the 
 two, it may very well happen that by removing some artificial 
 restrictions which we have placed on our trade with him, we 
 may arrive at the result of increasing our neighbour's trade by 
 a percentage on his trade greater than the percentage by which 
 we increase our own — a catastrophe which excites the liveliest 
 alarm in the minds of those who think the infant of two years 
 lives faster than the youth of twenty, because in one year the 
 infant has doubled his age, whilst the youth has added only 
 one-twentieth to his. 
 
 It would be seen to be the height of absurdity if a manu- 
 facturer, a merchant, a farmer were to look on the prosperity 
 of his customers as signs of his own decay. Conceive the 
 village baker saying to the shoemaker, " You are making too 
 much by my custom ; you have enlarged your shop, you are 
 taking an apprentice : you eat more of my bread, it is true, 
 but I cannot bear to see you so rich. I shall do without 
 shoes, and go barefoot, in order that your balance may be less 
 at the end of the year." And yet this is the spirit in which we 
 often look at foreign statistics. The very growth in them 
 which we envy is often the necessary result of the increase of 
 our own trade, which, again, is the result of our own free 
 policy. When we reduced our tariff between 1840 and 
 i860, we increased our own exports and imports; but we
 
 PART It. — RETALIATION. 89 
 
 increased those of America and Germany and France at the 
 same time. 
 
 Consequently, in comparing national statistics, the question 
 is not whether we increase faster than or as fast as other 
 nations, though this question may often be answered in the 
 affirmative, but does our Free system enable us to do trade 
 with other nations which we should not do without it, and 
 does it enable us to do trade from which they cut themselves off 
 by a' system of Protection ? 
 
 In saying that trade is necessarily a mutual benefit, I do Competi- 
 not forget Competition, or the partial and local suffering which ^lo"- 
 it occasionally causes. Competition becomes wider, if not 
 more severe, as communication extends. But competition is 
 one form of a higher law, of which in this case we can see the 
 beneficent results, and which neither men nor nations can dis- 
 regard with impunity. Free Trade cheerfully obeys this law ; 
 it has regard to sellers who ivant to sell what other people 
 ' want to buy, and to buyers who want to buy what other 
 people zcant to sell. Protection disregards these two useful 
 classes, and tries to encourage at their expense the sellers who 
 want to sell what nobody wa?its to buy. If in the race of 
 competition we were entirely thrown out ; if, whilst other 
 nations were prospering, our forges were extinguished, our 
 looms idle, our pauperism on the increase, and our consump- 
 tion seriously diminishing, it would be time, not to reverse our 
 policy, but to reconsider our position. But whilst the very 
 opposite of this is the case, it is the height of folly to look with 
 jealousy on the growing wealth of other nations who can sell 
 what we want to buy, and buy what we want to sell. 
 
 CHAPTER XXIV. 
 
 RECENT COMMERCIAL DEPRESSION. 
 
 We have already seen what an impetus our trade received in Burden of 
 the period between 1840 and i860. We know also how much Proof lies 
 
 ■t^ r-r^ii r ,on tliose 
 
 the trade of France, as well as of Fngland, grew after the who call for 
 treaty of i860 ; and we may fairly ask our opponents, who are Change of 
 calling for a reversal of the policy which produced those °^^ "^^'
 
 9° 
 
 FREE TRADE 
 
 FAIR TRADE. 
 
 benefits, to show not only tliat we have since that time been 
 deprived of them, but tliat we should not have suffered that 
 loss if we had not been Free Traders, ^\'e have a right to 
 call upon them to define the specific evil of which they com- 
 plain, and then to prove that it is due to Free Trade. I need 
 not say that no such definition, no such proof, is forthcoming, 
 and we are left with nothing but a vague shadow to fight with. 
 
 Let us, however, take such facts as we can lay hold of, and 
 see how far they bear out the notion that we have lost our 
 markets in the world. 
 
 Let us take first of all the recent commercial depression, 
 and let us admit that our exports, as measured in nominal 
 values, have considerably diminished since those roaring years 
 of prosperity, 1872 and 1873. They were 256 and 255 millions 
 in those years, and 191 and 223 millions in 1879 and 1880. 
 They are now rising again, but are not yet equal in nominal 
 value to those of 1872. Let us admit, too, that this decrease 
 of exports has been the sign and result of a real depression, 
 and that both profits and wages have decreased since those 
 so-called prosperous years. This in itself has nothing to do 
 with the question at issue, unless it can be shown to arise from 
 a permanent loss of market for our manufactures. Nothing 
 whatever of the kind has been shown, or can be shown. But it 
 can be shown that the prosperity of the earlier years of the 
 decade is exaggerated ; that the depression is exaggerated also; 
 and that there are ample causes to account both for one and 
 the other without assuming any falling off in the general demand 
 for or supply of English goods. 
 
 The prosperity of 1872 and 1873 ^^^ been immensely 
 exaggerated. All persons engaged in producing coal and iron 
 made, no doubt, enormous profits, but they were led by those 
 profits into an extravagant expenditure, partly on personal 
 expenses and luxuries, but still more on plant and machinery 
 for increasing the output, which has flooded the market with 
 excessive supply, and from which no adequate return has yet 
 been received. This expenditure of capital in fixed and, at 
 first, unremunerative investments is one cause of subsequent 
 depression. But whilst coal and iron masters made fortunes 
 in those years, manufacturers and others who had to use coal 
 and iron had to bear heavy outgoings, and their profits were 
 reduced accordingly. Prices being high all round, people with 
 fixed incomes suffered accordingly. Even the high wages
 
 PART II. — RETALIATION. 9 I 
 
 of the time went less far than lower wages do when prices 
 are lower. A great deal of the prosperity was apparent rather 
 than real. 
 
 The statistics made the exports appear larger than they Statistic . 
 really were, because prices Avere so high. The quantities of ^""'^^ i . i 
 goods exported, and the labour necessary to produce them, leading.^ 
 were as large in the subsequent years of depression as they 
 had been in the years of inflation, but appear to be less because 
 prices are so much lower. The exports of British produce were 
 255 millions in 1873, and 223 millions in 1880. If the exports 
 of 1880 were valued at the prices of 1873 they would be 311 
 millions, or the largest on record. 
 
 Imported raw material, e.g., cotton and wool, was much Prices of 
 dearer in the period of inflation than in the subsequent period t^'^j!]^i^''^" 
 of depression, and consequently that portion of the exports 
 which is due to British labour and capital differed in the two 
 periods much less than appears at first sight by the figures of 
 the total exports. For instance, the raw cotton imported in 
 1873 was about the same in quantity as the raw cotton 
 imported in 1879. But the raw cotton used in our manufac- 
 tures exported cost us 14 millions more in 1873 than the same 
 quantity cost us in 1879. 
 
 The prices and exports of the inflated years were due to Teinporary 
 causes which were temporary and accidental, and brought with Causes of 
 them a necessary reaction. Amongst other causes may be " ^''^n. 
 mentioned : — 
 
 Expenditure of capital in this country on plant and machinery, 
 not even yet fully reproductive. 
 
 Investments of EngHsh capital abroad, some of which were 
 wholly unproductive — e.g., the bad foreign loans ; and some of 
 which were not immediately productive, e.g., American rail- 
 ways, but which are now in various ways bringing us a large 
 return of imports. 
 
 Advances made to assist France in paying the German 
 indemnity, which caused a large export from France and 
 England to Germany at the time, and large exports from 
 France to England and to Germany at a later time. I have 
 given the figures which illustrate this process in the Tables VIII., 
 IX., and X. in the Appendix. 
 
 All these causes have little to do with the permanent 
 demand for goods ; all of them largely increased our exports at 
 tlie time ; some of them proved in the end losses, whilst others
 
 ()2 FREE TRADE 7'. FAIR TRADE. 
 
 liavc hclj^ed lliat increase in our subsequent imports which 
 Fair Traders seem to dread even more than losses. The infla- 
 tion, as well as the depression, is, tlierefore, fully accounted 
 for without any reference to closed markets or decrease in 
 permanent demand. 
 i,argeEx- It is a complete mistake to suppose that extraordinarily 
 H^ghPriccs ^^^'i^ cxports, very high prices, and a great demand for labour 
 not neccs- are necessarily signs of great and permanent prosperity ; they 
 ^^/p^. ^^^^^ ^^^ ^^^y signs of great activity. They may be caused by a 
 perity!^ continuous demand, and by good and reproductive invest- 
 ments of capital, in which case they are elements of permanent 
 prosperity. But they may be caused by bad investments, by 
 payment of debt, or by unproductive expenditure on war, or by 
 other causes which may lead to absolute loss. If I employ a 
 thousand men to dig a hole and fill it up again, I shall cause 
 high wages, high prices, and great prosperity in my neighbour- 
 hood for a time ; but my capital will be lost, and when the 
 work is at an end there will be a sad reaction and relapse. 
 These are very elementary truths, but they seem to be forgotten 
 by many popular expounders of statistics. 
 
 CHAPTER XXV. 
 
 EFFECT OF BAD HARVESTS. 
 
 Losses of That the farmers have suffered severely during the last five 
 K-irmers qj. g|^ years, there can be no doubt. The amount of their 
 
 due to four ,.•'.' . , , , 
 
 causes : losses It IS not casy to estnnate ; but competent observers have 
 
 I, Rise of calculated that, if their present condition, arising from the 
 
 ^^Rise of losses of the last six years, is compared with their condition ten 
 
 Wages ; years ago, they must be the worse by a sum approaching 200 
 
 3, Lowered millions, or, taking it by the year, 30 millions a year. Whatever 
 
 4,'^Deficient ^^ ^^^^ ^^""^ ^■^^s lost by them, it is due to several factors, of 
 
 Produc- which bad harvests is only one. A rise in rents — which had 
 
 tion. been going on long before the beginning of the decade, and 
 
 which continued until 1872-73 — an increase in the cost of 
 
 labour, and a heavy fall in the price of agricultural produce, 
 
 owing to foreign competition, are other factors. Of these four
 
 PART II. — RETALIATION, 93 
 
 factors, the rise of rents, and the rise of labour — a most uncer- 
 tain item — have been estimated to account for something less 
 than one-third of the whole loss, leaving more than two-thirds of 
 the whole loss to the two factors of bad harvests and lowered 
 prices. In what proportion it should be divided between these 
 two factors, is a matter of controversy. Some persons would 
 attribute the larger proportion to the bad harvests ; others think 
 that this has had a much smaller effect than lowered prices ; 
 but that both factors have had a great effect in causing loss to 
 the farmers, all agree. 
 
 Upon the questions of what is the total amount of loss. First three 
 and in what proportions it is to be attributed to each of these ^ '"^^ ^° 
 factors, which will probably be the subject of much dis- interns" 
 cussion, I will not enter ; the important point for our present not to the 
 purpose is that it is only that portion of the farmer's loss whoieCom- 
 which is due to bad harvests which is a pure economical 
 loss to the country. The rise of rent goes into the land- 
 lord's pocket ; the rise of wages to the labourer ; and if the 
 farmer loses by the substitution of cheaper food from abroad, 
 the consumers of that food gain in lowered prices. The 
 present agricultural depression has, consequently, been con- 
 fined, to a great extent, to the farming and landowning classes. 
 Farmers have suffered much, rents have been remitted or 
 lowered, but the population generally have been little affected, 
 and trade has begun to revive during the worst times of agri- 
 culture. For the first time since the repeal of the Corn Laws, 
 foreign competition, in supplying food to our people, has been 
 unaccompanied by such a rise in demand as to compensate, 
 and more than compensate, the English agriculturist. Even 
 now it is doubtful whether the recent fall in prices will have as 
 great an effect in lowering the letting value of land as the in- 
 creased demand for food, consequent on Free Trade, has had 
 in raising it in former years. 
 
 So far, therefore, as lower prices are concerned, the nation what is the 
 is not a loser. The loss of the farmer and landowner is the effect of 
 gain of the rest of the people. But it is worth while to con- Production 
 sider what, under a system of Free Trade, is the effect on the on entire 
 welfare of the entire community of so much of the farmer's loss ^°'": ^ 
 as is really due to a bad harvest. That it is a loss to the'"""'^' 
 agricultural interests, and consequently to the community, 
 which includes those interests, there is no doubt ; but to what 
 extent does it affect the large majority of the population, who
 
 94 FRKE TRADE ?'. FAIR TRADE. 
 
 Effect of are neither farmers nor landowners ? The loss which they suffer 
 bad Har- hag, I bclicvc, been both exaggerated and understated. In one 
 whole of our anli-frce-trade journals 1 find the following passage : — 
 
 torn- " Mr. Bright explains the depression of trade by the loss of 
 
 munity. niillions through the insufficiency of harvests, and the inability 
 of all persons interested in agriculture to make their accus- 
 tomed purchases. 
 
 "But the Free Traders denied this. They said that foreign 
 corn would pour in, and must be paid for, and would bring 
 about a profitable exportation of non-agricultural products." 
 
 Whether the Free Traders said this or not, I do not know. 
 But the real state of the case seems to be as follows : — 
 
 Suppose that there is a deficiency of lo million quarters — 
 worth, say, 20 million pounds. The agricultural interest will lose 
 this sum, and will be actually so much the poorer. They will 
 be unable to exchange their corn for non-agricultural products, 
 and, so far, trade will be injured. I'he argument above referred 
 to as the argument of the Free Traders, assumes that the same 
 quantity of corn must be purchased abroad at the same price 
 as would have been paid for the corn produced at home, and 
 that the same quantity of non-agricultural produce must be 
 exported to pay for it ; and that, if so, manufacture and trade 
 will not suffer on the whole. But the above assumption is not 
 strictly accurate, as the following considerations will show : — 
 
 1. Supposing the conditions of production abroad to remain 
 the same, the corn brought from abroad will necessarily cost 
 rather more than the home-grown corn would have cost, and 
 the goods sent to pay for it will have to pay freight and ex- 
 penses. This loss will fall on the whole community. If, 
 indeed, as has been recently the case with ourselves, the im- 
 porters of corn are also the carriers, the freight will return into 
 the pocket of the nation. 
 
 2. The course of trade will be deranged, and this will be a 
 loss to the manufacturer as well as to the agriculturist. 
 
 3. The foreign purchaser will not want so much of the 
 same things as the home purchaser, and will probably have 
 to be tempted by a lower price. Fie may want some things 
 very much, as the United States wanted iron for railways in 
 18S0. In that case, the price of iron would go up in England, 
 but the price of other manufactures would go down. 
 
 4. The demand for corn will be large and immediate. Bills 
 of America on England will be at a discount. Bills of England
 
 PART ir.— RETALIATION. 95 
 
 on America will be at a premium. The former will be in 
 excess. There will be an immediate profit to America on 
 the business, till the balance is redressed by the exports to 
 America. 
 
 Consequently, in their different ways, the trading and 
 manufacturing interests of England, as well as the agricultural 
 interest, must suffer from our bad harvests ; but their suffer- 
 ing is comparatively small ; and under present circumstances 
 is largely compensated, if not more than compensated, by the 
 low prices of Foreign food. What their suffering would be if 
 Foreign food were excluded, or raised in price by high duties, 
 it is, in the present state of our population and of their employ- 
 ment, frightful to contemplate. 
 
 CHAPTER XXVI. 
 
 EXCESS OF IMPORTS. 
 
 Another subject of panic on which an infinite quantity of Excess of 
 nonsense has been talked, is the recent excess of imports over "^^° 
 exports. This nonsense has been so often and so fully ex- 
 posed that it is unnecessary to repeat in detail the many 
 arguments which show that our imports are large, because they 
 include the profits of our present trade, and of our past 
 savings. But it may be desirable to state the outhnes of l.mperfec- 
 the case shortly, premising that the incompleteness of our s°adsticsas 
 statistical records makes error easy and exactness impossible, statement 
 for, not only do our statistics of exports omit much which is of Balance 
 really produced and sent out of the country, but all attempts 
 to strike an exact balance of imports and exports are confused 
 and baffled by investments, and by the traffic in securities. 
 We know that all exports of goods are made either in exchange 
 for the imports of other goods or bullion, or by way of loan to 
 be repaid hereafter by imports — and we know that imports 
 are made either in exchange for goods or bullion, with the 
 necessary additions for freight and profit, or by way of repay- 
 ment of the principal or interest of loans which we have formerly 
 made. But we do not know how much is due to each of these 
 causes, and we cannot, therefore, strike an accurate balance.
 
 96 
 
 FREE TRADE 7'. FAIR TRADE. 
 
 Excess of 
 Imports. 
 
 We do not know the exact state of our debtor and creditor 
 account with foreign countries. The difficulty is increased by 
 the fact that securities arc now used as a sort of international 
 cash, and are transferred from country to country, not as per- 
 manent investments, but in place of bullion to settle the 
 balance of accounts. In consequence there is large room for 
 speculation and for error. 
 
 But all economists agree that we are a largely lending 
 country, and that we have enormous investments abroad, of 
 which the interest and profit are daily returning to us in the 
 shape of imports. The case may be put shortly as follows : — 
 
 The excess of imports over exports in 1880 was 
 
 Imports 
 Exports 
 
 ^•4 1 1,229,565 
 286,414,466 
 
 ^124,^15,099 
 
 The amount of English capital constantly employed 
 abroad in private trade and in permanent investments, 
 including Stock Exchange securities, private advances, property 
 owned abroad by Englishmen, British shipping, British 
 owned cargoes, and other British earnings abroad, has been 
 estimated by competent statisticians at from 1,500 to 2,000 
 millions. Taking the lower figure, the interest or profit 
 upon it, at 5 per cent., would be 75 millions, and at the higher 
 figure, 100 millions. But a large proportion of this amount 
 being employed in active business, would bring in much more 
 than 5 per cent, profit, probably not less than 10 per cent. 
 Supposing one-quarter to bring in that interest, we should 
 have, as the income of 1,500 millions capital, 94 millions; 
 for the income of 2,000 millions capital, 125 millions. The 
 former amount is about three-fourths of, and the latter equals, 
 the excess of imports over exports. But besides this, there is 
 the question of freights. A very large proportion of the trade of 
 the United Kingdom is carried in English ships, and these ships 
 also carry a large proportion of the trade of the world which 
 does not come to England. This is, in fact, an export of 
 highly-skilled English labour and capital which does not appear 
 in the export returns, and considering that it includes not only 
 the interest on the capital invested in the ships, but wages, pro- 
 visions, coals, port expenses, repairs, depreciation, and insurance ; 
 and that the value of English shipping employed in the foreign
 
 PART II. — RETALIATION. 97 
 
 trade is estimated at considerably more than loo millions Ouigoini; 
 sterling, the amount to be added to our exports on this account °" ^hips. 
 must be very large. Add to this the ships built for foreigners, 
 amounting in 1880 to 70,000 tons — chiefly steam ships — the 
 ships repaired for foreigners and the ships sold to foreigners, 
 amounting to 75,000 of sailing and 36,000 of steam tonnage 
 worth altogether several millions, which do not appear in 
 our list of exports. All these outgoings, except the small 
 part spent abroad, with the profits, must either return to 
 this country in the shape of imports, or be invested abroad. 
 From all I can learn, I believe that 50 millions is too 
 low an estimate of the amount of unseen exports, which 
 should be added on this account to the total of exports 
 visible in our statistical returns. In addition, there are the 
 commissions and other charges to agents in this country, 
 connected with the carriage of goods from country to country, 
 which are analogous in their nature to the charges of the ship- 
 owners for conveying goods, all of which appear in our accounts 
 of imports, but none of which appear in the list of exports. 
 If there is any truth in the above figures, not only is the excess 
 of imports over exports accounted for, but there is really a 
 large surplus of imports due to us, which can only be accounted 
 for by supposing that we are still investing large amounts of our 
 savings in foreign countries and in the colonies. 
 
 We need not, therefore, be afraid either that we are con- 
 suming the realised earnings of past generations, or that we are 
 ceasing to be able to earn. Though receiving more, we are 
 still earning ; and w-e may consume in confidence, because v.-e 
 produce in abundance. 
 
 I cannot finish this chapter better than with Cobden's own 
 words * : — 
 
 " Now, we are met by the monopolists with this objection : Cobden's 
 —If you have a Free Trade in corn, foreigners will send you lustration 
 their wheat here, but they will take nothing in return. The of import; 
 argument employed, in fact, amounts to this, if it amounts to and Drain 
 anything— that they will give us their corn for nothing. I °^ *^°''^' 
 know not what can exceed the absurdity of these men if they 
 be honest, or their shallow and transparent knavery if they be 
 dishonest, in putting forward such an argument as that. If 
 there be a child here, I will give him a lesson which will make 
 
 * See " Cobden's Speeches," p. 63. Speech in London Sth February, 1S44. 
 H
 
 98 FREE TRADE 7'. FAIR 1 RADE. 
 
 him able to go home and laugh to scorn those who talk about 
 Keciprocity, and induce him to make fools' caps and bonfires of 
 the articles in the Mornt'/iir j\^st or Herald. Now, I will illus- 
 trate that i)oint. I will take the case of a tailor living in one of 
 your streets, and a provision dealer living in another, and this 
 busybody of a Reciprocity man living somewhere between the 
 two. He sees this tailor going every Saturday night empty- 
 handed to the provision dealer, and bringing home upon his 
 shoulder a side of bacon, under one arm a cheese, and under 
 the other a keg of butter. Well, this Reciprocity man, being 
 always a busybody, takes the alarm, and says : ' There is a one- 
 sided trade going on there, I must look after it.' He calls on 
 the tailor, and says, ' This is a strange trade you are doing ! 
 You are importing largely from that provision dealer, but I do 
 not find that you are exporting any cloths, or coats, or waist- 
 coats in return ? The tailor answers him, ' If you feel any 
 alarm about this, ask the provision dealer about it ; I am all 
 right, at all events.' Away goes the Reciprocity gentleman to 
 the provision shop, and says, ' I see you are doing a very 
 strange business with that tailor ; you are exporting largely 
 provisions, but* I do see that you import any clothes from him : 
 how do you get paid ? ' ' Why, man, how should I ?' replies the 
 provision dealer, ' in gold and silver, to be sure ! ' Then the 
 Reciprocity man is seized with another crotchet, and forthwith 
 begins to talk about the ' drain of bullion.' Away he flies to the 
 tailor, and says, ' \\'hy, you will be ruined entirely ! What a 
 drain of the precious metals is going on from your till ! That 
 provision dealer takes no clothes from you ; he will have 
 nothing but gold and silver for his goods.' ' Ay, man,' replies 
 the tailor, ' and where do you think I get the gold and silver 
 from ? Why, I sell my clothes to the grocer, the hatter, the 
 bookseller, and cabinet maker, and one hundred others, and 
 they pay me in gold and silver. And pray, Mr. Busybody, 
 what would you have me do with it ? Do )ou think my wife and 
 family would grow fat on gold and silver?' Now, if there is 
 any litde boy or girl in this assembly, I hope they will go home, 
 and for exercise write out tliat illustration of Reciprocity, and 
 show it to any of their friends who may be seized with this 
 crotchet respecting Reciprocity and the drain of gold, and sec if 
 they cannot laugh them easily out of their delusions."
 
 PART II. — RETALIATION. 99 
 
 CHAPTER XXVII. 
 
 POINTS TO BEAR IN MIND IN COMPARING STATISTICS OF 
 TRADE OF DIFFERENT NATIONS. 
 
 5a r,- 
 son witii 
 
 Let us now take the case of one or two foreign countries, and Com 
 see whether what we know of their trade is sucli as to make us other 
 fear that we are losing our hold on the markets of the world. Nations. 
 In making any such comparison, two or three points must be 
 remembered. 
 
 First, as I have already pointed out, the increase of our Increas.- f 
 own trade necessarily involves the increase of the trade of^^gans^' 
 foreign countries. This must be so, whether they open their increase -r 
 ports or not. If they reduce their duties contemporaneously Foreign 
 with our reduction, their trade will increase by so much the 
 more ; if not, it will increase, but not so much. It is therefore 
 to be expected and desired that the trade of foreign nations 
 should increase when our own increases, and such an increase 
 is not so much taken from us, but so much in our favour. 
 
 Secondly, in comparing our own trade with that of other Manufac- 
 countries, it is common to take the whole exports of domestic thinafo, a^ 
 produce as the test. But this is ;////// ad re/n, so far as our toco'inp.M . 
 manufactures are concerned. 
 
 We export little or no food, and little or no raw produce of 
 the soil. If we wish to see whether other nations are progress- 
 ing faster than ourselves, or, which is the more material point, 
 beating us out of the market, we ought to confine our attention 
 to what we produce ourselves. I have, therefore, in the follow- 
 ing figures endeavoured to do this in a rough way. 
 
 Thirdly. It must be remembered that the following Our 
 figures, taken from our statistics of exports, do not include the pxporrd ? 
 unseen exports which we make in the shape of ships and not inciu ! ■ 
 freight. I'hese are as much the produce of English skill and Freight. 
 labour as our cottons or our v/ooUens, and probably amount 
 annually, as above stated, to more than 50 millions, one-sixth of 
 our whole exports. 
 
 Fourthly. Even as regards manufactures, it ought to be no We cannot 
 surprise to us that some nations are progressing: faster than our- |^?^P ^'' 
 
 * . . , y ° ^. , . Manufac- 
 
 selves, or even competing with us in some articles m our own tures. 
 markets, if we hold our own as a whole.
 
 100 FREE TRADE 7'. FAIR TRADE. 
 
 We supple- It seems sometimes as if we entertained the notion that we 
 which we '^ ^^'^ ^^ ha.\'e a monopoly of manuflicture, and we are frightened 
 lose by if we see that any article which we make is successfully made 
 new inven- jj^ another country. Nothing can be more absurd. Providence 
 has given us no monopoly of natural gifts, and the very essence 
 of the Free Trade doctrine is that each country shall do what 
 it can do best. It is not a loss, but a great gain to us, if France 
 sends to the world, and to us among the rest, her tasteful stufls, 
 and if America provides us with her ingenious labour-.saving 
 machines. We have been the first in the field with the great 
 metal and textile manufactures, and we are still first in general 
 mechanical skill. But the probability is that other countries 
 will by degrees follow us successfully in the older manufactures 
 and in the coarser productions ; and that we shall still continue 
 to invent and to supply the world with the newer products of 
 scientific manufacture. As some evidence that this is actually 
 the case, I may. quote the following passage from Mr. New- 
 march's exhaustive address to the Statistical Society, contained 
 in the SociQiy?, Journal of June, 1878, p. 211. "Between 
 1856 and 1877 supplemental exports (viz., those not included 
 under the great heads of Textiles; Sewed; IMetals, Ceramics;&:c.), 
 increase threefold, viz., from 13 to 37 millions, and the pro- 
 portion to the total exports rises from 11 to 19. The progres- 
 sion of the figures is rapid and large, and strongly suggestive of 
 a vigorous and inventive trade in which the rapid appearance 
 of new commodities is proportionally pressing open and enlarg- 
 ing the previous classifications and vocabularies." The supple- 
 mental list thus referred to contains, amongst a multitude 
 of articles, such as biscuits, medicines, chemicals, painters' 
 colours, musical instruments, telegraph materials, india-rubber 
 and jute manufactures, &c., &c. To find that France, Ger- 
 many and America are making cotton and woollen goods for 
 themselves and exporting them is what we must expect. The 
 question we have to consider is, what is our manufacturing 
 position compared with the manufacturing position of countries 
 which have Protective systems, and whether such success as 
 they have has accrued to them in consequence of their Pro- 
 tective systems, or in spite of them. 
 
 In the tables appended, I have taken the exports of England, 
 France, Germany and the United States at two different periods, 
 and have divided them roughly into food, raw materials, and 
 manufactures, and have endeavoured to see — first, what is the
 
 PART II. — RETALIATION. 
 
 amount of manufactures exported by each country ; secondly, 
 what proportion that amount bears to its total exports ; and 
 thirdl}', how these proportions are progressing. I have said 
 above, that I do not myself rely on the distinctions commonly 
 drawn between raw materials and manufactures, and that there 
 is a great difficulty in drawing any satisfactory line of dis- 
 tinction between them. The distinctions contained in these 
 tables do not therefore pretend to accuracy. Pig iron, 
 for instance, which is here classed as a raw material, is 
 the product of one of our most important manufactures, is 
 one of our chief exports, and is highly protected in many 
 foreign countries. But I have taken the distinctions as made in 
 tables which are already before the public ; and, generally speak- 
 ing, it may be said that what are here included under manufac- 
 tures are special objects of protection in protectionist countries. 
 The case of England, as shown in these tables, is as follows : 
 
 Exports of Domestic Produce from England. * 
 
 Exports of 
 the L'niteJ 
 Kingdom 
 in 1870 an 1-1 
 
 
 Amount, in Thousands of 
 Pounds. 
 
 Percentage of Total. 
 
 
 70. 
 
 1880. 
 
 1870. 
 
 18S0. 
 
 Food .... 
 Raw Material . 
 Manufacture-; . 
 
 £ £ 
 7,607 8,825 
 13,744 23,272 
 178,236 190,963 
 
 4 
 
 7 
 
 89 
 
 100 
 
 4 
 10 
 86 
 
 Total . . . 199,587 223,060 
 
 100 
 
 CH.'VPTER XXVIII. 
 
 STATISTICS OF FRENCH TRADE IN RECENT YEARS. 
 
 Our direct imports from France, as is well known, exceed our imports & 
 direct exports to France, and they do this by an ainount Avhich ?^P°''^^ . 
 
 ji- 1 r r ■ ■, -1 r- -r^ , irom anQ to 
 
 exceeds anythmg due to us for freight and profit. But what- France 
 ever the explanation of this excess may be, the proportion before and 
 borne by exported English produce to French imports has Treaty. 
 
 * See Table XVII... in Appendix, for the details.
 
 FREE TRADE 7>. FAIR TRADE. 
 
 increased rather than duiiinished since the French Treaty, 
 whilst the actual amount of English produce exported has 
 trii)lcd, thus sliowing that the excess of imports is not due to 
 the character of the 'i'rcaty tariffs. The figures arc as follows: — 
 
 Ave rage of 
 Three Years. 
 
 The exports from France, according to the French statistics 
 for 1869, the year before the war, and for 1879, the last year 
 for which the statistics are issued, are as follows : — 
 
 Exports or Domksiic Produck trom Franxk. * 
 
 
 Amount, in 
 Thousands of Pounds. 
 
 Percentage. 
 
 
 1869. 
 
 1879, 
 
 1869. 1879. 
 
 Food 
 
 Raw Material 
 Manufactures 
 
 £ 
 34.017 
 21,482 
 
 70,504 
 
 £ 
 33,159 
 25,210 
 
 69.515 
 
 27-0 
 
 17-0 
 560 
 
 260 
 19-8 
 
 54-2 
 
 Total .... 
 
 126,003 
 
 127,884 
 
 100 
 
 100 
 
 The value of manufactures exported from France has 
 therefore actually decreased in the decade, and its proportion to 
 the value of food and raw materials exported has decreased 
 also, whilst the whole exports have also decreased slightly. In 
 fact, the trade has been stationary, whilst the English trade has 
 largely increased, as shown above. It is, however, only fair to 
 add that the trade of France has probably increased, like the 
 trade of other countries, in 1S80, but I have not been able to 
 get the detailed figures. If to the above list of exports we 
 were to add shipping and freights, we should find that the 
 exports of England have increased much faster than those of 
 France. 
 
 * See Table X\'III., in Appendi.x, for the details.
 
 PART II RETALIATION. 
 
 103 
 
 Half the articles on which duties are imposed by the Duties 
 Frencli tariff are articles to be used solely or principally imposed i- 
 in further manufiicture, e.i^., yarns of all kinds, cotton, silk Articles 
 and woollen, unbleached cloths, combed wool, iron and used in 
 steel of all kinds, copper sheets and wire, coal, alkali, salt, Manufac- 
 tiles and bricks, and leather ; whilst amongst all the rest 
 are articles which conduce not less materially if less directly 
 to production, by improving the condition of the workman, 
 or by facilitating the conduct of business. I believe I 
 might go through most of them, and show how France manages 
 by im^josing a protective duty to countervail her own natural 
 advantages of soil, climate and human character, or to enhance 
 her natural difficulties ; whilst freedom from the weight of duties 
 in our case enables us to take advantage of her deficiencies. 
 The special cases of leather, silk, sugar and shipping, 1 have 
 noticed more particularly below. 
 
 CHAPTER XXIX. 
 
 GERMAN TRADE IN RECENT YEARS. 
 
 The exports from Germany for the same years are as follows : — Expor:s 
 
 from 
 Germany 
 in 1869 and 
 1879. 
 
 Exports of Domestic Produce from Germany. 
 
 
 Amount, in 
 Thousands of Pounds. 
 
 Percentage. 
 
 
 ti869. 
 
 1S79. 
 
 1869. 
 
 1879. 
 
 Food .... 
 Raw Material 
 Mamifaclures . 
 
 28,356 
 38,383 
 43,864 
 
 £ 
 
 37,948 
 47,283 
 
 53,551 
 
 25-6 
 
 347 
 397 
 
 27-3 
 34'o 
 3S7 
 
 Total 
 
 110,603 
 
 138,782 
 
 100 
 
 100 
 
 * See Table XIX., in Appendix, for the details, 
 f The values for 1869 are estimated only.
 
 104 TREE TRADE ?'. FAIR TRADE. 
 
 , German There is no doubt that German trade increased consider- 
 
 ably during the decade ending with 1879, during which time 
 she had the benefit of the French indemnity, and a reasonably 
 free tariff. Wc know, however, that her commercial condition 
 has not of late been satisfactory. Her case is specially interest- 
 ing. One of the first of European nations, fresh from union and 
 from triumph, with a large, ingenious, and industrious population, 
 but without the enormous natural resources which have made 
 the fortune of America, after making great progress towards 
 Free Trade has thought fit, under the imperious guidance of 
 1 • 1 ce her great leader, to turn back towards Protection. Her tariff 
 .ircks qC 1879, though not so high as the German tariff had been in 
 ry. i860, was professedly and thoroughly protective; it increased 
 the duties on everything from completed manufactures to food 
 and raw material. The same policy was carried out on the 
 railways, which were forced against their own wish and interest 
 to carry imported and exported goods at local rates, just as our 
 advocates of equal mileage would like to see done at home. 
 Under these circumstances the result is a matter of great 
 interest. We have for some time heard mutterings of disappoint- 
 ment. We have been told that the trade of the Baltic ports 
 and of the railways which lead to them and to the Russian 
 frontier, is seriously injured, that the price of corn has been 
 raised to the poor, that emigration from Germany is increasing; 
 and that the deposits in the savings banks are diminished. 
 i ■ ' fleets But we have not till lately been able to get any general account 
 'j , i'^''™^" of German trade. A pamphlet has, however, recently been 
 according published by the Free Trade Association at Berlin, containing 
 to cierman the reports of the Chambers of Commerce in Germany (eighty- 
 *''^^'"m"^ five in number), on the trade of 1880, and giving in most 
 cases their opinions on the new commercial policy. The 
 general results are very striking. If, instead of drawing my 
 arguments from the teaching of political economy, I had drawn 
 them from this pamphlet, I should have used the same reason- 
 ing and almost the same language.* 
 
 There is throughout these reports a concurrence of opinion 
 that trade in Germany is depressed ; that there was a slight 
 improvement in the beginning of 1880, but that the impulse to 
 this was given by the revival of trade in other countries ; that 
 their trade became depressed again towards the end of the 
 
 * See abstract of this pamphlet, and translation of the preface, recently 
 published by the Board of Trade.
 
 PART II. — RETALIATION. I05 
 
 year, when the new tariff had come fully into operation ; that Effects of 
 the internal demand for manufactures is slack ; that the price of p'"?.';^'^"'j'- 
 raw material is high ; that food is dear; and that the working Cinmn' 
 classes are worse off than they were. Trade. 
 
 The preface to this pamphlet says, " Perhaps no critic of 
 this new system was prepared for the rapidity and the decision 
 with which the consequences of the new tariff have shown 
 themselves — first, in increasing the difficulties of trade ; 
 secondly, in raising the prices of the necessaries of life ; 
 thirdly, in injuring the prosperity of the labouring classes." 
 Most of the Chambers which express an opinion on the new 
 commercial policy dislike it, and attribute to it much of the 
 present depression ; some approve it, but even these are dis- 
 satisfied with the actual results, and either seek for more 
 protection, or — what is, perhaps, the severest condemnation 
 of protection — they ask that, when they export their manu- 
 factures, they may have drawbacks of all the import duties 
 which have been paid on their materials. In short, they seek 
 to sell cheap abroad and dear at home ; which, absurd as it is, 
 is not wonderful when we are told that some of the ironmasters 
 in Germany are now taking contracts for steel rails abroad at 
 lower prices than those at which they sell them in Germany. 
 Protection has, indeed, reached its iie plus ultra of folly, if a 
 Government is first to tax all its subjects in order to enable its 
 own manufacturers to sell dear at home, and then to tax them 
 over again in order to enable the same manufacturers to sell 
 cheap abroad. 
 
 The result of recent elections in Germany gives additional 
 importance to such expressions of opinion as are contained in 
 this paper ; and they derive additional importance from the 
 fact recently stated in the newspapers, that Prince Bismarck 
 has taken steps to subject any future expressions of opinion by 
 the Chambers of Commerce to his own ofticial control. At the 
 same time, I do not wish to make more of these reports than 
 they are worth. German trade shared in the temporary 
 revival of 1880, and it will, no doubt, share again in the 
 revival now taking place in the trade of other countries. And 
 it will very likely then be said that such revival is due to their 
 Protective system. But the opinions of the Chambers of Com- 
 merce show that hitherto it has not succeeded, and that they 
 expect it to be a disappointment in future.
 
 io6 
 
 FKEE TRADi: 
 
 lAIR IRADE. 
 
 CHAPTER XXX. 
 
 UNITED states' TRADE. 
 
 Let us next take the case of the United States. They lev)', 
 as is well known, enormous duties, ranging up to 50 per cent., 
 and even 100 per cent., on almost everything that is made with 
 hands. With all this, they are at this moment in a state of 
 great prosperity. But it is not long ago that we heard of 
 depression in the towns of the United .States far more acute 
 than any which our workmen have laboured under. The 
 recent growth of their trade is very remarkable. 
 
 The following is an analysis of their e.xport trade in 1870 
 and 18S0, excluding bullion and specie ; — 
 
 Exports of Exi'oRTs of Domestic Produce fro.m the U-ntted .States.* 
 
 United 
 St.ites in 
 
 
 Amount, in Thousands 
 of Pounds. 
 
 Percentage. 
 
 
 1870. 
 
 1880. 
 
 1870. 
 
 i8So. 
 
 Food .... 
 Raw Material 
 Manufactures 
 
 21,660 
 
 45,600 
 
 8,609 
 
 96,694 
 57,199 
 17,763 
 
 28-6 
 6o"i 
 "■3 
 
 56-3 
 
 33 3 
 io'4 
 
 Total . 
 
 75,869 
 
 171,656 
 
 100 
 
 100 
 
 But it is desirable to go a little further back, and for this 
 purpose I take the figures from a very interesting article on 
 United States' trade in the Times of the 7th November, 1881. 
 If the figures do not correspond exactly with those given 
 above, it is because the following figures include bullion and 
 specie ; and because, in the figures for 1880, the dollar is taken 
 at 4s, in the Times article, and at 4s. 2d. in the figures given 
 above. 
 
 * See Table XX., in .Appendix, for details.
 
 PART II. — RETALIATION. I07 
 
 The following are the exports of the United States and i-xports of 
 United Kingdom respectively, since 1S40: — ^"'''^'^ , 
 
 ° ^ ■" ^ States and 
 
 ,, k T^ r> rx^ ,, United 
 
 Lxi'ORis* <iF DoMKsric Pr()I)U(;k, in Tuuus.wds or Pounds. Kin-'dom 
 
 
 United States. 
 
 United Kinjjdom. 
 
 in each de- 
 
 
 
 
 cade since 
 
 IS40 . 
 
 . ^22,779 . 
 
 . /5i>309 
 
 1840. 
 
 1850 . 
 
 • 27,389 . 
 
 • 71,367 
 
 
 i860 . 
 
 74,637 . 
 
 . 135,^91 
 
 
 IS70 . 
 
 84,100 . 
 
 . 199,586 
 
 
 I8S0 . 
 
 . 166,658 . 
 
 223,060 
 
 
 If to these figiu-es were added tlie figures representing 
 those exports which each country makes in the form of its 
 shipping, the comparative growth of the trade of the United 
 Kingdom would appear to be very much larger, especially in 
 later years, during which the shipping of the United States has 
 been diminishing, and that of the United Kingdom largely 
 increasing. 
 
 It will l^e observed in the above figures that the trade of Growth of 
 the United States increased little between i860 and 1870, no .'Population 
 
 , , . » , , . ,,,''.., in the two 
 
 doubt in consequence of the exhaustion caused by the civil Countries, 
 war ; and that this leeway was made up in the subsequent 
 decade. The most important observation, however, is that 
 during the whole of the periods above mentioned the popula- 
 tion of the United States grew much faster than that of the 
 United Kingdom ; and that, if we take the amount of trade 
 per head of each country in each decade, the trade of the 
 United Kingdom has grown much faster than that of the 
 United States. The following are the figures : — 
 
 Exp^ 
 
 3RTS 
 
 PER I 
 
 IE AD 
 
 OF 
 
 THE TWC 
 
 ) Countries. 
 
 
 Compari 
 
 
 
 
 
 
 
 
 
 
 son of 
 
 
 
 Un 
 
 ted State:;. 
 
 
 Unitt 
 
 d Kii 
 
 gdom. 
 
 Exports 
 
 1840 
 
 
 £1 
 
 II 
 
 I 
 
 
 ■ £1 
 
 18 
 
 9 
 
 per head 
 
 1850 . 
 
 
 I 
 
 6 
 
 2 
 
 
 2 
 
 II 
 
 10 
 
 
 i860 . 
 
 
 2 
 
 10 
 
 II 
 
 
 4 
 
 14 
 
 7 
 
 
 1870 . 
 
 
 2 
 
 6 
 
 II 
 
 
 6 
 
 7 
 
 II 
 
 
 1880 . 
 
 
 3 
 
 8 
 
 I 
 
 
 6 
 
 9 
 
 5 
 
 
 These are not figures to alarm us. It is idle to expect that 
 30 million of people shall produce as much as 50 million of 
 the same people. 
 
 * Tlie exports from the United States include bullion and specie. Those 
 from the United Kingdom do not. But this will make very little difference.
 
 lo8 FREE TRADE V. FAIR TRADE. 
 
 ( auses of The United States are probably, however, at this moment 
 
 I nited ^ ^ ' 
 
 M.ites 
 
 one of the most prosperous nations in the world. 
 
 rosperity. The source of their prosperity is not far to seek. It is not 
 to be found in those industries Avhich they try to cherish by 
 Protection, but in the raw productions of the fertile soil and 
 climate of their immense territory. They have 50 millions of 
 the most industrious and energetic people in the world ; they 
 have a country as large as Europe, with every variety of good 
 climate, and with an unlimited area of unexhausted soil. They 
 have excellent communication througliout all the parts of this 
 immense area. Besides this, though shut off by their tariffs 
 from the rest of the world, they have absolute Free Trade 
 within their own borders. It is as if there were no custom 
 houses within the limits of Europe. Besides this, they have 
 the Old World wanting food, and affected by bad harvests. 
 No wonder, then, that they supply the world with food and 
 agricultural produce. Only a tenth of their population is 
 concerned in trade. The export of manufactures from the 
 United States in 1880 was 17I millions sterling, whilst our 
 own export of manufactures in the same year was 190 millions. 
 Even in their own highly protected market, our manufactures 
 are sold to the extent of 24.^ millions a year; whilst in our 
 open market theirs are only sold to the extent of 2} millions. 
 With great facilities for producing iron and steel, and with a 
 considerable native production, prices were so high in 1880 
 that, in spite of the duty of 40 per cent, imposed on foreign 
 iron, we were able to send them ;j^i 0,000,000 worth, whilst 
 what they sent us was worth ;j^2oo,ooo. 
 
 Their exports were very large in 1880, and have increased 
 enormously in the decade ; but of what do they consist ? 
 
 Ninety per cent, are food and raw materials, whilst the 
 manufactures which they try so hard to foster and protect 
 do not amount to more than 10 per cent. Their shipping, 
 as we shall see below, is not one-fourth — or, if we count one 
 ton of steam as equal to four of sailing, not one-seventh of our 
 own. Of their whole trade they carried 75 per cent, in their 
 own vessels in 1850, and only 16 per cent, in 1880. Food 
 constituted 56 per cent, of their exports in 1870, and the 
 amount of food which they export has increased more 
 than fourfold since that year. If we were to include 
 freights of shipping in the exports of manufactures, their 
 exports of manufactures would show a decrease instead of an
 
 PART II. — RETALIATION. I09 
 
 increase. The things which they have not protected they 
 provide the world with ; in the things which they protect, 
 and we leave free, they are nowhere in the race. So much 
 stronger is Nature than human law — so great are the advan- 
 tages which Freedom has over Protection. 
 
 The real moral to be drawn from American trade is the 
 Free Trade moral — viz., that the free development of natural 
 advantages, and the free exchange of natural products, are the 
 true sources of commercial prosperity. 
 
 CHAPTER XXXI. 
 
 TRADE OF CANADA AND AUSTRALIA. 
 
 It is too soon to trace the effect of the Canadian tariff" of 1879 Trade of 
 on her trade, and it is especially difficult to eliminate other Canada 
 causes which have affected it. It would have been very Canadian 
 strange if Canada had not, tariff" or no tariff, participated in the Tariff, 
 revival which has taken place in the trade of the American con- 
 tinent ; it would be doubly strange if, with her natural capacity 
 for producing corn, and with the recent scarcity in Europe, she 
 had not very largely increased her exports. For those exports 
 she must be paid, and we should therefore also expect to see 
 her imports increase very largely, and with them her customs 
 revenue. We do find an increase, but by no means a very 
 large one. In 1880, after the new tariff, the amount received 
 as customs revenue had increased over that received in 1878, 
 the year before the new tariff, by a little more than a million 
 of dollars. The duties in 1880 amounted to about 20 per cent, 
 in value of the whole imports of the country. In 1874 and 1875, 
 before the new tariff, the duties constituted only from eleven to 
 thirteen per cent, of the value of the imports, and in those 
 years the customs revenue was much larger than it was in 18S0. 
 Comparing the trade of 187S, the year before the new tariff, 
 with 1S80, the last year since the new tariff, we find that the 
 imports were 90 millions of dollars in the former year, and 86 1 
 millions in the latter year; whilst the exports were 79 millions 
 in the former, and 88 millions in the latter. In 1873-74 the
 
 FREE TRADE V. FAIR TRADE. 
 
 C.inacl.i has 
 succeeded 
 in making 
 lier Exports 
 larger than 
 her Im- 
 ports ! 
 
 imports had been 128 millions, and the exports 8g millions of 
 dollars. Considering the immense demand of Europe for corn, it 
 is surprising that even with the check on her industry imposed 
 by the new tariff, the increase of exports in 1880 should have 
 been so small as it is. Hut Canada has succeeded in reaching the 
 millennium of the Protectionists ; she has considerably reduced 
 her imports, and for the first time since 1868 she has made her 
 exjjorts exceed her imports. She has managed, so far as her 
 statistics tell the story, to give to foreign countries a good deal 
 more than .she has received from them in return. This, in the 
 case of a new country seeking for capital from England, a 
 country too, which owns a great deal of shipping, and which 
 must therefore have large invisible exports in the shape of 
 freights, is a truly remarkable result, and one of which Protec- 
 tionists may well be proud ! Canada has, probably, succeeded 
 in calling into existence some weak manufacturing interests 
 which will prove a thorn in her side, but she has done so at 
 the expense of her natural industries, and has checked the 
 flow of capital and labour from Europe, of which she stands in 
 so much need. We have heard whispers in this country of a 
 desire for bargains with England, under which England should 
 either advance money to her, or give some preferential treat- 
 ment to Canada as the price for a reduction of her duties on 
 English goods. Whether such proposals have ever been enter- 
 tained or made by men of influence in Canada, I do not know. 
 But the chilling reception all such notions have met with in this 
 country, ought to be a lesson to Canada, and to other Protec- 
 tionists, that if you want to win the favours of your mistress, it 
 is a very bad plan to put on a fit of sulks in order to make your 
 return to good-humour the price for her smiles. The Protec- 
 tionist policy of Canada is deeply to be regretted by all her 
 well-wishers here, not because il injures the trade of England, for 
 to that trade it is a comparative trifle, but because it tends to 
 cripple the industry of Canada, and to create a bad feeling 
 between the two countries. 
 
 The case of Victoria and New South Wales is particularly 
 interesting, because the two colonies are in many respects simi- 
 larly situated ; and whilst the one, Victoria, has embraced Pro- 
 tection, the other (New South Wales) has remained steadfast to 
 Free Trade. Both have progressed, but New South Wales has 
 made by far the greater progress of the two. The following 
 short resume of the facts derived from official papers was sug-
 
 PART II. — RETALIATION. ITI 
 
 gested by Mr. Baden Powell's paper on the subject, read at 
 the late meeting of the British Association, and I forbear to 
 give my readers or myself the trouble of a detailed criticism 
 of the statistics, because Mr. Powell's paper is published in 
 extenso in the Fort/iv^ktly Review for January. 
 
 It appears, on comparing the progress . of the two colonies 
 for the last decade, that the following are the general results: — 
 
 Population 
 
 Excess of Immigrants 
 over Immigrants 
 
 The Value of Rateable 
 Property 
 
 Customs Revenue 
 
 Imports 
 Exports 
 
 Victoria. 
 
 has incre;)sed from 
 726,000 to 860,000, 
 or 18 per cent. 
 
 stationary . 
 
 has increased by less 
 
 than one-half 
 stationary . 
 
 have increased from 1 2\ 
 millions to I4j mil- 
 lions, or 17 percent. 
 
 haveincreased from 12A 
 millions to 16 mil- 
 lions, or 28 per cent. 
 
 New South Wales. 
 
 has increased from 
 502,000 to 770,003, or 
 53 per cent. 
 
 has increased from 4,000 
 to 19,000. 
 
 has more than doubleil. 
 
 has increased Ijy nearly 
 one -half; and is, with a 
 less population and low 
 tariff, nearly as great 
 as that of Victoria, with 
 a large population and 
 high tariff. 
 
 have increased from 7|- 
 millions to 14 millions, 
 or 80 per cent. 
 
 have increased from 8 
 millions to 15^ mil- 
 lions, or 94 per cent. 
 
 These facts need no comment from me. 
 
 CHAPTER XXXII. 
 
 SPECIAL INSTANCES OF THE EFFECTS OF PROTECTION DUTIES ON 
 PRODUCTION — LEATHER, SUGAR, SALT. 
 
 There are one or two special illustrations of the benefit of free 
 tariffs in forwarding production, which it may be worth while 
 to mention specially.
 
 112 FREE TRADE t. FAIR TRADE. 
 
 Leather, At the recent Leather Exhibition in this country it ap- 
 
 MarTunfc^*^ l)cared that the exportation of boots and shoes from this 
 lures of. country was largely increasing, whilst the importations 
 from France and other countries were decreasing, and at 
 the same time the importation of tanned and dressed 
 hides into this country was largely increasing. The follow- 
 ing is the statement in the report in the Twus of tlie 
 27 th September, 1881 : — 
 
 " The increase in the number of exhibits this year as com- 
 pared with last is, roughly speaking, proportional to the improve- 
 ment which has in the interval taken place in the trade of our 
 boot and shoe manufacturers, the Board of Trade returns for 
 the seven months ending July 31st, this year, showing that we 
 exported 3,277,740 pairs of boots and shoes in that period 
 against 2,800,992 in the corresponding period of 1880. and 
 3,071,424 in 1879. Our Australian colonies took 1,309,752 
 pairs. The imports of boots and shoes, on the contrary, showed a 
 decline. While 1,041,624 pairs were imported from France and 
 other countries in the first seven months of 1879, only 711,420 
 pairs were imported in 1880, and but 572,232 pairs in the corre- 
 sponding period this year." 
 
 " From these figures it is argued that our English manu- 
 facturers are rapidly improving the quality and finish of their 
 goods, and are so enabled to compete successfully with Conti- 
 nental makers. Of materials, on the other hand, importations 
 show an increase. In the first seven months of 1879 ^^'^ 
 imported 21,1^4,765 pounds weight of tanned and dressed 
 hides ; in 1880 the quantity had risen to 26,516,269 lbs., and in 
 1881 to 28,686,360 lbs." 
 
 It further appeared from the speech of Mr. Jackson, M. P., that 
 we import tanned leather to the value of tliree millions a year, that 
 much of this leather comes from America, and that live cattle 
 come here from America, that they are killed here, that their 
 skins are sent back to America to be tanned, and that they are 
 then sent back here to be used in manufacture. The reason, 
 as I am informed, is not that we do not tan hides as well as 
 the Americans ; but that they, adopting newer and rougher 
 methods, do the first part of the process more quickly and 
 cheaply than we do, so that it is worth while to commence 
 tanning in America, and then send back the hides to 
 be completely tanned, and then used, in England. If 
 so, it is a remarkable instance of modern division of
 
 FART II. — RETALIATION. II3 
 
 labour, and of the advantage of free, cheap, and speedy Leather, 
 communication. _ JndSu- 
 
 It would, no doubt, save labour and expense if we could factures of. 
 do the whole of the process of tanning as cheaply as the 
 Americans, and it is to be hoped we rnay learn to do so. But 
 our present system gives us both the finer process of tanning 
 and the manufacture for export as well as for home consumption 
 of cheap boots and shoes ; whereas, if we imposed a tax on 
 tanned hides for the supposed benefit of our tanners, we should 
 probably destroy all prospect of improvement in our own 
 tanning, and we should still more probably ruin our manu- 
 factures of boots and shoes, and divert it to our foreign 
 rivals. 
 
 In turning to the returns, in which attempts have been 
 made to discriminate between raw materials and manufactures, 
 I find tanned hides inserted among manufactures. And in 
 turning to the tariffs of foreign countries, I find that tanned 
 leather is subject to a duty in France, Germany, Russia, 
 Denmark, Sweden, Norway, Austria, Italy, and the United States. 
 I\Ir. Jackson says that France is contemplating a duty of 400 
 per cent, on manufactured articles of leather. She would 
 become a more formidable competitor if she would give to 
 her skilful and ingenious workers in leather the benefit of 
 untaxed hides. 
 
 Take, again, the article of sugar, of which we have heard so Raw Sugar 
 much lately. Austria and Germany, at their own cost, make cheap to us, 
 raw sugar unnaturally cheap by giving a bounty on its exporta- France, 
 tion. On the raw sugar, though much importuned by certain 
 special interests, we do not, and I trust never shall, impose 
 a duty. France, on the other hand, imposes on raw sugar 
 a considerable duty for the benefit of her sugar growers. The 
 consequence is that, though she grows beet sugar, whilst 
 we cannot, her refiners have to pay a comparatively high price 
 for raw sugar, whilst ours get it duty free. The export of 
 refined sugar from France is decreasing, and refining is increasing 
 in England ; and, whilst our refineries increase, our people, at 
 the same time, get cheap sugar. French production of sugar 
 has decreased from 425,000 tons in 1878 to 320,000 tons in 
 1880, and her exportations from ;^2,o97,526 to ;^i, 556,836 
 worth. In this country the production of refined sugar is largely 
 on the increase, having risen from less than 430,000 tons 
 in 1864 to upwards of 700,000 tons in 1880. France, it 
 I
 
 114 FREE TRADE V. FAIR TRADE. 
 
 is said, contemplates increasing her tax on foreign raw sugar. 
 She would stand a better chance of competing were she to 
 abolish it altogether.* 
 
 Take, again, salt. Salt enters largely into manufacture. 
 It is a chief material of alkali, and alkali of glass. France 
 imposes a heavy duty on salt. In this country it is free and 
 cheap. We export a large and increasing quantity of alkali 
 (7,000,000 cwts. in quantity, and ^2,400,000 in value, in 1S80), 
 and a large and increasing quantity of glass (;i^i, 000,000 
 in value in 1880), whilst neither alkali nor glass appear among 
 the principal articles of French export. Chemicals in the 
 French list may possibly include " alkali," but, if so, I find 
 that the export of French chemicals has increased little, if 
 at all, in the last 10 years, and is now only 58,266,000 francs, 
 whilst the export of English chemicals has increased from 
 ;^733,422 in 1866 to ;/{^2,384,o2i in 1880. In this case we 
 can probably produce salt more cheaply than France, owing to 
 our geological formations. But she enhances her natural 
 difficulties by an artificial one. 
 
 Again, if we take silk, which is a special French manu- 
 facture, it appears that France exported to us silk goods, 
 the produce of her own manufacture, to the amount of 6^ 
 millions sterling in i860 before the French treaty came 
 into operation, and to the amount of io| millions in 1866, 
 whilst the amount she exported to us in 1879 was only 3^ 
 millions ; and I am informed that this diminution is due to the 
 protective duty she levies on cotton yarns, which are wanted to 
 mix with the silk, and which her manufacturers have con- 
 sequently to pay dear for, whilst her successful rivals in Switzer- 
 land get their cotton yarns duty free. Meanwhile, I find that 
 the exports of silk manufactures from England, which had 
 dropped from a million and a half in i860 to a million in 1867, 
 have risen in 1880 to two millions. 
 
 • S'e2 Pari. Paper, Xo. 422 of 1881.
 
 PART II. — RETALIATION. 
 
 "5 
 
 CHAPTER XXXIII. 
 
 SHIPPING. 
 
 So much has been said about shipping that I am ahiiost Shipping o 
 afraid of referring to it, but it is so striking an instance of ^j^^^^^^^'^^^ 
 the advantages of freedom and the impotency and mischief 
 of protection, that I must state the figures again. Most of 
 the following are taken from the Appendix to Mr. Chamber- 
 lain's speech, as published by the Cobden Club. 
 
 Statement of the Percentage of the Foreign Trade of the United Kingdom 
 carried on in British Ships compared {in thousands of tons). 
 
 Average of 
 Three Years. 
 
 Total Foreign Trade 
 (Thousands of Tons). 
 
 Total carried in British 
 
 Ships 
 
 (Thousands of Tons). 
 
 Proportion of Total Trade 
 
 carried en in British Ships 
 
 (Per cent.). 
 
 1854-6 
 
 19,582 
 
 11,537 
 
 59 
 
 1857-9 
 
 22,798 
 
 13,299 
 
 58 
 
 1860-2 
 
 25,940 
 
 15,094 
 
 58 
 
 1863.5 
 
 27,613 
 
 18,193 
 
 66 
 
 1866-8 
 
 32,566 
 
 22,095 
 
 68 
 
 1869-71 
 
 37,699 
 
 25,632 
 
 68 
 
 1872-4 
 
 44,123 
 
 29,485 
 
 67 
 
 1875-7 
 
 49,531 
 
 33.051 
 
 67 
 
 1878-80 
 
 54,349 
 
 38,025 
 
 70 
 
 Statement shoiving the Proportion of the Tonnage of the United Kingdom to 
 the Tomiage of certain Foreign Countries at different Dates, multiplying 
 steam tonnage by FOUR to reduce it to a common denominator with 
 sailing tonnage [in thousands of tons). 
 
 
 United Kingdom. 
 
 Foreign Countries. 
 
 Total 
 
 Year. 
 
 Thousands of 
 Tons. 
 
 Per cent, of 
 Total. 
 
 Thousands of 
 Tons. 
 
 Per cent, of 
 Total. 
 
 (Thousands of 
 Tons). 
 
 i860 
 1870 
 1880 
 
 5,942 
 
 8,950 
 
 14,679 
 
 42 
 49 
 
 55 
 
 8,143 
 
 9,217 
 
 11,992 
 
 58 
 51 
 45 
 
 14,085 
 18,167 
 26,671 
 
 The foreign countries included are : — France, Germany,
 
 ii6 
 
 FREE TRADE 7K FAIR TRADE. 
 
 Holland, Belgium, Austria, Hungary, Italy, Sweden and Norway, 
 Denmark, Greece, and the United States (oversea tonnage). 
 
 Tonnage belonging to the United Kingdom. 
 (In Thousands of Tons.) 
 
 3,397 .Sailing. 
 1S50 (The Date of the Repeal of the Navigation Laws) -^ '^^ Steam. 
 
 i Total. 
 
 ( 3.397 -S: 
 J 168 St 
 
 ^ 3,56s T. 
 
 Years. 
 
 Sailing. 
 
 Steam. 
 
 Total. 
 
 Years. 
 
 Sailing. Steam. 
 
 Total. 
 
 1S69 
 
 4,76s 
 
 948 
 
 5,713 
 
 1875 
 
 4,207 
 
 1,945 6,152 
 
 1S70 
 
 4,578 
 
 1,113 
 
 5,691 
 
 1876 
 
 4,258 
 
 2,005 • 6,263 
 
 1871 
 
 4,374 
 
 1,320 
 
 5,694 
 
 1877 
 
 4,261 
 
 2,139 6,400 
 
 1872 
 
 4,213 
 
 1,538 
 
 5,751 
 
 1878 
 
 4,239 
 
 2,316 6,555 
 
 1873 
 
 4,091 
 
 1,714 
 
 5,So5 
 
 1879 
 
 4,069 
 
 2,511 6,580 
 
 1874 
 
 4,108 
 
 1,871 
 
 5,979 
 
 iSSo 
 
 .3,851 
 
 2,723 6,574 
 
 Annual "I 
 Average j 
 
 4,355 
 
 1,417 5,772 
 
 Annual \ 
 Average j 
 
 4,148 
 
 2,273 6,421 
 
 1 
 
 NoTr:. — It seems important to notice that while the aggregate of sailing 
 and steam tonnage has increased, the increase is exclusively in steam tonnage, 
 which is more efiective than sailing tonnage as three or four to one. 
 
 Tonnage belonging to France. 
 (In Thousands of Tons.) 
 
 Years. 
 
 Sailing. 
 
 Steam. 
 
 Total. 
 
 
 1840 
 
 652 
 
 9 
 
 662 
 
 
 1850 
 
 684 
 
 14 
 
 688 
 
 
 i860 
 
 928 
 
 68 
 
 996 
 
 
 1870 
 
 921 
 
 151 
 
 1,072 
 
 
 1879 
 
 6;6 
 
 255 
 
 932 
 
 
 OvKR-SEA Tonnage biclonging to the United States. 
 (In Thousands of Tons ) 
 
 Years. 
 
 Sailing. 
 
 Steam. 
 
 Total. 
 
 1S4O 
 
 S96 
 
 4 
 
 900 
 
 1850 
 
 1,541 
 
 45 
 
 1,586 
 
 i860 
 
 2,449 
 
 97 
 
 2,546 
 
 1S70 
 
 1,324 
 
 193 
 
 1,517 
 
 18S0 
 
 1,206 
 
 147 
 
 1,353
 
 PART ir. — RETALIATION-. 
 
 117 
 
 Total Trade of the United States carried 171 United States and Foreipi Vessels 
 respectively, with the Percentage carried by each [in thousands of dollars).* 
 
 Years. 
 
 In American Vessels. . 
 
 In Foreign Vessels. 
 
 Percentage in American 
 Vessels. 
 
 1S40 
 1850 
 i860 
 1870 
 1881 
 
 198,424 
 239,272 
 507,247 
 352,969 
 268,080 
 
 40,802 
 
 90,764 
 
 255.040 
 
 638,927 
 
 1,378,556 
 
 82-9 
 72-5 
 
 66-5 
 35-6 
 
 l6'2 
 
 Total Tonnage Entered and Cleared in the United States, in each of the 
 years 1850, i860, 1870, and 1S80 (years ended "^oth June), distinguish- 
 ing American, British, and other Foreign Vessels* {in thousands of tons). 
 
 
 Tonnage. 
 
 Percentage. 
 
 Years. 
 
 
 
 
 
 
 
 
 
 
 Ameri- 
 can. 
 
 British. 
 
 Other 
 Countries. 
 
 Total. 
 
 Ameri- 
 can. 
 
 British. 
 
 Other 
 Couniries. 
 
 Total. 
 
 
 
 
 
 
 
 
 
 Per 
 
 
 Tons. 
 
 Tons. 
 
 Tons. 
 
 Tons. 
 
 Percent. 
 
 Per cent. 
 
 Per cent. 
 
 cent. 
 
 1850 
 
 5,206 
 
 2,845 
 
 659 
 
 8,710 
 
 5977 
 
 32-67 
 
 7-56 
 
 100 
 
 i860 
 
 12,087 
 
 4,068 
 
 910 
 
 17,065 
 
 70-33 
 
 23-84 
 
 5-33 
 
 100 
 
 1870 
 
 6,993 
 
 9,246 
 
 2,085 
 
 18,324 
 
 38-16 
 
 50-46 
 
 11-38 
 
 100 
 
 1S80 
 
 6,834 
 
 20,697 
 
 «,523 
 
 36,054 
 
 18-95 
 
 57-41 
 
 23-64 
 
 100 
 
 Our success, it is to be observed, has taken place since we Early 
 repealed our Navigation Laws, and deprived our shipowners proi" sr of 
 of every privilege, whilst we have also given them free access gt"Je^ 
 to every market for their materials. In Europe we might have Shipping, 
 expected to remain supreme, but, within my own recollection, 
 the United States were formidable rivals. When I was a boy 
 American liners were the pride of Liverpool, and careful 
 observers prophesied that United States shipowners must 
 become the carriers of the world. The following passage 
 from I)e Tocqueville's "Democracy in America" (Vol. ii., 
 Chap. X.), is curious enough to deserve quotation. 
 
 " From the Bay of Fundy to the Gulf of Mexico the coast of HeTccque- 
 the United States extends for nearly 900 leagues. These shores j!|.|^^^ 
 form a single, uninterrupted line; they are all under the same rule. 
 There is no nation in the world which can offer to commerce 
 
 * J'l'om the I'niied States statiitics.
 
 ii8 
 
 FREE TRADE V. FAIR TRADE. 
 
 ports • with greater depth, greater width, and greater safety. 
 
 Europe is, then, the market of America, as 
 
 America is the market of Europe ; and maritime trade is 
 as necessary to the inhabitants of the United States, to bring 
 their agricultural produce to our ports, as to take our manu- 
 factures to them. The Anglo-Americans have at all times 
 shown a decided taste for the sea. Their independence, in 
 breaking the commercial links which bound them to England, 
 gave a new and i)o\verfuI impulse to their maritime genius. Since 
 that time the number of the ships belonging to the Union has 
 increased nearly as fast as the number of its inhabitants. At this 
 day it is the Americans themselves who carry to their homes 
 nine-tenths of the imports from Europe. It is the Americans, 
 too, who carry to the consumers of Europe three-quarters of 
 the exports of the New World.* The ships of the United States 
 fill the ports of Havre and Liverpool. One sees but few 
 English or French ships in the j)ort of New York. Thus, 
 not only does the American merchant brave competition on 
 his own soil ; he competes successfully with foreigners on theirs. 
 
 I think that nations, like men, almost always show 
 
 from their youth the powerful features of their destiny. When I 
 see the spirit with which Anglo-Americans carry on trade, the 
 facilities they possess for doing it, the success which they 
 attain in it, I cannot help believing that they will one day 
 become the first maritime power of the globe. They are 
 impelled to take possession of the sea as the Romans were to 
 conquer the world." 
 
 Such was De Tocqueville's prophecy in 1835. And now 
 the ships of the United States are not one-fourth or, if steam is 
 taken into account, not one-seventh of those of England ! 
 And whilst American ships carry less than one-fifth of the 
 whole trade of the United States, Eritish ships carry much 
 more than one-half of that trade. 
 
 England has 55 per cent, of the ocean tonnage and carrying 
 trade of the entire world, and America is nowhere. If England 
 has special advantages from nature, other nations have the 
 same. As De Tocqueville truly remarks, — in seaports, in 
 harbours, in human skill and industry, and in natural aptitude 
 for the sea, America is not inferior to ourselves ; of coal 
 
 • At this day, 1881, according to the statistics of the United States, 
 16 per cent, in value of their trade is carried in United States ships, and 84 per 
 cent, in foreign ships, of which more than two-thirds are British.
 
 PART II. — RETALIATION. II9 
 
 and iron she has an ample store ; her geographical position 
 is as good as ours. Every port in the world, our own included, 
 is as free to American ships as to ours, whilst the Union closes 
 her trade between her Atlantic and Pacific ports to our ships. 
 But whilst we leave our shipowner to buy his materials and 
 build and buy his ships where and how he pleases, America 
 refuses to place a foreign-built ship upon her register, and 
 imposes a duty of 50 per cent, on the materials of shipbuilding. 
 At the same time, whilst she thus protects her shipowners out 
 of existence, she leaves her capital and energy free to devote 
 themselves to the production of food in her boundless realms 
 of virgin soil, and the consequence is that, whilst she is 
 developing with extraordinary rapidity those natural resources 
 of soil and climate, with which her laws have not directly 
 interfered, she has surrendered to us the field in which nature 
 allows us to compete, and which, at one time, she seemed 
 destined to win also. 
 
 We are accustomed to think our railway interest an impor- Shipping a 
 tant interest, and so it is. But in current expenditure on compared 
 skilled labour our shipping interest is still more important. Railway 
 The fixed capital of the railways is over 700 millions; the Interesi. 
 fixed capital in ships is probably not a fourth or fifth of that 
 amount. But the working expenses of the railways in 1880 
 were ;^^h millions, whilst the outgoings on shipping, which give 
 employment and remuneration to a great variety of forms of 
 skilled labour, probably amount to nearly double that sum. 
 The gross income of the railways in 1880 was 65^ millions. 
 What the gross income of shipping was we have no means of 
 estimating exactly ; but it must have been very large indeed, 
 probably much more than that sum. Our shipping interest is 
 one of which the nation may well be proud. 
 
 CHAPTER XXXIV. 
 
 DAD CONSEQUENXES OF RETALIATION, SUPPOSING IT POSSIBLE, 
 AND SUPPOSING A CASE COULD BE MADE FOR IT. 
 
 We have seen that retaliation would be an impotent weapon in Conse- 
 our hands : that to retaliate on article.? of food, or of raw p^g^^j^-^^ ^' 
 material, is out of the question ; and that to retaliate on manu- tion.
 
 120 
 
 FREE TRADE V. FAIR TRADE. 
 
 ilaterials 
 could be 
 jcarcer and 
 iearer. 
 
 factures, as proposed by tlic Fair Trade League, or on luxuries, 
 as proposed by Lord Salisbury, would have no effect except 
 that of exposing us to a far more dangerous retaliation in 
 return. We have also seen that our position as Free Traders 
 in the midst of Protectionist countries is not such as to call for 
 a change in our policy. But, assuming that all these things 
 were unproved ; supposing that a fundamental change is 
 necessary ; and supposing that a retaliatory policy were possible 
 for us, it is worth while to consider what its consequences 
 would be. 
 
 1. One efifect of retaliation would be to deprive English 
 people of the goods they can buy better and cheaper abroad. 
 This, if confined to luxuries, would, perhaps, be the least of the 
 evils caused by it. If the only effect of a high tariff were to 
 limit the sums expended on the hothouse, the shrubbery, the 
 game preserve, the hunting stable, the race-course, or the ball- 
 room, there would be comparatively little objection to it. The 
 national loss would be small, but the effect, whether for fiscal or 
 economical purposes, would be small also. If retaliatory duties 
 are to have any real efi'ect, they must touch things which a great 
 many people want and use ; and in this case the comfort and con- 
 venience of a large number of people would be seriously affected. 
 
 2. A second effect of retaliation would be to diminish the 
 sale and manufacture of English goods. Goods of foreign 
 make bought for our use at home are ex hypothesi better and 
 cheaper than similar goods of native manufacture. Goods of 
 English make bought for use by foreigners abroad are ex 
 liypothesi better and cheaper than similar goods of foreign 
 manufacture. If English people are prevented from buying 
 abroad, and foreigners from buying here, there will be less 
 produced, less profit made, and less to spend in return on both 
 sides. The Frenchman who sells his silk to us makes more 
 profit, and buys directly or indirectly more of our goods in 
 return than the English silk merchant would do if we were to 
 compel English people agairst their will to use English silk 
 instead of French silk. 
 
 3. We should cripple our own trade by depriving it of 
 materials. Many, if not most, articles are made for further use 
 in manufacture. What is a manufactured article in retrospect 
 is raw material in prospect, as I have shown in the case of 
 sugar and dressed hides. 
 
 4. We should also stunt and cripjile our manufactures, by
 
 PART II. — RETALIATION. 121 
 
 bestowing the fatal gift of Protection upon them, and depriving \ve should 
 them of the stimulus of foreign competition. At this moment lose the 
 our leather trade suffers by American competition, because the of"com- 
 Americans tan hides cheaper than we do. Our Bradford fabrics petition, 
 are or have been suffering, because our wives and daughters 
 have found French or German woollens pleasanter or prettier 
 than Yorkshire goods. If we were to exclude American leather, 
 or French woollens, we should exclude the stimulus requisite for 
 improvement in the tanneries and woollen mills of England, 
 and very likely stop the improvement in these particular manu- 
 factures which is at this very moment in progress. 
 
 5. A further and a most serious evil has not been sufti- Last 
 ciently considered. We are not now arguing with Protectionists, protg°[p,i 
 who wish to keep out foreign goods altogether ; we are arguing interests 
 with people who wish to exclude foreign goods only in order to ^^''se t^nn 
 make foreigners admit English goods. Now what will be the ^^ '^^ ' 
 position of our unhappy protected interests when retaliation has 
 effected its purpose, and when the foreign nation against whom 
 
 it is directed offers us a free tariff on the condition of our 
 repealing our protective duties? We shall have nursed up a 
 miserable interest, feeble for purposes of production, as pro- 
 tected interests always are, but powerful in the lobbies, and 
 clinging with tenacity to its protective duties, which will then 
 be seen to stand in the way of other and more important 
 interests. This unhappy interest will either maintain itself to 
 their detriment, or it will be sacrificed for their benefit, and its 
 last state will be worse than its first. The ribbon-weavers of 
 Coventry have time out of mind been complaining of bad trade 
 and foreign competition. Since the French Treaty they have, 
 at any rate, known their fate, and Coventry has other manu- 
 factures and other prospects of prosperity. It would be the 
 height of cruelty to tempt capital and labour back into the 
 ribbon trade by the prospect of a protection against French 
 ribbons, to be withdrawn as soon as the French people become 
 alive to their own true interests, and repeal their duties on 
 English iron and cotton. 
 
 6. A seventh evil of retaliation peculiarly evident to the Confusion 
 official mind, but not the less a great public evil, is that it p ^^'^ 
 would lead to all the confusions and difficulties which arise House, 
 from duties differing according to the nationality of the goods, 
 
 and all the mischiefs and frauds attendant on certificates of 
 origin. A generation has passed away since the reforms of the
 
 122 FREE TRADE V. FAIR TRADE. 
 
 tariff swept this troublesome rubbish into the ofTicial waste- 
 paper basket. Those who were at work then can remember 
 what a relief that reform was. But the mischiefs formerly 
 caused to trade in its then contracted state were as nothing 
 compared to the evils which such a system would now inflict 
 on trade, considering the infinitely greater number of com- 
 mercial dealings which now take place, and the infinitely greater 
 speed with which they must be conducted. 
 
 CHAPTER XXXV. 
 
 PRACTICAL APPLICATION OF RETALIATORY DUTIES TO FRENCH 
 SILKS AND FRENCH WINES. 
 
 Retaiution Let us see how Retaliation w'ould work in an actual and not im- 
 of Siik!^ probable case. If we should be so unfortunate as to fail in the 
 present negotiations with France, there will be a cry for Retalia- 
 tion, and it will be a formidable one, for it will unite in one current 
 special interests which desire Protection, general feelings of in- 
 dignation and political temptation. A heavy tax on French 
 silk will probably be pressed upon the Government. Silk is, 
 comparatively speaking, a luxury, and it is an important French 
 manufacture. According to our own statistics, we imported 
 silk to the value of about lo millions sterling from France in 
 1880. There is some reason to doubt these figures, as the 
 exports from France to England, according to French statistics, 
 are only 6^ millions, of which 3I millions are French manufac- 
 ture ; but it is certainly an important article of French manu- 
 facture and export. We also make and export a large quantity 
 of silk manufactures, amounting in 1880 to about 2 millions. 
 Let us see what would be the consequence of a high j)rotective 
 duty on French silk imported into England. 
 Silk would I. English people would get their silk goods less good and 
 i.c worse |gj,g clieap. This, it may be said, is a trifle. Silk is a luxury, 
 
 and dearer ' ' -',,.,'. ...,,,., . -i ' 
 
 iiiEngiand. and people can do very well without it. I will admit that it is 
 not the most important of articles ; but is it a trifle to make the 
 handkerchief, the ribbon, the Sunday gown dearer and uglier ? 
 Is it a trifle to take from our people one of the few articles 
 which add grace and beauty to our somewhat sombre and dreary
 
 PART II. — RETALIATION. I 23 
 
 life ? Speaking in the interest of those who can spend little 
 upon mere beauty and ornament, I cannot come to any such 
 conclusion, 
 
 2. It will diminish the quantity of English goods which are Fewer 
 now sent, directly or indirectly, to France in return for French English 
 silk. This is beyond doubt. Whatever France sends us we be°^ade' 
 pay for, and we pay for it in something we can make better and sold in 
 than she does ; we shall lose a certain quantity of French Exchange, 
 custom, directly or indirectly. But it will be said, " The money 
 
 now spent by English people on French silk must be spent on 
 something else ; that something will probably be silk made 
 in England, and so English labour and capital will be employed 
 as much and as profitably as if they were employed to pay the 
 French for their silk." 
 
 The rejoinder is clear : they will be employed, but not as 
 much or as profitably. Ex hypothesi the French make the 
 silk they send us better and cheaper than we do ; they can 
 make more profit out of it, and can therefore spend more on 
 other goods of ours in return. On the other hand, it is equally 
 clear that the English capital and labour which we are going to 
 divert into the silk business is now employed on something 
 which pays better than silk, or they would be employed in 
 making silk. Consequently, by diverting this labour and 
 capital to silk-making we are making it less profitable than it 
 was before the tax. There will be a loss all round. 
 
 3. It will deprive our own silk manufacturers of the stimulus Silk manu- 
 for improvement now arising from French competition ; and p*^'^'^'^ I" 
 this, considering the value of French taste and ingenuity in will not be 
 improving the beauty of manufactures, is no small con- stimulated 
 sideration. mion"'^'" 
 
 4. It will call into existence a protected manufacture, weak \ ^veak 
 and sickly as such manufactures always are. Who that remem- manufac- 
 bers the constant distress of the Spitalfields weavers in the days J"""*^ ^^''' "^^ 
 of Protection, can desire to see English money and English 
 workmen again tempted by protective duties into such a business? 
 
 5. It will not only coax a miserable trade into existence. And this 
 but if Retaliation answers the purpose of its promoters, and the ^^^'^ 
 French are induced by our refusal of their silks to offer to wilUiere- 
 take our cottons and wool and iron on reasonable terms, we after be 
 shall be forced to abandon this protected trade to the tender deserted, 
 mercies of French competition. We shall have indulged it and 
 pampered it only to betray and desert it.
 
 124 FREE TRADE V. FAIR TRADE. 
 
 'Tlie 6. In the meantime we shall have to distinguish at the 
 
 House"\vill Custom IIousc bctwecu I'rench-madc silk and all other silks; 
 have to dis- for it is an essential part of the policy of Retaliation and Recipro- 
 tinguish city that we are not to i:)lacc these duties on the goods of 
 Countrv Countries which take our goods free. Switzerland, for instance, 
 and ])robal)ly Italy, send their silk goods to us through France. 
 French goods may be sent to us through Belgium or Holland. 
 We must therefore ascertain, before we allow any bale of 
 silk goods to be landed in England, whether they have been 
 made in France or in some other country. Conceive the confu- 
 sion, difficulty, and delay which such official obstructions would 
 cause. They would injure trade more than the tax itself 
 
 In silk I liave taken a manuf;\cture which is carried on both 
 in France and I'Jigland, and in which, therefore, Retaliation 
 involves Protection to English manufocture. This would not 
 be the case with wines, to which X. (the writer in the Fall Moll 
 Gazelle, to whom I have referred above) points as an article on 
 which we might properly lay a retaliatory duty. If, in con- 
 sequence of the treaty dropping, our hands are freed, and if 
 either fiscal or social reasons lead us to desire to alter our wine 
 duties, by all means let it be done ; but if they are to be purely 
 retaliatory — that is, if we impose duties which we know to be 
 injurious to ourselves for the purpose of injuring France, and 
 thereby comjielling her to reduce some of her duties on our 
 goods — then they would be open to all the objections I have 
 pointed out in the case of silk. They would, it is true, not 
 protect our manufactures of wine, as we have none, but they 
 would protect the wine-growers of .Spain, Italy, and Germany, 
 which it is certainly not our object to do. In all other respects 
 such duties would be followed by every one of the evil con- 
 sequences I have pointed out as the consequences of a retalia- 
 tory duty on silk.
 
 PART II. — RETALIATION. 125 
 
 CHAPTER XXXVI. 
 
 PROTECTION FOR THE PURPOSE OF CHECKING A TOO EXCLUSIVE 
 DEVELOPMENT OF AGRICULTURE. 
 
 There is one attitude of young Protectionist countries towards Retaliation 
 trade which remains to be considered — viz., that of those who where Pio- 
 admit that they are incurring economical loss by their policy, !,X^p°'ed^to 
 but who, notwithstanding, resolutely exclude foreign manu- check 
 factures, on the ground that the cultivation of the soil and the exclusive 
 export of raw produce are not by themselves industries suffi- iuf",'^" " 
 cient to promote national progress ; and that it is the interest 
 and business of the State to foster other forms of industry, in 
 order the sooner and the better to form a completely developed 
 society. These views are probably wrong ; but they deserve 
 more attention than they commonly receive from us, and are 
 less easy to answer than the ordinary Protectionist fallacies. 
 But, right or wrong, Retaliation against this class of Protectionists 
 is still more foolish than against others. Retaliation plays their 
 game exactly ; it is their professed object to force their own 
 labour and capital out of its natural channel — the tilling of the 
 soil- -and to turn it artificially into the channels of manufacture. 
 By refusing to take their raw produce we help them in effecting 
 this object ; for we make their natural productions less valu- 
 able. So far from fearing Retaliation as an injury, they will 
 accept it as a friend and an ally ; so far from being frightened 
 into opening their ports to our manufactures by the refusal of 
 their raw produce, they will hail that refusal as the comi)!e- 
 ment of their own policy. 
 
 CHAPTER XXXVH. 
 
 RETALIATION DOES NOT ONLY NOT EFFECT ITS OBJECT, V.VT 
 HAS A CONTRARY EFFECT. 
 
 Almost any one of the objections above noticed appears to me Retaliation 
 to be fatal to the principle of Retaliation ; but there is still ^^''^ 
 anohter objection, which has as great weight as any of them. ReTaHa^ 
 Retaliation is not calculated to effect its object; it is calculated tion.
 
 126 FREE TRADE V. FAIR TRADE. 
 
 Retaliation to cftbct the very opposite. It grows upon itself. It provokes 
 
 producf-s fiirtiicr Retaliation, until the nations arc liopelessly alienated. 
 
 A little consideration will show how natural this is, ana now 
 
 little reason we have to expect a favourable result from it. 
 
 It shows In the first place, we lead Protectionists to think that we do 
 
 our^own '" "'^^ believe in our own principles. " See," they will say, "what 
 
 Principles. England is doing. She professes to believe that the lowering 
 
 of import duties is a good thing in itself, and yet she is taking 
 
 the first opportunity to raise her own. We will follow her 
 
 example rather than her precepts." 
 
 It arouses In the second place, a natural feeling of antagonism is 
 
 antago- arouscd ; and feeling is often stronger than self-interest. " We 
 
 are giving so much, and you give so little ; we will punish you 
 
 by giving less." Canning's well-known despatch involves a 
 
 poUtical, if not an economical truth : — 
 
 " In matters of commerce the fault of the Dutch 
 Is giving too little and asking too much ; 
 With equal advantage the French are content, 
 So will clap on Dutch bottoms 20 per cent." 
 
 It needs no thought to feel angry at an over-reaching 
 bargainer ; it needs much thought to see that the over-reacher 
 over-reaches himself more than he over-reaches us — that we are 
 the greatest gainers by what we have given him. 
 Strength of But this is not all. The strength of Protection lies in the power 
 Citer^e's'ts'^ of concentrated protected interests. They spend money, time, 
 and trouble in defence of their ])rivileges ; they intrigue behind 
 the throne ; they crowd the lobbies ; and are ready to take the 
 best advantage of the popular indignation caused by an un- 
 Experience successful negotiation. The French limperor was either unable 
 m Prance ^j. unwilling to sacrifice his French iron-masters, though cheap 
 America, iron was one of the first necessities of France. M. Tirard 
 quakes before Rouen and Roubaix. The iron-founders of 
 Pennsylvania are more urgent in the Senate House at Washing- 
 ton than all the western prairies. It needed a most unusual 
 conjunction of political philosophy, public interest, wealthy 
 manufacturers, distress among the working classes, and heroic 
 leaders, to repeal our own Corn Laws. Our ship-owners have 
 scarcely yet forgiven the repeal of the Navigation Laws, though 
 freedom of trade has given them the command of the seas. 
 The recent growls from Preston, from Bradford, and from 
 Lincolnshire, show how soon and how easily, even in this
 
 PART II. — RETALIATION. 1 27 
 
 country, partial and self-seeking interests could mislead the 
 multitude and excite a jealous and angry cry, not only for Fair 
 Trade but for Protection. Once embarked in a war of tariffs, 
 and we are much more likely to arrive at prohibition than at 
 Free Trade. 
 
 What are the teachings of experience ? We have some Protec- 
 Protectionist and some half-Protectionist countries. Do they t'onist 
 get better terms from each other than the Free-trading countries? geTno"^^ 
 Does the United States get better terms from France or Ger- better 
 many or Canada than England or Holland ? Are the Pro- ^^^"]^ '''''^" 
 tectionist countries ready to fly into each other's arms? We 
 know very well that this is not the case. Lord Salisbury speaks 
 as if nothing had happened before the French treaty ; but 
 the very reason for the adoption of the commercial policy Failure of 
 which we pursued from 1840 to i860 was that negotiations for ^j*""'-^' 
 commercial treaties had been tried and had failed signally. They negouT-*^' ^ 
 had been tried by the ablest negotiators, by Sir R. Peel and tions. 
 Mr. Gladstone, and by the Minister who preceded them. They 
 had been tried with the best possible materials for negotiation, 
 with Protective duties on our part such as Lord Salisbury in his 
 wildest dreams can never hope to get; duties, too, which our own 
 Minister wished for our own sakes to reduce or repeal. When 
 Mr. Ricardo brought forward his motion, in 1844,* his first and 
 strongest point Avas that negotiations for commercial treaties 
 with Brazil, Portugal, Spain, and France had all been pending 
 and had all come to an end, not only without any favourable 
 result, but with the result of leaving our relations with those 
 countries worse than they had previously been. This no doubt 
 was one principal reason why, though Mr. Ricardo's motion 
 was rejected at the time, Sir R. Peel and Mr. Gladstone subse- 
 quently adopted its policy.f 
 
 The conclusion of Mr. Ricardo's speech consisted of an apt 
 quotation from Dr. Franklin, which may be almost taken as a 
 prophesy. 
 
 "Suppose X to be a country having three manufactures, Dr. 
 cloth, silk, and iron, furnishing those manufactures to three ^'■^"'^'■"• 
 countries. A, B, C ; and that X, to improve the cloth manufac- 
 ture, should lay a duty amounting to prohibition on all the cloth 
 coming from A ; that A, to retaliate, should lay a prohibitory 
 duty on silk coming from X. The silk-workers would begin to 
 
 * " Hansard," vol. 73, p. 1271. 
 
 t See Sir R. Peel's speech, 6 July, 1849, "Hansard," vol. 106, p. 1429.
 
 I2S FREfe TRADE V. FAIR TRADE. 
 
 com]ilain, and X, to jjrotcct them, should lay a prohibitory duty 
 on the silk coming from B ; B, to retaliate, should put a pro- 
 hibitory duty on iron coming from X. The iron manufacturers 
 would complain, and then X, to protect them, should lay a pro- 
 hibitory duty on iron coming from C ; whilst C, to retaliate, 
 should lay a duty on the cloth coming from X. And Dr. 
 Franklin asked, what benefit these four countries would gain 
 by these prohibitions, while all four would have curtailed the 
 sources of their comforts and the conveniences of life." 
 
 Our experience is not confined to this side the Atlantic. 
 Dr. Franklin's supposed case represents exactly the present 
 iprocity relation between his own country and Canada. The United 
 States and Canada are meant by nature to do business freely 
 with one another. An artificial barrier between them is to the 
 eyes of common sense, as of political philosophy, absurd and 
 unnatural ; and yet it exists, and has grown into formidable 
 dimensions within the last 25 years. This is no doubt partly 
 due to extraneous circumstances, such as the dispute about the 
 Fisheries and Fenian raids ; but in the main it has been the 
 natural result of endeavours to arrive at Free Trade by the 
 road of Retaliation. In 1854, as I have mentioned above, a 
 commercial treaty was made between Canada and the United 
 States to the mutual advantage of both, under which certain 
 products of each country were admitted into the other duty 
 free, liberty to tax other products being still reserved. In 1865 
 the United States denounced that treaty. What were the rea- 
 sons they gave for it ? Those reasons were contained in an 
 elaborate report of the Committee of the House of Representa- 
 tives, which was laid before our Parliament.* The Committee 
 admit and assert, in the strongest terms, the importance to 
 Canada and to the United States of the most unrestricted inter- 
 course, and indeed advocate, as the best if not the only method 
 of effecting it, a complete ZoUverein, or Customs' Union on the 
 German plan, including all British North America, within the 
 limits of which no Customs' duties whatever should be levied. 
 The same Committee condemn the then existing treaty in 
 terms which remind one of our Fair Traders, because, as they 
 say, it was one-sided ; in other words, because the people of the 
 United States obtained under it Canadian corn, and fish, and 
 timber duty free, whilst the Canadians were compelled by their 
 own import duties to pay an extra and unnecessary price for the 
 * See Despatch from Lord Lyons, North America, No. 10, 1862.
 
 PART II. — RETALIATION. I 29 
 
 sugar, cotton, silk, iron, and wool of the United States. The Canada 
 Committee made special, and apparently not ill-founded, com- ^"<^ United 
 plaints that Canada had ever since the treaty constantly Re^dp^rocity 
 increased her duties on these articles until her conduct had Treaty, 
 provoked severe observations from the English Colonial Minis- 
 ter, which again provoked unpleasant recrimination in the 
 Canadian Parliament. What induced Canada thus to increase 
 her duties, I do not know ; but that she should do so in the 
 hope of obtaining still better terms from the United States, was 
 a natural result of the bargaining system. At any rate, the 
 result was that the United States, instead of taking a step in the 
 direction of freedom, said, ''If you give us such bad terms, we 
 will give you worse ; " and they consequently withdrew from the 
 treaty, and left Canadian goods subject to their oppressive 
 tariff. The attempts at a bargain went on more or ess until 
 1879, when Canada, finding herself worsted, determined to re- 
 taliate with greater vigour, and adopted the Protective tariff of 
 1879, of which we have heard so much, and which, whatever 
 Mr. Goldwin Smith may say, was distinctly Protectionist in 
 character, and was expressed and intended to be a commercial 
 blow to the United States. What will be the next step no one 
 can say. Sooner or later both parties will probably come to 
 their senses ; but in the meantime, we may well ask, with Dr. 
 Franklin, "what benefit those two countries have gained by their 
 prohibitions, whilst each has curtailed the sources of their com- 
 forts and the conveniences of life"? But such is the natural 
 result of the use of those dangerous weapons Retaliation and 
 Reciprocity ; and to such an end we may be very sure Retaliation 
 would soon come in this country, especially if it were wielded 
 by the hands of those who cannot see the fundamental truth 
 that every separate restriction on commerce, whether imposed 
 by ourselves or others, is a separate and independent evil to 
 ourselves as well as to our neighbours, and that every removal 
 of every restriction is a separate and independent gain to 
 ourselves as well as to our neighbours,
 
 t-^o 
 
 FREE TRAI>r. 7'. F.MR TRADE. 
 
 Cobden's 
 Treaty 
 gives no 
 counte- 
 nance to 
 Retalia- 
 tion. 
 
 We did 
 
 nothing we 
 .'•hould not 
 have done 
 without a 
 Treaty. 
 
 Wine the 
 sole excep 
 tion, if an 
 exception. 
 
 CHAPTER XXXVIII. 
 
 THE FRENCH TREATY OF 1860. 
 
 To Retaliation, whatever Lord Salisbury may say, the French 
 treaty of i860, properly understood, gives no real countenance. 
 In that treaty we neither imposed nor threatened to impose 
 duties either on French or on any other goods ; on the contrary, 
 we took duties oft' French goods, and at the same time off similar 
 goods the produce of all other countries. 
 
 In doing this, we were doing what was strictly for our own 
 interest, independently of the action of France. In deference 
 to the weakness of France, we put what we did into the form of 
 a bargain — Do iit des ; but we were giving nothing we should 
 have wished to keep. AVhat we did was, with one doubtful ex- 
 ception, what we should have done, and ought to have done, 
 had France made no relaxation of her duties. This is the dis- 
 tinction which Lord Salisbury fails to see. There is a world- 
 wide difference between taking advantage of the accident that 
 what we do for our own sakes is looked on by a foreign nation 
 as a concession, and doing something which for our own sakes 
 we should avoid, in order to have a concession to make. The 
 fact that the form of the French treaty has misled Lord Salisbury 
 and others into overlooking this distinction, is, to my mind, the 
 greatest objection to it. 
 
 The single exception to which I have referred, if indeed it 
 is an exception, is the wine duty. Strong reasons, founded on 
 considerations affecting the health of the people and the 
 safety of the revenue, were given for the particular duties fixed 
 in 1860-62. So far as these reasons support those duties, there 
 can be no possible objection to them. But there can be no 
 doubt that in fixing these duties the interests of France had 
 also some influence, and there can be no doubt that these 
 duties do give some advantage to French wine over the wines 
 of other countries. Further investigation and experience have 
 led to a doubt whether these duties were properly settled. The 
 Committee of the House of Commons which sat upon this 
 subject in 1879 came to the conclusion that the fiscal and 
 
 i
 
 PART II. — RETALIATION. 131 
 
 social reasons given for these duties were insufficient, and the Treaty 
 Spanish and Portuguese Governments have strongly and ^^^°' 
 repeatedly remonstrated against them, as creating differential 
 charges on the wines of Spain and Portugal. Spain has even 
 gone so far as to retaliate by differential duties on English goods. 
 Our own colonies have complained, as mentioned above, in 
 Chapter XV. Without pretending to give an opinion on this 
 vexed controversy, I think it illustrates strongly the danger of |^^"&^^ °^ 
 making, as " X." proposes, even such a question as the reduc- illustrated" 
 tion of wine duties, where no question of Protection to English by the 
 interests is concerned, and where the reduction is clearly in pi"esent 
 our own interest, the subject of a tariff bargain. If Sir C. things. 
 Dilke returns from Paris without a French treaty in his pocket, 
 and if France subjects our goods to the increased duties of her 
 general tariff, and if Spain and Portugal offer readjustments of 
 their tariff in return for readjustment of the wine duties, it will 
 be almost too much to expect from human nature that we 
 should not, in making that readjustment, have regard to the 
 interests of Spain and Portugal, and take a vindictive pleasure 
 in sacrificing the interests of France. And yet I beheve that 
 the true policy for us to adopt is to have regard only to what 
 we should do if no French or Spanish tarift" existed : to admit 
 low-priced French wines at a lower rate of duty ; to reduce the 
 present duty on Spanish and Portuguese wines ; or to increase 
 the wine duties altogether, and repeal some other tax, such as 
 the tea duty ; whichever may be most advantageous to us, 
 with a simple regard to the interests of our revenue and the 
 benefits to be derived by our people from light or strong wines 
 or from tea. If we simply admit Spanish and Portuguese wines 
 because it is our interest to get those wines cheap, and to 
 encourage trade with Spain and Portugal, it will be well. And 
 if the present Spanish Minister wishes to make such a reduction 
 the condition of reducing his own tariff, we shall properly get the 
 benefit of his action. But if we tie our hands by a treaty, we 
 may embarrass ourselves financially ; and if our arrangements 
 are such as to place a differential and vindictive duty on the 
 wines of France, we shall undoubtedly be committing a great 
 economical as well as political mistake, and be starting on a 
 course of policy towards France which will have a bad effect, 
 not only on the trade between the two countries, but on rela- 
 tions which are still more important than trade. Let us not begin 
 a war of Retaliation, whatever may be the conduct of France.
 
 '32 
 
 FREK TRADE V. FAIR TRADE. 
 
 It is not, however, by the balance of economical results, 
 past, present, or future, that the value of the French Treaty 
 can be rightly judged. Its effect at the time in putting a 
 stop to that alienation of the two nations which was then 
 threatening to break out into war, and the kindly personal 
 intercourse which has since been brought about between 
 Frenchmen and Englishmen, are results of still greater 
 importance than increase of trade. If the present negotia- 
 tions should result in failure, the economical result will jjrobably 
 be a matter of little importance to us. It will certainly be a 
 matter of little importance compared with the political evil 
 arising from the consequent irritation and alienation of the two 
 nations. One thing, however, may be said of the French 
 treaty, which, considering the danger of all negotiations of the 
 kind, is perhaps not its least merit — viz., that it cannot be a 
 precedent ; for, by abolishing all or nearly all the duties we can 
 spare, it has left us little or no means to strike further bargains. 
 In speaking as I have done of the French treaty of i860, I 
 am quite aware of the value of the system, well described in 
 the following passage from Mr. Morley's "Life of Cobden." 
 
 "In these treaties, and in the treaty made afterwards by 
 England with Austria, Sir Louis Malet reminded its opponents 
 in later years that each of them had a double operation. Not 
 only does each treaty open the market of another country to 
 foreign industry; it immediately affects the markets that are 
 already opened. For every recent treaty recognised the ' most 
 favoured nation ' principle, the sheet-anchor of Free Trade, as 
 it has been called. By means of this principle, each new point 
 gained in any one negotiation becomes a part of the common 
 commercial system of the European confederation. ' By means 
 of this network,' it has been excellently said by a distinguished 
 member of the English diplomatic service, ' of which few Eng- 
 lishmen seem to be aware, while fewer still know to whom they 
 owe it, all the great trading and industrial communities of 
 Europe — />., England, France, Holland, Belgium, the Zollverein 
 (1870), Austria, and Italy — constitute a compact international 
 body, from which the principle of monopoly and exclusive 
 privilege has once for all been eliminated, and not one member 
 of which can take off a single duty without all the other mem- 
 bers at once partaking in the increased trading facilities thereby 
 created. By the self-registering action of the * most favoured 
 nation ' clause, common to this network of treaties, the tariff
 
 PART 11.— RETALIATION^. 1 35 
 
 level of the whole body is being continually lowered, and the 
 road being paved towards the final embodiment of the Free 
 Trade principle, in the international engagement to abolish all 
 duties other than those levied for revenue purposes.' " 
 
 But it must be remembered that some of the nations have Actual con- 
 drawn back from these treaties ; that Germany, Austria, Italy, and sequence^ 
 France have recently raised their duties ; and that if it is a great Treaties, 
 advantage to have duties reduced for us behind our back, and 
 without effort on our part, by the operation of the " most favoured 
 nation " clause, there is some inconvenience in having them 
 raised behind our back by action on the part of two foreign 
 nations with which we have nothing to do. It may also be some 
 drawback to the value of this generally excellent clause if one 
 nation — France, for instance— should be prevented from re- 
 ducing her tariff in our favour, because if she did so, she would 
 be compelled by the " most favoured nation " clause to give 
 the same privilege to another nation — say Germany. 
 
 In short, if the separate action followed by us from 1840 to Result of 
 i860 was not successful in making other nations reduce their Treaties on 
 
 • action 01 
 
 duties, I think we must admit that neither has the treaty system Foreign 
 adopted in i860 been followed by unalloyed success, whilst it Nations 
 has certainly set men's minds in a wrong direction. Even the aUog-ether 
 inestimable advantages derived from a better feeling between successful. 
 England and France will not be unalloyed if the failure of the 
 present negotiations should lead to a revival of bitter feeling. 
 
 In making this reference to the French Treaty of i860, 1 do 
 not wish to be understood as saying that the balance of results, 
 even in an economical point of view, have not been good. I 
 only say that there have been large drawbacks. 
 
 It may seem ungenerous and out of place, in a paper Cobden's 
 published by the Cobden Club, to say a word which seems to Views, 
 throw doubt upon the great work of Cobden's later years. But 
 Cobden is beyond any such criticism. His greatness consisted 
 in the way in which he kept his great object in view, aided but 
 not fettered by formulas. When Freedom of Trade could be 
 promoted by separate action, he was for separate action ; when 
 he thought it could be promoted by joint action with France, 
 he was for joint action. If that joint action had been shown to 
 him to have consequences dangerous to Free Trade, he would 
 have been the first to abandon it. If I hesitate about the 
 policy and effect of the commercial treaties, it is certainly not 
 " because they do not sound in tune with the verbal jingle of an
 
 134 FREE TRADE T. FAIR TRADE. 
 
 ' objec- abstract dogma." My doubts are very practical and concrete. 
 
 [y "^^ I am cafraid of being led into Retaliation. If it is true, as some 
 
 'ii<-ads of the thorough-going advocates of the treaty appear to think, 
 
 '•-'•t'liia- that it is useless for us to abolish our duties on imports, unless 
 
 foreign nations at the same time abolish their duties on our 
 
 exports, Lord Salisbury's conclusion is inevitable — \vc must 
 
 reimpose our own import duties, until we can get foreign 
 
 nations to take off theirs. To controvert this conclusion is one 
 
 of the principal objects of this paper.
 
 PART ir. — RETALIATION. 1 35 
 
 CONCLUSIONS OF PART II. AS TO RETALIATION. 
 
 To sum up : the conclusions to which the above reasoning 
 leads us on the subject of Retahation are as follow : — 
 
 1. Retaliation is an impotent weapon in our hands. Retalia- 
 
 2. To lower foreign tariffs was not the sole or principal j'°i,^^'q. 
 object of the authors of our present policy. They would have tent, 
 adopted that policy had they known that no foreign tariff would 
 
 be lowered. 
 
 3. All duties are impediments to trade ; the fewer duties, 2. Un- 
 the fewer impediments. We can remove our own duties ; we called for. 
 cannot remove our neighbours'. 
 
 4. No tariff is an absolute barrier ; and a free country has 
 such advantages in production that it can compete with a 
 Protectionist country, even for the home market of the latter. 
 
 5. Exports involve imports ; all Protectionist countries de- 
 sire to export, and must therefore import. Wliere a Protec- 
 tionist country exports to another country, the second country 
 must pay in goods, if not directly to the Protectionist country, 
 indirectly through some third country. 
 
 6. There are many free and many neutral markets, and in 
 all of them a Free-trading country has advantages over a 
 Protectionist rival. 
 
 7. Protection has not, so far as we can judge, advanced 
 trade and manufacture in France, Germany, or the United 
 States. 
 
 8. The trade of a country depends on many things besides 
 Free Trade. Free Trade only removes impediments. What 
 can be claimed for Free Trade is that a country is better with 
 it than without it. The present prosperity of the United States 
 does not affect the question. 
 
 9. For the above reasons, there is no fear of our losing our 
 market, and the case for Retaliation fails.
 
 136 rUEK TRADE 7'. FAIR TRADE. 
 
 3- ^'is- 10. Retaliation must, in its immediate consequences, be 
 
 chievous. injurious to ourselves. 
 
 11. Retaliation is calculated to defeat its own object, and 
 to ])rovoke further Retaliation. 
 
 12. The Cobden treaty affords no ground whatever for 
 Reciprocity or Retaliation.
 
 FIxNTAL CONCLUSIONS. 137 
 
 FINAL CONCLUSIONS. 
 
 The proposals of the Fair Trade League, worthless as they 
 may be in themselves, have afforded an opportunity for discuss- 
 ing points of some real interest, and for answering some ques- 
 tions which deserve an answer. 
 
 On the Colonial question it is impossible not to feel New 
 sympathy with the desire to draw closer the commercial bonds poi°yJ^ 
 between ourselves and those growing communities of our own object may 
 lineage and habits which it is England's greatest pride to have ^e good : 
 brought into existence. It has been the object of the first part j^^^j^ 
 of this paper to show that all the proposals which have been 
 made for effecting this object by legislative means involve 
 either restrictions on our trade with other countries, or re- 
 strictions on colonial self-government ; and that any such 
 restrictions would tend to disruption, and not to closer 
 union. 
 
 The great fact is that Governments cannot create trade ; Govern- 
 they can only impede and injure it. They cannot divert it"^^"!fu*? 
 without diminishing it. When people talk of its being the not create 
 duty of the Government to find markets for their people, what Trade, 
 they mean is that the Government shall deprive their people of 
 the markets which they find for themselves. 
 
 On the second great question which I have treated — viz., Retaliation 
 Retaliation — there can be no such sympathy. Retaliation bad in 
 appears to me to be the natural offspring of a state of mind effect.^^ '" 
 which regards our gain as others loss — a state of mind which is 
 the hot-bed of Chauvinism, Imperialism, and Protection. A 
 wave of feeling springing out of this state of mind has lately 
 swept over us and over the world ; and it is not surprising that Hopeful 
 it should bring with it a moderate revival of Protection in Tenden- 
 countries where protected interests rule the State, and a feeble '''^^" 
 attempt to revive it in our own. But the great tide sweeps on 
 its course, and this is but an eddy in the stream. The Alabama 
 treaty, and its present success ; the courage which has dared to 
 give back the Transvaal to the victorious but powerless Boers ;
 
 138 FREE TRADE V. FAIR TRADE. 
 
 the power of a minority, for the first time in our history, to 
 offer a stout resistance to an impending war ; the rapid reversal 
 of an aggressive policy by the constituencies — these are the 
 real landmarks by which to judge of a progress in international 
 morality Cobden could scarcely have dreamed of In the same 
 way, the great stream of commercial freedom sweeps on ; 
 there are temporary eddies, but time and circumstances are 
 in its favour, and its main course is in one direction. Steam 
 and telegraph have brought the nations of the world together ; 
 Prohibition has been .succeeded by Protection, and Protection 
 in many cases by Freedom ; the limits of petty States have been 
 enlarged into Customs Unions and Federations, which embrace 
 whole continents ; and England leads the van in a way which 
 excites the jealousy of those who do not understand the secret 
 of her real progress. It is the misfortune of the state of mind 
 to which I have referred that it fails to apprehend and ap- 
 preciate that moral element in trade which gives to it its 
 greatest value and significance — that element, namely, by virtue 
 of which each act of trade is a good to both the parties to it, 
 and each removal of a national restriction on trade is a good to 
 all the nations concerned. It is twice blessed. It blesseth 
 him that gives and him that takes. It reconciles self-interest 
 with morality — our duty to ourselves with our duty to our 
 neighbour ; and it thus brings the nations a little nearer to the 
 distant ideal of the Christian moralist. 
 
 I cannot end this paper better than with Cobden's own 
 words : — - 
 
 " I do not think the nations of the earth will have a chance 
 of advancing morally in their domestic concerns to the degree 
 of excellence which we sigh for until the international relations 
 of the world are put upon a different footing. The present 
 system corrupts society, exhausts its wealth, raises up false gods 
 for hero-worship, and fixes before the eyes of the rising genera- 
 tion a spurious if a glittering standard of glory. It is because 
 I believe that the principle of Free Trade is calculated to alter 
 the relations of the world for the better, in a moral point of 
 view, that I bless God I have been allowed to take a prominent 
 part in its advocacy."
 
 APPEl^DIX. 
 
 TABLES. 
 
 Comparison of our Foreign and Colonial Trade. 
 
 1. Statement of the Value of the Exports of British and Irish Produce from 
 
 the United Kingdom, and of the Amounts and Proportion exported to 
 Foreign Countries and British Possessions respectively, in each of the 
 Years from 1856 to 1880 inclusive p. 142 
 
 2. Statement of the Value of the Total Exports of British and Irish, and 
 
 Foreign and Colonial Produce from the United Kingdom, and of the 
 Amounts and Proportion expoiied to Foreign Countries and British 
 Possessions respectively, in each of the Years from 1856 to 1880 
 inclusive ........../. 143 
 
 3. Statement of the Value of the Imports of Merchandise into the United 
 
 Kingdom, and of the Amounts and Proportion from Foreign Countries 
 and British Possessions respectively, in each of the Years from 1856 to 
 1880 inclusive ...,....,/. 144 
 
 4. Statement of the Total Value of Imports and Exports of Merchandise 
 
 into and from the United Kingdom, and of the Amounts and Proportion 
 from and to Foreign Countries and British Possessions, in each of the 
 Years from 1856 to 18S0 inclusive ..... z>. 145 
 
 5. Statement in Detail of the Total Exports of Merchandise from the 
 
 United Kingdom to each of certain Foreign Countries and British 
 Possessions, in each Year and Period of Five Years since 1866, with 
 the Proportions that the Amounts for each Country and Possession 
 bear to the whole Exports in each Year and Period //. 146 to 151 
 
 6. Statement in Detail of the Imports of Merchandise into the United 
 
 Kingdom from each of certain Foreign Countries and British 
 Possessions, in each Year and Period of Five Years since 1866, with 
 the Proportions that the Amounts from each Country and Possession 
 bear to tlie whole Imports in each Year and Period pp. 152 to 154
 
 140 APPENDIX. 
 
 7. Statement compiled from the two previous Tables, showing the Propor- 
 tion of the Total Foreign Trade of the United Kingdom — Imports and 
 Exports of Merchandise — carried on with each of the undermentioned 
 rorcign Countries and Hritish Possessions . . //. 155 and 156 
 
 Effects of French luJcmnity. 
 
 8. Statement showing the Value of Imports of Merchandise into Germany 
 from the undermentioned Countries, and of Exports thereof from 
 Germany to the same Countries in the Years 1868 to 1877, made up 
 from the statistics of the difTerent Countries named (in the absence of 
 official German statistics) by treating the Exports from them to 
 Germany as Imports into Germany, and the Imports from Germany 
 into them as Exports from Germany . . . . . /• ^S7 
 
 9. Statement showing the Total Value of Merchandise Imported into and 
 
 Exported from France in the Years 1868 to 1877, according to the 
 French official returns . . . . . . . /*• 158 
 
 10. Statement showing the Value of Imports of Merchandise into France 
 from the undermentioned Countries, and Exports thereof from France 
 to the same Countries, according to the French official returns, in the 
 Years 1868 to 1877, covering the period of the payment of the In- 
 demnity to Germany .... . . • /• '59 
 
 Circuitous Trade between the United A'ingdoin, United States, and India 
 and other Countries. 
 
 11. Statement showing the Value of the Imports of Merchandise and 
 Treasure, on Private and (lovemment Account, into British India 
 from the United Kingdom, and Value of the Exports of the same from 
 British India to the United Kingdom, in the Years 1870 to 1879, com- 
 piled from the official statistics of the Indian Government . /. 160 
 
 12. Statement showing the Value of the Imports of Merchandise and 
 Treasure, on Private and Government Account, into British India 
 from the undermentioned Countries, and Value of the Exports of 
 the same from British India to the same Countries, in the Years 
 1870 to 1879, compiled from the official statistics of the Indian 
 Government . ...... . . p. 161 
 
 Duties levied on British Produce in Foreipt Countries and Colonies. 
 
 13. Return of the Rates of Import Duty levied in the principal European 
 Countries, in the United States, and in the principal Colonial 
 Possessions of the United Kingdom, on the undermentioned Articles 
 of British Produce or Manufacture ... . 162 to 167
 
 APPENDIX. 141 
 
 14. Return of the estimated or actual aa valorem Rates of Import Duty 
 levied in the principal European Countries, in the United States, 
 and in the principal Colonial Possessions of the United Kingdom, 
 on the undermentioned Articles of British Produce or I\Ianu- 
 facture //. l6S to 171 
 
 Proportions in ivhich different Coutitnes supply tis with Fooa. 
 
 15. Statement showing in what Proportion, according to Value, the principal 
 Articles of Food, except Fruit, were imported into the United King- 
 dom from Foreign Countries and British Possessions in the Year 18S0, 
 with the Total Values of such Articles imported from all Foreign 
 Countries and British Possessions respectively . //. 172 to 173 
 
 16. Statement showing the Proportion per cent, of the Total Value of the 
 Articles of Food named in Table 15, imported into the United King- 
 dom from Foreign Countries and British Possessions, for the Year 
 1880 /• 174 
 
 Exports from the United Kingdom, Fratiee, Germany, and United States, 
 classified as Food, Raw Material, and Mannfactures. 
 
 17. Statement showing the Value of the Exports ot British and Irish 
 Produce in each of the Years 1870 and 1880, classified as Articles of 
 Food, Raw Materials, and Manufactured Goods . //. 175 to 180 
 
 19. Statement showing the Proportion of Food, Raw Materials, and 
 Manufactured Articles in the Domestic Exports of France for each 
 of the Years 1869 and 1S79, compiled from the French official 
 returns //. 181 to 183 
 
 18. Statement sho\\ing the Proportion of Food, Raw Materials, and 
 Manufactured Articles in the Domestic Exports of Germany for each 
 of the Years 1869 and 1879, compiled from the official returns of 
 Germany .,.....• //. 184 to 186 
 
 20. Statement showing the Proportion of Food, Raw Materials, and Manu- 
 factured Articles in the Domestic Exports of the United States for each 
 of the Years 1870 and 1880 (Years ended 30th June), compiled from 
 the official returns of the United States ...//■ 1S7 to 189
 
 14: 
 
 APrENDIX. 
 
 TABLE I. 
 
 statement ef the Value ej the Exports of British and Irish Produce from the United 
 Kinf;dom, and of the Amounts and Proportion Exported to Foreign Countries 
 and British Possessions respectively., in each oftlie Years from 1856 to 1880 inclu- 
 sive; in thousands of pounds, i.e., 100 = 100,000. 
 
 
 
 Exported to Foreign Coun- | 
 
 Exported to B 
 
 ritish Pos- 
 
 
 Total Value 
 
 tries on 
 
 >•• 
 
 sessions 
 
 jnly. 
 
 
 of Exports of 
 British and Irish 
 
 
 
 
 
 lears. 
 
 
 
 
 
 
 Produce. 
 
 Amount. 
 
 Per Cent, 
 of Total. 
 
 Amount. 
 
 Per Cent, 
 of Total. 
 
 
 £ 
 
 £ 
 
 
 £ 
 
 
 1856 
 
 115,827 
 
 82,527 
 
 71-2 
 
 33.300 
 
 28-8 
 
 1857 
 
 122,066 
 
 84,911 
 
 69-6 
 
 37,155 
 
 30-4 
 
 1858 
 
 116,609 
 
 76,386 
 
 65-5 
 
 40,223 
 
 34-5 
 
 1859 
 
 130,412 
 
 84,268 
 
 64-6 
 
 46,144 
 
 35-4 
 
 i860 
 
 135,891 
 
 92,226 
 
 67-9 
 
 43,665 
 
 321 
 
 1861 
 
 125,103 
 
 82,858 
 
 66-2 
 
 42,245 
 
 33-8 
 
 1862 
 
 123,992 
 
 82,097 
 
 66-2 
 
 41,895 
 
 33-8 
 
 1863 
 
 146,602 
 
 95,723 
 
 65-3 
 
 50,879 
 
 347 
 
 1864 
 
 160,449 
 
 108,735 
 
 67-8 
 
 51,714 
 
 32-2 
 
 1865 
 
 165,836 
 
 117,629 
 
 70-9 
 
 48,207 
 
 29-1 
 
 1866 
 
 188,917 
 
 135,198 
 
 71-6 
 
 53,719 
 
 28-4 
 
 1867 
 
 180,962 
 
 131,162 
 
 72-5 
 
 49,800 
 
 27-5 
 
 1868 
 
 179,678 
 
 129,813 
 
 72-2 
 
 49,865 
 
 27-8 
 
 1869 
 
 189,954 
 
 141,881 
 
 747 
 
 48,073 
 
 253 
 
 1870 
 
 199,587 
 
 147,773 
 
 74 -o 
 
 51,814 
 
 26-0 
 
 1871 
 
 223,066 
 
 171,816 
 
 77-0 
 
 51,250 
 
 23-0 
 
 1872 
 
 256,257 
 
 195,701 
 
 76-4 
 
 60,556 
 
 23-6 
 
 1873 
 
 255,165 
 
 188,836 
 
 74-0 
 
 66,329 
 
 26-0 
 
 1874 
 
 239,558 
 
 167,278 
 
 69-8 
 
 72,280 
 
 30-2 
 
 1875 
 
 223,466 
 
 152,374 
 
 68-2 
 
 71,092 
 
 31-8 
 
 1876 
 
 200,639 
 
 135,780 
 
 677 
 
 64,859 
 
 323 
 
 1877 
 
 198,893 
 
 128,970 
 
 648 
 
 69,923 
 
 35 '2 
 
 1878 
 
 192,849 
 
 126,611 
 
 657 
 
 66,238 
 
 34-3 
 
 1879 
 
 191,532 
 
 130,530 
 
 68-2 
 
 61,002 
 
 31-8 
 
 1880 
 
 223,060 
 
 147,806 
 
 ; 663 
 
 75,254 
 
 337
 
 APPENDIX. 
 
 143 
 
 TABLE II. 
 
 Statement of the Value of the Total Exports of British and Irish, and Foreign and 
 Colonial Produce fiom the United Kingdoitt, and of the Amounts and Proportion 
 Exported to Foreign Countries and British Possessions respectively, in each of the 
 Years from 1856 to 1880 inclusive ; in thousands of pounds, i.e., 100 = 100,000. 
 
 
 
 Exported to Foreign Coun- 
 
 Exported to British Pos- 
 
 
 
 tries only. 
 
 sessions 
 
 3nly. 
 
 Years. 
 
 Total Value of 
 Exports. 
 
 
 
 
 
 
 
 
 
 
 Amount. 
 
 Per Cent, 
 of Total. 
 
 Amount. 
 
 Per Cent, 
 of Total. 
 
 
 £ 
 
 £ 
 
 
 £ 
 
 
 1856 
 
 139,221 
 
 102,525 
 
 73-6 
 
 36,696 
 
 26-4 
 
 1857 
 
 146,174 
 
 105,738 
 
 72-3 
 
 40,436 
 
 277 
 
 1858 
 
 139,783 
 
 96,570 
 
 69-1 
 
 43,213 
 
 30-9 
 
 1859 
 
 155,693 
 
 106,042 
 
 68-1 
 
 49,651 
 
 31-9 
 
 i860 
 
 164,521 
 
 117,988 
 
 717 
 
 46,533 
 
 28-3 
 
 1861 
 
 159,632 
 
 114,493 
 
 717 
 
 45,139 
 
 28-3 
 
 1862 
 
 166,168 
 
 120,744 
 
 727 
 
 45,424 
 
 27 '3 
 
 1863 
 
 196,902 
 
 141,932 
 
 72-1 
 
 54,970 
 
 27-9 
 
 1864 
 
 212,588 
 
 156,892 
 
 73-8 
 
 55,696 
 
 26*2 
 
 1865 
 
 218,832 
 
 167,285 
 
 76-4 
 
 51.547 
 
 23-6 
 
 1866 
 
 238,906 
 
 181,738 
 
 76-1 
 
 57,168 
 
 23-9 
 
 1867 
 
 225,802 
 
 172,440 
 
 76-4 
 
 53,362 
 
 23 '6 
 
 1868 
 
 227,779 
 
 174,061 
 
 76-4 
 
 53,718 
 
 23-6 
 
 1869 
 
 237,015 
 
 185,123 
 
 78-1 
 
 51,892 
 
 2I"9 
 
 1870 
 
 244,080 
 
 188,689 
 
 77-3 
 
 55,391 
 
 227 
 
 1871 
 
 283,575 
 
 228,014 
 
 80-4 
 
 55,561 
 
 19-6 
 
 1872 
 
 314,589 
 
 248,980 
 
 79-1 
 
 65,609 
 
 20 '9 
 
 1873 
 
 311,005 
 
 239,857 
 
 77-1 
 
 71,148 
 
 22 '9 
 
 1874 
 
 297,650 
 
 219,740 
 
 73-8 
 
 77,910 
 
 26*2 
 
 1875 
 
 281,612 
 
 204,957 
 
 72-8 
 
 76,655 
 
 27-2 
 
 1876 
 
 256,777 
 
 186,627 
 
 727 
 
 70,150 
 
 27-3 
 
 1877 
 
 252,346 
 
 176,594 
 
 70 -o 
 
 75,752 
 
 30-0 
 
 1878 
 
 245,484 
 
 173,491 
 
 707 
 
 71,993 
 
 29-3 
 
 1879 
 
 248,783 
 
 182,274 
 
 73"3 
 
 66,509 
 
 267 
 
 1880 
 
 286,415 
 
 204,887 
 
 71-5 
 
 81,528 
 
 28-5
 
 144 
 
 APPENDIX. 
 
 TABLE III. 
 
 Statement of the Value of the Iiii/>orts of Merchaiuiise into tlu United Kingdom, and 
 o/ the Amounts and Prof'ortion from Foreign Countries and British Possessions 
 respectively, in each of the Years from 1856 to 1880 inclusive; in thousands 0/ 
 'founds, i.e., 100 = 100,000. 
 
 
 
 Imported from Foreign 
 
 Imported from British 
 Possessions only. 
 
 
 
 Countries 
 
 only. 
 
 
 Total Value of 
 Imports. 
 
 
 
 
 
 Years. 
 
 
 
 
 
 
 
 Amount. 
 
 Per Cent, 
 of Total. 
 
 Amount. 
 
 Per Cent, 
 of Toul. 
 
 
 I 
 
 £ 
 
 
 £ 
 
 
 1856 
 
 172,544 
 
 129,517 
 
 75-1 
 
 43,027 
 
 24-9 
 
 1857 
 
 187,844 
 
 141,661 
 
 75-4 
 
 46,183 
 
 24 6 
 
 1858 
 
 164,584 
 
 125,970 
 
 76-5 
 
 38,614 
 
 23-5 
 
 1859 
 
 179,182 
 
 139,707 
 
 78-0 
 
 39,475 
 
 22 -o 
 
 i860 
 
 210,531 
 
 167,571 
 
 79-6 
 
 42,960 
 
 20 '4 
 
 1861 
 
 217,485 
 
 164,809 
 
 75-8 
 
 52,676 
 
 24-2 
 
 1862 
 
 225,717 
 
 160,434 
 
 7I-I 
 
 65,283 
 
 28-9 
 
 1S63 
 
 248,919 
 
 164.235 
 
 66 -o 
 
 84,684 
 
 34 "o 
 
 1864 
 
 274,952 
 
 181,208 
 
 65-9 
 
 93,744 
 
 34-1 
 
 1865 
 
 271,072 
 
 198,231 
 
 73-1 
 
 72,841 
 
 26-9 
 
 1866 
 
 295,290 
 
 223,084 
 
 75-5 
 
 72,206 
 
 24-5 
 
 1867 
 
 275.183 
 
 214,449 
 
 77-9 
 
 60,734 
 
 22-1 
 
 1868 
 
 294,694 
 
 227,700 
 
 77-3 
 
 66,994 
 
 227 
 
 1869 
 
 295,460 
 
 225,044 
 
 76-2 
 
 70,416 
 
 23-8 
 
 1870 
 
 303.257 
 
 238,425 
 
 78-6 
 
 64,832 
 
 21-4 
 
 1871 
 
 331.015 
 
 258,071 
 
 78-0 
 
 72,944 
 
 22 
 
 1872 
 
 354,694 
 
 275.321 
 
 77-6 
 
 79,373 
 
 22-4 
 
 1873 
 
 371,287 
 
 290,277 
 
 78-2 
 
 81,010 
 
 21-8 
 
 1874 
 
 370,083 
 
 287,920 
 
 77-8 
 
 82,163 
 
 22-2 
 
 1875 
 
 373,940 
 
 289,516 
 
 77-4 
 
 84,424 
 
 22-6 
 
 1876 
 
 375.155 
 
 290,822 
 
 77-5 
 
 84,333 
 
 22 "5 
 
 1877 
 
 394,420 
 
 304,866 
 
 77-3 
 
 89.554 
 
 227 
 
 1878 
 
 368,771 
 
 290,835 
 
 78-9 
 
 77,936 
 
 2ri 
 
 1879 
 
 362,992 
 
 284,049 
 
 78-3 
 
 78,943 
 
 217 
 
 1880 
 
 411,230 
 
 318,711 
 
 77-5 
 
 92,519 
 
 22-5
 
 APPENDIX. 
 
 M5 
 
 TABLE IV. 
 
 Statement of the Total Value of Imports and Exports of Merchandise into and from 
 the United Kingdom, and of the Amounts and P70portion from and to Foreign 
 Countries and British Possessions, in each of the Years from 1S56 to i83o inclu- 
 sive i in thousands of pounds, i.e. 100= 100,000. 
 
 
 
 Total Value Im 
 
 ported from, 
 
 Total Value Imported from. 
 
 
 
 and Exported 
 
 0, Foreign 
 
 and E.\ported 
 
 to, british 
 
 
 Total Value of 
 
 Countries 
 
 only. 
 
 Possession 
 
 s only. 
 
 Years. 
 
 Imports and 
 Exports. 
 
 
 
 
 
 
 
 
 
 
 
 
 Amount. 
 
 Per Cent, 
 of Total. 
 
 Amount. 
 
 Per Cent, 
 of Total. 
 
 
 £ 
 
 £ 
 
 
 £ 
 
 
 1856 
 
 311,765 
 
 232,042 
 
 74 "4 
 
 79,723 
 
 25-6 
 
 1857 
 
 334,oiS 
 
 247,399 
 
 74-1 
 
 86,619 
 
 25 "9 
 
 185S 
 
 304.367 
 
 222,540 
 
 73-1 
 
 81,827 
 
 26-9 
 
 1859 
 
 334,875 
 
 245,749 
 
 73-4 
 
 89,126 
 
 26-6 
 
 i860 
 
 375,052 
 
 285,559 
 
 76-1 
 
 89,493 
 
 23-9 
 
 1861 
 
 377,117 
 
 279,302 
 
 74-1 
 
 97,815 
 
 25-9 
 
 1862 
 
 391,885 
 
 281,178 
 
 71-8 
 
 110,707 
 
 28-2 
 
 1863 
 
 445,821 
 
 306,167 
 
 687 
 
 139,654 
 
 31-3 
 
 1864 
 
 487,540 
 
 338,100 
 
 69-3 
 
 149,440 
 
 307 
 
 1865 
 
 489,904 
 
 365,516 
 
 74-6 
 
 124,388 
 
 25-4 
 
 1866 
 
 534,196 
 
 404,822 
 
 75-8 
 
 129,374 
 
 24-2 
 
 1867 
 
 500,985 
 
 386,889 
 
 77-2 
 
 114,096 
 
 22-8 
 
 1868 
 
 522,473 
 
 401,761 
 
 76-9 
 
 120,712 
 
 23-1 
 
 1869 
 
 532,475 
 
 410,167 
 
 77 -o 
 
 122,308 
 
 23-0 
 
 1870 
 
 547,337 
 
 427,114 
 
 78-0 
 
 120,223 
 
 22 -O 
 
 1871 
 
 614,590 
 
 486,085 
 
 79-1 
 
 128,505 
 
 20 "9 
 
 1872 
 
 669,283 
 
 524,301 
 
 78-3 
 
 144,982 
 
 217 
 
 1873 
 
 682,292 
 
 530,134 
 
 777 
 
 152,15s 
 
 22-3 
 
 1874 
 
 667,733 
 
 507,660 
 
 76-0 
 
 160,073 
 
 24-0 
 
 1875 
 
 655,552 
 
 494,473 
 
 75-4 
 
 161,079 
 
 24-6 
 
 1876 
 
 631,932 
 
 477,449 
 
 75-6 
 
 154,483 
 
 24-4 
 
 1877 
 
 646,766 
 
 481,460 
 
 74'4 
 
 165,306 
 
 25-6 
 
 1878 
 
 614,255 
 
 464,326 
 
 75-6 
 
 149,929 
 
 24 "4 
 
 1879 
 
 611,775 
 
 466,323 
 
 76-2 
 
 145-452 
 
 23-8 
 
 1S80 
 
 697,645 
 
 523,598 
 
 75-1 
 
 174,047 
 
 24-9
 
 146 
 
 APPENDIX. 
 
 «! 2 
 
 29 
 
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 APPENDIX. 
 
 147 
 
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 153 
 
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 156 
 
 APPENDIX. 
 
 
 
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 APPENDIX. 
 
 157 
 
 TABLE VIM. 
 
 Staiement showing the I 'alut 0/ Imports of Meychandise into Germany from the iinder- 
 mentioned Countries, and of Exports thereof from Germany to the same Countries in 
 the Years 1S68 to 1877, made up from the Statistics of the different Countries named 
 (in the absence of official German statistics) by treating- the Exports from them to 
 Germany as Imports intoGermany, aytd the Imports from Germany into them as Exports 
 ■''rom Germany ; in thousands of Francs and Pounds sterling — i.e., 100 = 100,000. 
 
 
 1 
 
 IMPORTS i.NTO Germany fro.m 
 
 
 EXCFSS OF 
 IMPORTS. 
 
 Years. 
 
 1 j 
 
 Gt. Pritain 
 
 Switzer- 
 land. 
 
 
 United 
 
 Total of 
 
 In Tho.l- 
 
 In Thou- 
 
 
 France. Belgium. 
 
 and Briiish 
 India. 
 
 luly. 
 
 Stat s.' 
 
 t 
 
 Enumerated: sands of 
 
 sands of 
 Pounds 
 
 
 i 
 
 
 
 
 
 I 
 
 Sterlii.ij. 
 
 
 F. 
 
 F. 
 
 F. 
 
 
 F. 
 
 F. 
 
 F. 
 
 F. 
 
 £ 
 
 1868 
 
 215,000 
 
 107,647 
 
 808,654 
 
 
 5.316 
 
 110,099 
 
 1,246,716 
 
 290,160 
 
 11,606 
 
 1869 
 
 305,000 
 
 121,276 
 
 803,716 
 
 c 
 
 3,022 
 
 139.133 
 
 1.372,147 
 
 399,488 
 
 15.979 
 
 1S70 
 
 104,000 
 
 138,535 
 
 708,014 
 
 I 
 
 4.774 
 
 174,390 
 
 1.129,713 1 365.617 
 
 14,624 
 
 1871 
 
 199,000 ' 209,085 
 
 971,234 
 
 tao 
 
 8,171 
 
 158,079 
 
 I. .545. 569 529.397 
 
 21,176 
 
 1872 
 
 1 410,000 j 240,277 
 
 1,083,667 
 
 ^ 
 
 7,600 
 
 185,101 
 
 1,926,645 662,755 
 
 26,510 
 
 1873 
 
 463,000 1 266,064 
 
 919.239 
 
 13.815 
 
 271,864 
 
 1.933.982 609,705 
 
 24,388 
 
 1874 
 
 ! 414,000 I 243,120 
 
 883,241 
 
 
 
 18,569 
 
 286,315 
 
 1,845,245 607,896 
 
 24,316 
 
 1875 
 
 1 427,000 ! 244,272 
 
 856,539 
 
 % 
 
 23.634 
 
 226,558 
 
 1,778,003 464,312 
 
 18,572 
 
 1876 
 
 ; 431,000 [ 244,322 
 
 748,3315 
 
 c3 
 
 20,599 
 
 224,247 
 
 1,668,504 1 331,881 
 
 13,275 
 
 1877 
 
 1 395>ooo 222,767 
 
 1 1 
 
 732,028 
 
 
 16,615 
 
 276,639 
 
 1,643,049 1 203,647 
 
 i 
 
 8,146 
 
 
 
 
 Exports 
 
 FRO.M Germany lo 
 
 
 exckss of 
 Exports. 
 
 
 
 
 
 
 
 
 1 .^, 
 
 
 
 Gt. nritiin 
 
 
 
 United 
 
 Total of 
 
 In Thou- 'In Til u- 
 
 
 France. I^elgium. 
 
 nd British 
 Inoia. 
 
 la.<d. 
 
 Italy. 
 
 Sta es. 
 
 Enumera'ed 
 
 s-nds of sants of 
 Francs. Pouiids 
 
 
 _ 
 
 
 
 
 
 
 Sterling. 
 
 
 F. 
 
 F. 
 
 F. 
 
 
 F 
 
 F. 
 
 F. F. 
 
 £ 
 
 i863 
 
 266,000 
 
 111.549 
 
 454,614 
 
 
 8,028 
 
 116,365 
 
 956,556 — 
 
 
 1869 
 
 256,000 
 
 116,160 
 
 45Q,930 
 
 c 
 
 10,107 
 
 130,462 
 
 972,659 -- 
 
 — 
 
 1870 
 
 103,000 
 
 121,688 
 
 386,013 
 
 > 
 
 12,917 
 
 140,478 
 
 764,096 — 
 
 _ 
 
 1871 
 
 160,000 
 
 230,244 
 
 482,421 
 
 U) 
 
 13,019 
 
 130,488 
 
 1,016,172 j — 
 
 — 
 
 1872 
 
 358,000 
 
 168,554 
 
 481,984 
 
 V 
 
 14,884 
 
 240,468 
 
 1,263,890 t — 
 
 — 
 
 1873 
 
 311,000 
 
 171.530 
 
 498.747 
 
 
 23,710 
 
 319,290 
 
 1.324.277 1 — 
 
 — 
 
 1874 
 
 315,000 
 
 166,852 
 
 499.266 
 
 
 27,899 
 
 228,332 
 
 1.237.349 — 
 
 _ 
 
 1875 
 
 349,000 
 
 171,597 
 
 546,498 
 
 c 
 
 37.312 
 
 209,284 
 
 1,313,691 — 
 
 
 
 1876 
 
 389,000 
 
 195.763 
 
 528,107 
 
 U 
 
 40,089 
 
 183,664 
 
 1.336,623 — 
 
 
 
 1877 
 
 373,000 
 
 214.767 
 
 657.387 
 
 
 25,202 
 
 169,046 
 
 1,439,402 j — 
 
 — ■ 
 
 '' The values of the United States e.\poi ts to Germany have been reduced from currency 
 to specie values. 
 
 t The returns for the United .States are for years ending 30th Jvine.
 
 1^8 
 
 APPENDIX. 
 
 TABLE IX. 
 
 tatement shmuing the Total I'alue of Merchandise Jtn/>orieti into, and Exported from, 
 France, in the Years 1868 to 1877, according to the French official Returns; in 
 thousands o/francs, i.e., 100 = 100,600. 
 
 Note. — The figures are those of the French "Special" Trade, vir., Imports for 
 Domestic Use and Manufacture, and Exports of Domestic Produce and Manufacture. 
 
 ■ 
 
 Years. 
 
 Total Imports. 
 
 Total Exports. 
 
 Excess of Imports. 
 In Thousands of 
 Francs and Thou- 
 sands of {, sterling. 
 
 Excess of Exports. 
 In Thousands of 
 Francs and Thou- 
 sands of i, sterling. 
 
 1 
 1868 
 
 Francs. 
 3,303,700 
 
 Francs. 
 2,789,900 
 
 (F.513,800) 
 
 \£ 20,552/ 
 
 — 
 
 1869 
 
 3.153,100 
 
 3,074,900 
 
 ( F. 78,200 \ 
 
 \L 3,128/ 
 
 — 
 
 1870 
 
 2,781,400 
 
 2,802,100 
 
 — 
 
 (F. 20,700) 
 \C 828 / 
 
 1871 
 
 3,566,700 
 
 2,872,500 
 
 f F. 694, 200 \ 
 \£ 27,768/ 
 
 — 
 
 1872 
 
 3.570,300 
 
 3,761,600 
 
 — 
 
 (F. 191,3001 
 
 \£> 7,652/ 
 
 1873 
 
 3.554,800 
 
 3.787,300 
 
 — 
 
 fF.232,500) 
 \£ 9,300/ 
 
 1874 
 
 3.507,700 
 
 3,701,100 
 
 — 
 
 (F. 193,400'. 
 
 \£ 7,736/ 
 
 1875 
 
 3.536,700 
 
 3.872,600 
 
 — 
 
 fF.335,900) 
 \C 13,436/ 
 
 1876 
 
 3,988,400 
 
 3.575.600 
 
 (F.412,800) 
 
 \£ 16,512/ 
 
 — 
 
 1877 
 
 3,669,800 
 
 3,436,300 
 
 (F. 233, 500) 
 
 \£. 9,340) 
 
 —
 
 APPENDIX. 
 
 159 
 
 TABLE X. 
 
 Statement showing the Value of Imports of Merchandise into France from the under- 
 inentioncd Countries, and Exports thereof from France to the satnf Countries, according 
 to the French official Returns, in the Years 1868 to 1877, covering the period of the 
 payment of the Indemnity to Germany ; in thousands of francs, \.t., 100 = 100,000. 
 
 
 IMPORTS. 
 
 e.xce.ss of 
 Imports. 
 
 Years. 
 
 Germany. 
 
 Belgium. 
 
 Gt Britain 
 
 and British 
 
 India. 
 
 Switzer- 
 land. 
 
 Italy. 
 
 United 
 States. 
 
 Total of 
 Enumerated 
 Countries. 
 
 In Thou- 
 sands of 
 .Francs. 
 
 In Thou- 
 sands of 
 Pounds 
 st 01 ling. 
 
 1868 
 1869 
 1870 
 1871 
 1872 
 1873 
 1874 
 1875 
 1876 
 1877 
 
 F. 
 
 266,000 
 
 256,000 
 103,000 
 160,000 
 358,000 
 311,000 
 315,000 
 349,000 
 389,000 
 373>ooo 
 
 F. 
 354,000 
 
 316,000 
 
 272,000 
 
 476,000 
 
 440,000 
 
 475,000 
 
 409,000 
 
 439,000 
 
 404,000 
 
 409,000 
 
 F. 
 679,000 
 
 687,000 
 
 646,000 
 
 920,000 
 
 764,000 
 
 673,000 
 
 697,000 
 
 753,000 
 
 789,000 
 724,000 
 
 F. 
 
 141,000 
 
 133,000 
 102,000 
 105,000 
 97,000 
 92,000 
 96,000 
 94,000 
 110,000 
 96,000 
 
 F. 
 327,000 
 
 321,000 
 
 235,000 
 
 441,000 
 
 375,000 
 
 346,000 
 
 289,000 
 
 322,000 
 
 415,000 
 
 342,000 
 
 F. 
 156,000 
 
 174,000 
 
 218,000 
 190,000 
 205,000 
 199,000 
 241,000 
 190,000 
 265,000 
 258,000 
 
 F. 
 1,923,000 
 
 1,887,000 
 
 1,576,000 
 
 2,292,000 
 
 2,239,000 
 
 2,096,000 
 
 2,047,000 
 
 2,147,000 
 
 2,372,000 
 
 2,202,000 
 
 F. 
 
 i8g,ooo 
 
 £ 
 
 7,560 
 
 
 
 
 
 E.\PORTS 
 
 
 
 
 Excess of 
 Exports. 
 
 Years. 
 
 Germany. 
 
 Belgium. 
 
 Gt Britain 
 
 and British 
 
 India. 
 
 Switzer- 
 land. 
 
 Italy. 
 
 United 
 States. 
 
 Total of 
 
 Enumerated 
 
 Countries. 
 
 In Thou- 
 sands of 
 Francs. 
 
 In Thou- 
 sands of 
 Pounds 
 sterling-. 
 
 
 F. 
 
 F. 
 
 F. 
 
 F. 
 
 F. 
 
 F. 
 
 F. 
 
 F. £ 
 
 1868 
 
 215,000 
 
 272,000 
 
 882,000 
 
 263,000 
 
 171,000 
 
 126,000 
 
 1,929,000 
 
 6,000 240 
 
 1869 
 
 305,000 
 
 295,000 
 
 914,000 
 
 261,000 
 
 230,000 
 
 193,000 
 
 2,198,000 
 
 311,000 12,440 
 
 1870 
 
 104,000 
 
 311,000 
 
 849,000 
 
 263,000 
 
 201,000 
 
 307,000 
 
 2,033,000 
 
 459,000 
 
 18,360 
 
 1871 
 
 199,000 
 
 410,000 
 
 823,000 
 
 205,000 
 
 153,000 
 
 313,000 
 
 2,103,000 
 
 - 
 
 - 
 
 1872 
 
 410,000 
 
 479,000 
 
 937,000 
 
 294,000 
 
 229,000 
 
 333>ooo 
 
 2,682,000 
 
 443,000 
 
 17,720 
 
 1873 
 
 463,000 
 
 470,000 
 
 926,000 
 
 337,000 
 
 230,000 
 
 291,000 
 
 2,717,000 
 
 621,000 
 
 24,840 
 
 1874 
 
 414,000 
 
 524,000 
 
 992,000 
 
 300,000 
 
 204,000 
 
 296,000 
 
 2,730,000 
 
 683,000 
 
 27,320 
 
 1875 
 
 427,000 
 
 527,000 
 
 1,075,000 
 
 315,000 
 
 219,000 
 
 264,000 
 
 2,827,000 
 
 680,000 
 
 27,200 
 
 1876 
 
 431,000 
 
 446,000 
 
 1,036,000 
 
 279,000 
 
 216,000 
 
 230,000 
 
 2,638,000 
 
 266,000 10,640 
 
 1877 
 
 395,000 
 
 446,000 
 
 1,067,000 
 
 237,000 
 
 185,000 
 
 217,000 
 
 2,547,000 
 
 345,000 13,800
 
 i6o 
 
 ArPFA'DfX. 
 
 TABLE XI. 
 
 Sttxttiiifiit shcnving lite I'alue of the Imports of Meychandise ami Treasure, on Privatt 
 ami Gm'emmcnt Account^ into British India from the United Kingdom, and 
 I 'alue of the Exports of the same, from British India to the United Kingdom, in 
 the 1 'ears ended jist March, 1871 to 1880 ; compiled front the official Statistics oj 
 the Indian Goz'emMeni ; in thousands 0/ pounds, i.e., 100 = ioo,coo. 
 
 i 
 
 
 
 Excess of 
 
 Ve.ir?; ended 
 
 Imports. 
 
 Exports. 
 
 
 31st March. 
 
 Imports. 
 
 Exports. 
 
 1871 
 
 29.905 
 
 32,084 
 
 I 
 
 2,179 
 
 1872 
 
 33,739 
 
 33.021 
 
 718 
 
 — 
 
 1873 
 
 28,887 
 
 28,667 
 
 220 
 
 — 
 
 1S74 
 
 30,888 
 
 28,832 
 
 2,056 
 
 — 
 
 1S75 
 
 35.494 
 
 27,972 
 
 7,522 
 
 — 
 
 1S76 
 
 34,519 
 
 28,371 
 
 6,14s 
 
 
 1877 
 
 39.555 
 
 29.3'5 
 
 10,240 
 
 
 1878 
 
 47.198 
 
 30,804 
 
 16,394 
 
 — 
 
 i8;9 
 
 33,140 
 
 28,400 
 
 4,740 
 
 — 
 
 i38o 
 
 38,440 
 
 27,7^1 
 
 10,659 
 
 — 
 
 Total for the 
 10 Years. 
 
 } 351.765 
 
 295.247 
 
 56,518 
 
 —
 
 APPENDIX. 
 
 i6i 
 
 TABLE XII. 
 
 Siafcment slicr.vinff the Value of the hnfiorts of Merchandise and Treasure, on Private 
 and Government Account, into British India, froin the undermentioned Coun- 
 tries ; and t/ie Value of the E sports of the satne front BritisJi India to the same 
 Countries, in the Years ended -^ist March, 1871 to 1880; compiiedfrom tlie official 
 Statistics of the Indian Government ; in thousands of pounds, i.e., 100 = 100,000. 
 
 Note. — The figures for the Years 1871-75 in the case of the United States are esti- 
 mates ; and for 1871 in the case of Austria and Italy are also estimates. 
 
 Imports. 
 
 Ve.irs 
 
 ended 
 
 31st 
 March. 
 
 France. 
 
 Austria. 
 
 Italy. 
 
 United 
 States. 
 
 China and 
 Hong Kontj. 
 
 Ceylon. 
 
 Total of 
 enumerated 
 Countries. 
 
 Excess of 
 
 Imports. 
 
 IS7I 
 1872 
 1873 
 1874 
 1875 
 1876 
 
 1877 
 1878 
 
 1879 
 1880 
 
 £ 
 423 
 
 555 
 378 
 362 
 
 413 
 678 
 
 592 
 571 
 
 454 
 588 
 
 £ 
 67 
 122 
 127 
 
 93 
 96 
 118 
 120 
 120 
 122 
 156 
 
 £ 
 
 66 
 115 
 
 147 
 339 
 2 So 
 
 527 
 1,366 
 
 435 
 393 
 
 7S5 
 
 £ 
 
 66 
 
 73 
 62 
 9S 
 
 193 
 201 
 172 
 280 
 
 349 
 526 
 
 £ 
 
 4,290 
 4,014 
 2,377 
 3.141 
 2,957 
 2,901 
 2,127 
 4,031 
 4,039 
 5.587 
 
 £ 
 1.035 
 1,088 
 
 903 
 909 
 941 
 966 
 987 
 
 797 
 
 907 
 
 1,091 
 
 £ 
 
 5,947 
 5.967 
 3,994 
 
 4,942 
 
 4,S8o 
 5,391 
 5.364 
 6,234 
 6.264 
 8,733 
 
 £ 
 
 Total 
 
 for the 
 
 10 Years. 
 
 5.014 
 
 1,141 
 
 4>453 
 
 2,020 
 
 35.464 
 
 9,624 
 
 57.716 
 
 — 
 
 Exports. 
 
 Years 
 ended 
 
 31st 
 March. 
 
 France. 
 
 Austria. 
 
 Italy. 
 
 United 
 Stdtes. 
 
 China and 
 Hong Kong. 
 
 Ceylon. 
 
 Total of 
 enumerated 
 Countries. 
 
 Excess of 
 Exports. 
 
 
 £ 
 
 £ 
 
 £ 
 
 £ 
 
 £ 
 
 £ 
 
 £ 
 
 £ 
 
 I87I 
 
 2,013 
 
 600 
 
 700 
 
 2,233 
 
 12,333 
 
 1,620 
 
 19,498 
 
 13.551 
 
 1872 
 
 4.175 
 
 1.057 
 
 1,134 
 
 2,079 
 
 13,944 
 
 2,082 
 
 24.471 
 
 18,504 
 
 1873 
 
 2,673 
 
 1,100 
 
 954 
 
 1,821 
 
 12,259 
 
 2,314 
 
 21,121 
 
 17,127 
 
 1874 
 
 3.134 
 
 939 
 
 1,320 
 
 1.643 
 
 11.507 
 
 2,823 
 
 21,366 
 
 16,424 
 
 1875 
 
 4,449 
 
 1,321 
 
 1,112 
 
 1,886 
 
 11,751 
 
 2,497 
 
 23,016 
 
 18.136 
 
 1876 
 
 4,603 
 
 1,410 
 
 1,224 
 
 1,778 
 
 11,520 
 
 2,695 
 
 23,230 
 
 17,839 
 
 1877 
 
 5.437 
 
 1,42s 
 
 1,410 
 
 1,896 
 
 13,442 
 
 3,396 
 
 27,009 
 
 21,645 
 
 1878 
 
 6,026 
 
 1,466 
 
 1,870 
 
 1.933 
 
 12,791 
 
 2,840 
 
 26,926 
 
 20,692 
 
 1879 
 
 3.947 
 
 1,395 
 
 1,673 
 
 2,038 
 
 13,677 
 
 3,787 
 
 26, s 1 7 
 
 20,253 
 
 1880 
 
 4.870 
 
 1,860 
 
 2,215 
 
 3,286 
 
 15,732 
 
 2,696 
 
 30,659 
 
 21,926 
 
 Total 
 
 
 
 
 
 
 
 
 
 for the 
 I© Years. 
 
 41.327 
 
 12,576 
 
 13,612 
 
 20,592 
 
 128,956 
 
 26,750 
 
 243.813 
 
 186,097
 
 l62 
 
 APPENDIX. 
 
 TABLE 
 
 Rilurn of the Kates of !iii/>art July In'icd in the /•rincipal Euro/>ean Countries, in the Unilt<i 
 
 A rticles of British. 
 
 1 UREIGN COUNTRILS. 
 
 Cerirany. Holland. BclKium. I'rance 
 
 Italy. 
 
 United 
 States. 
 
 30 . 
 35 • 
 45 • 
 47 ■ 
 60 . 
 70 . 
 77 . 
 79 • 
 
 (un- 
 
 Cotton Yarn (single 
 unbleached) : 
 Up to No. 12. 
 Above 12 to 17 
 
 • > 17 » 23 
 .. 23 . 
 f. 30 . 
 >• 35 • 
 >• 45 > 
 .1 47 1 
 
 • I 60 , 
 1. 70 . 
 .. 77 I 
 !. 79 
 
 Cotton Cloth 
 ble.tched) : 
 Weighing 13 kilo- 
 grammes and 
 above per 100 sq. 
 mfetres : 
 
 Of 27 threads or 
 less per 5 sq. 
 millimetres 
 Of 28 to 35 thds. 
 Of 36 „ 38 „ 
 Over 38 „ 
 Weighing from 11 
 to 13 kilogs. ex- 
 clusive per 100 
 sq. metres : 
 Of 27 threads or 
 less .... 
 Of 26 to 35 thds. 
 Of 36 ,,38 „ 
 Over 38 ,, 
 Weighing from 7 
 to II kilogs, 
 elusive per 100 
 sq. metres . 
 
 Weighing less 
 than 7 kilogs 
 per 100 sq. metres 
 
 Linen Yarn (single 
 
 unbleached) 
 
 UploNo.s(Eng) 
 
 5 to 
 
 £ s. d. 
 i'cr cwt. 
 
 35 
 40 
 60 
 , 119 
 
 Above 119. 
 
 Free 
 
 j-o 15 3 
 o 18 3 
 
 £ s. d. 
 Per cwt. 
 
 (■082 
 j-o 12 2 
 
 U 16 3J 
 
 jo 4 oj 
 
 5% 
 ad val. 
 
 1 6i 
 
 2 6^ 
 
 3 oi 
 
 4 6i 
 
 Free. 
 
 From 
 
 I 4 5 
 
 to 
 
 From 
 I 12 6 
 
 Free. ■ 
 
 £ s. d. 
 Per cwt. 
 
 O 12 2 
 
 o 16 3 
 
 !From f 
 ' ?oM 
 6 I II C 
 
 104 
 I 12 6 
 
 i' 
 1041 
 
 I 12 6 
 
 From 
 
 I 4 5 
 
 to 
 
 From 
 t 12 6 
 
 14 
 
 1 4 
 
 £ s. d. 
 Per cwt. 
 
 074 
 |o 8 II 
 
 [•0 13 o 
 
 ^ o 15 lO 
 
 o 19 6 
 
 £, s. d 
 Per cwt. 
 
 061 
 >o 8 2 
 
 /[. s. d. 
 Per cwt. 
 
 268 
 
 -and 20 % 
 
 ad val. 
 
 li 
 
 6 10 
 
 From N 
 I 6 10 
 
 to 
 I 10 6 
 
 From 
 
 I 12 6 
 
 2 10 10 
 as above 
 
 Exceed- 
 ing 5 or. 
 to the 
 S(]. yard: 
 2Ad. per 
 sq. yard 
 or 3d. per 
 sq. yard, 
 accord- 
 ing to 
 quality. 
 
 Other 
 unblea- 
 ched 
 cotton 
 tissues 
 35 % ad 
 val. 
 
 40% 
 ad val.
 
 APPENDIX. 
 
 163 
 
 States, and in the priiuipal Colonial Possessions 0/ tlie United Kingdom, on the undertnentioned 
 Produce o>- Manufacture. 
 
 COLONIAL POSSESSIONS OF THE UNITED KINGDOM. 
 
 Queensland. 
 
 Cape of 
 Goctl Hope. 
 
 ;i s. d. £ s. d. 
 Per cwt. Per cwt. 
 
 Free. 
 
 V 
 
 £ s. d. 
 Per cwt. 
 
 Free. 
 
 Free. 
 
 i I2i% 
 
 { ad val. 
 
 \ ad val. 
 
 (^ ad val. 
 
 ad val. 1 
 
 10% 
 ad val. 
 
 £, s. d. 
 
 Per cwt. 
 
 »{ 
 
 Free by 
 Law of 
 24 Sept., 
 
 10% I 
 ad val. ) 
 
 «{ 
 
 5%, 
 ad val. 
 
 5% 
 ad val. 
 
 S% 
 ad val. 
 
 £s. d. 
 Per cwt. 
 
 Under 40's 
 
 9 4 
 and i$Xad 
 val. Other, 
 20% ad val. 
 
 1 10% 
 j ad val. 
 
 sq. yard 
 id. to id. 
 
 and 15^ ad 
 val. 
 
 20 X 
 
 ad val. 
 
 10% 
 ad val. 
 
 10 ;i 
 ad val.
 
 1 64 
 
 APPKNDK. 
 
 TAHLK XIII. 
 
 i\f the A'rt/ .c i'f hiiport Oiity Ir-.'ietl in the pthuipul Eiitol'can Coitntries, in the United 
 
 Articles 0/ British 
 
 
 
 
 
 
 1 ORUIGN COUNTRIES ((ontiuued). 
 
 
 
 
 
 Ariiclcs. 
 
 
 
 
 
 
 
 
 
 
 
 
 Germany. 
 
 Holland. 
 
 Belgium. 
 
 France. 
 
 Italy. 
 
 Austria. 
 
 United 
 Sutei- 
 
 
 £. 
 
 s. d. 
 
 
 £. s. d. 
 
 i. s. d. 
 
 i. s. d. 
 
 ~£ 
 
 s. 
 
 d. 
 
 £. s d. 
 
 I jiin Cloth (iin- 
 
 Per cwt. 
 
 
 Per cwt. 
 
 Per cwt. 
 
 Per cwt. 
 
 Per cwt. 
 
 Per cwt. 
 
 Mc:.. lied) : 
 
 
 
 
 
 
 
 
 
 
 
 5 threads or less per 
 
 , 
 
 
 
 
 
 (0 4 io{) 
 
 
 
 
 
 5 millimetres . . 
 
 
 
 
 * 
 
 /o 2 oi 
 
 1 «o [ 
 
 
 
 2 
 
 o\ 
 
 \ 
 
 6 to 8 threads 
 
 
 
 
 ( Sail- 
 
 \ 
 
 II 5 >. 
 124 
 
 Co 9 s ) ( 
 
 \ 
 
 
 
 
 9 .. " .. 
 
 
 From 
 
 cloth 
 
 
 
 
 
 
 From 
 
 '2 1) 
 
 
 
 
 3 o\ 
 
 free. 
 
 10% 
 
 165 
 
 
 
 
 
 35% 
 
 IJ .. M M 
 
 
 I 
 
 to 
 
 " Other 
 
 ad val. 
 
 -) I 16 7 1 
 
 t 3 6 
 
 ^0 
 
 12 
 
 2 
 
 r '° 
 
 >5 » 17 .. 
 
 
 10 6 
 
 5% ad 
 
 
 269 
 
 
 
 
 40%, 
 
 18 „ 20 „ 
 
 
 
 
 \ val. 
 
 J 
 
 3 9 I 
 
 
 J 
 
 
 
 ad val. 
 
 21 .. 23 >. 
 
 
 
 
 
 
 5 S 8 
 
 
 r 
 
 
 
 
 ^4 thrds. and above 
 
 ' 
 
 
 
 
 V6 I II y 
 
 \ 
 
 P 
 
 I 
 
 3 
 
 J 
 
 Wuollen Yarn"; (single 
 
 
 
 
 
 
 
 
 
 
 
 unbleached) : 
 
 
 
 
 
 
 
 
 
 
 
 Measuring to the 
 
 
 
 
 
 
 
 
 
 
 
 kilogramme less 
 
 
 
 
 
 
 
 
 
 
 
 than30,50ometres 
 
 N 
 
 
 
 
 /o 10 2 \ 
 
 
 
 
 
 
 30, 500 to 40, 500 , , 
 
 
 
 
 
 
 
 
 
 / 
 
 40,500 „ 50,500 ,, 
 
 
 
 
 
 14 3 
 18 3 
 
 
 
 
 
 From 
 
 50,500 ,, 60,500 ,, 
 
 
 
 
 
 / 
 
 
 
 6} 
 
 4 >3 4 
 
 60,500 ,, 70,500 ,, 
 
 -0 
 
 4 o\ 
 
 Free. 
 
 082 
 
 124 
 -165- 
 
 I 4 •( 
 
 ° 
 
 to 
 
 A '° 
 
 70,500 ,, 80,500 ,, 
 80,500 ,, 90,500 ,, 
 
 
 
 
 
 I 10 6 
 
 ( 
 
 
 
 8 
 
 2 
 
 "j'3 4 
 
 and 35 % 
 
 90,500 ,, 100,500 ,, 
 
 
 
 
 
 I 14 7 
 I 18 7 
 
 v2 8 ; 
 
 
 
 
 
 ad val. 
 
 100,500 metres and 
 above .... 
 
 1 
 
 
 
 
 
 
 
 
 
 Woollen Cloth (un- 
 
 
 
 
 
 
 
 
 
 
 
 printed) : 
 
 
 
 
 
 
 
 
 
 
 
 With cotton warp : 
 
 
 
 
 
 
 
 
 
 
 
 Above 600 grnis. 
 
 \ 
 
 
 
 
 / 
 
 1 f 
 .2 8 -j 
 
 
 
 8 
 
 
 per sq. metre . . 
 
 
 
 
 
 
 2 
 
 
 
 N All 
 
 300 to 600 grms. 
 per sq. metre. . 
 
 
 
 
 
 
 2 
 
 10 
 
 10 
 
 cloths 
 weigh- 
 
 Less than 300 
 
 
 
 
 
 
 ) I 
 
 
 
 
 ing 4 oz. 
 
 grms. per sq. metre 
 
 
 
 r 5% 
 
 (ad val. 
 
 0/ 
 
 Trt *y 
 
 / V 
 
 4 
 
 I 
 
 3 
 
 and 
 
 Other kinds : 
 Above 600 grms. 
 
 -3 
 
 8 7 
 
 ^0 /o 
 
 ad val. 
 
 ad val. 
 
 \ / 
 
 
 
 8 
 
 . above, 
 perM. 
 
 per sq. metre. . 
 
 
 
 
 
 
 1 
 
 ^ 
 
 
 
 yard, 
 
 450 to 600 grms. 
 per sq. mfetre . . 
 
 
 
 
 
 
 u I - 
 
 3 
 
 
 
 II 
 
 II 13 *. 
 and3S%v 
 
 Less than 450 
 grms. per sq. metre 
 
 ) 
 
 
 
 
 V 
 
 J I 
 
 4 
 
 I 
 
 3 
 
 1 ad val. 
 
 Porcelain : 
 
 White 
 
 
 
 7 I 
 
 r 5% 
 
 (ad val. 
 
 10% 
 ad val. 
 
 10% ). 
 ad val. ) 
 
 4 loi 
 
 
 
 5 
 
 I 
 
 { &. 
 
 
 Glassand Glasswares: 
 
 
 
 N 
 
 4I 
 
 
 100 bottles. 
 
 
 
 
 t ->c y 
 
 Common bottles . 
 
 
 
 I 6i 
 
 6i 
 
 024$ 
 
 
 
 I 
 
 6} 1 ad^al. 
 
 Window glass: 
 Common . . . 
 
 
 3 oi 
 to 
 5 I 
 
 . S% 
 ad val. 
 
 10% 
 ad val. 
 
 |-o I 5 
 
 Per cwt. 
 033 
 
 
 
 4 
 
 0} 
 
 (070 
 Vo 14 
 
 /I'p to 34 
 
 'by 30 in. 
 
 sq., lid 
 
 Plate glass : 
 
 
 
 
 10% ) 
 ad val. j 
 
 sq.yard. 
 
 
 
 
 
 10 4d. pet 
 S-l. ft. 
 
 Polished. . . . 
 
 
 
 12 2 
 
 
 2 8i 
 
 082 
 
 
 
 8 
 
 2 
 
 Of larsef 
 
 
 
 
 
 
 
 
 
 
 
 sixe. 
 
 
 
 
 
 
 
 
 
 1 It. old. to 
 
 
 
 
 
 
 
 - 2s. ./ p-r 
 
 Vsq. ft. 
 
 
 
 / 
 
 V ! 
 

 
 APPENDIX. 
 
 165 
 
 (coHtinucci). 
 
 States, and in the principal Colonial Possessions 0/ the United Kingdotn, on the undtrineuticned 
 Produce or Manufacture. 
 
 COLONIAL POSSESSIONS OF THE UNITED KINGDOM (contiuutd). 
 
 New South Virtnria 
 Wales. ^ "^'°"*" 
 
 ;£ s. d. I s. d. 
 Per cwt. Per cwt. 
 
 Free. 
 
 ad va!. 
 to 
 
 15% 
 ad va'. 
 
 cub. ft. 
 
 , cub. ft. 
 
 Free. 
 
 Free. 
 
 I s. d. 
 Per cwt. 
 
 Free. 
 
 5/0 
 ad val. 
 
 i 10% 
 ( ad val. 
 
 10% 
 ad val. 
 
 i V 
 
 j I2i% 
 
 ( ad val. 
 
 i '4% 
 ( ad val. 
 
 ad val. 
 
 ad val. 
 
 rSailcloth 
 free. 
 Other 
 
 10 % ad 
 ^, val. 
 
 £ s. d. 
 Per cwt. 
 
 Sailcloth 
 
 free. 
 
 Other 
 
 15 % ad 
 
 val. 
 
 ad val. 
 
 10% 
 a4.val. 
 
 ad val. 
 
 10% 
 
 ad val. 
 
 15% 
 
 ad val. 
 
 Free. 
 
 Free. ' 
 
 10% 
 ad val. 
 
 100 sq.ft. 
 020 
 
 10 /J 
 ad val. 
 
 15 % 
 ad val. 
 
 V 
 
 ; 
 
 5% 
 
 ad val. 
 
 f 5% 
 ( ad val. 
 
 5% 
 ad val. 
 
 5/0 
 ad val. 
 
 5% 
 ad val. 
 
 JL s. d. 
 Per cwt. 
 
 Sailcloth 
 25 % ad val. 
 
 Other 
 20% ad val 
 
 Cape o' 
 Good li"pe. 
 
 I 15 o 
 and 20% 
 ad val. 
 
 ad vj 
 
 ad val. 
 
 :i 15 
 
 and 20 % 
 , ad val. 
 
 ad 
 
 10X 
 ad v_l, 
 
 ad val. 
 
 10% 
 ad v.d.
 
 i66 
 
 APPENDIX. 
 
 TABLE XIII. 
 
 J\etu) n pf the Rata pf Import Duty In'icd in the />ritui/>al Eioflpean Countries, in the United 
 
 A rticles of liriliih 
 
 lOREI'.N COrNTRn;S [conlinutit). 
 
 CcriT<any. Iloll.ird. Bcli;iuin. France. Italy. Austria. 
 
 United 
 Slates. 
 
 I s. d. 
 
 Ir.m : Per cwt. 
 
 J'i;; 006 
 
 Bar o 1 3I 
 
 Rails for Railways N 
 
 — Iron ... 1 
 
 Rails for Railways I ° ' 3i 
 
 — Steel . . . 
 
 Copper : ! 
 
 In.;ois, Cakes, or \ p 
 
 .Slabs ..... i)-'^'^^^ 
 Hammered, in Bars 061 
 T.mned Leather (un- I 
 
 wrought) : | C From 
 
 Ox and Cow ) j o 9 2 
 
 Hides. . . ■ ) to 
 Call" Skins . . ) Vo 18 3 
 Alkali: i 
 
 Bicarbonate of ) „ . ,1 
 Soda . . . . )-° ' 33 
 
 Crj'stals of SoJa . ' o o gj 
 
 I 
 Soda Caustic . . o 2 oj 
 
 I'.ipcr : 
 
 For Writing . . 
 
 l s. d. 
 Per cwt. 
 
 ;- Free 
 
 Free 
 Free 
 
 £ s. 'd. £ s. A. £ s. d. 
 Per cwt. Per cwt. Per cwt. 
 o o 2^1 o o 9} Free 
 
 Free 
 
 Free 
 
 For Printing 
 
 Seed Oils ; 
 
 Linseed 
 Rape . 
 
 o 5 I 
 
 i 5% 
 ( ad Vol, 
 
 £ s. d. 
 Per cwt. 
 006 
 
 o 2 6J 
 
 Free 1 Free ; o i 7i 
 o 4 o}j o 4 o? 040? 
 
 1 1 From 
 
 o 2 6i-I 
 
 u 
 
 £ s. d. 
 
 Per cwt. 
 o I s5 
 / o 4 8 
 and 
 
 I according 
 \ to size 
 
 033 
 
 '' P.irtly Steel 
 "048 
 Pure Strcl 
 O 5 10 
 
 061 
 
 Free 
 
 o 4 oj 
 
 I Si 
 009} 
 
 I o 2 7J 
 
 J ) O 10 2 
 
 ■o I 7J o 'a 3 
 
 »0 I 0,0 O II 
 
 C...-ils 
 
 Free 
 
 Beer or Ale : 
 In Casks 
 In bottles 
 
 Free 
 
 Gal. 
 
 Free 
 
 Free 
 
 to 
 
 ( Not 
 "( specified 
 
 iPure 
 o 2 oi 
 Impure 
 o o 2J 
 
 Free 
 8 2 
 
 3 oi 
 Not 
 specified 
 
 o 4 Oj 
 
 3 oJ 
 
 o 2 5} o 2 5} 
 
 Ton 
 o o ii}l Free 
 
 ^'l 
 
 6i 
 
 Free 
 
 I Gal. ; Gal. | Gal. ' 
 ' 1 a J o o 2J ) _ „i ( o o toj 
 
 .( 15% to 25% 
 ( ad val. 
 
 070 
 
 Not 
 specified 
 
 070 
 
 35 '{ ad val, 
 
 20 % or 25 ' 
 
 ad val. 
 
 according as 
 
 unsized or 
 
 sized. 
 
 Gal. 
 
 / o I 6 
 (012 
 
 /Anthracite 
 f Tree. 
 J Bitumi- 
 j nous, 
 ! Ton 
 V o 3 ij 
 Gal. 
 
 I 100 Btls. 
 
 Au additional e.\cise duty on letter p.-it er of 4s. jld. per rwi. An ad(l:iinii.-,l 
 t Excise d'.ity in addition : — At 16 degrees
 
 APPENDIX. 
 
 167 
 
 [continued). 
 
 States, and in the principal Colonial Possessions of the United Kingdom, oh the undermentioned 
 
 Produce or Manu/actttre. 
 
 COLONIAL rOSSESSIONS OF THE UNITED KINGDOM (continued . 
 
 £ s. d. 
 Per cwt. 
 
 '- Free 
 
 Free 
 
 I Free 
 
 Free 
 
 [-0 I o 
 
 Free 
 
 jQ s. d. 
 Per cwt. 
 
 i 25 ,{ 
 ( ad va'. 
 
 [ 20 % 
 ad val. 
 
 ad val. 
 
 Free 
 
 )- Free 
 
 Gal. 
 
 J- Free 
 
 ; 
 
 Gal. 
 006 
 009 
 
 o i3 8 
 
 Free 
 
 Free 
 
 Free 
 
 Gal. 
 
 £ s. d. 
 J'er cwt. 
 
 Free 
 
 
 10% 
 ad val. 
 
 Free 
 
 .( 10% 
 ( ad val. 
 
 Gal. 
 
 006 
 
 Free 
 
 Gal. 
 
 £ s. d. 
 Per cwt. 
 
 i ^0% ] 
 ( ad val, 
 
 10 to 12^ % 
 
 ad val 
 
 12^% 
 
 ad val. 
 
 I2^% 
 
 ad val. 
 
 \ 12* % 
 ( ad val. 
 
 I2i% 
 
 ad val. 
 
 i 10% 
 ( ad val. 
 
 / 12I % 
 ( ad val. 
 
 Free 
 
 £ s. d. 
 
 Per cwt. 
 
 Free 
 
 ad Val. 
 
 Free 
 
 10% 
 ad val. 
 
 04b 
 024 
 
 j- Free 
 
 Cape of 
 Good Hope 
 
 Gal. 
 o o 9 I O I o 
 
 L 10 % 
 
 I ad val 
 
 Gal. 
 
 ,-0 I o 
 
 Ton 
 010 
 
 Gal. 
 
 (009 
 1° 1 3 
 
 £ s. d. 
 Per cwt. 
 
 - Free - 
 
 Free 
 
 From 
 094 
 
 >o I o 
 
 Free 
 
 /Uncut^ 
 free. I 
 \ Cut 
 Vad val.y 
 
 Gal. 
 006 
 
 Free 
 
 Gal. 
 o I 3 
 016 
 
 £ s. d. 
 
 Per cwt. 
 
 Free 
 
 ad val. 
 
 f 5% 
 ( ad val. 
 
 5%, 
 ad val. 
 
 Not 
 J specified 
 
 / o I o 
 
 _( Not 
 ( specified 
 
 \ 5% 
 ad val. 
 
 Gal. 
 
 006 
 
 5% 
 ad val. 
 
 Ton 
 016 
 
 Gal. 
 
 009 
 
 £ s. d. 
 
 Per cwt. 
 005 
 
 17^% 
 ad val. 
 
 15%, 
 ad val. 
 
 10% 
 ad val. 
 
 - 10% 
 ad val. 
 15 to 20% 
 
 , ad val 
 
 20 % 
 ad val. 
 
 Free 
 
 20% 
 ad val. 
 
 £ s. d. 
 
 (. 10% 
 ad val. 
 
 10% 
 ad val. 
 
 10% 
 ad val. 
 
 10% 
 ad val. 
 
 10% 
 ad val. 
 
 1 25% ^ Gal. 
 ad val. 
 
 20 % 
 ad val. 
 
 Ton 
 (Anxhrct. 
 02 4 
 -, Bitumi- 
 nous j I 
 Vo 2 9i y 
 Gal. j Gal. 
 
 ° ° 5 'l-o o 4 
 
 Ton. 
 
 o 10 
 
 excise dut\' n other kinds fro u 2s. jjd to 4s. 25d. per cwt. 
 the duty would be 4id. per gallon.
 
 1 68 
 
 APPENDIX. 
 
 
 
 
 
 
 
 
 
 
 
 
 d 
 
 _: 
 
 
 
 
 
 
 " o ° 
 
 ■S'^eV 
 
 
 w 
 
 > 
 
 
 
 
 
 
 
 
 
 ■g 
 
 ■o 
 
 >o .i-> 
 
 o 
 
 
 ^, 
 
 r^ 
 
 ^ 'rCl 2 
 
 ^Sto 
 
 
 '5 
 
 < 
 
 ■»♦ ♦• 
 
 «- lO 
 
 
 
 
 • 
 
 
 
 
 
 z^'— s 
 
 
 
 
 
 
 
 
 
 o^ 
 
 5,0 
 
 
 
 5-; 
 
 
 
 
 ■c 
 
 s 
 
 5 ! M 
 
 ^° X' 2 
 
 
 
 ^ 
 
 Ss. ^-'S^ 
 
 ;; 
 
 
 1 
 
 
 o o 
 
 • *- 
 
 * 
 
 • 
 
 
 O 
 
 « 
 
 o 
 o 
 
 • 
 
 * • • 
 
 O 
 
 • 
 
 
 ::^ 
 
 >• 
 
 s^ >>; 
 
 J^ ^^ ^' 
 
 
 o^ 
 
 5-: 
 
 ^ -0^^ 
 
 
 
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 M U-) 
 
 m tN. O 
 
 
 t>. 
 
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 1^ n oo 
 
 
 
 
 " 
 
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 • 
 
 • 
 
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 • 
 
 to 
 
 
 
 
 
 
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 X 
 
 
 
 
 
 /" 
 
 
 ~N 
 
 
 
 
 4 -^ £ 
 
 
 0. 
 
 i"^ 
 
 
 
 
 o 
 u 
 
 y. 
 
 ■0 
 
 £ 
 
 > 
 •a 
 
 < 
 
 
 
 
 rt yi = 
 
 
 
 2 <o o 
 
 + • • 
 
 • 
 
 
 
 
 * 
 
 ft> 
 
 rt t^ 
 
 "^ 
 
 
 
 2 
 
 
 
 K ^ ^ y 
 
 
 
 3i :? 
 
 f^ 
 
 
 
 
 
 
 
 
 P 
 
 ^ w 
 
 * 
 
 
 
 
 
 J'_>. J, 
 c = 5: 
 
 ■^r^ 
 
 
 
 
 
 
 ' 
 
 
 
 — ^ 
 
 "• 
 
 
 
 «;;; 
 
 
 
 
 
 
 
 
 5 
 
 ■p 
 
 o^lj'=>.Jx» 
 
 O X 
 
 
 :^« 
 
 ^^ 
 
 ^' >^ 
 
 5s; 
 
 
 
 < 
 
 111! 
 
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 fa + 
 
 
 
 o 
 
 o ,^ 
 
 
 
 ^ — 
 
 ^ 
 
 
 
 
 V 
 
 
 
 
 ^ 
 
 y 
 
 
 
 
 
 
 
 S >o 
 
 
 
 
 
 
 
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 u 
 
 i-° 
 
 s-; 
 
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 J 
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 ■c 
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 fa 
 
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 m o 
 
 
 
 ^ 
 
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 • 
 
 
 
 
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 ■s « 
 
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 •:3 
 
 
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 ^ 
 
 
 
 
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 c 
 
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 o c 
 
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 rt 
 
 
 
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 1 
 
 c 
 ■r 
 
 ^_2 J 
 
 n
 
 APPENDIX. 
 
 169 
 
 ^^S 
 
 ON O * * 
 
 ■* o 
 
 « * 
 
 o a o 
 
 5^<5 « 
 
 ■1- « o 
 
 
 .-?1 i 
 
 ■5 S 
 
 C 3 
 
 00.0 
 
 
 ;z;* 
 
 
 n^ 
 
 ■Xinp 
 sspxa 
 
 |tUOI4ippE 
 
 % 01 pUE o^oX° 5-^ 
 
 000 o 
 
 5-« S^ 
 
 -M 
 
 o Ji 
 
 •f rt-5 
 
 
 l. s o 
 OUCQ 
 
 b. C:q{
 
 I70 
 
 APPENDIX. 
 
 
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 171 
 
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 APPENDIX. 
 
 
 
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 and unmanufactured j 
 
 
 
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 and Calves . 
 
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 174 
 
 APPENDIX. 
 
 TABLE XVI. 
 
 Statement shozvin^ the Proportion per cent, of the Total Value oj the Articles of Food 
 named in Table XV. impo' ted into the United Kingdom from Forei^i Countries 
 and British Possessions, /or the i'ear i83o. 
 
 Countries. 
 
 Per Centage 
 of Total. 
 
 A. — Fonij^n Countries. 
 
 Russia 
 
 Sweden ...... 
 
 Denmark ...... 
 
 Germany ...... 
 
 Holland 
 
 Belgium ...... 
 
 France ...... 
 
 Spain ...... 
 
 Portugal . . . . . 
 
 Roumania , . . . . 
 
 China ...... 
 
 Foreign West India Islands 
 
 United States ..... 
 
 Other Foreign Countries . . . 
 
 Total of Foreign Countries 
 
 B. — British Possessions, 
 
 British India 
 
 Australia ...... 
 
 British West Indies and British Guiana 
 British North America 
 Other British Possessions . 
 
 Total of British Possessions 
 
 Total of Foreign Countries and British 'i 
 Possessions ...... J 
 
 31 
 
 I '4 
 29 
 
 8'3 
 5-5 
 ro 
 7-6 
 II 
 09 
 o-S 
 
 I'O 
 
 35 "4 
 8-1 
 
 82-4 
 
 5-8 
 1-9 
 
 3-5 
 3-8 
 2-6 
 
 176
 
 APPENDIX. 
 TABLE XVII. 
 
 175 
 
 Statement shnving the Value of the Exports 0/ British and Irish Produce in each 0/ the 
 Years 1870 and 1880, classified as Articles of Food, Raw Materials, and Manu- 
 factured Goods ; in thousands of pounds, i.e., 100 = 100,000. 
 
 Articles Extorted. 
 
 1870. 
 
 18S0. 
 
 (a) Articles of Food : — 
 
 £ 
 
 £ 
 
 Animals, living : 
 
 
 
 Oxen, bulls, cows, and calves 
 
 41 
 
 60 
 
 Sheep and lambs 
 
 26 
 
 35 
 
 Swine 
 
 2 
 
 3 
 
 Beer and ale . . 
 
 1,882 
 
 1,734 
 
 Biscuit and bread 
 
 436 
 
 583 
 
 Butter 
 
 316 
 
 202 
 
 Cheese . . • 
 
 no 
 
 51 
 
 Corn, grain, meal, and flour: 
 
 
 
 Wheat 
 
 544 
 
 348 
 
 Malt 
 
 242 
 
 162 
 
 Oats . . . . 
 
 160 
 
 99 
 
 Other kinds of grain 
 
 30 
 
 24 
 
 Wheat-meal and flour 
 
 163 
 
 74 
 
 Other kinds of meal and flour 
 
 6 
 
 12 
 
 Fish, fresh and cured : 
 
 
 
 Salmon 
 
 45 
 
 42 
 
 Cod and ling 
 
 44 
 
 44 
 
 Herrings 
 
 723 
 
 1,422 
 
 Oysters 
 
 30 
 
 45 
 
 Pilchards 
 
 30 
 
 47 
 
 Unenumerated 
 
 44 
 
 179 
 
 Hops 
 
 93 
 
 53 
 
 Pickles, vinegar, and sauces . . 
 
 470 
 
 679 
 
 Provisions, imenumerated 
 
 926 
 
 i>o35 
 
 Spirits, British and Irish 
 
 183 
 
 544 
 
 Sugar, refined and candy 
 
 934 
 
 1. 127 
 
 ,, molasses, treacle, and syrup . . 
 
 35 
 
 186 
 
 Tobacco and snuff, manufactured in the United 
 
 
 
 Kingdom : 
 
 
 
 Snuff 
 
 5S 
 
 7 
 
 Other kinds of manufactured tobacco 
 
 31 
 
 25 
 
 Wine, British made 
 
 3 
 
 3 
 
 Total 
 
 7,607 
 
 8,825 
 
 (b) Raw Materials : — 
 
 
 
 Clay, unmanufactured 
 
 98 
 
 163 
 
 Coals, cinders, &c. : 
 
 
 
 Coals . . 
 
 5.290 
 
 7,837 
 
 Coke and cinders 
 
 224 
 
 338 
 
 Products of coal, peat, or shale, including \ 
 
 
 
 naphtha, paraffme and oil thereof, and petro- > 
 
 331 
 
 492 
 
 leum, pitch, and tar . . . . . . ) 
 

 
 176 
 
 APPENDIX. 
 TAI'.I.K XVII. f,w///;//.'.-,/) 
 
 Artici.f.s ExI'ORTED. 
 
 b) Raw Materials {continued) : — 
 Copper, ore 
 
 ,, unwrought, in ingots, cakes, or slabs 
 Flax, dressed and undressed . . 
 Grease, not otherwise described 
 Hemp, British dressed 
 Hides, raw 
 Iron: 
 
 Ore 
 
 Old, for re-manufacture 
 
 Pig and puddled 
 Lead, ore 
 
 ,. pig 
 
 Plumbago 
 
 Rags (except woollen), and other materials for / 
 making paper . . . . . . . . ) 
 
 Seeds of all sorts 
 Skins and furs : 
 
 Sheep and lambs, undressed (without the wool) . . 
 
 Foreign, dressed in the United Kingdom 
 
 Unenumerated 
 Steel, cast in ingots . . 
 Tin, unwrought 
 
 Wood and timber, rough-hewn, sawn, or split 
 Wool, sheep and lambs, British 
 
 ,, not being sheep and lambs, including 1 
 foreign (dressed in the United Kingdom), and ^ 
 flocks and rag-wool . . . . . . j 
 
 Zinc or spelter, ore 
 
 ,, ,, crude, in cakes 
 
 Other articles, unmanufactured 
 
 Total 
 
 (c) Manufactured Goods : — 
 
 Alkali 
 
 Apparel and slops 
 Arms, ammunition, &c. : 
 
 Shot of iron, including shells 
 
 Gunpowder . . 
 
 Percussion caps 
 
 Ordnance stores and ammunition 
 
 Cannon and mortars 
 
 Muskets 
 
 Rifles 
 
 Fowling pieces 
 
 Revolvers 
 
 unenumerated 
 
 1870. 
 
 1880. 
 
 £ 
 
 £ 
 
 I 
 
 8 
 
 796 
 
 1,054 
 
 93 
 
 98 
 
 73 
 
 28S 
 
 90 
 
 13 
 
 77 
 
 194 
 
 I 
 
 27 
 
 502 
 
 1,165 
 
 2,229 
 
 5.219 
 
 2 
 
 4 
 
 760 
 
 357 
 
 8 
 
 9 
 
 390 
 
 673 
 
 ^37 
 
 231 
 
 257 
 
 715 
 
 164 
 
 673 
 
 130 
 
 256 
 
 12 
 
 187 
 
 633 
 
 399 
 
 43 
 
 55 
 
 5S1 
 
 1,187 
 
 166 
 
 547 
 
 4 
 
 2 
 
 84 
 
 94 
 
 568 
 13,744 
 
 990 
 
 23,272 
 
 1,486 
 
 2,398 
 
 2,205 
 
 3.212 
 
 9 
 
 41 
 
 427 
 
 373 
 
 54 
 
 73 
 
 1 485 
 
 530 
 
 106 
 
 92 
 
 98 
 
 61 
 
 655 
 
 95 
 
 95 
 
 133 
 
 18 
 
 16
 
 APPENDIX. 
 TABLE XVII. {continued). 
 
 177 
 
 Articles Exported. 
 
 (c) Manufactured Goods {continuaf}:— 
 Arms, ammunition, &c. {continuecl) : 
 
 Other firearms 
 
 Parts of firearms 
 
 Swords, cutlasses, bayonets, and other arms, not 
 being firearms 
 Bags and sacks, empty 
 Bleaching materials 
 Books, printed . . 
 Brass, manufactures of 
 Candles of all sorts 
 Caoutchouc manufactures 
 Carriages, carts, &c. ; 
 
 Railway carriages . . 
 
 )> waggons, trucks, &c. 
 Cement . . 
 
 Chemical products or preparations, unenumerated 
 Clay, manufactures thereof . . 
 Clocks, watches, and parts thereof . . 
 Coal, cinders, &c. : 
 
 Fuel, manufactured . . 
 Copper, wrought or manufactured : 
 
 Coin . . 
 
 Mixed, or yellow metal for sheathing 
 
 Unenumerated 
 Cordage cables, and ropes of hemp or like material 
 Cotton twist and yam 
 Cotton Manufactures : 
 
 Piece goods, plain . . 
 ,, ,, printed 
 ,, ,, of mixed materials .. 
 
 Lace and patent net 
 
 Hosiery, stockings and socks 
 ,, of other sorts 
 
 Thread for sewing . . . . 
 
 Other manufactures, unenumerated 
 Earthen and china ware : 
 
 Red pottery and brown stone ware 
 
 Earthenware, china ware, parian, and porcelain 
 Furniture (household), cabinet and upholstery wares 
 Glass : 
 
 Plate, rough or silvered (including looking- ) 
 glasses and mirrors) . . . . . . i 
 
 Flint, plain, cut, or ornamental (including I 
 bottles and phials of flint glass) . . ' 
 
 Common bottles 
 
 Other manufactures, unenumerated 
 M 
 
 1870. 
 
 1880. 
 
 £ 
 
 £ 
 
 6 
 
 2 
 
 8 
 
 39 
 
 14 
 
 4 
 
 914 
 
 1,452 
 
 177 
 
 442 
 
 631 
 
 970 
 
 247 
 
 323 
 
 133 
 
 143 
 
 693 
 
 834 
 
 88 
 
 76 
 
 388 
 
 215 
 
 366 
 
 693 
 
 1,043 
 
 2,384 
 
 176 
 
 191 
 
 146 
 
 157 
 
 124 
 
 197 
 
 23 
 
 8 
 
 796 
 
 1,022 
 
 1,205 
 
 1,250 
 
 354 
 
 296 
 
 14,671 
 
 11,902 
 
 33,831 
 
 34,755 
 
 18,137 
 
 22,377 
 
 339 
 
 546 
 
 839 
 
 1,974 
 
 293 
 
 402 
 
 520 
 
 541 
 
 1,208 
 
 2,073 
 
 1,578 
 
 994 
 
 56 
 
 87 
 
 1,637 
 
 1,978 
 
 231 
 
 481 
 
 145 
 
 254 
 307 
 
 127 
 
 193 
 249 
 
 H7
 
 178 
 
 APPENDIX. 
 
 TABLF, XVII. UoittinueJ). 
 
 Articles Exported. 
 
 1870. 
 
 (c) Manufactured Goods {continued): — 
 
 Haberdashery and raillinery (including embroidery ) 
 and needlework) . . . . . . . . J 
 
 Hardware and cutlery, unenumeratcd 
 
 Hats of felt 
 
 ,, straw . . 
 ,, other sorts 
 Implements and tools : 
 Agricultural . . 
 Unenumerated 
 Iron : 
 
 Bar 
 
 Angle 
 
 Bolt and rod 
 
 Railroad : 
 
 Rails and tie rods 
 Wheels and axles 
 Unenumerated 
 Wire of iron or steel (except telegraph) . . 
 Sheets, and boiler and armour plates 
 Galvanised, other than wire 
 Hoops 
 
 Tin plates . . 
 
 Anchors, grapnels, chains, and cables 
 Tubes and pipes, wrought . . 
 Nails, screws, and rivets . . 
 Cast or wrought and all other manufactures, ) 
 unenumerated . . . . . . . . i 
 
 Steel, bar, of all kinds 
 
 „ sheets 
 Manufactures of steel, or of steel and iron combined 
 Lead, rolled and sheet, piping and tubing . . 
 Leather, tanned, unwrought . . 
 
 ,, wrought, boots and shoes . . 
 ,, ,, other articles, unenumerated .. 
 
 Linen and jute yarn . . 
 Linen and jute manufactures : 
 
 Linen piece goods, plain, unbleached or bleached 
 
 ,, ,, checked, printed, or dyed, ) 
 
 and damasks and diapers . . . . J 
 
 Sailcloth and sails . . 
 Thread for sewing . . 
 Linen manufactures, unenumerated 
 Jute manufactures . . 
 Lucifer and vesta matches 
 Machinery and millwork : 
 
 Steam engines, or parts of, locomotive . . 
 
 I 
 4.813 
 3.812 
 
 344 
 142 
 
 41 
 
 249 
 
 77 
 
 2,252 
 62 
 
 301 
 
 7.136 
 638 
 982 
 366 
 911 
 454 
 688 
 
 2,363 
 382 
 324 
 332 
 
 2,369 
 
 98s 
 107 
 
 575 
 1S6 
 850 
 
 1,148 
 300 
 
 2,434 
 
 S.983 
 421 
 
 193 
 283 
 369 
 790 
 169 
 
 810 
 
 L 
 
 3,875 
 
 3,521 
 558 
 
 395 
 53 
 
 263 
 I'S 
 
 1,907 
 
 76 
 
 393 
 
 4,212 
 276 
 
 584 
 828 
 
 1,229 
 
 1,361 
 793 
 
 4,458 
 265 
 452 
 374 
 
 2,700 
 
 9S7 
 
 96 
 
 827 
 
 226 
 
 1,153 
 1,282 
 
 375 
 1,212 
 
 4,819 
 150 
 166 
 372 
 328 
 
 2,255 
 145 
 
 785
 
 APPENDIX. 
 TABLE XVII. {continued). 
 
 179 
 
 Articles Exported. 
 
 1870. 
 
 iSSo. 
 
 ((•) Manufactured Goods {continued) : — 
 
 £ 
 
 £ ■ 
 
 Machinery and milhvork {continued) -. 
 
 
 
 Steam engines, or parts of, other descriptions . . 
 
 1,188 
 
 2,001 
 
 Not being steam engines, agricultural 
 
 303 
 
 680 
 
 ,, ,, other descriptions 
 
 2,993 
 
 5.797 
 
 Manure, unenumerated 
 
 415 
 
 1,128 
 
 Medicines 
 
 615 
 
 814 
 
 Musical instruments and parts thereof 
 
 146 
 
 200 
 
 Oil, other than essential and medicinal : 
 
 
 
 Seed . . 
 
 1,286 
 
 1,621 
 
 Other sorts, unenumerated 
 
 119 
 
 351 
 
 Oil and floor cloth (including india-rubber clotli) . . 
 
 219 
 
 383 
 
 Painters' colours and materials 
 
 877 
 
 1,164 
 
 Paper : 
 
 
 
 Writing or printing, and envelopes 
 
 428 
 
 856 
 
 Plangings 
 
 119 
 
 138 
 
 Pasteboard, millboard, &c. (including playing cards) 
 
 19 
 
 38 
 
 Unenumerated (and articles of paper, except ) 
 papier mach^) . . . . . . , . ) 
 
 84 
 
 20S 
 
 
 Perfumery of all sorts 
 
 102 
 
 108 
 
 Pictures 
 
 86 
 
 310 
 
 Plate, gold and silver . . 
 
 59 
 
 67 
 
 Plated and gilt M'ares . . 
 
 131 
 
 167 
 
 Prints, engravings, drawings, &c. . . 
 
 41 
 
 97 
 
 Saddlery and harness . . 
 
 2^7 
 
 436 
 
 Saltpetre (British prepared) . . 
 
 77 
 
 60 
 
 Silk, thrown, twist, or yarn . . 
 
 i>i54 
 
 684 
 
 Silk manufactures : 
 
 
 
 Of silk only- 
 
 
 
 Broad stuffs 
 
 510 
 
 710 
 
 Plandkerchiefs, scarfs, and shawls 
 
 149 
 
 409 
 
 Ribbons of all kinds 
 
 96 
 
 123 
 
 Lace 
 
 81 
 
 no 
 
 Unenumerated . . 
 
 299 
 
 251 
 
 Of silk and other materials — 
 
 
 
 Broad stuffs 
 
 231 
 
 302 
 
 Other kinds 
 
 85 
 
 125 
 
 Soap 
 
 218 
 
 440 
 
 Stationery, other than paper 
 
 489 
 
 724 
 
 Stones and slates : 
 
 
 
 Slate by tale . . . . .... 
 
 141 
 
 177 
 
 Grindstones, millstones, and other sorts of stone 
 
 138 
 
 84 
 
 Telegraph wires and apparatus 
 
 2,523 
 
 1,301 
 
 Turpentine, oil or spirit of . , 
 
 7 
 
 10 
 
 Umbrellas and parasols 
 
 253 
 
 45S 
 
 Wood and timber, manufactured : 
 
 
 
 Staves and empty casks 
 
 157 
 
 "3
 
 I So 
 
 APPENDIX. 
 TABLE XVII. (continued). 
 
 Articlks Exported. 
 
 ((■) Manufactured Goods {continueti): — 
 Wood and Timber, manufactured [coiitiniicJ) : 
 
 Uncnumeratcd 
 Woollen and worsted yarn : 
 Woollen yarn (carded) . . 
 Worsted yarn (combed) . . 
 Woollen and worsted manufactures : 
 
 Broad cloths, coatings, &c., all wool . . 
 
 ,, ,, of wool mixed ) 
 
 with other materials . . . . . . i 
 
 Narrow cloths, coatings, &c., all wool 
 
 ,, ,, of wool mixed } 
 
 with other materials . . . . . . \ 
 
 Worsted stuffs, all wool . . 
 
 ,, ,, ofwoolmixed with other materials 
 Blankets and blanketing 
 Flannels . . 
 Carpets, not being rugs . . . . . , 
 
 Shawls 
 
 Rugs, coverlets, or wrappers 
 Hosiery 
 
 Small wares and manufactures of wool or ) 
 worsted, unenumerated . . . . i 
 
 Yam, alpaca, mohair, and other sorts, unenumerated 
 Zinc or Spelter, manufactures of . . 
 Other Manufactured Goods 
 
 Total 
 
 1S70. 
 
 £ 
 
 80 
 
 98 
 
 107 
 
 4,897 
 
 3.238 
 
 2,107 
 
 2,382 
 
 815 
 
 3,077 
 
 979 
 
 538 
 
 849 
 
 739 
 
 2,052 
 
 1,029 
 
 11,736 
 
 6,213 
 
 645 
 
 587 
 
 366 
 
 310 
 
 1,393 
 
 1,134 
 
 "7 
 
 158 
 
 151 
 
 361 
 
 266 
 
 320 
 
 190 
 
 418 
 
 189 
 
 878 
 
 57 
 
 41 
 
 3,034 
 
 S-917 
 
 178,236 
 
 £ 
 
 251 
 
 190,963 
 
 Siatement showing the Total I 'alues 0/ the Exports 0/ British and Irish Produce in 
 each of the Years 1870 aiui 1880, classified as Articles 0/ Food, Raw Materials, 
 and Manufactured Goods ; ivith the percentage Proportion that each Class is of 
 the Total Exports ; in thousands of pounds, i.e., 100 = 100,000. 
 
 
 1870. 
 
 1880. 
 
 
 Amount. 
 
 Per cent 
 of Total 
 
 Amount. 
 
 Percent 
 of Total 
 
 Articles of Food, Drink, and Tobacco 
 Raw Materials 
 Manufactured Goods 
 
 £ 
 7,607 
 
 13,744 
 178,236 
 
 4 
 
 7 
 
 89 
 
 £ 
 
 8,825 
 
 23,272 
 
 190,963 
 
 4 
 10 
 
 86 
 
 Total Exports of British and '^ 
 Irish Produce . . ) 
 
 I99,5'57 
 
 100 
 
 223,060 
 
 100
 
 APPENDIX. 
 
 I8l 
 
 TABLE XVIII.: 
 
 Siate>iient shcnving the ProJ>oriion of Food, Raw Materials^ and Manufactured A 'ticUt 
 in the Dotnestic Exports of France, for each of the Years 1869 and 1879, coinpi'ed 
 from the French official Returns ; in thousands 0/ pounds, i.e., 100 == 100,000. 
 
 .\rticles Exported. 
 
 {a) Articles of Food : — 
 
 Brandy, spirits, and liqueurs ... 
 Butter and cheese 
 
 Cattle, &c 
 
 Eggs ... ... 
 
 Farinaceous substances not otherwise specified 
 
 Fish 
 
 Fruit, for the table 
 
 ,, oleaginous 
 Grain and meal : Wheat, spelt, meslin 
 
 Rye 
 
 Other kinds 
 Hops 
 Ice 
 
 Meat of all kinds 
 
 Oil, olive 
 
 Salt 
 
 Sugar, raw 
 
 ,, refined ... 
 Syrups, preserves, &c. ... ... ... 
 
 Tobacco, manufactured... 
 
 Truffles ... 
 
 Vegetables, green, salted, or preserved 
 
 Wines of all kinds 
 
 Other articles of food ... 
 
 Total of Food 
 
 (/') Raw Materials :— 
 
 Building materials (lime, bricks, slate, &c. ) .. 
 Cards for carding machines 
 Coal and coke ... 
 
 Cotton, raw 
 
 Fat, oil 
 
 Feathers ... 
 
 Flax and hemp ... 
 
 Grease of all kinds 
 
 Hair of all kinds 
 
 Hemp fibre 
 
 Hides, raw 
 
 Horses, mules, &c. 
 
 Madder .. 
 
 1869. 
 
 1879. 
 
 L 
 
 £ 
 
 2,457 
 
 4,130 
 
 3.116 
 
 2,665 
 
 1,351 
 
 893 
 
 1,455 
 
 1,304 
 
 805 
 
 1,818 
 
 694 
 
 1,519 
 
 1,086 
 
 998 
 
 621 
 
 334 
 
 661 
 
 392 
 
 893 
 
 301 
 
 1,215 
 
 1,066 
 
 475 
 
 81 
 
 304 
 
 221 
 
 398 
 
 445 
 
 136 
 
 200 
 
 86 
 
 102 
 
 602 
 
 537 
 
 3,240 
 
 4,033 
 
 174 
 
 195 
 
 45 
 
 ,70 
 
 57 
 
 298 
 
 166 
 
 541 
 
 13,447 
 
 10,30!::, 
 
 533 
 
 708 
 
 34,017 
 
 33,159 
 
 375 
 
 ■504 
 
 84 
 
 75 
 
 178 
 
 273 
 
 3,016 
 
 2,67s 
 
 66 
 
 252 
 
 143 
 
 1,348 
 
 364 
 
 519 
 
 6S9 
 
 1,053 
 
 4S9 
 
 454 
 
 127 
 
 123 
 
 971 
 
 2,110 
 
 78S 
 
 638 
 
 519 
 
 23
 
 iS: 
 
 APPENDIX. 
 'lABLE XVllI. {continued) 
 
 Articlks Exported. 
 
 (/') Raw Materials (contin ) : — 
 Native resins 
 Ores of all kinds 
 Pitch and mineral tar ... 
 Rags for paper making... 
 Saffron ... 
 Silk, raw and waste 
 Silkworms' eggs... 
 Sowing seed 
 
 Stones, lithographic and other... 
 Wood, for building purposes ... 
 Wool, raw 
 Other raw materials 
 
 Total Raw Materials 
 
 (f) Manufactured Articles : — 
 Arms and ammunition ... 
 Artificial flowers, &c. ... 
 Basketwork of all kinds 
 iBooks, stationery, &c. ... 
 
 Candles ... ... ... 
 
 Caoutchouc manufactures 
 
 Carriages 
 
 Chemical products not otherwise specified ... 
 
 Clocks and watches 
 
 Colours ... ... ... ... 
 
 Copper, wrought 
 
 Cutlery ... 
 
 French fancy wares 
 
 Furniture, and other wood manufactures 
 
 Garancine (extract of madder)... 
 
 Glass, and glass wares ... 
 
 Gold and silver wares ... 
 
 Grindstones 
 
 Haberdashery, &c. 
 
 Hats, of felt 
 
 ,, mats, and other manufactures of straw ) 
 or bark ... ... ... ) 
 
 Instruments : optical, mathematical, sur- ) 
 gical, &c. ... ... / 
 
 ,, musical ... 
 
 Leather wares ... 
 
 Machinery 
 
 Medicines, compounded 
 
 Oil-cake 
 
 163 
 
 312 
 
 406 
 
 399 
 
 3.966 
 
 5.930 
 
 595 
 
 921 
 
 619 
 
 425 
 
 564 
 
 416
 
 APPENDIX. 
 
 183 
 
 TABLE XVIII. {continued). 
 
 Articles Exported. 
 
 (r) Manufactured Articles [continued) : — 
 Paper and cardboard ... 
 Perfumery 
 
 Pottery and porcelain ... 
 Quinine, sulphate of ... 
 Skins and hides, dressed 
 Soap, other than scented 
 Tartrates... 
 Tissues: Cotton... 
 
 ,, Linen, hempen, and jute 
 
 Silk 
 
 ,, Woollen 
 Umbrellas and parasols 
 Tools, and other metal wares ... 
 Wearing apparel 
 Works of art 
 Yams : Cotton ... 
 
 ,, Linen, hempen, and jute 
 
 ,, Woollen 
 Other manufactured articles ... 
 
 Total of Manufactured Articles ... 
 
 Summary. 
 
 
 Amount. 
 
 Percentage. 
 
 
 1869. 
 
 1879. 
 
 1869. 
 
 1879. 
 
 Food ... 
 Raw Materials 
 Manufactures 
 
 £ 
 34,017 
 21,482 
 
 70,504 
 
 £ 
 33,159 
 25,210 
 69,516 
 
 27 'O 
 17-0 
 56-0 
 
 26-0 
 
 54-2 
 
 Total 
 
 126,003 
 
 127,885 
 
 100 
 
 100
 
 184 
 
 AlTr.Kl)iX. 
 TABLE XIX. 
 
 Sta.'ciiic.'it sfimvinf^ the l'rofiortii>n 0/ J-'ood, Kaw Materials, and Manufactured 
 Articles in ihe I'>omcstic Exports of Germany, for each 0/ the Years 1869 and 
 1879; comf'iUd from the official Returns of Germany; in thousands of marks, 
 i.e., 100 — 100,000. 
 
 Articles Exportkh 
 
 (rt) Food :— 
 
 Animals, living— - 
 
 Cattle 
 
 Sheep 
 
 Swine 
 
 Beer 
 
 Brandy 
 
 Butter 
 
 Fruit of all kinds 
 Grain — 
 
 Wheat 
 
 Barley 
 
 Oats 
 
 Other grain, and flour 
 Hops ... 
 Meat ... 
 Sugar, raw ... 
 
 ,, refined 
 Syrup and molasses ... 
 Tobacco, manufactured 
 
 ,, unmanufactured 
 
 Wine ... 
 Other articles of food 
 
 Total of Food 
 
 Marks 
 
 (/>) R.\w Matkriai.s : — 
 Animal produce, ik.c.... 
 Cotton, raw ... 
 J"lax, hemp, and jute 
 
 Fuel 
 
 Hides and skins, including leather — 
 
 Cow hides ... 
 
 Other kinds 
 Horses 
 Metals, crude — 
 
 I'ig iron 
 
 1869.* 
 
 1879. 
 
 Marks. 
 
 Marks. 
 
 32,800 
 
 45.350 
 
 30,000 
 
 37,600 
 
 16,400 
 
 24,090 
 
 3.400 
 
 23,400 
 
 20,700 
 
 14,800 
 
 26,800 
 
 22,000 
 
 52,000 
 
 77,700 
 
 149,000 
 
 127,000 
 
 17,200 
 
 40,600 
 
 15.900 
 
 15,500 
 
 104,200 
 
 166,900 
 
 lS,200 
 
 22,300 
 
 6,600 
 
 8,970 
 
 10,600 
 
 58,200 
 
 4,500 
 
 21,390 
 
 5,700 
 
 10,190 
 
 11,800 
 
 6,760 
 
 8,300 
 
 1,380 
 
 22,800 
 
 21,910 
 
 10,226 
 
 12,930 
 
 567,126 
 
 758,970 
 
 28,356* 
 
 37,948 
 
 36,500 
 
 90,680 
 
 61,865 
 
 65,000 
 
 23,208 
 
 40,250 
 
 97,200 
 
 84,200 
 
 18,470 
 
 22,800 
 
 18,034 
 
 24,680 
 
 12,745 
 
 34,000 
 
 12,814 
 
 25,610 
 
 The values for 1S69 are estimated only.
 
 APPENDIX. 
 TABLE XIX. [ccutimicd). 
 
 185 
 
 Articles Exported. 
 
 1879. 
 
 (li) Raw Materials [continued) : — 
 Metals, crude [conlinucii)— 
 
 Iron and steel, unmanufactured ... 
 
 Other raw metals ... 
 Oil: Petroleum 
 Ores and minerals — 
 
 Iron ore 
 
 Other kinds 
 Rags for paper-making 
 Silk, raw 
 
 Wood of all kinds for further manufacture 
 Wool (sheep's) 
 Soap, oil and resins ... 
 Other unmanufactured articles 
 
 Total of Raw Materials 
 
 Marks 
 
 £ 
 
 (c) Manufactured Articles : — 
 
 Books, pamphlets, and other publications 
 
 Chemical products, drugs, &c, 
 
 Dyewoods 
 
 Gunpowder ... 
 
 Glasswares and earthenware 
 
 Guano... 
 
 India-rubber manufactures ... 
 
 Iron and steel, manufactures of 
 
 Leather wares 
 
 Machinery 
 
 Manures (except guano) 
 
 Metal wares ... 
 
 Paper and paper-hangings ... 
 
 Rails for railways 
 
 Ships ... 
 
 Tissues — 
 
 Cotton 
 
 Linen and hempen 
 
 Silk 
 
 Woollen 
 
 Other kinds, and ready-made clothing 
 Wood wares and basket work 
 Works of art, ornaments, &c. 
 
 Marks. 
 
 12,604 
 69,730 
 
 7,75s 
 
 5,400 
 84,480 
 500 
 17,630 
 115,800 
 74,026 
 40,000 
 58,896 
 
 767,660 
 
 38,383* 
 
 23,000 
 
 48,931 
 
 1,496 
 
 811 
 
 51,500 
 
 2,600 
 
 18,780 
 
 31,882 
 
 31,784 
 
 21,212 
 4,218 
 6,104 
 17,000 
 13,350 
 43,000 
 
 73,945 
 22,475 
 86,418 
 161,502 
 75,407 
 14,974 
 74,000 
 
 Marks. 
 
 64,650 
 
 60,440 
 
 4,480 
 
 20,900 
 73,200 
 7,480 
 48,300 
 70,500 
 66,440 
 55,720 
 86,330 
 
 945,660 
 47,283 
 
 22,200 
 
 120,780 
 
 1,800 
 
 3,920 
 
 55,000 
 
 1,890 
 
 15,000 
 
 47,400 
 
 51,750 
 
 39,010 
 
 22,230 
 
 11,200 
 
 26,100 
 
 23,000 
 
 32,590 
 
 95,260 
 13,560 
 66,690 
 142,100 
 98,590 
 43,100 
 54,900 
 
 The values for 1369 are estimated only.
 
 1 86 
 
 Af'I'Ii.NDIX, 
 
 TABLE XIX. {cotttinued). 
 
 .\rticles ExPORTF.n. 
 
 1869.* 
 
 1S79. 
 
 {<•) Manufactured Akticlv.?, {continue,!) :— 
 Yarns — 
 
 Cotton 
 
 Linen and hempen 
 
 Woollen 
 
 Other kinds 
 Other manufactured articles 
 
 Marks. 
 
 10,692 
 5.072 
 
 32,292 
 
 62 
 
 4,770 
 
 Marks. 
 
 24,700 
 4,700 
 
 24,400 
 3.700 
 
 25,450 
 
 I Marks 
 Total of Manufactures ... < 
 
 ( £ 
 
 877,277 
 • 43,864* 
 
 1,071,020 
 53,551 
 
 Summary. 
 
 
 Amount. 
 
 Percentage. 
 
 
 1869. 
 
 1879. 
 
 1869. 
 
 1S79. 
 
 1869. 
 
 J879. 
 
 
 Marks. 
 
 Marks. 
 
 £ 
 
 £. 
 
 
 
 Food , 
 
 567,126 
 
 758,970 
 
 28,356 
 
 37,948 
 
 25-6 
 
 27-3 
 
 Raw Materials 
 
 767,660 
 
 945,660 
 
 38,383 
 
 47,283 
 
 347 
 
 34-0 
 
 Manufactured ) 
 Articles . j 
 
 877,277 
 
 1,071,020 
 
 43,864 
 
 53,551 
 
 397 
 
 387 
 
 Total . , 
 
 2,212,063* 
 
 2,775,650 
 
 110,603* 
 
 138,782 
 
 100 
 
 100 
 
 he values for 1S69 arc estimated only.
 
 APPENDIX. 
 
 187 
 
 TABLE XX. 
 
 Statement shovjiHg the Proportion 0/ Food, Raw Materials, and Manufactured Articles 
 in tlie Domestic Ex/>orts 0/ the United States, for each of the Years 1870 and 1880. 
 {Years ended ■yith June), co}n/>i led from, the official Returns of the United Stales ; 
 in thousands of dollars, i.e., 100 = 100,000. 
 
 
 Articles E.xroRTED. 
 
 Years ended 30th June, 
 
 
 
 
 
 
 i37o.t 
 
 iSSo.t 
 
 («) 
 
 Food :— 
 
 Dollars. 
 
 Dollars. 
 
 
 Animals, living 
 
 1,045 
 
 15,882 
 
 
 Beer, ale, porter, and cider 
 
 26 
 
 299 
 
 
 Bread and breadstiiffs : 
 
 
 
 
 Indian corn 
 
 1,289 
 
 53,29s 
 
 
 Wheat 
 
 47>I7I 
 
 190,546 
 
 
 Wheat flour 
 
 21,170 
 
 35'333 
 
 
 Other breadstuffs 
 
 2,621 
 
 8,86c 
 
 
 Fruits 
 
 543 
 
 2,091 
 
 
 Hops ! 
 
 2,516 
 
 2,573 
 
 
 Oil, Vegetable 
 
 Z26 
 
 3,476 
 
 
 Provisions ; 
 
 
 
 
 Bacon and hams ... 
 
 6,123 
 
 50,988 
 
 
 Beef, fresh 
 
 ,, salted 
 
 j. 1,940 1 
 
 7,442 
 2,881 
 
 
 Butter 
 
 592 
 
 6,691 
 
 
 Cheese 
 
 8,881 
 
 12,172 
 
 
 Lard 
 
 5>933 
 
 27,920 
 
 
 Meats, preserved ... 
 
 314 
 
 7,877 
 
 
 Pork 
 
 3>253 
 
 5,930 
 
 
 Other 
 
 2,140 
 
 5.142 
 
 
 Spirits 
 
 726 
 
 3,028 
 
 
 Sugar, refined 
 
 555 
 
 2,718 
 
 
 ,, unrefined, and molasses 
 
 91 
 
 541 
 
 
 Tobacco, and manufactures of 
 
 ( Dollars 
 
 22,705 
 
 18,442 
 
 
 129,960 
 
 464,130 
 
 
 Total of Food { 
 
 
 
 
 ( £ 
 Raw Materials: — 
 
 21,660* 
 
 96,694* 
 
 il>) 
 
 
 
 
 Coal ... 
 
 1,306 
 
 2,058 
 
 
 Cotton, raw 
 
 227,028 
 
 211,536 
 
 
 Furs and furriers' wares 
 
 1,941 
 
 5,404 
 
 
 Ginseng 
 
 455 
 
 533 
 
 
 Raw hides and skins 
 
 365 
 
 649 
 
 * In the year 1870 the conversions have been made at the currency rate of 3s. 4d. to 
 the dollar, and in 1880 at the average rate of 4s. 2d. 
 t Exclusive of bullion and specie.
 
 i88 
 
 APPI'NDIX. 
 TAr.Li: XX. (<onliiiiuJ). 
 
 AKTlCLliS Kxi'OKTiiU. 
 
 (/■) Paw Matkkiai.s (conliniicJ) :— 
 
 Naval stores (resin, turpentine, tar, and pitch 
 Oil, Mineral ... 
 
 ,, Animal (fat and t'lsli) ... 
 (Quicksilver 
 Seeds ... 
 Tallow 
 Wool, raw 
 All other unmanufactured articles ... 
 
 Total of Raw Materials ... 
 
 ( Dollars 
 
 ( £ 
 
 } 
 
 and 1 
 / 
 
 ((■) Manufactured Articles: — 
 Agi-icultural implements 
 Books, pamphlets, and other publications. 
 Carriages, railway cars, carts, and parts 
 
 thereof ... 
 Clocks and watches ... 
 Copper, and manufactures of 
 Cotton, manufactures of 
 Drugs, chemicals, medicines, and dye [^ 
 
 stuffs (including acids) ... 
 Fancy articles, combs, perfumery 
 
 toilet soap 
 Glass and glass wares 
 Hemp, and manufactures of, including 
 
 cordage ... 
 Iron and steel, and manufactures of 
 Jewellery, and other manufactures of gold 
 
 and silver 
 Leather, and manufactures of 
 Manures 
 
 Marble and stone, and manufactures of 
 Metals, and manufactures of, not elsewhere 
 
 specified ... 
 Musical instruments ... 
 Oilcake 
 Ordnance stores 
 
 Years ended 30th June. 
 
 1870.+ 
 
 1880.+ 
 
 Dollars. 
 
 Dollars. 
 
 1,920 
 
 32,669 
 
 1,148 
 
 5>2 
 
 98 
 3,815 
 
 2,453 
 
 36,219 
 
 1,676 
 
 1,360 
 
 2,777 
 7,689 
 
 55 
 2,285 
 
 72 
 2,128 
 
 273,597 
 
 274,554 
 
 45,600* 
 
 57,199* 
 
 1,069 
 341 
 
 2,246 
 627 
 
 977 
 
 1,407 
 
 5S9 
 1,042 
 3,787 
 
 1,453 
 
 849 
 
 9,981 
 
 2,495 
 
 3.531 
 
 409 
 
 531 
 582 
 
 13,483 
 60 
 
 673 
 115 
 180 
 
 401 
 267 
 
 3,419 
 
 1,229 
 
 876 
 750 
 
 1,629 
 
 14,716 
 232 
 
 6,760 
 
 604 
 
 653 
 971 
 811 
 
 6,260 
 777 
 
 * In the year 1870 the conversions have been made at the currency rate of 3s. 4d. to 
 the dollar, and in 1880 at the average mte of 4s. 2d. 
 t Exclusive of bullion and specie.
 
 APPENDIX, 
 
 189 
 
 TABLE XX. [iontinued). 
 
 
 
 
 Years endec 
 
 30th June. 
 
 Articles Exported. 
 
 1870.+ 
 
 i88o.t 
 
 [c) Manufactured Articles 
 Paper and stationery 
 Soap, common 
 
 Starch 
 
 Turpentine, spirits of 
 
 Wearing apparel 
 
 Wood, and manufactures of 
 
 Wool, manufactures of 
 
 All other manufactured artic 
 
 (contin 
 
 les ; 
 
 iie^x) :— 
 
 ( Dollars 
 1 £ 
 
 Dollars. 
 
 515 
 623 . 
 107 
 
 1,357 
 619 
 
 13,735 
 
 124 
 
 2,922 
 
 Dollars. 
 
 1,183 
 
 690 
 
 44S 
 
 2,132 
 
 708 
 
 16,237 
 
 216 
 
 8,515 
 
 Total of Manufactures . . . 
 
 51,651 
 8,609* 
 
 85,262 
 17,763* 
 
 Summary. 
 
 
 tAMOUNT. 
 
 Percentage. 
 
 
 1870. 
 
 1880. 
 
 1870. 
 
 1880. 
 
 1870. 
 
 1880. 
 
 Food . 
 Raw Materials 
 Manufactured "I 
 Articles / 
 
 Dollars. 
 129,960 
 273,597 
 
 51,651 
 
 Dollars. 
 
 464,130 
 
 274,554 
 
 85,262 
 
 £ 
 21,660 
 45,600 
 
 8,609 
 
 * 
 
 £ 
 
 96,694 
 
 57,199 
 17,763 
 
 28-6 
 6o'i 
 
 11-3 
 
 56-3 
 33 3 
 10 "4 
 
 Total . 
 
 455,208 
 
 823,946 
 
 75,869 
 
 171,656 
 
 100 
 
 100 
 
 * In the year 1870 the conversions have been made at the currency rate of 3s. ^A. to 
 the dollar, and in 1880 at the average rate of 4s. 2d. 
 t Exclusive of bullion and specie. 
 
 Cassell, Fetter, Galpin & Co., Belle sauvage Works, Lo.ndon, E.C
 
 -A^^- 
 
 POPULAR FALLACIES 
 
 REGARDING 
 
 TRADE AND FOREIGN DUTIES 
 
 BEING THE 
 
 ''SOPHISMES ECONOMIQUES 
 
 F R E D E R I C B A S T I AT, 
 
 Late Member of the Institute 
 of France. 
 
 ADAPTED TO THE PRESENT TIME 
 
 BY 
 
 EDWARD ROBERT PEARCE. 
 
 Cassell, Fetter, Gal pin & Co.: 
 
 LONDON, PARIS & NEW YORK. 
 1882.
 
 PREFACE. 
 
 No work with which I am acquainted puts the principles of 
 Free Trade more forcibly — by means of the most homely 
 illustrations — than the " Sophismes Economiques " of Bastiat. 
 The importance of being armed with principles cannot be 
 over-estimated ; they are a touchstone which should be ever 
 at hand to test and explain the changing conditions of home 
 and foreign trade. While figures change from day to day, 
 principles remain unchanged. 
 
 In the following pages I have been able to reduce the 
 " Sophismes " to nearly half their original size, the present 
 phase of the controversy rendering much that was first written 
 unnecessary. I have given the illustrations an English form, 
 by changing francs to pounds, French names to English, &c., 
 and a few illustrations which were somewhat out cf date I have 
 altered to suit the present time. Some new passages which 
 have been introduced are included within brackets [ ]. I have 
 made use of the English edition brought out in 1846 by the 
 late Mr. Porter, the well-known author of the " Progress of the 
 Nation." 
 
 E. R. ?. 
 
 London, 
 
 famiary loth, 1882.
 
 CONTENTS. 
 
 PAGE 
 
 Free Trade and Fair Trade: Propositions of the Fair Trade Mani- 
 festo — Protection to National Labour — One-sided Free Trade — 
 Retaliatory Duties — A Bund with the Colonies — Incomplete Truths 
 — The Broken Window ... ... ... ... ... 9 
 
 Abundance and Scarcity : Over-production — Flooding our Mar- 
 kets — Man as a Producer and Man as a Consumer — Man as a 
 Solitary Animal — Effect of Exchange on the Interests of Producers 
 — Over-production as a Remedy — Some Recent Causes of Distur- 
 bance to Trade ... ... ... ... ... ... 12 
 
 Obstacle — Object : Natural Obstacles — Division of Labour allots 
 
 each Obstacle to a Different Class of Men — Physician, &c. .. l8 
 
 Effort — Result : Effort does not Measure Wealth — Inconsistency of 
 
 Individuals — Labour does not Constitute Riches ... ... 20 
 
 To Equalise the Conditions of Production : The Present 
 State of Manufactures and of Agriculture — A Handicap Race — The 
 Reason why Countries Exchange Productions —Capitalists Leaving 
 the Country — Commerce in 1842 — Agriculture in 1831 — Oranges 
 — Import Duties do not Equalise the Conditions of Production — 
 The Least Favoured Country has most to Gain by Exchange — Im- 
 provements in Machinery — The Saw — The Plough — Water — Sugar 
 — Coffee — Exchange is the Barter of Equal Amounts of Labour... 23 
 
 Our Productions are Burdened with Taxes: Tobacco and 
 Spirits, Fiscal Taxes — Justice and Police — Roads, Bridges, and 
 Schools — Tin — Everybody cannot be Protected — The most Heavily 
 Taxed Country should be the First to Open her Ports — Local and 
 National Taxation of England, Europe, &c. ... ... •••33
 
 VI CONTENTS. 
 
 PACE 
 
 Imports and Exports; Alarm of Fair Traders— Marching to Ruin 
 — Profit and Loss in Traders' Account Books — Mr. Smith's Experi- 
 ence — An Easy Method of Doubling our Capital — Imports and 
 Exports of Bullion and Foreign Bonds — Imports and Exports in 
 1873 — How does Capital ^if/ Abroad ? — Profit on Coal Sent to 
 India in 1880 — Import and Export Tables and Indirect Routes ... 37 
 
 Petition of the Tallow-Ch.wdlers, Lamp-Makers, &c. : 
 
 Fogs in London — Birmingham Buckle-makers and Shoe-ties ... 42 
 
 Differential Duties : The French Husbandman and the Belgian 
 and English \Voollen Manufacturers — The Good the CustomHouse 
 Officer would do — On whom Fall the Duties on Foreign Goods — 
 Salt sent to Russia — Differential Duties in Favour of the Colo- 
 nies — Such Existed on Sugar in 1S45— The advantage to England 
 of offering an Open Market ... ... ... ... 44 
 
 Reciprocity: Dulltown and Brisktown, a Fable ... ... 48 
 
 Will Retaliatory Duties Raise the Rate of Wages ? : 
 Abundance, not Price, is the Test of Well-being — The Fallacies of 
 High Prices — W^heat at 40s. and at 30s. a Quarter — Wages Depend 
 upon the Demand — The Farmer and his Son — The Result of Pro- 
 ducing Everj-thing at Home —The Fair Trade Manifesto and Adam 
 Smith — Dr. Franklin's Illustration ... ... ... ... 50 
 
 Theory and Practice : Superior Wisdom of Foreign Countries — 
 Making Things at Home in order to Employ Labour — Universal 
 Experience against the Practice — Every one is Practically a Sound 
 Economist ... ... ... ... ... ... 56 
 
 Reciprocity Again : Mr. Ecroyd considers that the English Work- 
 man's Employment is being taken from him — WTiat can a Man 
 Take Outof National Circulation, and What Out of General Circula- 
 tion ? — Sir E. Sullivan would Reduce our Purchases from Foreigners 
 in order to Cause an Increased Employment of National Labour — 
 M.Lecocq's Boots — The More we Buy the More we Sell — Railways 
 and Electricity — The Juggle of Money — It is a Medium — The 
 Effect of Retaliatory Duties — Their Injury to the Consumer — Yar- 
 mouth Bloaters — The Taxation of so-called Luxuries — Protection 
 in Victoria and Germany — Protection in 1S40 ... ... 58 
 
 " No such Things as Fi.xed Principles : " There is a Natural 
 Law of Exchanges — The Provisioning of London — "Exceptions 
 to every Rule" — This there cannot be in Free Trade ... ... 65
 
 CONTENTS. Vll 
 
 PAGE 
 
 National Independence : If \ve Depend on Foreign Countries for 
 Food, what shall we do in Time of War ? — True Reciprocity — 
 Interest Antagonistic to War — The Bugbear of our Dependence 
 upon Foreigners — Grain Imports in 1809-10 — The Troops of 
 Napoleon, how Clad and Shod — Arguments against Foreign 
 Produce equally Efficacious against Machinery — Most Machinery 
 co-exists with most Employment — A Machine Reducing the Cost 
 of Hats, its Effect ... ... ... ... ... 67 
 
 Raw Materials : Better to Import Raw Materials than Manufactured 
 Goods — This Fallacy Wide-spread — The Englisli Market to be 
 Reserved for Natural Labour — Labour alone is the Cause of Value 
 — A Ton of Iron and a Ton of Watch-springs — Duties on Raw 
 Materials might Arouse the Shipping Interest — M. Lecocq Again 
 — It is not more Advantageous to Tax Manufactured Goods than 
 Raw Materials ... ... ... ... ... ... 73 
 
 Metaphors: "Invaded" by Foreign Producers — "Flooded" with 
 
 Foreign Goods — " Inundated " with Foreign Produce ... ... 78
 
 POPULAR FALLACIES 
 
 REGARDING 
 
 TRADE AND FOREIGN DUTIES. 
 
 CHAPTER I. 
 
 FREE TRADE — FAIR TRADE. 
 
 [A LEAGUE has been formed " for the preservation of our home 
 industries and the protection of our national labour against 
 unfair foreign competition." The manifesto from which these 
 words are taken goes on to say, "The policy of one-sided trade 
 which has so long been maintained in this country is enabling 
 foreigners to gain the monopoly of our markets, to displace 
 British labour, and to deprive British workmen of their pur- 
 chasing power — i.e., of their wages." 
 
 The members of this League — who, though they use the 
 word Protection, object to be called " Protectionists," preferring 
 to be known as " Fair Traders" — deny our right to use the words 
 Free Trade as descriptive of the system of trade at present 
 existing in this country. They say that Free Trade only exists 
 between us and those countries which impose no taxes upon 
 our productions — that ours is only a free importation system, 
 a one-sided Free Trade, for foreign countries tax our productions 
 while we do not tax theirs, and that from this one-sided system 
 we are suffering loss. " Isolated Free Trade," says the mani- 
 festo already mentioned, " is ruining the country." 
 
 The Fair Trade manifesto further says that " foreign 
 nations do not tax their consumers by taxing British com- 
 modities ;" from which we are meant to infer that if we 
 taxed foreign commodities we should not be taxing the British 
 consumer,
 
 lO POPULAR FALLACIES REGARDING 
 
 The Fair Trade League, while anxious to protect English 
 labour against unfliir foreign competition, declare that they are 
 convinced Free Traders, and that their object is to obtain real 
 Free Trade — viz., the abolition of the taxes levied by foreign 
 countries upon our productions. This accomplislied, the 
 I>eague would have no objection to our levying none in return. 
 We are to bring this about by mar.shalling ourselves under the 
 banner of reciprocity and "holding out threats of retaliatory 
 measures, which, if necessary, are to be strictly enforced." I 
 do not know whether any one seriously believes that our return 
 to Protection would cause foreign countries to adopt Free Trade. 
 I should have thought that if one country protecting against 
 another country could have led to this result, the number of 
 countries at present levying protective duties would surely have 
 been sufficient to effect it without adding one more to the 
 number. 
 
 The League further proposes that there should be a con- 
 federation of the mother country and the colonies, for the 
 purpose of carrying out within the empire the principles of 
 absolute Free Trade. JMany other propositions are made in 
 the manifesto of the League, but these are sufficient for our 
 present purpose. 
 
 The aim of this little treatise is to show that every one of 
 these propositions involves a fallacy — that is to say, involves 
 and conceals assumptions on matters of fact which are entirely 
 erroneous. 
 
 Every person must be considered in two lights — as a 
 producer and as a consumer. The Fair Traders consider only 
 the producer. I intend to prove that the levying of taxes 
 upon imports, which the Fair Traders propose, would not lead 
 to the employment of one single additional labourer or work- 
 man, nor would it raise the wages of labour one penny, while 
 it would cause an increase in the cost of articles of consump- 
 tion. As every one, without exception, is a consumer, it would 
 be injurious to all. 
 
 The strength of the Fair Trade movement is due partly, 
 no doubt, to selfish interest, but it rests mostly upon error — 
 upon incomplete truths. Let me illustrate what I mean. 
 
 It is common enough to hear it said of the extravagance 
 of a spendthrift that " it is all good for trade." Such root has 
 this fallacy taken, that IvLandcville has enunciated the paradox 
 that "private vices are public benefits." The strength of this
 
 TRADE AND FOREIGN DUTIES. II 
 
 fallacy lies in its setting forth an incomplete truth; the good is 
 visible to the external eye, the evil can only be perceived by 
 the mind.] 
 
 The clumsy son of your excellent grocer breaks the large 
 pane of glass in his father's shop. One of the spectators con- 
 soles the unfortunate grocer by saying " It is an ill-wind that 
 blows nobody good. Everybody must live, and what would 
 become of the glaziers if panes of glass were never broken ? " 
 This contains an entire theory. It costs ;£^ to repair the 
 damage, and you therefore say it brings jQ^ to the glazier's 
 trade — it encourages that trade to that amount. I grant it : 
 you reason justly. The glazier comes, repairs the window, rubs 
 his hands, and blesses the careless son. All this is that whica 
 is seen. 
 
 It is not sem that as our shopkeeper has spent jQ^ upon 
 one thing he cannot spend it upon another. // is Jtot seen 
 that if he had not the window to replace he would have 
 purchased some clothes, or books, or furniture, or taken his 
 family for an outing, or invested the money in his trade. 
 
 The window is broken, and the glazier's trade is en- 
 couraged : that is seeti. 
 
 Had the window not been broken, the tailor's trade (or 
 some other) would have been encouraged to the amount of 
 ;^5 : this is that which is not seen. 
 
 The sum total, then, of industry ifi general^ of national 
 labour, is not affected whether windows are broken or not ; but 
 how about the grocer ? He has spent ;^5 upon the window, 
 and has no more for his money than he had before ; only he 
 is poorer by ;£^. Had the window not been broken, he would 
 have had the enjoyment of some more clothes or something 
 else, and the window too. 
 
 Now, as the grocer is part of society, we must come to the 
 conclusion that in making an estimate of its labours and 
 enjoyments it has lost the value of the broken window. 
 
 [We shall presently see that if we adopt the retaliatory 
 measures recommended by the Fair Traders, we shall simply 
 transfer a certain amount of labour from the tailor or the 
 bookseller to the glazier ; the community, as represented by the 
 grocer, being the poorer by that amount.]
 
 12 POPULAR FALLACIES REGARDING 
 
 CHAPTER II. 
 
 AfiUNDANCE — SCARCITY. 
 
 Which is better — abundance or scarcity? 
 
 " What ! " you will exclaim, " how can this be made a ques- 
 tion ? Is it possible to maintain that scarcity is the foundation 
 of the well-being of men ?" Yes, this has been maintained ; it is 
 maintained every day, and I do not hesitate to say that the 
 theory of scarcity is extremely popular. It is advanced in 
 conversation, in newspapers, in books, in Parliament ; and 
 although the assertion may appear extravagant, it is neverthe- 
 less true that political economy will have fulfilled its task 
 when it shall have caused the simple proposition — that 
 riches consist in the abundance of things — to be universally 
 accepted. 
 
 But recently the cry was, " We are suffering from over- 
 production." Therefore abundance is dreaded. 
 
 We now hear every day, " The foreigner is flooding our 
 markets with his goods." Therefore we fear abundance. 
 
 Have not some said, " Let bread be dear, and agricultural 
 depression will disappear " ? But bread can only be dear 
 because it is scarce, therefore these men extol scarcity. 
 
 How does it happen that abundance appears to be dreaded, 
 and scarcity to be desired ? I intend to trace this illusion to 
 its source. 
 
 It is seen that a man becomes rich in proportion as he 
 draws a greater profit from his work— that is to say, according 
 as he sells at a higher price. He sells at a higher price, in 
 proportion to the rarity — the scarcity — of the kind of product 
 which is the object of his industry. Hence it is concluded 
 that, with regard to him at least, scarcity enriches him. Apply- 
 ing successively this reasoning to all manufacturers and pro- 
 ducers, the theory of scarcity is deduced. Hence we pass to 
 the application ; and, in order to favour all classes of pro- 
 ducers, dearness is to be artificially excited, the scarcity of 
 everything is to be brought about by prohibition and 
 restriction. 
 
 The same reasoning may be pursued in the case of 
 abundance. It is observed that when any particular produce
 
 TRADE AND FOREIGN DUTIES. 13 
 
 abounds, it is sold at a low price ; then the producer gains less. 
 If all producers are in the same situation, they are all miserable ; 
 it is then abundance which ruins society. Accordingly, men 
 seek by legislation to oppose abundance. 
 
 This fallacy obtains all its force from being applied, not 
 to all producers generally, but now to this branch of industry, 
 now to that. It is a syllogism ; not false, but incomplete. But 
 whatever there may be which is true in a syllogism is always 
 and necessarily present to the mind. On the other hand, in- 
 completeness is a negative quality, an absent datum which it is 
 very possible, and even very easy, to hold of no account. 
 
 Man produces in order to consume. He is, at the same 
 time, a producer and a consumer. The reasoning which I 
 have just established considers him only as a producer. Con- 
 sider him as a consumer, and we arrive at an opposite conclu- 
 sion. Might it not in truth be said : — 
 
 The cheaper he buys the richer is the consumer. Things 
 are bought cheap in proportion to their abundance ; then 
 abundance enriches him : and this reasoning extended to all 
 consumers would conduct to the theory of abundance I 
 
 It is the imperfectly comprehended notion of exchange 
 which produces these illusions. Sellers desire a dear market, 
 buyers a cheap market. 
 
 If man were a solitary animal, if he worked exclusively for 
 himself, if he consumed directly the fruit of his own labour — in 
 a word, if he did not exchange, then the theory of scarcity 
 would never have been introduced into the world. It would 
 be too evident that abundance would be advantageous to him, 
 in whatever way it might come to him ; whether it were the 
 result of his industry, of ingenious tools, of powerful machinery 
 which he might have invented, or whether he owed it to the 
 fertility of the soil, to the liberality of nature, or even to a 
 mysterious itivasion of productions which the waves might have 
 brought from other parts and abandoned to his use on the 
 shore. The solitary man, in order to insure a demand for his 
 own labour, would never dream of breaking the instruments 
 which spared it, of neutralising the fertility of the soil, of 
 restoring to the sea the goods which it had borne to him. He 
 would easily comprehend that labour is not an end, but a 
 means ; that it would be absurd to reject the end for fear of 
 injuring the means. He would comprehend that the economy of 
 labour is another name iox pj-ogress.
 
 14 POPULAR FALLACIES REGARDING 
 
 But exi/iange confuses our view of this simple truth. In 
 civiUsed life, with the separation of occupations which it brings 
 about, the production and consumption of an article are not 
 combined in the same individual. Each is therefore induced 
 to see in his own labour no longer a means but an end. 
 Exchange creates relatively to each article two opposing 
 interests — that of the producer and that of the consumer. 
 
 Let us take a producer of any description j what is his 
 interest? It consists in these two things: ist, That the 
 smallest possible number of persons should occupy themselves 
 in the same business as himself; 2nd, That the greatest 
 possible number should seek for the produce of this kind of 
 labour — competition limited and sale unlimited. 
 
 What is the interest of the consumer ? A large supply and 
 a small demand. 
 
 One of these two interests must necessarily coincide with 
 the social or general interest, and the other be contrary to it. 
 
 But which of these should legislation favour as being the 
 expression of the public good, if indeed it ought to favour 
 cither? 
 
 In order to arrive at this knowledge, it is sufficient to 
 inquire what would happen if the Legislature were to seek to 
 realise the secret desires of manufacturers and producers. 
 
 In the character of producers, it must be allowed each of 
 us has anti-social wishes. Are we wool growers ? Should we 
 be grieved if there were a murrain affecting all the sheep in 
 the world except ours ? IViis is the theory of scarcity. Are 
 we proprietors of iron-works ? We should desire that there 
 was no other iron in the market than that which we brought 
 there, however much the public might be in want of it ; and 
 precisely because this want was so urgently felt and so im- 
 perfectly satisfied, we should receive a high price for our own 
 iron. This is, ogain, the theory of scarcity. Are we farmers ? 
 We say let bread be dear — that is to say, scarce — and 
 the agriculturist will flourish. This is still the theory of 
 scarcity. 
 
 Do we manufacture silk goods ? We desire to sell them at 
 the most advantageous price for us. We would willingly con- 
 sent to the prohibition of all rival manufactures ; and if we 
 dare not attempt its realisation, nor even publicly express a 
 wish to do so, we still would endeavour to bring it about by 
 indirect means ; for example, by excluding foreign silks, in
 
 TRADE AND FOREIGN DUTIES. 1$ 
 
 order to diminish the quantity in the market^ and so produce a 
 scarcity. 
 
 We could thus pass under review every branch of industry, 
 and should always find that producers, in so far as they are 
 such, have anti-social views. It follows thence, that if the 
 secret wishes of each producer were realised, the world would 
 rapidly retrograde towards barbarism. The sail would pro- 
 scribe steam, the oar would proscribe the sail, the railway 
 would have to cede the right of transit to the cart, this again 
 to the horse, and the horse to the pedlar. 
 
 But if we proceed to consider the immediate interest of 
 the consumer, we shall find that it is in perfect harmony with 
 the general interest — with what the well-being of the human 
 race demands. 
 
 When the buyer presents himself in the market, he desires 
 to find it abundantly provided. That the seasons may be 
 propitious to the gathering in of agricultural produce ; that 
 inventions more and ,more admirable may place within his 
 reach a greater number of articles of necessity and of comfort ; 
 that time and labour may be saved ; that distances may 
 vanish ; that the spirit of peace and of justice may allow a 
 diminution in the weight of taxes ; that barriers of every kind 
 may fall — in all this the interest of the consumer runs parallel 
 with the public interest. He can push his secret wishes to the 
 very extreme, without his wishes ceasing to be philanthropic. 
 
 I supposed just now a Legislature composed of manu- 
 facturers and producers, of which each member would frame 
 as a law his secret wish in the character of producer ; and I 
 said that a code emanating from this assembly would be 
 systematised monopoly — the theory of scarcity put in practice. 
 
 In the same way, a chamber where each would consult his 
 own interest as consumer would end by systematising liberty, 
 the abolition of all restrictive measures, the overturning of all 
 artificial barriers \ in a word, by the realisation of the theory 
 of abundance. 
 
 It follows thence : 
 
 That to consult exclusively the immediate interest of pio- 
 duction, is to consult an anti-social interest. 
 
 That to consult exclusively the immediate interest of 
 consumption, is to consult the general interest. 
 
 As a radical antagonism exists between the seller and the 
 buyer, the producers seek to make the laws, which ought to
 
 1 6 POPULAR FALLACIES REGARDING 
 
 1)0 at least neutral, take the part of the seller against the buyer, 
 of the producer against tlie consumer — of clearness against 
 cheapness, of scarcity against abundance. 
 
 Now I ask, would tlie people be better nourished under 
 such laws, because there was less bread, meat, and sugar in 
 the country ? Would they be better clothed because there was 
 less wool, linen, and cloth ? 
 
 But it is said, if the foreigner inundates us with his produce, 
 he will carry away all our money. 
 
 We shall see later on if this be so. 
 
 [Before the Fair Traders brought forward their proposals 
 for retaliatory duties, "over-production" was pointed to as the 
 especial cause of the prevailing commercial depression. A 
 diminution of production as a remedy was popular with both 
 masters and men. It is plausible, but short-sighted. The 
 natural remedy for a too limited market is extension, by 
 cheapening the article i)roduced ; the artificial remedy is to 
 render it dearer. A lower price extends old markets, and 
 opens new. Every idle day, every holiday, means non-creation 
 of wealth, and every article produced is wanted to exchange. 
 If the cotton spinners are right in reducing production, the col- 
 lier is right in producing less coal, the farmer in producing less 
 food, and so on. Every producer will have created less ex- 
 changeable wealth, will get more for the one thing he sells, and 
 give more for the twenty he buys. To the workman this is 
 especially injurious, for whereas the capitalist can store up his 
 capital, the labourer cannot store up his labour ; if he does not 
 sell it day by day it is lost. 
 
 But the theory of "over-production" — one form of the 
 theory of scarcity — has now been dropped, to give place to 
 another form of the same theory — viz., restrictions on the 
 importations of foreign produce. 
 
 It may be well to be reminded here of the following causes 
 of disturbance to trade and manufactures, all of wb.ich falling 
 within the past ten years, many deem alone sufficient to account 
 for the state of commercial depression from which the country 
 has been suffering. 
 
 At the beginning of the decade we had the Franco- 
 German war disturbing the industry of those countries, and 
 causing a large expenditure in England. Following upon this 
 came the railway mania in the United States, during which
 
 TRADE AND FOREIGN DUTIES. 1 7 
 
 iron rails rose to j[^2o a ton * (1873), to fall within four years 
 to the other extreme — viz., ^,^4 los. a ton. From 1870 to 
 1874 foreign countries were borrowing from us at the rate of 
 nearly ^^100,000,000 a year. These immense loans went 
 abroad, not in the form of money, but as materials for railways, 
 telegraphs, gas-works, water-works, tramways, as steam coal, fire- 
 arms, machinery, &c. That is to say, the money was spent upon 
 English labour, and the products of that labour were exported. 
 We know that this must have been the case from the returns of 
 bullion, which show that in each of those years we imported 
 more gold and silver than we exported (p. 40). Next came 
 repudiation of their debts by foreign borrowers, and we found 
 ourselves in the possession of worthless bonds to the value of 
 ^1,000,000,000. Not only did the interest — some^6o,ooo,ooo 
 annually — cease, but the unpleasant experience diminished loans 
 to foreigners ; and as these loans had all gone abroad in the form 
 of English labour, the employment of English labour suffered a 
 severe check. Besides this, China and India have both suffered 
 from famine, and consequently the spending power of those 
 two countries was for a time diminished. Since the Franco- 
 German war larger standing armies than before have 
 been maintained in Europe, and the spending power of the 
 countries which have maintained them has been thereby 
 lessened. Trade has been disturbed by a considerable rise in 
 the value of gold, owing mainly to the fact that Germany has 
 made it her standard metal, and that the United States and 
 Italy have both returned to specie payments after using paper 
 money for many years. Added to all this, we have suffered 
 from three unusually bad harvests in this country. Are not 
 these things sufficient to explain the commercial depression 
 which has existed, without seeking to lessen production or to 
 impugn the Free Trade principles which we have adopted ?] 
 
 * Many private firms were converted into joint-stock companies at the 
 then inflated prices, and the directors from time to time complain that they 
 are unable to declare any dividends.
 
 l8 POPULAR FALLACIES REGARDING 
 
 CHAPTER III. 
 
 OBSTACLE — OBJECT. 
 
 Man is, by nature, entirely destitute of appliances. Between his 
 state of destitution and the satisfying of his wants there exists 
 a multitude of obstacles, which it is the end of labour to sur- 
 mount. It is curious to investigate how and why these obstacles 
 to his well-being have themselves become in his eyes the cause 
 of his well-being. 
 
 I require to transport myself a thousand miles. But 
 between the points of departure and arrival, mountains, sea, 
 rivers, morasses, forests — in a word, obstacles interpose ; and to 
 vanquish these obstacles I must use many efforts, or, what is 
 the same thing, I must cause others to use many efforts, and 
 for these I must pay them. It is clear with regard to this case 
 that I should have been in a better condition if these obstacles 
 had not existed. 
 
 In the journey through life, man requires to assimilate 
 to himself a prodigious quantity of nourishment, to guard 
 himself against the inclemencies of the seasons, and to pre- 
 serve himself against and relieve himself from a crowd of evils. 
 Hunger, thirst, sickness, heat, cold, are so many obstacles set 
 up on his path. 
 
 In a state of isolation he must combat them all by hunting, 
 fishing, farming, spinning, weaving, building ; and it is clear 
 that it would be better for him that these obstacles existed in a 
 less degree, and still better if they did not exist at all. In society 
 he does not attack personally each of these many obstacles, 
 but others do it for him ; and in return he removes one of the 
 obstacles by which his fellow-creatures are surrounded. 
 
 It is clear also that, considering things in the mass, it is 
 much better for men taken together — for society — that the 
 obstacles be as weak and also as few as possible. 
 
 But if we investigate the views of men as they have been 
 modified by exchange, it will soon be perceived how they have 
 happened to confound wants with wealth, and the obstacle with 
 the object. 
 
 The separation of occupations causes each man, instead of 
 striving on his own account with all the obstacles which sur- 
 round him, to combat only with one ; to combat it, not for
 
 TRADE AND FOREIGN DUTIES. 1 9 
 
 himself alone, but for the benefit of his fellow men, who in 
 their turn render him a similar service. 
 
 But it results from this that each man sees the immediate 
 cause of his riches in the obstacle which he has made it 
 his profession to combat upon account of others. The 
 greater this obstacle, the more disposed his fellow men are to 
 remunerate him for having vanquished it ; that is to say, 
 the more disposed are they to labour to remove, for his benefit, 
 those obstacles which inconvenience and trouble him. 
 
 A physician, for example, does not occupy himself in 
 baking his bread, in constructing his instruments, in weaving 
 or making up his clothes. Others do these things for him, and 
 in return he combats the maladies which aftlict his patients. 
 The more numerous, intense, and frequent these maladies are, 
 the more willing others are — the more they are forced, indeed 
 — to work for his personal advantage. In this point of 
 view, illness — that is to say, a general obstacle to the well- 
 being of men— promotes the well-being of an individual. 
 All producers, in Avhat concerns them, reason in the same 
 manner. The shipowner draws his profits from the ob- 
 stacle called distance ; the farmer from that which is called 
 hunger ; the manufacturer of stuffs from that called cold ; the 
 instructor lives upon ignorafice; the physician upon the 
 maladies of men. It is thus quite true that each profession 
 has an immediate interest in the continuation, and even in the 
 aggravation, of the special obstacle which forms the object of 
 its exertions. 
 
 Seeing this, theorists who base their system upon these 
 individual opinions arrive at the following conclusions : They 
 say, what we require is wealth ; labour is wealth. To multiply 
 obstacles is to give an incitement to industry. 
 
 If we prevent the bringing of sugar from where it is cheaply 
 produced, we create an obstacle to our procuring it. A certain 
 number of our citizens will set themselves to contend against 
 this obstacle, and will thereby make their fortunes. 
 
 Here, it will be said, are certain men who want casks for their 
 beer. It is an obstacle ; and here are certain other men who 
 employ themselves in removing this obstacle by making casks. 
 Suppose an ingenious machine is invented, which cuts down the 
 oak, squares it, divides it into a number of staves, puts them 
 together, and transforms them into beer barrels. The obstacle 
 is very much diminished, and with it the fortune of the coopers. 
 
 B 2
 
 20 POPULAR FALLACIES REGARDING 
 
 Maintcain tlicni botli by a law. Prohibit the macliinc. Toil then 
 — the primeval curse of man — is a blessing. 
 
 In order to penetrate to the bottom of this fallacy, it is 
 sufficient to say that human labour is not an end but a means. 
 It is never left without employment. If one obstacle fails, it 
 will attack another, and humanity is freed from two obstacles 
 by the same amount of labour which would have destroyed but 
 one only. If the art of the coopers ever became useless, their 
 labour would take another direction. But from what fund, it 
 may be asked, would they be remunerated ? Precisely from that 
 which remunerates them now; for when a mass of labour 
 becomes disposable through the removal of an obstacle, a corre- 
 sponding amount of remuneration becomes disposable also. 
 
 CHAPTER IV. 
 
 EFFORT — RESULT. 
 
 We have just seen that between the arising of our wants 
 and their being satisfied obstacles are interposed. By the 
 efforts of industry we surmount these obstacles. 
 
 But by what is our well-being, our wealth, measured ? Is it 
 by the result of effort, or by the effort itself? There must 
 always exist a relation between the effort employed and the 
 result obtained. Does progress consist in the relative increase 
 of the second or of the first term of this relation ? 
 
 According to the first system, wealth is the result of labour. 
 It increases in proportion to the increase of the relation of the 
 result to the effort. Absolute perfection consists in the in- 
 finite separation of the two terms — that is to say, effort nothing, 
 result infinite. 
 
 According to the second system, the effort itself constitutes 
 and measures wealth. To progress is to increase the ratio 
 of the eftbrt to the result. 
 
 The first system naturally welcomes everj-thing which tends 
 to diminish work and to increase its results : powerful machines, 
 which add to the efficiency of man's labour ; exchange, which 
 allows of our deriving the greatest benefit from natural agents 
 distributed in divers degrees upon the surface of the globe;
 
 TRADE AND FOREIGN DUTIES. 21 
 
 intelligence which makes discoveries ; experience which veri- 
 fies ; competition which stimulates, &c. 
 
 Logically, also, it follows that, to fulfil the conditions of the 
 second system, everything which has the effect of increasing 
 work and diminishing its result must be desired — prohibitions, 
 privileges, monopolies, abolition of machinery, sterility, &c. 
 
 It is well to remark, that the universal practice of men is 
 always directed by the principle of the first doctrine. A man 
 has never been seen, and never will be seen — be he farmer, 
 manufacturer, merchant, artisan, soldier, author, or savant — who 
 does not concentrate all the powers of his mind upon the 
 effort to make better, to make more quickly, to make more 
 economically — in a word, to tnake more with less. 
 
 The opposite doctrine is in use by theorists, who never- 
 theless, in what concerns them personally, act as everybody 
 else does — to obtain from labour the greatest possible sum of 
 useful effects. This is always so when we set out on a false 
 principle. It soon brings results so absurd and so mischievous, 
 that we are forced to check ourselves. The punishment would 
 follow too soon upon the error, and expose it at once. But 
 in matters of speculative industry, such as these theorists 
 reason upon, a false principle may be followed a long time 
 before they are warned of its falseness by the complicated 
 consequences to which it leads ; and when at length these 
 consequences are revealed, they act according to the opposite 
 principle, contradict themselves, and seek to justify their change 
 of front by asserting that in political economy there is no 
 absolute principle. Let us, then, see if these two opposite 
 principles do not reign by turns. 
 
 The farmer who desires a tax on foreign wheat lends all his 
 efforts to this double end. As a farmer, his aim is to save 
 labour and produce wheat as cheaply as possible,^for the cheaper 
 his product the greater is the remuneration he receives. When 
 he prefers a good plough to a bad one, improves his land, 
 and calls to his aid all the processes which science and 
 experience have revealed to him, he has, and he can have, 
 but one end — to diminish the ratio of the effort to the result. 
 We have not, indeed, any other means of recognising the skill 
 of the cultivator and the perfection of a process but by ascer- 
 taining what these have retrenched from the effort and added 
 to the result ; and as all the farmers in the world act upon this 
 principle, we may say that the whole human race, without 
 doubt for its own advantage, endeavours to obtain everything.
 
 22 POPULAR FALLACIES REGARDING 
 
 whether it be bread or any other production, as cheap as 
 possible, that is to say, with the least amount of labour. 
 
 This tendency once admitted, should indicate to us in 
 what manner we ought to second industry ; for it is absurd 
 to say that the laws of men ought to operate in an inverse 
 direction to the laws — for we may call such tendency a law — 
 of Providence. 
 
 But when the farmer, as a politician and a voter, says, " I 
 comprehend nothing of the theory of cheapness ; I prefer rather 
 to see bread dearer and work more abundant;" it is very evi- 
 dent that the principle of the farmer as a politician and a voter 
 is diametrically opposed to that of the farmer as a farmer To 
 be consistent with himself, he should vote against all restriction ; 
 or he should carry out on his farm the principle that he follows 
 out at the ballot box. We should then see him sowing his 
 seed on the most barren land, for he would succeed thus in 
 working much to obtain little. We should see him banish the 
 plough, since the culture with the spade would gratify his 
 double wish — bread dearer, and work more abundant. 
 
 Restriction has for its avowed end, and for its recognised 
 effect, to increase labour. It has also for its avowed end, and 
 for its recognised effect, to promote dearness, which is nothing 
 else than the scarcity of products — labour infinite, produce nothing. 
 
 One often hears it said that " labour constitutes the riches 
 of a people." This is true if it mean that the results of labour 
 constitute the riches of the people ; but not true if it mean (as 
 it does) that the intensity of labour is the measure of the 
 riches. Put restrictive duties, it is said, upon foreign produce, 
 double the work for a specified article, and you double 
 the riches ; thence riches are measured not by the result 
 but by the intensity of labour. Accordingly, if a country is in 
 a critical situation, it is because she has produced too much, 
 her labour has been too fruitful ; her people too well fed, too 
 well clothed, too well provided with everything ; too rapid 
 production has outstripped their desires. An end must then 
 be put to this scourge, and in order to do this they must 
 be forced by restrictions to work more and to produce less. 
 "W'e ought to desire that human intelligence should grow weak 
 and become extinguished ; for as long as it exists, it will 
 incessantly strive to augment the ratio of the end to the 
 means, and of the product to the work ; for it is therein, precisely 
 and exclusively, that intelligence consists.
 
 TRADE AND FOREIGN DUTIES. 23 
 
 CHAPTER V. 
 
 TO EQUALISE THE CONDITIONS OF PRODUCTION. 
 
 [As to our manufactures, we have been assured by Sir H. 
 Giffard that " ever since the EngUsh ports have been open free 
 to Other people, while theirs have been closed to us, the manu- 
 factures of the country have declined."* As to agricultural pro- 
 duce, Sir J. Holker has told us that we are pursuing " a Quixotic 
 policy of Free Trade, regardless of any consideration of reciprocal 
 dealing, and that we should prevent a ruinous competition in 
 beef, mutton, and crops." t Mr. Ecroyd says that "we must 
 remove the food-grov,dng trade from the United States by a 
 small differential duty." Many others tell us that "we 
 ought to put a tax upon foreign produce equal to the difference 
 in cost between an article made by us and a similar article 
 made by foreigners — that this is to insure free competition, 
 for free competition cannot exist except there be equality of 
 conditions and of cost."] 
 
 When a handicap race is to be run, the weight that each of 
 the horses has to carry is proportioned to his power, and 
 thus conditions are equalised. Applying this idea to com- 
 merce, the Fair Traders think it most desirable that the 
 conditions of production should be equalised. 
 
 As this argument constantly recurs, I propose to examine it 
 with care, and in doing so I entreat the attention and the 
 patience of the reader. I will first consider the inequalities 
 which depend upon natural causes, and afterwards those which 
 arise out of divers conditions of taxation. 
 
 Here, as elsewhere, we again find that the theorists who 
 favour retaliatory duties take only the point of view of the pro- 
 ducers; while we advocate the cause of the unhappy consumers,, 
 of whom they absolutely refuse to take any account. They com- 
 pare the field of industry to a handicap race, forgetting that in 
 a handicap the race is at the same time the means and the end. 
 The public takes no interest in the contest beyond the contest 
 itself But when you start your horses for the sole end of know- 
 ing which is the best racer, you do not weight them differently. 
 
 * At Launceston, Oct. 27, 1881. Western Morning News. 
 t At Preston, Nov. 7, 1881. Titnes.
 
 24 POPULAR FALLACIES -REGARDING 
 
 If y(xi have for your object the speedy arrival at the goal 
 of inii)ortant and ])ressing news, would you, williout incon- 
 sisteiK y, create o])stacles against those horses which offered 
 you the best conditions for s])ccd? This is, however, what 
 you would do in regard to industry. You forget the result 
 sought for, which is ivell-being — which is not increased by 
 placing obstacles in the way of its attainment. 
 
 But since we cannot bring our adversaries to our point of 
 view, let us {)lace ourselves in theirs, and examine the question 
 with regard to production. 
 
 I shall seek to establish : 
 
 I St. That to bring to the same level the conditions of 
 labour is to attack exchange in its principle. 
 
 2nd. That it is not true that the labour of a country may 
 be destroyed by the competition of more favoured countries. 
 
 3rd. That were this even correct, retaliatory duties would not 
 equalise the conditions of production. 
 
 4th. That Free Trade brings these conditions as much as 
 possible to the same level. 
 
 5th. Lastly, That the least favoured countries gain the 
 most by exchanges. 
 
 I St. To bring the conditions of labour to the same level, 
 not only deranges markets, but attacks exchange in its 
 principle ; for all commerce is founded precisely on that 
 diversity, or, if it be preferred, upon those inequalities of 
 fertility, of aptitude, of climate, of temperature, which you 
 would efface. If Devonshire sends cider to Kent, and Kent 
 hops to Devonshire, it is because these two counties are 
 placed in different conditions of production. Is there, then, 
 another law for international exchanges ? 
 
 2nd. It is not true, in fact, that the inequality of conditions 
 between two similar branches of industry necessarily involves 
 the destruction of that which is the least advantageously cir- 
 cumstanced. On the turf, when one of the horses gains the prize 
 the others lose it ; but when two horses work for the produc- 
 tion of what is useful, each produces in proportion to its power, 
 and though the strongest does the most service, it does not 
 follow that the weaker does no good at all. Wheat is 
 grown in all the counties of England, though there are enor- 
 mous differences of fertility in them ; and if by chance there is 
 one which does not cultivate it, the reason is because its culti- 
 vation is not found profitable there. In the same manner,
 
 TRADE AND FOREIGN DUTIES. 25 
 
 analogy would teach us that, under the system of Free Trade, 
 wheat would be grown in all the kingdoms of Europe, and if 
 there were one which renounced its growth it would be because, 
 pursuing its own inlerest, it would have found how to make a 
 better use of its land, of its capital, and of its labour power. 
 And why does not the fertility of one country paralyze the 
 agriculture of a neighbouring but less favoured country ? Be- 
 cause, though your field produces three times more than mine, 
 it has cost you ten times more, therefore I can still compete 
 with you. This is all the mystery. And remark, that superiority 
 in some respects leads to inferiority in others. It is precisely 
 because your soil is more fertile that it is dearer : in this 
 manner it is not accidentally but necessarily that an equilibrium, 
 or a tendency to it, is established ; and can any on& deny 
 that Free Trade is the system which favours this tendency 
 most ? 
 
 I have given as an example a branch of agriculture, but I 
 could equally well have furnished an example in another branch 
 of industry. There are tailors at Newcastle, but that does not 
 prevent there being tailors in London, though the latter pay 
 much more for their rent, furniture, journeymen, and living. 
 But they have also a different class of customers, and that 
 suffices not only to re-establish the balance but even to make 
 it decline on their side. 
 
 When, then, we speak of equalising the conditions of labour, 
 we must at least examine whether Free Trade does not do that 
 which we are urged to seek from arbitrary measures. 
 
 There are two countries, A and B. A possesses all kinds of 
 advantages over B. You, my Fair Trade opponent, immediately 
 conclude that labour is concentrated in A, and that B is power- 
 less, and can do nothing. A, you say, sells much more than it 
 buys ; B buys more than it sells. I should be able to contest 
 this point, perhaps, but I will meet you on your own ground. 
 
 By the hypothesis, labour is in great demand in A, and in 
 consequence it soon rises in price. 
 
 Iron, coal, land, provisions, capital, are in great demand ; 
 and they soon rise in price. 
 
 During this time labour, iron, coal, land, provisions — all are 
 quite neglected in B, and soon everything there falls in price. 
 
 This is not all. A always selling, B always buying, money 
 passes from B into A. It abounds in A — it is scarce in B. 
 But abundance of money is the same as saying that it requires
 
 26 rOPUI.AR FALLACIES REGARDING 
 
 iiuK h to buy all otlier things. Then in A, to the real dearness 
 which arises from a very active demand, there is added a 
 nominal dfarness consequent on the extra projjortion of the 
 precious metals. 
 
 Scarcity of money signifies that there may be very little 
 expended in each purchase. Then in B nuniinal cheapness is 
 combined with real cheapness. 
 
 Under these circumstances, industry will have all sorts of 
 motives, of motives, if I may so say, carried to the fourth 
 power, to desert A and establish itself in B. 
 
 But to return to the region of reality : we must say that it 
 will not have waited for this moment, as these sudden dis- 
 placements are repugnant to the nature of industry, and that, 
 from the beginning, under a system of Free Trade, it would be 
 progressively divided and distributed between A and B, accord- 
 ing to the laws of supply and demand — that is to say, according 
 to the laws of justice and utility. 
 
 And when I say that if it were possible that industry could 
 be concentrated on one point, there would rise within itself, 
 and by its own movement, an irresistible power of decentralisa- 
 tion, I do not put forth an empty hypothesis. 
 
 [Let us listen to what the manifesto of the Fair Traders 
 says : " Capitalists are closing their works in England, and are 
 leaving the country to erect new works in Protectionist coun- 
 tries." Again, " The free importation of products of labour 
 manufactured abroad is diminishing the home demand to such 
 an extent that capitalists arc beginning to close their works in 
 this country and to erect similar works abroad, where their 
 capital is protected from unfair competition." Now listen to 
 what a manufacturer said in the Chamber of Commerce in 
 Manchester, in 1842, when Protection ruled (I suppress the 
 figures on which he rested his- demonstration): — "Formerly 
 we exported cotton stuffs ; this exportation has given place to 
 that of yarn, which is the material for making the stufis ; after- 
 wards to that of machines, which are the instruments of pro- 
 duction of the yarn ; later still, to that of capital, with which we 
 constructed our machines ; and lastly, to that of our workmen, 
 and of our industrial genius, which are the sources of our 
 capital. All these elements of labour have been, the one after 
 the other, exercised wherever it was found that most advantage 
 could be made of them, where living is less dear, life more 
 easy ; and immense manufactories founded by English capital,
 
 TRADE AND FOREIGN DUTIES. 27 
 
 carried on by English workmen, and directed by English 
 engineers, may be seen in the present day in Prussia, in 
 Austria, in Saxony, in Switzerland, and in Italy." 
 
 The manifesto says nothing about agricultural depression ; I 
 presume because it was considered patent to all. But let us 
 hear a farmer's petition, drawn up in 1831, when Protection 
 was doing its utmost for agriculture : " We, the gentry, magis- 
 trates, clergy, freeholders and occupiers of land in the district 
 of the once opulent vale of Taunton, most humbly represent to 
 your Honourable House that the cruel distress throughout the 
 district in which we reside has arrived at an unparalleled height, 
 and is daily increasing to an alarming extent, with a progressive 
 decline in the value of all productions of the earth, accompanied 
 by an overwhelming burden of taxation such as was never 
 endured by any country, and has swallowed up the capital of 
 the farmer, and brought the greater proportion of independent 
 yeomen to the brink of ruin, which, without the most speedy 
 relief, must terminate in the annihilation of this most excellent 
 and invaluable body of men."] 
 
 You see that nature, or rather Providence, more ingenious, 
 more wise, more foreseeing, than your narrow and rigid theorist 
 imagines, has not willed this concentration of labour, this 
 monopoly of every superiority, about which you argue as an 
 absolute and irremediable fact. It has provided, by means as 
 simple as infallible, the prevention of this by dispersion, diffu- 
 sion, association, simultaneous progress— everything which your 
 restrictive laws would paralyze as much as possible : for their 
 tendency in isolating people is to render the diversity of their 
 conditions much more marked, to prevent the process of level- 
 ling, to hinder their fusion, to neutralise the counterpoise, and to 
 shut up the people in their respective superiority or inferiority. 
 
 3rd. In the third place, to say that by a retaliatory duty 
 the conditions of i)roduction are equaHsed, is to use an incorrect 
 expression which conveys error. It is not true that an import 
 duty equalises the conditions of production. These remain 
 after the duty the same as they were before. What the duty 
 equalises, at most, are the conditions of sale. It may, perhaps, 
 be said that I play upon words ; but I throw back the accusa- 
 tion upon my adversaries. It is for them to prove that produc- 
 tion and sale are synonymous, without which proof I have a 
 right to reproach them, if not for playing upon words, at least 
 for confounding them.
 
 28 POPULAR FALLACIES REGARDING 
 
 Let me be allowed to make this jjoint clear by an example. 
 
 Assume that the idea came into the head of some Cornish 
 speculators to devote themselves to the production of oranges. 
 They know that the oranges of Portugal can be sold in London 
 for one penny each, while they, on account of the conserva- 
 tories, (!v:c., which will be necessary for their growth and pre- 
 servation, on account of the cold, which is often adverse to their 
 culture, would not be able to charge less than a shilling per 
 orange as a remunerative price. They therefore require that 
 the oranges of Portugal may be charged with a duty of eleven- 
 pence. By means of this duty the conditions of production ^ say 
 they, will be equalised. 
 
 Well, I say that the conditions of productioii arc not in any 
 way changed. The law has not made Lisbon colder nor 
 Cornwall hotter. The orange will continue to be natjiral/y 
 ripened in Portugal and artificial/y in Cornwall ; that is to say, 
 its growth will require much more human labour in the one 
 country than in the other. That which will be equalised are 
 the conditions of sale. The Portuguese will have to sell their 
 oranges for a shilling each, elevenpence of which will go to 
 pay the duty. Evidently this tax will be paid by the English 
 consumer ; and observe the whimsicality of the result. Upon 
 each Portuguese orange consumed, the country will lose 
 nothing, for the extra elevenpence paid for it by the consumer 
 will go into the Treasury. There will be a displacement, 
 but no loss. But upon each English orange consumed there 
 will be elevenpence loss, or nearly so ; for the buyer will lose 
 that amount most certainly, and the seller will also as certainly 
 not gain it, since, from the hypothesis, he will only obtain for 
 the orange a remunerative price. I leave to the Fair Traders 
 the task of drawing the conclusion. 
 
 4th. If I have insisted upon this distinction between the 
 conditions of production and the conditions of sale — a distinc- 
 tion which the Fair Traders will, without doubt, find para- 
 doxical — I have done so to lead up to another statement, that 
 after equalising the conditions of production, exchaiige would not 
 be really free. I must be permitted to follow my argument to 
 the end : I will not be long. 
 
 Will you consent to assume for a moment that the average 
 rate of wages of daily labour in England is three shillings per 
 man. It will incontestably follow that to produce directly an 
 orange in England, will cost one-third of a day's labour, or
 
 TRADE AND FOREIGN DUTIES. 29 
 
 its equivalent, while to produce the value of a Portuguese 
 orange will cost only one thirty-sixth of a day's labour, which 
 is saying, in other words, that the sun does in Lisbon what 
 labour does in Cornwall. But is it not evident that if I can 
 produce an orange, or, what comes to the same thing, if I can 
 buy an orange, with a thirty-sixth of a day's work, I am placed 
 relatively to this production exactly under the same conditions 
 as the Portuguese producer himself, deducting the cost of 
 transit, which ought, of course, to be at my charge ? It then 
 is certain that Free Trade equalises the conditions of produc- 
 tion, directly or indirectly, as much as they are capable of 
 being equalised, since it leaves no other existing inequality but 
 the inevitable difference of the cost of transport. 
 
 I add that Free Trade equalises all the conditions of en- 
 joyments, of comforts, and of consumption ; this, which we 
 never take into consideration, is, however, the essential part, 
 since definitely consumption is the final aim of all our industrial 
 efforts. With freedom of exchange, we are able to enjoy the 
 fruits of the Portuguese sun equally with the Portuguese himself. 
 
 5th. This might suffice, but I will go further. I assert, and 
 with full conviction, that if two countries find themselves placed 
 in conditions of unequal production, that of the two, the one 
 7vhich is the least favoured by Jiatiire has the most to gain 
 from freedom of exchange. 
 
 Really the whole question rests upon this point, and in 
 elucidating it I shall have an opportunity of expounding an 
 economic law of the highest importance, which, if well com- 
 prehended, seems to be destined to bring over all those who 
 in our day are seeking, by what they designate as Fair Trade, 
 to promote commercial prosperity. I mean the law of con- 
 sumption, which the greater part of the Fair Traders may, 
 perhaps, be reproached for having too much neglected. 
 
 Consumption is the end, the final object to which all 
 economic phenomena converge, and it is, consequently, in 
 consumption that their definitive solution is to be found. 
 
 All circumstances which favour production are welcomed 
 by the producer, for the immediate effect is to enable him to 
 demand a greater remuneration for himself; all circumstances 
 which are adverse to production distress the producer, for 
 the immediate effect is to limit his employment, and consequently 
 his remuneration. 
 
 When a workman is able to improve the manipulation of
 
 30 POPULAR FALLACIES REGARDING 
 
 his particular branch of industry, the immediate advantage is 
 reaped by himself. This is necessary, in order to induce him 
 to turn his attention to the subject; and it is just, because his 
 effort should have its recompense. 
 
 How does a new discovery operate ? A man discovers a 
 new mechanical process. At first he is enriched and others 
 impoverished. 
 
 But the discovery becomes known ; others imitate him. 
 Their profits are at first considerable. They gain much, but 
 they gain less than the inventor, for competition is awakened 
 and begins its work. The price is lowered. The profits 
 of the imitators diminish in proportion as the period from 
 the time of the invention lengthens — that is to say, in 
 proportion as imitation becomes less meritorious. The new 
 industry soon arrives at its normal state ; in other words, the 
 remuneration is regulated by the general rate of profits. But 
 how does this show itself? By the cheapness of the article 
 produced. And for whose benefit ? For the benefit of the 
 consumer, i.e., of society generally. The producers who thence- 
 forward have no particular and exclusive merit, receive no 
 longer an exclusive remuneration. As consumers, they with- 
 out doubt participate in the advantages which the invention 
 has conferred on the community. But this is all. Inasmuch 
 as they are producers, they have fallen again under the 
 ordinary conditions common to all the producers in the 
 country. Society pays them for their work, but no longer for 
 the utility of the invention. That has become the common 
 and free heritage of the whole of the human race. 
 
 This is true of all the instruments of labour, from the nail 
 and the hammer, to the locomotive engine and the electric 
 telegraph. Society enjoys all through the abundance of con- 
 sumption, and enjoys it gratuitously, because their effect is 
 to diminish the price of articles, and all that part of the 
 price which has been annihilated, which represents the work of 
 the inventor in the production, evidendy renders the pro- 
 duction in that degree gratuitous. The only thing remaining 
 to be paid for is the manual labour. I send for a workman, 
 he comes with his saw, I pay him three shillings per day, and he 
 saws for me twenty-five planks. If the saw had not been 
 invented he would not perhaps have fashioned one, and I 
 should not the less have paid him for his day's work. The 
 usefulness of the saw is then a gratuitous gift to me; it
 
 TRADE AND FOREIGN DUTIES. 3 1 
 
 is a portion of the heritage which I have received in common 
 with other men from the inteUigence of our ancestors. I 
 have two labourers in my field ; the one holds the handle 
 of the plough, the other the handle of the spade. The 
 result of their work is very different, but the price of the 
 day's labour of each is the same, because remuneration is not 
 in proportion to the utility of the product of labour, but to the 
 effort — to the labour required. 
 
 I entreat the patience of the reader a little further, and beg 
 him to believe that I have not lost sight of my subject — com- 
 mercial freedom. But he must allow me to recapitulate the 
 conclusion at which I have arrived. Remuneration is not 
 measured by the utility of the works which the producer brings to 
 market, but by the cost of his labour* 
 
 I have taken my examples mainly from human inventions. 
 Let us now refer more especially to natural advantages. In 
 all production nature and man co-operate. But the useful part 
 which nature performs is always gratuitous ; only that part 
 which is due to human labour forms the object of exchange, 
 and consequently of remuneration. This remuneration no 
 doubt varies very much, by reason of the intensity of the 
 labour, the skill, the promptitude, and the aptitude of the 
 workmen, of the need for it at the time, of the temporary 
 absence of rivalry, and other circumstances. But it is not 
 the less true in principle that the part produced by the co- 
 operation of natural forces, since it belongs to all, does not in 
 any degree enter into the price of the product. 
 
 We do not pay for the light of the sun, because nature 
 gives it. We pay for that of electricity, of gas, of tallow, of 
 oil, of wax, because in these cases there is human labour to 
 be remunerated ; and we must remark, that it is entirely the 
 work and not its utility to which remuneration is proportioned, 
 so that it may very well happen that one of these illuminating 
 powers, though much more intense than another, may, however, 
 cost less. It would be sufScient for this result that the same 
 quantity of human labour could furnish more of this product 
 than of the other. 
 
 When a Water Company supplies my house with water, if 
 
 * It is true that labour does not receive a uniform remuneration. There 
 are different kinds of labour, more or less intense, dangerous, skilful, <S:c. 
 Competition establishes in each case a current price, and it is of this variable 
 price that I speak.
 
 32 POPULAR FALLACIES REGARDING 
 
 I were to pay for it with regard to the absolute utility of the 
 water, my fortune would not suffice. But I pay on account of 
 the trouble which the company has taken in bringing it. The 
 water is not really the subject of our bargain, but the labour 
 required for obtaining the water. Tropical countries are very 
 favourable to the production of sugar and coffee. This is the 
 same as saying that nature does the greater part of the work, 
 and leaves little to be done by manual labour. But then, who 
 reaps the advantages of this liberality of nature? Not those 
 countries — forcompctition obliges them toreceiveonlyremunera- 
 tion for the manual labour — but mankind in general ; for the 
 result of this liberality is cheapness^ and cheapness belongs to 
 all the world. Thus the bounties of nature, as well as improve- 
 ments made in the processes of production, are, or are con- 
 stantly tending to become, under the law of competition, the 
 common and gratuitous patrimony of consumers, of the mass 
 of mankind. 
 
 The countries which do not possess these advantages 
 have, therefore, everything to gain by exchanging with those 
 which do possess them, because exchange is made between the 
 amounts of labour and labour, the portion of usefulness derived 
 from nature which these works include being deducted. And 
 they are evidently the most favoured countries which have incor- 
 porated in a given amount of human labour the most of these 
 natural advantages. Their products, representing less labour, 
 are less highly paid for ; in other terms, they are cheaper, and 
 if all the liberality of nature resolves itself into cheapness, 
 evidently it is not the country producing, but the country 
 consuming, which reaps the benefit of it. 
 
 A is a favoured country, B is a country less favoured by 
 nature. Exchange is the barter of value, and the value being 
 reduced by competition to represent labour, exchange is the 
 barter of equal amounts of labour. What nature has done for 
 the productions exchanged is given in one shape or another 
 gratuitously, and over and above the purchase \alue. Hence 
 it follows strictly, that to exchange with countries most favoured 
 by nature is most advantageous ; and that whereas countries 
 which levy duties upon foreign produce benefit by this gra- 
 tuitous assistance of nature less the amount of the duties they 
 levy, countries which have free ports benefit by the full value 
 of it.
 
 TRADE AND FOREIGN DUTIES. 33 
 
 CHAPTER VI. 
 
 OUR PRODUCTIONS ARE BURDENED WITH RATES AND TAXES. 
 
 That our productions are burdened with rates and taxes, 
 is a part of the same fallacy. You demand that foreign 
 productions should be taxed, in order to neutralise the effects 
 of the rates and taxes which press heavily on our home pro- 
 ductions. The question still is, how to equalise the conditions 
 of production. We need only say one word on this head, which 
 is, that the rate or tax is an artificial obstacle, which has exactly 
 the same result as a natural obstacle — that of forcing a rise in 
 price. If this rise arrives at such a point that there is more 
 loss in creating the production than in obtaining it from abroad, 
 by applying our industry to the production of other things to 
 exchange for it, private interest will soon learn to choose the 
 lesser of two evils. I might, therefore, send the reader back to 
 the preceding demonstration ; but the fallacy which I have 
 here to combat recurs so often in the dolorous lamentations 
 of the " Fair Trade " school, that it well deserves a special dis- 
 cussion. 
 
 If you speak of those few taxes which are laid on certain 
 productions, I am ready to admit that it is reasonable to 
 subject foreign produce to them. For example : it would 
 be absurd to lake off the duty from tobacco or foreign spirits. 
 Tobacco is not produced in this country, and the tax protects 
 no one. On spirits manufactured in England we levy a tax 
 (Excise) equivalent to the duty on foreign spirits. Here again 
 the tax protects no one. These are circumstances under 
 which I admit of a duty, not protective but fiscal, being placed 
 on foreign productions.* 
 
 But to assert that a country should, because she is subjected 
 
 * The Fair Trade manifesto quotes with approval the following words 
 from Mr. Mill : — "A country cannot be expected to renounce the power of 
 taxing foreigneis, unless foreigners will in return practice towards itself the 
 same forbearance. The only mode in which a country can save itself from 
 being a loser by the revenue duties imposed by other countries on its com- 
 modities, is to impose corresponding revenue duties on theirs." I would point 
 out that by revenue duties Mr. Mill means duties levied not for protective, 
 but for fiscal purposes — duties which, if levied upon foreign goods, would also 
 be levied upon the same articles produced at home, 
 C
 
 34 POPULAR FALLACIES REGARDING 
 
 to heavier rates and taxes than neighl)ouring nations, protect 
 herself by her tariff from the competition of her rivals, is a 
 fallacy, which I intend to assail. 
 
 The State may make a good or a bad use of its taxes. It 
 makes a good use when it renders services to the public 
 equivalent in value to what the public gives ; it makes a bad 
 use of them when it expends this value without giving any- 
 thing in return. 
 
 In the first case, to say that taxes place the country that 
 pays them in a more unfavourable condition for production 
 than that which is free from them, is a fallacy. We pay 
 ;^6, 5 00,000, it is true, for justice and police ; but we have 
 justice and police, the security which they afford us, the 
 time they save us ; and it is very probable that production 
 is neither easier nor more active among people, if there 
 be any such, where each takes the law into his own 
 hands. I grant that we pay several millions in local rates 
 for roads, bridges, and schools; but then we possess these 
 roads, these bridges, and these schools, and unless it should 
 be asserted that their cost is a wasteful expenditure, nobody 
 can say that they render us inferior to those people who have 
 none. Taxes well employed, far from injuring, help the means 
 of production. 
 
 Those taxes (if there be any) which are unproductive, 
 abolish if you can ; but it is the strangest way that can be 
 imagined of neutralising their effects to add other taxes. If 
 we are taxed needlessly already, surely that is the strongest 
 reason why we should not tax ourselves still more ? 
 
 There is no doubt that a retaliatory duty is a tax which, 
 directed against a foreign product, really falls upon the home 
 consumer (p. 28) ; and as the consumer is the tax-payer, is it 
 endurable to address him in these terms : " Because the rates 
 and taxes are heavy, we are going to put on more " ? 
 
 Protection might, without changing its nature or results, 
 take the form of a direct tax, levied by the State upon all, 
 and distributed by it in indemnifying premiums to the privi- 
 leged branches of industrj'. 
 
 Let us assume that foreign tin can be sold in our market 
 at ;^5o a ton and no lower, and English tin at jP^doi a ton as 
 the lowest price. 
 
 Under this hypothesis there will be two ways for the State 
 to insure the home market to the home producer.
 
 TRADE AND FOREIGN DUTIES. 35 
 
 The first would be to place a duty of _;^ 12 a ton upon 
 foreign tin. It is clear that it would thus be excluded, since it 
 could not be sold for less than;,^62 — viz., ^50 for the remu- 
 nerative price, and ^\2 for the tax ; and at this price it v*'ould 
 be shut out from the market by English tin, which we have 
 assumed to be at ^60. In this case, the buyer, the consumer, 
 will have paid all the cost of Protection. 
 
 The State might also levy a tax upon the public, and 
 distribute it in premiums to the tin smelters at the rate of ^12 
 a ton. The protective result would be the same. Foreign 
 tin would be equally excluded ; for our tin smelters would sell 
 at ^^48, which, with the p^i2 premium, would give them a 
 remunerative price of jP^do ; and with tin in the market at 
 ;^48, the foreigner could not sell his at ;j^5o. 
 
 I can only see one point of difference between these two 
 systems. The principle is the same, the result is the same ; only 
 in the one case the protective duty is paid by the consumers 
 of the article, in the other by all the tax-payers. 
 
 I confess frankly my predilection for the second system. 
 It appears to me more just, more economical, and more 
 straightforward — more just, because, if society wishes to give a 
 largess to some of its members, all should contribute towards 
 it ; more economical, because it would save much expense in 
 collecting, and would do away with many impediments ; in 
 fine, more straightforward, because the public would see the 
 operation clearly, and know what it was being made to do. 
 
 But if the protective system had taken this form, would it 
 not be rather laughable to hear people say, " We pay heavy 
 taxes for the army, the navy, justice, public works, the debt, 
 &c. — it exceeds ^83,000,000 ; for this very reason it is de- 
 sirable that the State should take another dozen millions from 
 us, to assist those poor iron companies which are unable to pay 
 any dividends, those unfortunate ribbon makers at Coventry, 
 those useful cotton spinners at Preston " ? 
 
 If it be narrowly looked at, you may be assured that this 
 is what the fallacy I am combating leads to. Your efforts 
 will be in vain ; you cannot give /noney to some without taking 
 it from others. If you mean absolutely to impoverish the con- 
 tributor, well and good ; but, it is like mockery to say to him, 
 " I am taking still more from you, to compensate for what I 
 have already taken." 
 
 You take advantage of England's being heavily burdened 
 c 2
 
 36 POPULAR FALLACIES REGARDING 
 
 with rates and taxes to deduce from it that you must protect 
 such or such branches of industry. But we have to pay these 
 taxes in spite of your duties. If, then, the representative of a 
 branch of industry were to come before you, and say, " I am 
 made to join in the payment of taxes ; that raises the cost price 
 of my productions, and 1 ask for a retaHatory duty to raise also 
 the selHng price ;" what else does he ask but that his part of 
 the taxes should full uj)on the rest of the community ? His 
 purpose is to recover, by the enhanced price of his jjroductions, 
 the amount of his share of taxation. Now, the whole of the 
 taxes being paid into the Treasury, and the mass of the people 
 being subject to this rise in price, they pay both their own 
 share of the tax and also that of this branch of industry. But 
 you say, " We will ])rotect everybody." In the first place, 
 such a thing is impossible ; and even were it possible, of what 
 advantage would it be ? "I will pay for you, you shall pay 
 for me, but anyhow the tax must be paid." 
 
 Thus you are the dupes of an illusion. You pay taxes and 
 rates in order to have an army, a navy, judges, roads, &c., and 
 afterwards you wish to free from its share of taxation first 
 one branch of industry, then a second, then a third, always 
 distributing the burden among the mass of the people ; but 
 you do nothing except create interminable complications, with- 
 out any other result than the existence of these complications. 
 Prove to me that the rise of price, owing to retaliatory duties, 
 would fall upon the foreigner, and I might see something 
 valid in your argument. But if it is true that the English 
 public paid taxes before the retaliatory duties were imposed, 
 and that subsequent to the imposition of the duties it pays at 
 once the retaliatory duties and the taxes, in truth I do not see 
 what is gained by it. 
 
 But I go much further. I say that the more heavily taxed 
 we are, the more eager we ought to be to open our ports 
 to the foreigner who may be less burdened than ourselves. 
 And why? To lay upon him a greater part of our burden. 
 It cannot be too often repeated that it is an incontestable 
 axiom in political economy that taxes upon imports fall upon 
 the consumer. 
 
 [But, I may ask, is it altogether tme that England, as com- 
 pared with other countries, is heavily burdened with rates and 
 taxes? A table compiled by Mr. Mulhall (Balance-Sheet of the 
 World) shows that far from this being the case, there is no other
 
 TRADE AND FOREIGN DUTIES. 37 
 
 country in Europe (with the exceptions of Denmark, Norway, 
 and Sweden) less heavily taxed than England. And even the 
 United States, a country often spoken of as if it were free from 
 the burden of rates and taxes, has, in this respect, an advan- 
 tage over us of only about 2^ per cent. 
 
 National and Local Taxation Compared with Earnings in 1880. 
 Great Britain ... ... ... ... ... 11 "88 
 
 Europe ... .. ... ... ... I5'38 
 
 United States... .. ... ... ... 9-21 
 
 South Africa ... ... ... ... ... 19-60 
 
 South America . ... ... ... ... I9'25] 
 
 CHAPTER VII. 
 
 IMPORTS AND EXPORTS. 
 
 " It is a fact of grave importance," say the Fair Traders, 
 "that the amount of imports is continually increasing, and 
 vastly exceeds the amount of exports ; every year England 
 buys more foreign productions, and sells in proportion fewer 
 home productions. Do not the figures prove it? What do 
 we see? In 1880 the imports exceeded the exports by 
 nearly ^200,000,000.* These facts indicate to us that 
 national labour is not sufficie?itly protected, that the compe- 
 tition of our rivals oppresses our national industry. Eco- 
 nomists have declared that when we buy we necessarily 
 sell a corresponding portion of our merchandise — in fact, that 
 the more we buy the more we sell. But this cannot be true. 
 It is evident that we are buying, not with our ordinary 
 productions, not with our revenue, not with the fruits of our 
 permanent labour, but with our capital, with our accumulated 
 savings, which should serve for reproduction. Every year 
 
 * This is the estimate adopted by Sir E. Sullivan and by many other Fair 
 Traders. The sum of _^"2oo, 000,000 is arrived at by excluding from the exports 
 of Great Britain our outward shipments of foreign and Colonial produce, which 
 is absurd. The returns for 1880 are as follows : — 
 
 Total Imports ^411,299,565 
 
 Exports of British produce ... _^223, 060,446 
 
 Ditto Foreign and Colonial ... .^63,354,020 
 Total Exports £2.?>6,,\i^,^66 
 
 Excess of Imports over Exports ... /'124, 815,099
 
 38 I'OrULAR FALLACIES REGARDING 
 
 we are giving nearly ;^2oo,ooo,ooo to foreigners. If this 
 continue, we march headlong to ruin, and entirely destroy the 
 national capital." 
 
 Well, these are men with whom it is possible to come to 
 an understanding. There is no hypocrisy in this language. 
 The theory of the balance of trade is most plainly acknow- 
 ledged in it. England imports ;;{^2oo,ooo,ooo more than she 
 exports ; therefore England loses ^^200,000,000 a year. And 
 the remedy?- — is to prevent importation. This conclusion 
 cannot be avoided. 
 
 Political Economists will doubtless blame me for arguing 
 against the balance of imports by exports. To combat the 
 theory of the balance of trade, they would say, is fighting 
 with a shadow. 
 
 However, not to fatigue my readers, I need not examine 
 this theory too closely. I will content myself with submitting 
 it to the test of facts. 
 
 Our principles are constantly accused of being only good 
 in theory. But tell me, gentlemen, do you believe that 
 merchants' account-books are good in practice ? It appears to 
 me that if there is anything in the world which has a practical 
 authority, when it is a question of profit and loss, it is traders' 
 account-books. It is very unlikely that all the merchants in the 
 world should for ages have come to an agreement together to 
 keep their books in such a manner that they show to them 
 their profits as losses and their losses as profits. 
 
 Now, one of my mercantile friends, having entered into 
 two transactions, the results of which have been very different, 
 I have been curious to compare on this head the accounts of 
 the counting-house with those of the Custom House. 
 
 Mr. Smith dispatched a ship from Liverpool to the United 
 States laden with English hardware to the amount of ;^io,ooo. 
 This was the declared value at the Custom House. On its 
 arrival at New Orleans it was found that the cargo had in- 
 curred 10 per cent, of charges, and it paid 25 per cent, in 
 duty, which made it amount to ;^i 3,500. It was sold at 20 
 per cent, profit, say ;!^2,ooo, and produced a total of p^i 5,500. 
 After paying the charges, ^{^1,000, and the duty, ;^2,5oo, Mr. 
 Smith had ^12,000 to receive. This he invested in cotton. 
 The cotton also incurred for transport, insurance, commission, 
 &c., 10 per cent, of charges, so that at the moment it entered 
 Liverpool the new cargo amounted to ^13,200, and this was
 
 TRADE AND FOREIGN DUTIES. 39 
 
 the value set down in the Custom House lists. To conclude, 
 Mr. Smith realised again upon this return cargo 20 per cent, 
 profit, say ;^2,4oo ; in other words, the cotton was sold for 
 
 The books of Mr. Smith show him on the credit side of the 
 account oi profits and losses, as gains, two items, one of ^2,000, 
 the other of ^2,400, and Mr. Smith is convinced that in this 
 respect his accounts do not deceive him. 
 
 But "what do the figures that the Custom House has set down 
 in reference to this transaction say ? They say that England 
 has exported p^i 0,000 and imported ;^i3,2oo; from which it 
 is concluded " tiiat she has tvasted her past savings, that she has 
 impoverished herself, that she is marching headlong to ruin, that 
 she has given p/^3,200 of her capital to the foreigner."* 
 
 Some time after, Mr. Smith dispatched another vessel, like- 
 wise laden with ^10,000 worth of our national productions. 
 But the unhappy ship foundered on quitting the port, and 
 nothing remained for Mr. Smith to do but to enter into his 
 books two little items thus worded : — 
 
 " Sundry merchandise, debtor to X, ;^i 0,000 for the purchase 
 of various articles shipped in the vessel N. 
 
 " Profit and loss, debtor to stindry merchandise, ;£io,ooo for 
 the total and complete loss of the cargo." 
 
 In the meantime, the Custom House for its part inscribed 
 ;j£"i 0,000 in its table of exports, and as it will never have any- 
 thing in return to set down in the table of imports, it follows 
 that this shipwreck brings a clear 7iet pj-ofit of ;^io,ooo to 
 England. 
 
 There is also this conclusion to be drawn from it — that, 
 according to the theory of the balance of trade, England 
 possesses a very simple means of doubling her capital at any 
 
 * Mr. Cross, in a speech delivered in the House of Commons (i2tb Aug., 
 1881), gave three ilkistrations drawn from foreign trade, showing the profits 
 made on the exportation of cargoes of cotton, iron, and coal respectively. In 
 each case Mr. Cross spoke as if the charges payable upon the outward ship- 
 ments went to swell the amount of the homeward investment. This is evidently 
 incorrect. It would be the same as saying that " Mr. Smith " invested in his 
 return shipment the full amount that he received for his cargo, viz., ^15,500, 
 instead of allowing for his paying away ^3,500 of it in charges and duty. The 
 homeward cargo is equal to the cost of the out\\ ard cargo plus the profit only. 
 The illustrations given by Mr. Cross were also imperfect by reason of his omit- 
 ting to allow any sum as profit on the transactions. Upon this oversight of 
 Mr. Cross's some Fair Traders have fastened, and have endeavoured to prove 
 from it that our imports should only exceed our exports by the merest fraction, 
 which is absurd.
 
 40 POPULAR FALLACIES REGARDING 
 
 minute. It would only be necessary for her to pass it all 
 through the Custom House and throw it into the sea. 
 
 In this case the exports will be equal in amount to her 
 capital ; the imports will be «//, and we shall gain all that the 
 ocean has swallowed up. 
 
 Of course this is too palpably ridiculous to be advanced by 
 the " Fair Traders ;" it is, however, what their argument comes 
 to, and they seek to give effect to it. 
 
 The truth is, that we must take the balance of trade the 
 contrary 7i'aj, and calculate our national profit from foreign 
 commerce by the excess of imports over exports. This excess, 
 the charges being deducted, forms the actual gain. And this 
 theory, which is the true one, leads directly to Free Trade. 
 
 Exaggerate this theory as much as you will ; it has nothing 
 !o dread from being submitted to the process. Suppose even, 
 if it would amuse you, that the foreigner inundated us with all 
 kinds of useful merchandise, without asking anything in return ; 
 that our imports were hifinite and our exports ;///; I still defy 
 you to prove that we shall be poorer in consequence. 
 
 [Driven from this position, the Fair Traders say that, inun- 
 dated by foreign produce, we are being stripped of all our 
 money to pay for it. " We are buying food from abroad faster 
 than we are making money to pay for it," says Sir E. Sullivan. 
 But this is not so. During the last ten years (i 871-81) we 
 have imported more gold and silver than we have exported by 
 ;^36, 000,000. Clearly we have not paid for our imports with 
 precious metals. " Then," say the Fair Traders, " you are 
 paying for them by sending abroad foreign bonds." This 
 is equally untrue ; for whereas twenty years ago we were 
 computed to possess ;!^i, 000, 000,000 of the world's obligations 
 in our strong-box, bankers who collect the dividends tell us 
 that at the present time the indebtedness of foreign countries 
 to England has enormously increased. " But," say the Fair 
 Traders, " how do you account for iJiis fact ? In 1873 — a year of 
 great prosperity — the imports, instead of exceeding the exports 
 by nearly ^{^200,000,000, exceeded them by little more than 
 ;^ioo,ooo,ooo." The answer is simple: at that time we 
 were lending to foreign countries at the rate of more than 
 ;^i 00,000,000 a year. 
 
 " How does capital get abroad," the Spectator enquired, a 
 short time ago, " without something like an excess of 
 exports over imports ? " The following illustration from the
 
 TRADE AND FOREIGN DUTIES, 4 1 
 
 Board of Trade returns will explain. In 1880, 587,000 
 tons of coal, valued at ^265,000, were exported to India, 
 where, after paying all charges, they realised ^900,000. 
 This sum purchased 60,000 tons of jute, the value of 
 which on arrival here was ;!^i,o8o,ooo. The coal left 
 this country valued at ^{^265, 000; its equivalent, the jute, 
 came home valued at ^1,080,000. Now, suppose that we 
 had wanted to lend India that year half a million. Instead of 
 investing the ^{^900,000 in jute, ;j^5oo,ooo of that amount 
 would have been handed over as a loan, and ;^40o,ooo would 
 have remained over for investment in jute. This, on arrival in 
 England would have been valued at ^480,000. We should 
 still show exports ^265,000, imports ;;^48o,ooo, an excess of 
 imports over exports of ^215,000, although in this very 
 transaction we had lent India half a million sterling. 
 
 When investigating tables of imports and exports, we 
 must be on our guard against supposing that they necessarily 
 render a complete account of the course of trade. Let me 
 illustrate this. In the published returns we appear to have 
 exported to France (1880) produce to the value of ^28,000,000, 
 and to have imported from that country produce to the value 
 of ^42,000,000. The same returns show that in that year we 
 exported to Belgium produce to the value of ^13,000,000, and 
 imported goods to the value of ^11,250,000. The explana- 
 tion is, that whereas almost the whole of the produce we take 
 from France comes to us direct from that country, a consider- 
 able portion of the produce we send her in exchange, coming 
 from the north of England, goes through Belgium, and so 
 appears in the tables as if it were exported to Belgium, 
 whereas it is really exported not to Belgium but to France. 
 
 But it may not unfrequently happen that a country does 
 export more to another country than it imports from it, 
 not merely in appearance — as in the case of our trade with 
 Belgium — but as a fact. The United States export con- 
 siderably more to England (chiefly food) than they import 
 from us. China exports largely of tea and silk to the United 
 States, but takes scarcely any American produce. India again 
 exports largely to China (mainly opium) and takes very little in 
 return. The result is, that England becomes indebted to the 
 United States, the United States to China, and China to India, 
 and accounts between the four countries are settled by England 
 sending to India large amounts of cotton goods.]
 
 42 POPULAR FALLACIES REGARDING 
 
 CHAPTER VIII. 
 
 PETITION OF THE TALLOW-CHANDLERS, LAMPMAKERS, AND 
 
 OTHERS. 
 
 " To the honourable the members of the House of Commons : 
 
 "We are suffering from the intolerable competition of a 
 foreign rival, who is placed, as it seems to us, in a condition so 
 infinitely superior to ours for the production of light, that he 
 inundates our national market at a marvellously reduced price; 
 for as soon as he shows himself our sale ceases, all consumers 
 apply to him, and a branch of I'^nglish industry of which 
 the ramifications are innumerable is immediately thrown into 
 a state of complete stagnation. We pray that you will be 
 pleased to make a law ordering that all windows, skylights, 
 inside and outside shutters, curtains, fan-lights, buUs'-eyes, 
 carriage-blinds, in short, that all openings, holes, chinks, and 
 crevices should be closed, by which the light of the sun 
 can penetrate into houses to the injury of the flourishing 
 trades with which we have endowed our country, which cannot 
 now, without ingratitude, abandon us to so unequal a contest. 
 
 " In the first place, if you shut out as much as possible all 
 access to natural light, if you thus create the necessity for 
 artificial light, what English industry exists which will not 
 in some measure be encouraged ? 
 
 " If more electric light is needed, more machinery must be 
 constructed. If more gas is required, more coal must be 
 raised. 
 
 " If more tallow is consumed, more oxen and sheep must 
 be bred and reared, and, in consequence, more meadows will be 
 cultivated ; there will be more meat, more wool, more hides, 
 and, above all, more manure, which is the foundation of all 
 agricultural riches. 
 
 " The same results will follow to our navigation : thousands 
 of vessels will be engaged in whale-fishing, and in a short time 
 we shall have a greatly strengthened marine, capable of up- 
 holding the honour of England against all comers. 
 
 " And further, in articles of London and Birmingham 
 manufacture, consider how many gilt, bronze and glass chan- 
 deliers, lamps, lustres, and candelabra must burn in the
 
 TRADK AND FOREIGN DUTIES. 45 
 
 spacious warehouses which will then take the place of our 
 present shops. 
 
 "Consider the matter, gentlemen, and you must be con- 
 vinced that there wall be scarcely an Englishman, from the 
 most Avealthy coal-master to the most humble matchseller, 
 whose condition will not be ameliorated tlirough the success 
 of our petition. 
 
 '• Gentlemen, we foresee your objections, but you will be 
 unable to bring forward one which is not to be fo.md in 
 the works of the partisans of Free Trade. 
 
 " If you tell us that, although tae may gain by this Protection, 
 England will be no gainer, because the consumer will be 
 burdened with the cost, we shall reply that ' you have no right 
 to consider the interests of the consumer. You should 
 sacrifice them in all cases where they are opposed to those 
 of the producer, in order to encourage industry — to extend 
 the boundaries of industry.' 
 
 " Do you say that the light of the sun is a gratuitous gift, 
 and that to reject gratuitous gifts is to reject wealth itself, 
 under the pretext of encouraging the means of acquiring it ? 
 But this is the very reason why we desire Protection to native 
 industry, and the more so in proportion as foreign produce 
 approximates to gratuitous gifts. 
 
 " Labour and nature are united in different proportions, 
 according to country and climate, in order to create a 
 production. 
 
 " The part which nature contributes is always gratuitous ; 
 it is the part which is added by labour which gives to the 
 production its value, and requires payment. 
 
 " If a Lisbon orange is sold at one-twelfth of a Cornish 
 orange, it is because a natural and therefore gratuitous heat 
 ripens the one, while the other is forced by an artificial and 
 therefore expensive heat. 
 
 "Consequently, when an orange arrives from Portugal, we 
 can say that eleven-twelfths of it is given to us gratuitously, 
 and one-twelfth as a return for labour ; or, in other terms, it is 
 given to us for one-twelfth the price relatively to those of 
 Cornwall. 
 
 "Again, when a product — tin, sugar, wheat, or cloth — 
 comes to us from abroad, and^we can obtain it with less labour 
 than if we made it ourselves, the difference is a gratuitous gift 
 which is conferred on us. This gift is more or less consider-
 
 44 POPULAR FALLACIES REGARDING 
 
 able, in proportion as the difference is more or less great. 
 It will l)e the quarter, the half, or three-quarters of the value of 
 the i)rocluction, according as the foreigner asks us three- 
 (juartcrs, a half, or a quarter as much as it would cost if home 
 manufactured. It is as complete as it can be when the giver, as 
 in the case of the sun giving light, asks no payment. The 
 question — and we put it formally — is, whether you wish to give 
 to England the benefit of a gratuitous consumption, or the 
 supposed advantages of a laborious ])roduction ? Choose, but 
 be consistent; for if you would reject tin, sugar, wheat, woollens, 
 and other foreign stuffs, /// proportion as their price approxi- 
 mates to zero, is it not absurd to admit the light of the sun, of 
 which the j)rice is at zero, during the whole day ? " 
 
 We may smile, and remember that winter fogs in London 
 sometimes accomplish for vendors of artificial light what this 
 petition demands. The loss the grocer suffered when his pane 
 of glass was broken (p. ii) is precisely similar to that which the 
 community suffers from the loss of the sun's light on these 
 occasions. 
 
 I am also reminded that when shoe-ties came into fashion 
 in the last century, and replaced buckles, the bucklemakers of 
 Birmingham petitioned Parliament to make the wearing of 
 buckles compulsory. 
 
 CHAPTER IX. 
 
 DIFFERENTIAL DUTIES AND A BUND WITH THE COLONIES. 
 
 *A POOR husbandman dwelling near Bordeaux raised a vine with 
 great care. After much anxiety and labour, he produced a 
 cask of wine, and in the satisfaction which he felt he no longer 
 remembered that he had earned it by the sweat of his brow. 
 
 " I will sell it," he said to his wife, " and with the proceeds 
 I will buy yarn, with which you can make your daughter's trous- 
 seau." The good countryman went to the town, where he met a 
 Belgian and an Englishman. The Belgian said to him, " Give 
 me your cask of wine, and in exchange 1 will give you fifteen 
 packets of yarn." The Englishman said, " Give me your wine, 
 and I will give you twenty packets of yarn, for we English 
 
 * As we levy no duties upon foreign or colonial produce, whether differential 
 or for the purposes of Protection, or, what is the same thing, of Reciprocity, the 
 above illustration has been left unchanged.
 
 TRADE AND FOREIGN DUTIES. 45 
 
 spin cheaper than the Belgians." But a Custom House officer 
 who was present objected. " My fine fellow," said he, " ex- 
 change with the Belgian if you please, but it is my business to 
 prevent your exchanging with the Englishman." " What ! " 
 said the countryman, '' you expect me to be satisfied with 
 fifteen packets of thread from Brussels when I can have twenty 
 from Manchester ? " " Certainly ; do you not see that France 
 would lose if you receive twenty packets instead of fifteen ? " 
 
 " It is hard for me to understand," said the wine-grower , 
 
 " And for me to explain," replied the Custom House officer ; 
 " but it is certain— for all the deputies, ministers, and journalists 
 are agreed on this point — that the more a people receives in 
 exchange for a certain quantity of its produce the more it is 
 impoverished." He was forced to exchange with the Belgian. 
 The husbandman's daughter had only three-quarters of her 
 trousseau, and the good people cannot yet understand how 
 ruin could ensue from receiving four instead of three, and how 
 they can be richer with three dozen napkins than with four 
 dozen. 
 
 [Now, suppose that the Custom House officer had been in- 
 structed to levy such a duty upon fifteen packets of English 
 yarn as would make their cost, with the duty, the same as 
 fifteen packets of Belgian yarn ; and, further, suppose that the 
 husbandman still preferred to purchase the English yarn ; then, 
 I ask, what useful service would the Custom House officer have 
 performed ?] Absolutely none. The husbandman might as 
 well have given the amount of the duty to a thief. It is in- 
 consequent to say that the Government will spend this money 
 to the great profit of national labour ; the thief would have 
 done the same, and so would the husbandman if he had not 
 been stopped on the road by the lawful highwayman. 
 
 [The manifesto of the Fair Traders tells us that "foreign 
 nations do not tax their consumers by taxing British commo- 
 dities." There is but one inference to be drawn from this — 
 that if we taxed foreign commodities we should not thereby be 
 taxing our consumers. I wonder what the husbandman would 
 say to this ? 
 
 But while the Fair Trade manifesto only leaves us to infer 
 this. Lord Randolph Churchill states it explicitly. He says: — 
 "Tax the skilled labour of the foreigner, tax imports, and 
 bestow the large profits in aid of the reUef of local taxation." 
 He clearly differs entirely in opinion from the Bordeaux hus-
 
 46 POPULAR FAMACIES REGARDING 
 
 bandman, and evidently l)clieves that taxes upon imports fall 
 not upon the consumer but upon the producer. We import 
 ;;^40o,ooo,ooo annually: why not, then, tax the foreigner 50 
 per cent. ? We should raise ;^2oo, 000,000 a year ! If any 
 one still entertains a doubt as to who pays the tax — the con- 
 sumer or the producer — the following illustration, given by 
 Mr. J- K. Cross, may help him to solve it : — 
 
 "We send salt to Russia. At Nantwich it is worth ids. 
 a ton, and at the port of Hull, free on board, say 15s. a ton. 
 It goes to St. Petersburg or to Odessa, and on arrival is taxed 
 ^^2 I OS. a ton. Who ])ays that? The salt is worth 10s. a ton 
 in Cheshire. Can it be that the salt pays the 50s. tax, or the 
 man who makes it? The salt only costs los.: how can it be 
 said that this tax is paid by us ? " 
 
 In addition to their proposals for retaliatory duties, the 
 Fair Traders further suggest'that we should do well to establish 
 differential duties in favour of our colonies. They propose 
 that " all tariffs should be abolished throughout the empire, 
 and that an Imperial Fiscal or Customs Union should be estab- 
 lished." This is a matter of great importance to England, 
 as it is sought to establish differential duties, which differ from 
 protective duties only in this — that they would be adopted not 
 for the supposed advantage of the home population, but in the 
 interests of our colonists. 
 
 In order to understand the loss which differential duties in 
 favour of the colonies would cause to the home population, we 
 have only to suppose ourselves in the position of the French 
 husbandman in the foregoing dialogue, and substitute for 
 the Belgian a West Indian sugar planter, for the English- 
 man a French sugar merchant, and for the yarn, the sub- 
 ject of the bargain, a certain number of barrels of sugar. 
 We .shall then be in a position to understand the injury 
 which the Fair Traders are asking us to do to ourselves, in 
 favour of a part of our fellow-subjects, who cannot be said 
 to take any part in sustaining the national burdens. In 1S45 
 we did indeed maintain in favour of our colonies a differential 
 duty against foreign sugar. It was sufficient to enable the 
 British plantation sugar, though i6s. per cwt. higher in price 
 than foreign sugar of the same quality, to _ monopolise the 
 home market. And in that year alone English sugar con- 
 sumers paid for their sugar, by reason of the differential 
 c^i'fy? ;^3, 000,000 more than they would otherwise have
 
 TRADE AND FOREIGN DUTIES. 47 
 
 done, no part of which reached the public Treasury, and 
 every penny of which was a dead loss to the community. 
 
 To this system we are now invited to return. Differential 
 duties are to be re-established, and the home consumers are to 
 suffer loss for the benefit of our colonial producers. 
 
 But this is not all. By the re-imposition of differential 
 duties there would be not only a loss to consumers but to 
 pri'ducers also, who would suffer in a multitude of ways. 
 " England," says Mr. J. K. Cross,* " is now the emporium of 
 the world ; she has no rival. Men who want the best market 
 come here to buy. But the Fair Traders would stop this. The 
 foreign merchant now comes here from Brazil, from Peru, or 
 the colonial merchant from Canada or the Cape, and buys 
 all he wants in London, whether it be the artificial flowers of 
 France, the gloves of France or Austria, Sweden or Germany, 
 Yeovil or Leicester — he finds them all in Wood Street ; the 
 silks of France, Switzerland, and Italy, in Fore Street, or in 
 St. Paul's Churchyard, and with the English silks as well ; 
 and having made his purchases of these wares, he buys his 
 cottons, his linens, his woollens, his small wares, and his 
 hosiery, of the English manufacturers, and as shipping is 
 direct from London and Liverpool to all the world, he ships 
 his parcel, which, being well bought, he knows will be well 
 sold. By differential duties we shall keep these and other 
 things out of the market ; but they will still be made : and 
 those who now come here to buy will go elsewhere, and 
 they will then buy more of foreign things than they do now. 
 We shall force the foreigner to buy past us, and by forcing him 
 to buy his cloths and silks from others, it is a thousand to one 
 he will buy from them some other things which he has hitherto 
 bought from the English. AVe should, moreover, lose the 
 profit on carriage and sale of foreign goods in our efforts to tax 
 the labour of the foreigner."] 
 
 * Speech at Oldham, Dec. 8, i8Si. Circulated by the Cobden Club.
 
 48 POPULAR FALLACIES REGARDING 
 
 CHAPTER X. 
 
 RECIPROCITY. 
 
 We have seen that all which serves to make transport difficult 
 acts in the same manner as Protection ; or, to put the converse, 
 that Protection acts in the same manner as conditions which 
 render transport difficult. 
 
 Thus we may truly call a tariff, a marsh, a rut, a ravine, a 
 steep declivity — in short, an obsiade, which has the effect of 
 augmenting the difference between the price of consumption 
 and the cost of production. In like manner, it is evident that 
 a marsh and a bog are in fact equivalent to protective duties. 
 
 An obstacle, although it may be artificial, is still an obstacle, 
 and for the same reason that a canal is more advantageous 
 than a sandy, mountainous, and ill-made road, so our welfare is 
 more consulted by PVee Trade than by Protection. 
 
 But " Fair Traders" say, this liberty must be reciprocal. 
 If we remove our restrictions from France, when France does 
 not remove hers from us, we are losers. We must make a 
 treaty of covuncne upon the basis of reciprocity ; we must 
 make mutual concessions ; we must make a sacrifice in buying, 
 in order to have the advantage in seUing. 
 
 Those who reason thus — I am sorry to be obliged to tell 
 them so — hold, knowingly or unknowingly, the principles of 
 Protection, only they are a little more inconsistent than absolute 
 Protectionists. 
 
 I will demonstrate this by means of a fable, 
 
 DULLTOWN AND BrISKTOWN, 
 
 There were — it does not signify how situated — two towns, 
 Dulltown and Brisktown. At a great expense they constructed 
 a road joining the two towns. AVhen it was made, Dulltown 
 said, " Brisktown is inundating me with her produce ; I must 
 consider about it." In consequence, she created and paid a 
 body of preventives — so called because their business was to 
 put obstacles in the way of the arrival of goods from Brisktown. 
 Soon afterwards, Brisktown had her body of preventives as 
 well.
 
 TRADE AND FOREIGN DUTIES. 49 
 
 After the lapse of several centuries, intelligence having made 
 great progress, Brisktown became sufficiently enlightened to 
 see that these reciprocal obstacles were only reciprocal annoy- 
 ances. She sent a diplomatist to Dulltown, whose speech, stript 
 of its official phraseology, was as follows : — 
 
 " We constructed a road, and now we put hindrances on 
 this same road. This is absurd ; we had better have left things as 
 they were ; we should not then have had to pay for making a 
 road, and then for the impediments which we have placed 
 there. I have come to propose to you, in the name of Brisk- 
 town, not that we should at once remove the obstacles which 
 we have mutually opposed to each other — to do so would be 
 acting on principle, and we despise principle as much as you 
 do — but to lessen some few of these obstacles, taking care to 
 balance equally our respective sacrifices in so doing." 
 
 Thus spoke the diplomatist. Dulltown asked time for 
 reflection. She consulted her manufacturers and agriculturists 
 by turns. At last, at the end of several years, she declared 
 that the negotiations were broken off 
 
 After this news, the inhabitants of Brisktown held a 
 council. An old man (who had been always suspected of 
 having been secretly bought by Dulltown) rose and said, — • 
 
 " The obstacles created by Dulltown injure our sales ; it is 
 a misfortune : those which we have created ourselves injure 
 our purchases ; this is another misfortune. We can do nothing 
 in the first case, but the second depends upon ourselves. Let 
 us relieve ourselves from the one, although we cannot be quit 
 of both. Let us abolish our preventive service, without 
 requiring Dulltown to do the same. At some future day she 
 will doubtless know her own interests better." 
 
 Another councillor, a practical man, free from principles, 
 who had thriven on the experience of his ancestors, ex- 
 claimed, " Do not let us listen to this dreamer, this theorist, 
 this innovator, this economist. We should be ruined if the 
 hindrances on the road between Dulltown and Brisktown were 
 not equalised and balanced. There would be more difficulty 
 in going than in coming; in exporting than in importing. 
 Relatively to Dulltown, we should labour under the same 
 disadvantages as Liverpool, Bristol, Hull, Glasgow, London, 
 Newcastle, Hamburg, and New Orleans, when compared with 
 the towns placed at the sources of the Mersey, the Severn, the 
 Ouse, the Clyde, the Thames, the Tyne, the Elbe, and the
 
 5© POPULAR FALLACIES REGARDING 
 
 Mississippi ; for it is more difficult to ascend rivers than to 
 descend them. (A voice: 'Towns at the mouths of rivers 
 have flourished more than towns situated at their sources.') 
 It is impossible. (The same voice : ' But it is so.') Well 
 then, they have prospered /// opposilion to all rules. '' 
 
 So conclusive a reason made the assembly waver. The 
 orator setded their convictions by speaking of national inde- 
 pendence, national honour, national dignity, and national 
 industry, of the inundation of foreign produce, of ta.xes, and 
 of ruinous competition — in short, he carried the vote for 
 the continuance of the obstacles ; and, if you are curious, 
 I can still take you to certain countries where you may see 
 with your own eyes the road-maker and the officer of the pre- 
 ventive service working together on the best of terms, by order 
 of the same legislative assembly, and at the expense of the 
 same tax-payer — the one to clear the road, the other to put im- 
 pediments upon it. 
 
 CHAPTER XL 
 
 WILL RETALIATORY DUTIES RAISE THE RATE OF WAGES ? 
 
 Would you rightly appreciate the effect of retaliatory duties ? 
 Then examine their influence upon the abundance or scarcity of 
 things, and not upon the rise or fall of prices. Have no con- 
 fidence in prices, for this would lead you into an inextricable 
 labyrinth. You are asked to levy duties on foreign produce 
 because it would enhance the price of home productions : — 
 
 "High prices increase the expense of living, and, con- 
 sequcnily, the price of labour, and each regains in the increased 
 price of his produce the increased amount of his expenses. 
 Thus, if all pay as consumers, all receive as producers." 
 
 It is evident that we can reverse the argument, and say : — 
 " If all receive as producers, all pay as consumers." 
 Now, what does this prove ? Nothing, except that Pro- 
 tection displaces capital uselessly and unjustly, and so does 
 spoliation. 
 
 Again, in order to admit that this vast apparatus succeeds 
 in providing compensation to the labourer, we must adhere 
 to the '• consequently" and believe that the price of labour
 
 TRADE AND FOREIGN DUTIES. 5 1 
 
 rises with the price of protected produce. Such is not 
 the case ; because I beheve that the price of labour, as of 
 everything else, is governed by the relation between supply 
 and demand. I can well understand that restriction would 
 diminish the supply of food and clothing, and consequently 
 raise the price, but T do not so clearly see how it would 
 increase the demand for labour, or, in other words, raise the rate 
 of wages. Moreover I the less believe it because the demand 
 for labour depends on the amount of disposable capital. Now, 
 Protection may displace capital, may divert it from one 
 industry to another, but cannot increase it to the amount of a 
 single farthing. 
 
 This is a question of the highest interest, and I shall return 
 to its consideration elsewhere. I go back to prices. 
 
 Suppose that an isolated nation, possessing a certain 
 quantity of coin, chose to burn half its produce every year; 
 I can prove, according to the theory stated above, that that 
 country will not be less rich. 
 
 Indeed, in consequence of this burning, everything will be 
 doubled in price, and the valuation made before and after the 
 disaster will show the same nominal amount. But then, who 
 will have lost ? If John buys his cloth dearer, he also sells his 
 wheat dearer, and if Peter loses on his purchase of wheat he will 
 retrieve his losses by the sale of his cloth. " Each regains in 
 the enhanced price of his produce the increased amount of 
 his expenditure, and if all pay as consumers, all receive as 
 producers." 
 
 All this is mystification, and not science. The truth, 
 reduced to its most simple expression, stands thus : whether 
 men destroy a quantity of cloth or wheat by fire or by jise, the 
 effect is the same as to price, but not as to capital, for wealth or 
 prosperity consists in having things for use. 
 
 In like manner, restriction, in diminishing the abundance of 
 things, may raise the price, so that each person may be, if you 
 please, as rich as regards money. Write, however, in an 
 inventory, three quarters of wheat at 40s., or four at 30s.; the 
 sum of both will be ^6, but will the respective quantities 
 equally supply the wants of the consumer ? 
 
 I shall not cease to bring back the Fair Trader to the sub- 
 ject as it affects consumers, for that is the end of all exertion, 
 and the solution of all economic problems. I shall ask him 
 again and again — Is it not true that restrictions, by preventing 
 
 D 2
 
 52 I'OI'UL\R lAI.FACIKS KI.G \KI)IN'0 
 
 exchanges, by limiting the division of hil)our, and forcing it to 
 be applied in overcoming the difficulties of situation and 
 temperature, end in diminishing the quantity produced by any 
 determinate amount of exertion ? And of what advantage is it, 
 if the less quantity, produced under the retaliatory system, has 
 the same nominal value as the greater quantity, produced 
 under the system of Free Trade ? Man does not live on 
 nominal values, but on real productions ; and the more there 
 are of 'these productions, no matter at what price, the richer 
 he is. 
 
 If you would judge between the two doctrines, put them to 
 the test of exaggeration. 
 
 According to the one doctrine, the English peojjle would be 
 quite as rich — that is to say, quite as well provided with every- 
 thing — with the tenth part of their annual productions, because 
 they would then become ten times more valuable. 
 
 According to our doctrine, the English people would be 
 infinitely rich, if their annual productions were infinitely 
 abundant, and consequently without any money value. 
 
 But is it true that retaliatory duties, which all confess raise 
 the price of things, and thus injure the workman, compensate 
 him at the same time by a proportionate rise in his wages? 
 
 On what depends the rate of wages ? 
 
 When two workmen run after one master, wages fall ; when 
 two masters run after one workman, they rise. 
 
 Allow me, for the sake of brevity, to make use of the 
 phrase which, although perhaps less clear, is more scientific : — 
 " The rate of wages depends on the relative proportions of the 
 supply of and demand for labour." 
 
 But on what does the supply depend ? 
 
 On the number of workmen in the market; and upon this 
 element retaliatory duties can have no influence. 
 
 On what does the demand depend ? 
 
 On the amount of disposable national capital. But under 
 a system of retaliatory duties the law says, " You shall no 
 longer receive such or such from the foreigner; it must be 
 produced at home." Does that increase capital? Not in the 
 least. It diverts it from one channel to another, but does 
 not increase it by a farthing. It does not increase the demand 
 for labour. 
 
 Such or such a manufactory is shown with pride. Has the 
 capital by which it was established and is carried on fallen
 
 TRADE AND FOREIGN DUTIES. 53 
 
 from the moon ? No, it has been necessarily abstracted from 
 that employed in agriculture, navigation, or other occupations. 
 
 I might descant much further on this subject, but I will now 
 endeavour to make my meaning intelligible by an illustration. 
 
 A farmer had a farm of 200 acres, which he valued at 
 ;^6,ooo. As is the case with all farms, this farm was better 
 adapted to produce certain articles of consumption than others. 
 It was mainly a dairy farm — that is to say, it had rich 
 pastures suitable for cattle — but a portion of it was also 
 suitable for growing wheat and barley. It might, therefore, 
 be called a mixed farm. But a small portion of the corn, 
 meat, butter, milk, and cheese which the farm produced 
 sufficed to support the farmer and his family, and he sold the 
 surplus in order to buy beer, clothes, &c. The whole of his 
 capital was distributed each year, in the form of wages, in the 
 payment of tradesmen, and to the Avorkmen in the neighbour- 
 hood ; this capital was returned to him by the sale of produce, 
 and, in fact, it increased from year to year, and the farmer, 
 knowing well that unemployed capital gives no return, im- 
 proved the condition of the working classes by means of his 
 annu.ll profits, which he used in improving his agricultural 
 implements and in erecting improved buildings on his farm. 
 He even placed some residue in the bank of the neighbouring 
 town ; but here it did not remain idle in the strong-box, but 
 was lent to ship-owners and to originators of useful works, 
 so that it ended by being converted into wages. 
 
 In course of time the farmer died, and his son succeeded to 
 his possessions. " It must be confessed," said he, " that my 
 father has been in error all his life. He bought beer from the 
 brewer ; he bought clothes from the draper and the tailor ; 
 he paid tribute to the miller for grinding his corn, and to the 
 tallow-chandler for his candles, while our servants could have 
 brewed, could have ground our wheat, and could have made 
 candles from the fat of the beasts. Moreover, he could have 
 grown flax, and our servants would have woven it ; he could 
 have kept sheep, and our servants would have manufactured 
 the wool into garments for our use. He wasted his substance 
 in giving to strangers wages which he could have easily distri- 
 buted at home." 
 
 [Accordingly the son attempted to carry out in real life the 
 charming, though uneconomic and anti-social, picture which 
 Pope has drawn ; —
 
 rOPULAR KALLACIES KEGAkDING 
 
 " Happy the man whose wish and care 
 A few paternal acres bound, 
 Content to breathe his native air 
 
 In his own ground. 
 Whose herds with milk, whose fields with V)read, 
 
 Whose flocks supply him with attire. 
 Whose trees in summer yield him shade, 
 In winter fire."] 
 
 Confident in his reasonings, he rearranged his farm. He 
 divided it into many portions. In one he kept sheep. To 
 feed them he grew turnips, and laid down part of his corn- 
 land in pasture. He grew flax, he put up a mill, he pur- 
 chased a loom, &:c., &c. He thus provided for all the wants 
 of his family, and made himself independent. He withdrew 
 nothing from general circulation ; but neither did he add any- 
 thing to it. Did he become richer ? No ; for the soil was 
 not fitted for the cultivation of flax, it was not well suited 
 for the breeding and rearing of sheep, and, in fact, the family 
 was not so well supplied as when the father provided for them 
 by means of exchange. 
 
 As for the workmen, there was no more work for them to 
 do than there had been formerly ; there were certainly five 
 times as many different things to be done, but then they were 
 each employed but a fifth of their former time upon them. They 
 made candles, but they grew less wheat ; clothes were no longer 
 bought, but, again, there was no spare butter, meat, milk, or 
 cheese for sale. Besides, the farmer could not expend more than 
 his capital in wages, and his capital, far from being increased by 
 this new mode of cultivation, diminished gradually. A great 
 part was converted into fixed capital, in the shape of buildings, 
 machines, and utensils without number, which were necessary in 
 order to carry on such various occupations. The result was 
 that the supply of labour was the same, but the means of pay- 
 ing for it diminished, and a fall in wages ensued. 
 
 This is a representation of what happens to a nation which 
 isolates itself by retaliatory duties. It multiplies the branches 
 of its industry, I allow, but it diminishes their importance. It 
 adopts a more complicated distribution of industry, but nut a 
 more profitable one ; for the same capital and the same 
 amount of labour must be employed to overcome more 
 natural obstacles. Its fixed capital absorbs a great portion 
 of its circulating capital — that is, of the funds which should 
 be appropriated to the payment of wages. That part which
 
 TRADE AND FOREIGN DUTIES. 55 
 
 remains circulating is parcelled out in vain, for it does not 
 augment the mass. It is as if we believed that the waters 
 of a lake became more abundant because, when distributed 
 into a multitude of reservoirs, they touched the ground in more 
 points, and presented a larger surface to the sun, forgetting 
 that this is precisely the cause why they are absorbed, evapo- 
 rated, and lost. 
 
 A certain amount of capital and labour being. given, they 
 will create a quantity of produce so much the less in proportion 
 to the number of obstacles to be overcome. So international 
 restrictions, forcing in each country capital and labour to 
 overcome more difficulties of climate and temperature, will 
 result in less produce being created, or, what comes to the same 
 thing, fewer gratifications being afforded to society. Now, if 
 there is a general diminution of gratifications, how can the 
 share of workmen be increased ? 
 
 [I cannot omit to notice that the Fair Trade manifesto 
 seeks authority for retaliatory duties from the following words 
 of Adam Smith : — " It may-^ sometimes be a matter of delibe- 
 ration how far it is proper to continue the free importation of 
 certain foreign goods when some foreign nations restrain by 
 high duties the importation of some of our manufactures into 
 their country. Revenge in\ this case naturally dictates retalia- 
 tion, and that we should impose like duties upon some or all 
 of their manufactures coming into our country." The sense in 
 which Adam Smith uses the word " dictates " in this passage is 
 not that of "command," but of "suggestion." We might read 
 the word " suggests " in it , place without forcing the meaning 
 he intended his words to '^ear. This is evident from what follows, 
 for Adam Smith proceeds to give several instances of unsuc- 
 cessful retaliation, adding — " There may be good policy in 
 retaliations of this kind when there is a probability that they 
 will procure the repeal of the high duty complained of When 
 there is no probability that any such repeal can be procured, it 
 seems a bad method of compensating the injury done to 
 certain classes of our people to do another injury to ourselves. 
 Every such law imposes a real tax upon the whole community, 
 not in favour of that particular class of workmen who are 
 injured by our neighbours' high duties, but of some other class." 
 Book IV., c. 2. Yet this halting opinion in favour of retaliation, 
 
 * " Must" in manifesto. 
 + " Revenge in" omitted in manifesto.
 
 56 POPULAR FALLACIES REGARDING 
 
 pronounced, be it remcniljcrcd, more than one liundred years 
 ago — when political economy was in its infancy — is to be now 
 made our rule of conduct and our guide. 
 
 The following illustration of Dr. Franklin's shows how 
 retaliatory duties might affect this country : — 
 
 England has, say, three manufactures — silks, iron, woollens 
 — and supplies three other countries — Germany, France, Bel- 
 gium. The silk trade is suffering somewhat, and England 
 wishes to increase the sale, and raise the price of silks in favour 
 of her own silk workers. 
 
 In order to do this she puts a duty upon French silks. 
 
 France, in return, raises her duties upon English iron. 
 
 Then the iron- workers complain of a decay of trade. 
 
 And England, to content them, puts a duty upon iron 
 castings coming from Belgium. 
 
 Belgium, in return, levies an increased duty upon English 
 woollens. 
 
 Then the woollen-workers complain of decay. 
 
 And England levies a duty on woollens coming from 
 Germany. 
 
 Germany, in return, levies increased duties upon silk goods 
 coming from England. 
 
 What is got by all these retaliatory duties ? 
 
 Answer : — All four countries find their common stock of 
 enjoyments and conveniences of life diminished.] 
 
 CHAPTER XII. 
 
 THEORY AND PRACTICE. 
 
 " You may flatter yourselves that your free-importation system 
 is right," say the Fair Traders ; " but for our part we believe 
 in the old experience and sagacity of the other European 
 countries." 
 
 What do we say, and what do you say ? 
 
 We say : — 
 
 " It is better to buy from others what would cost us 
 more to make for ourselves." 
 
 And what do you say ? 
 
 "It is better to make things for ourselves, even when it
 
 TRADE AND FOREIGN DUTIES. 57 
 
 would cost US less to buy them from others, for it employs 
 labour." 
 
 But, gentlemen, putting aside theory, demonstration, and 
 reasoning — all of which you declare yourselves nauseated 
 with — which of these two assertions is supported by universal 
 practice ? 
 
 Go into the fields, workshops, factories, and warehouses ; 
 look above, beneath, around you ; examine the operations in 
 your household ; observe your own constantly repeated acts ; 
 and say, what principle governs the acts of labourers, work- 
 men, contractors, and shopkeepers ? What is your own personal 
 practice ? 
 
 Does the farmer make his own clothes? Does the tailor 
 grow his own corn ? Do you make household bread when you 
 can buy it cheaper of the baker ? Do you put down your pen 
 to use the blacking brush, so as not to pay tribute to the shoe- 
 black ? Does not all social economy depend upon the separa- 
 tion of occupation, upon the division of labour — in short, 
 upon exchange! And what is exchange but the result of a 
 calculation which we all make, and which leads us to believe 
 that if we discontinue direct production, and obtain things 
 indirectly, we shall save both time and trouble ? 
 
 You are not then practical men, for you cannot point out a 
 single man on the surface of the globe who acts in accordance 
 with your principles. 
 
 But you say, " We have never intended to make our princi- 
 ples the rule of individual conduct. To do so would be to 
 force men to live like snails, each in his own shell. We limit 
 ourselves to the assertion that our principle should govern the 
 relations established between agglomerations of the human 
 family — between nations." 
 
 Well, this is still erroneous. The family, the parish, the 
 municipality, the county, are so many agglomerations which 
 all, without exception, /r^r//(r«//v reject your principle, and have 
 never even thought of it. All procure by means of exchange 
 that which would cost them dearer to obtain by means of 
 production. Nations would do the same thing if you did not 
 prevent them by force. 
 
 It is we, then, who are the practical men — the men of 
 experience. 
 
 Our theory is so little opposed to practice that it is merely 
 practice expounded. We observe the actions of men, impelled
 
 58 POPULAR FALLACIES REGARDING 
 
 by the instinct of preservation and of progress, and their fiee 
 and voluntary acts are what we call political economy^ or the 
 economy of society. We repeat, unceasingly, every man is 
 practically a good political economist, producing or exchanging, 
 as he may find it most advantageous to produce or to exchange. 
 Each by experience arrives at the science, or rather the science 
 is only this same experience scrupulously obser\'ed and 
 methodically expounded. 
 
 But you make a theory in the bad sense of the term. You 
 conceive and invent modes of acting, which are not sanctioned 
 by the practice of any living man, and then you would call 
 restriction and pruhibition to your assistance. 
 
 I defy you to apply to international concerns a doctrine 
 which you confess is absurd when applied to the transactions 
 which take place between individuals, families, parishes, towns 
 or counties. By your oivn avowal, it is only applicable to 
 international concerns ; and this is the reason why you are 
 obliged to repeat at every turn : — 
 
 " There are no such things as absolute principles. That 
 which is good for an individual, a family, a parish, a town, a 
 county, is bad for a nation. That which is good in detail — for 
 instance, to buy mstead of producing, when buying is more 
 advantageous than producing — even that is bad for the body 
 politic ; the political economy of individuals is not that of 
 nations,'' and other extravagant assertions of the same sort. 
 
 And why is all that ? Examine it closely. It is to prove 
 to us that we, as Consumers, are your property ; that we belong 
 to you ; that you have an exclusive right over us ; that you 
 may feed and clothe us at your own prices, whatever may be 
 your unskilfulness, or your inferior capacity. No, you are not 
 the practical men, you are the men of unverified theories, — 
 theories which lead you, wittingly or unwittingly, to spoliation. 
 
 CHAPTER XIII. 
 
 RECIPROCITY AGAIN. 
 
 " Are we sure that the foreigner will purchase from us as much 
 as he sells to us? " say the Fair Traders. 
 
 [Mr. Ecroyd does not doubt about it for one moment. He 
 is quite certain that the foreigner will not. He says — "The
 
 TRADE AND FOREIGN DUTIES. 59 
 
 nations from whom we chiefly purchase our supply of food, 
 and who, until the past five or six years, took large quantities 
 of our manufactures in payment, will now take them from us 
 no longer. They have shut out our goods by heavy duties. 
 Thus the English workman's employment, by which he earned 
 the money to pay for his imported food, is taken from' 
 him ! "] * 
 
 I admire the manner in which men who, above all things, 
 call themselves practical, reason contrary to all practice ! 
 
 In practice, can there be any bargain to the amount of a 
 hundred, a thousand, or ten thousand pounds, which is a direct 
 barter of produce against produce? Since money has been 
 introduced into the world, has any man said, " I will not buy 
 my shoes, hats, advice, lessons, of any shoe-maker, hat-maker, 
 lawyer, or master, who will not buy my wheat for an equiva- 
 lent value ? " And why should nations impose such a restraint 
 upon themselves ? 
 
 How do such things come about ? 
 
 Suppose a nation deprived of all foreign intercourse. A 
 man has grown some wheat ; he puts it into the national cir- 
 culation at the highest rate which he can get for it, and receives 
 in exchange — what ? sovereigns ; that is to say, orders for 
 goods, infinitely divisible, by means of which he can withdraw 
 from the national circulation at his own convenience, and at its 
 just value, whatever he may want or wish for. Definitively, 
 at the end of the operation, he will have withdrawn from the 
 mass precisely the equivalent of that which he has put in ; 
 and in value, his consumption will have exactly equalled his 
 production. 
 
 As exchanges between this country and others are free, it 
 is not into national circulation, but into general circulation, 
 that every one puts his productions and takes out from it 
 what he consumes. It does not signify to a man whether 
 what he puts into general circulation is bought by a fellow- 
 countryman or a foreigner; whether the goods which he 
 receives come from an Englishman or a Frenchman — v»^hether 
 the articles against which he exchanges the goods which are 
 necessary to his wants have been made on this or that side of 
 the English Channel There will always be an exact balance 
 between what he puts in and what he takes out of the great 
 
 * Burnley Advertiser (letter to), Sept, 15th, 1879.
 
 6o rorui.AR fallacies regarding 
 
 comnion reservoir; and if this is true in the case of an 
 individual, it is true, also, with regard to the whole nation. 
 
 The only difference between the two cases is, that in the 
 last instance each has access to a more extensive market in 
 which to make his sales and purchases, and consequently has 
 a better chance of making them both on advantageous terms. 
 
 This objection has been made : " If every one is agreed not 
 to take out of circulation the produce of a certain individual, 
 he on his side could take nothing out of the mass. This 
 would be the same with regard to a nation." 
 
 The answer is this : — If this nation could withdraw nothing 
 from the mass, it would put nothing into it ; it would work for 
 itself; it would be obliged to submit to that to which you 
 would beforehand subject it — viz., to be isolated. 
 
 [Now let us apply this argument to England, and first let 
 us hear what Sir E. Sullivan says : — " Will foreign nations buy 
 more of our goods if we put a duty on their goods ? Certainly 
 not. They will continue to buy from us just what they do 
 now, neither more nor less, but we shall buy ^40,000,000 to 
 ;j<|'5o, 000,000 less of their goods." How can this be possible? 
 We know that we are not paying for foreign produce with 
 precious metals — nor with foreign bonds (p. 40). It is there- 
 fore certain that whatever we take from foreign countries we 
 pay for in produce. How on earth then are foreign nations 
 to pay us for the goods they take from us if we do not take 
 theirs in exchange? The statement of Sir E. Sullivan is 
 simply absurd. 
 
 But the idea underlying these words of Sir E. Sullivan is — 
 that by buying of the foreigner we are depriving the English 
 labourer of employment. This idea pervades the Fair Traders' 
 arguments. Their manifesto, quoting the words of a foreign 
 Protectionist, M. Pouyer Quertier, says : — "We want the English 
 consumer to accustom himself to the use of the products of 
 French industries : we do not want our consumers to accustom 
 themselves to use British commodities ; " — " and so," compla- 
 cently adds the manifesto, " say most other foreign statesmen." 
 Sir E. Sullivan and " most other foreign statesmen " are, there- 
 fore, completely in accord. The fallacy that the purchase of 
 foreign produce deprives our countr)aiien of labour has been 
 lucidly exposed by Mr. Porter, in the following illustration : — 
 " Will any one tell me," said a noble lord, " that when he 
 buys and wears a pair of French boots, he does not encourage
 
 TRADE AND FOREIGN DUTIES. 01 
 
 French labour at the expense of his own countrymen, whom 
 he deprives of employment ? " One would really think that 
 the fallacy involved in this question is too transparent to 
 deceive any one. Let us trace the operation. M. Lecocq, of 
 Paris, sends to London a pair of boots, in the making of which 
 have been employed French tanners, curriers, and boot-makers. 
 The boots are sold in London, and paid for in coined money. 
 This coin does not find its way to Paris, but M. Lecocq draws 
 a bill upon his London agent, and for this bill he obtains 
 five-franc pieces from a Paris banker, who sells the bill to 
 an ironmonger having to pay a London merchant for metal 
 sent to him from this country. The bill, at maturity, is 
 discharged from the money paid by the buyer of the boots — 
 M. Lecocq having paid the leather merchant and his workmen 
 with the money he received from the Paris banker. It is not, 
 of course, pretended that this is the precise course pursued ; 
 but a course equivalent to it is followed in ninety-nine cases 
 out a hundred. Let us, however, suppose what, according to 
 the noble lord's position, is the very worst that can happen — 
 viz., that M. Lecocq receives the identical coin given in pay- 
 ment for his boots. This no further alters the operation than 
 by complicating it in some slight degree. Whence has the 
 coin been obtained ? England has no mines of gold, and must 
 purchase the precious metal which it needs with its iron, its 
 coals, its cotton, linen and woollen manufactures ; and having 
 need of more gold by reason of the payment made to M. 
 Lecocq, will send a piece of linen to California in order to 
 purchase it. " Will any one tell me that in buying and wearing 
 M. Lecocq's boots I have not given employment to the miner 
 and smelter in the first case, or to the linen-weaver in the 
 second case ? " 
 
 The Fair Traders treat with the most unmitigated contempt 
 the principle that the more we buy from foreigners the more they 
 must buy from us ; yet there is nothing more absolutely certain. 
 To diminish our purchases from them, by the imposition of reta- 
 liatory duties, would compel them to lessen their purchases from 
 us. The purchase of the French boots enabled the Paris smith 
 to pay for the English metal. English labour was employed 
 just as much as before, only it took another form. 
 
 Now, does any Free Trader propose that we should not adopt 
 the electric light because its adoption would displace the labour 
 of gas-men and others, or was it ever suggested that we should
 
 62 POPULAR FALLACIES REGARDING 
 
 orego the use of railways because they would throw a number 
 of coachmen and post-boys out of employment ? If pur- 
 chasers seek what they require abroad, it is because the articles 
 they need are produced there with greater economy — the money 
 sent to pay for them will certainly return to the English work- 
 man to pay him for the goods sent abroad as the etiuivalcnt 
 for our purchases. Labour will be emjjloyed just as much 
 as before, and the community, as the consumer, will be bene- 
 fited by the difference in cost. 
 
 When we commenced to take oft" the duties on foreign 
 goods, although foreign countries made no corresponding 
 reductions, and in some instances nearly doubled and trebled 
 some of their duties as a defensive measure, they were, never- 
 theless, compelled in the course of a ver)' few years to double 
 and treble their purchases from this country. As we purchased 
 more freely of them, they had to take our goods in return. 
 
 But then comes in the juggle of money, and people fail to 
 see that even if we send bullion to pay for our purchases we 
 must export our labour in some form to obtain the bullion, so 
 that it comes to exactly the same thing as if we exported our 
 own produce immediately in return for our foreign purchases.] 
 
 INIoney is simply a medium. John has completed a coat, 
 for which he wishes to receive a little bread, some meat, a visit 
 from the doctor, a ticket for the play, &c. The exchange 
 cannot be effected in kind, so what does John do ? He first 
 exchanges his coat for some money, which is called sale^ 
 then he exchanges this money again for things which he wants, 
 which is called purchase^ and only now has the reciprocity 
 of services completed its circuit. It is only then that the 
 exchange is complete. 
 
 [Retaliatory duties can only result in loss to the consumer. 
 \{, in spite of their imposition, we still continue to purchase of 
 the foreign producer as before, the whole of the increased cost 
 of the article purchased will fall upon the consumer, and be 
 to him a dead loss {e.g., the husbandman, p. 44). If, instead 
 of purchasing from the foreigner, we transfer our custom to the 
 home producer, the consumer will still be a loser to the extent 
 of the increased amount he has to pay to obtain from the 
 home producer an article equal in quality to that he formerly 
 obtained from the foreigner. If this was generally understood, 
 many, who now hanker after retaliatory duties, would cease to 
 do so.
 
 TRADE AND FOREIGN DUTIES. 63 
 
 Many occupations undoubtedly feel the effect of foreign 
 duties severely. The fishermen of Yarmouth and the east 
 coast bitterly resent the heavy duty which France levies upon 
 "bloaters." They are more than half-disposed, in conse- 
 quence, to approve of retaliatory duties. What would be the 
 effect ? Lessened purchases by us, and, as a consequence, 
 lessened purchases by France. Who can say, if John ceased 
 purchasing French silks of Louis, for his wife, that Louis 
 would be able to continue purchasing Yarmouth bloaters for 
 the consumption of his family on fast days. He now can 
 pay for his bloaters with his silks, but if we no longer take his 
 silks in payment, he will have to cease buying bloaters in return. 
 
 Sometimes there escapes from the lips of Free Traders 
 expressions such as : "I should not object to seeing import 
 duties placed upon luxuries." Of course such expressions can 
 only come from those who have not thoroughly mastered Free 
 Trade principles. The illustration I have just given is 
 sufficient to show this. Silks, velvets, &c., are always classed 
 under luxuries, and yet we see that the purchase of silk may 
 enable a large number of men to be employed in herring 
 fishing — not an occupation supported by a love of luxury — 
 who otherwise might have to lay aside their fishing, and turn 
 their industry to the production of the silks, &c. which we 
 should be hindered by duties from importing. 
 
 Unfortunately there are few things which suffer more from 
 an unjust stigma than so-called luxuries. The term "luxuries," 
 truly understood, indicates not any particular class of produce, 
 but rather the wasteful abuse of any kind of produce in ways 
 inconsistent with sobriety. 
 
 Whether we call duties imposed upon foreign produce by 
 the name of "Protective" duties, or of "retaliatory" duties, 
 their effect upon consumers and upon the prosperity of the 
 country will be identical. The following table is interesting as 
 showing what Protective duties have been doing for the colony 
 of Victoria during the past ten years. (See Daily News, 
 Aug. 16, 1S81.) 
 
 Population of Victoria, census of 1871 ... ... 731,000 
 
 Returns of excess of births over deaths from 187 1 
 
 to 1881 146,000 
 
 Number of immigrants registered as arriving to 
 
 settle in the colony from 1871 to 1S81 ... 53, 000 
 
 Total ... ... ... 930,00c 
 
 Number of actual population, census 1 881 ... 855,000
 
 64 POIH-LAR FALLACIES REGARDING 
 
 The conclusion to be drawn from these figures is that 
 between 187 1 and 1881 no less than 75,000 persons — more by 
 22,000 than the number of her immigrants during that period — 
 found the fiscal system of Victoria so unfavourable to their 
 well-being, that they left the country and emigrated to places 
 offering fewer impediments to prosperity. 
 
 According to an interesting parliamentary paper just pub- 
 lished by the Board of Trade, the reports of eighty-five 
 Chambers of Commerce in Germany denounce with remark- 
 able unanimity the new Protective tariff in that country. 
 They say that it " has restricted trade, and at the same time 
 enormously enhanced the cost of living, thus materially 
 deteriorating the condition of the people." Wages are lower 
 in Germany than in England, but owing to the Protectionist 
 tariff the prices of many necessaries of life are higher there than 
 with us — Bacon and cheese stand at double our prices, bread 20 
 per cent, higher, sugar, tea, coffee, rice, &c., all dearer. House 
 rent also is higher. They have to exercise a " constant careful 
 pinching, of which we have no idea in England." The working 
 man " rarely tastes butcher's meat ; " he has " to live on watery 
 soup ; fuel, too, is frightfully dear." 
 
 Does any one ask what would be our condition under a 
 system of "Protection" or "retaliation," whichever we are 
 pleased to call it, for the result would be the same ? 
 
 Let him turn back to the tales of the dark days of 
 Protection in the '30's and early '40's — to Dickens's " Old 
 Curiosity Shop," for instance, and little Nell and her grand- 
 father frightened by the bread-rioters in the iron-blast districts 
 of Birmingham. Then we were in much the same condition 
 as Germany now. Sugar cost three times as much as it does 
 now. Tea was five shillings a pound ; coffee half-a-crown. 
 Bread fluctuated enormously in price. There was no cheap, 
 wholesome jam for the little children. There was little school- 
 ing ; the average duration of life was less ; the death rate was 
 higher. There was no prospect but of a hard struggle for 
 bare subsistence from the cradle to the grave. The people 
 were worse housed, and the Protective tarift", instead of raising, 
 kept down the rate of wages. Misery and discontent were rife 
 throughout the land.]
 
 TRADE AND FOREIGN DUTIES. 6$ 
 
 CHAPTER XIV. 
 
 " NO SUCH THINGS AS FIXED PRINCIPLES." 
 
 Nothing is more astonishing than the way in which men 
 resign themselves to ignorance about things which are of the 
 utmost importance for them to understand. And when we 
 hear men give utterance to this axiom : — " There are no such 
 things as fixed principles," we may be quite sure that they have 
 no real wish to dispel their own ignorance. 
 
 One man says : " If you continue to tolerate this one-sided 
 Free Trade, the foreigner will inundate you with his produc- 
 tions — the American with wheat, the Frenchman with sugar, the 
 Spaniard with wool, the Italian with velvet, the Belgian with 
 cattle — so that there will remain no field for native industry." 
 
 Another answers, " If you forbid these exchanges, all the 
 various benefits which nature has bestowed upon each climate 
 will be for you as if they had no existence. You would 
 gain nothing from the fecundity of the American soil, from 
 the fertility of the French, from the cheapness of Spanish 
 labour, from the warmth of the Italian climate, nor from the 
 richness of the Belgian pastures, and you would be obliged to 
 obtain, by a forced production, that which by exchange you 
 might procure as a natural produce." 
 
 Assuredly one of these is mistaken. But which one ? It 
 would be worth while to inquire, for this is not a mere question 
 of difference of opinion. Two roads are before you ; you must 
 take your choice, and one of them necessarily leads to misery. 
 In order to escape the difficulty, you say, " There are no such 
 things as fixed principles." 
 
 But if exchanges have not a natural law of their own, either 
 of exclusion or of freedom, if they are capriciously useful or 
 mischievous, if, in short, there are no fixed principles, then we 
 must ponder over, balance, and regulate transactions ; we must 
 equalise the conditions of labour ; an Herculean task, well 
 fitted to secure to those to whom it is intrusted large salaries 
 and great influence. 
 
 On entering London, one might reflect, ''There are 4,000,000 
 human beings here who would die in the space of a few days 
 if there were not a constant influx of all kinds of provisions 
 E
 
 66 lOl'ULAR FALLACIES REGARDING 
 
 to this vast metroi)olis." Imagination takes fright at tlie task 
 of enumerating tlie immense niuhii)licity of articles wliicli must 
 pass into that vast city to-morrow, without wliicli the hves of 
 its inliabitants might fall a sacrifice to the convulsions of 
 famine, riots, or pillage. And yet all are now sleeping, without 
 a tliought of so dreadful a ]jrospect to disturb their jjeaccful 
 slumbers. On the other hand, all the counties of England 
 have been labouring all day, without mutual agreement, in 
 order to supply London. How does it happen that every day 
 an exact supply is brought to this gigantic market? AVhat, 
 then, is the intelligent and secret power which presides over 
 the astonishing regularity of such complicated operations ; a 
 regularity in which all have such thoughtless confidence, 
 although their welfare and lives depend upon it ? This power 
 is a fixed, an absolute principle, the ])rinciple of the freedom 
 of trade. We have confidence in that impulse which Pro- 
 vidence has placed in the hearts of all men to whom it has 
 confided the preservation and indefinite amelioration of our 
 species — in interest, since we must call it by its right name, 
 which is so active, vigilant, and provident, when it has freedom 
 of action. What would be your condition, Londoners, if a 
 minister thought fit to substitute for this power combinations 
 made by his genius, however wise he might be ? Suppose 
 he should think fit to take the entire direction of this prodigious 
 machinery, and to hold all its springs in his own hands, to 
 determine by whom, where, how, and on what conditions each 
 article should be produced, transported, exchanged, and con- 
 sumed ? Although there is much suffering within your precincts, 
 although misery, despair, and perhaps starvation, may cause 
 more tears to fall than your zealous charity can dry, it is pro- 
 bable, nay. I will say it is certain, that the arbitrary intervention 
 of Government would infinitely multiply those sufterings, and 
 would bring upon all the evils which now aftecl but a small 
 number of your fellow-citizens. 
 
 Now, having this confidence in a principle Avhen it acts 
 upon our home afiairs, why should we not have equal confidence 
 in the same principle acting upon international transactions, 
 which are certainly no less numerous, no less delicate, and no 
 less complicated ? And if it be not necessary that a Minister 
 of Commerce should regulate our branches of industry, should 
 weigh our chances, our profits, and our losses, should be 
 occupied with the distribution of our currency, and should
 
 •IRADE AND FOREIGN DUTIES. 67 
 
 equalise the conditions of labour in our internal trade, ■why- 
 should it be necessary that the Custom House officer, going 
 beyond his fiscal province, should pretend to exercise a pro- 
 tecting care over our foreign commerce. 
 
 [But to return to the question of the existence of " fixed 
 principles," one of the Fair Trade arguments in favour of 
 retaliatory duties is, "Yes, we quite admit the principles of 
 Free Trade, but then you know that there are exceptions 
 to every rule." There may be exceptions to every rule, but 
 there are no exceptions to principles. The real drift of the 
 assertion is that " there are no such things as fixed principles." 
 
 But permit me to point out that there can be no exceptions 
 to the rule even of Free Trade without adopting a complete 
 change of principles. For how can you make an exception 
 in favour of one producer and refuse to do the same for another ? 
 If you tax American wheat to please the farmer, you must tax 
 Belgian castings to please the iron-master. If you tax French 
 silks to please the silk-weaver, you must tax velvets to please 
 the velvet manufacturer. If you tax ribbons to please Coventry, 
 you must tax woollens to please Bradford. 
 
 And what will be the result? Prices will rise all round, 
 and upon the rise in prices will follow a diminished demand. 
 Labour, consequently, will find less employment. 
 
 Some Fair Traders are more logical. They do not ask for 
 " exceptions to the rule," but for a total subversal of the prin- 
 ciples of Free Trade. Yet even some of these men are clearly 
 to be numbered amongst those who believe that there are " no 
 such things as fixed principles," for some who would subvert 
 our present fiscal system have said that " Even ' one-sided ' 
 Free Trade has been beneficial to the country until within 
 the last few years." And what is that but saying that there 
 are no such things an fixed principles ?J 
 
 CHAPTER XV. 
 
 NATIONAL INDEPENDENCE. 
 
 AjiIONG the arguments brought forward in favour of the 
 retaliatory system, we must not omit that of national inde- 
 pendence. 
 
 "What should we do in case of war," is said again and 
 again, "if we depend upon foreign countries for our food?" 
 E 2
 
 68 POPULAR FALLACIES REGARDING 
 
 And the French monopolists on their side exclaim : 
 
 " What will become of France in time of war if she 
 depends on England for her coal and iron ?" 
 
 We do not consider one thing, which is, that the sort 
 of dependence which arises from exchanges, from commercial 
 transactions, is a reciprocal dependence. This is the only true 
 reciprocity. We cannot depend on foreigners without foreigners 
 depending on us. Now this is the very essence of society. 
 To break the natural relations is not to place ourselves in 
 a state of independence, but in a state of isolation. 
 
 But observe well, we isolate ourselves from the fear of war, 
 while the mere act of isolation is the beginning of war. It 
 makes war more easy, less onerous, and consequently less 
 unpopular. If nations offered to each other permanent 
 markets, if their intercourse could not be interrupted without 
 bringing the double infliction of privation and embarrassment, 
 they would no longer have occasion for those powerful fleets 
 which ruin them, nor for those immense armies which crush 
 them. The peace of the world would not be compromised 
 through the caprice of a Bismarck or a Salisbury, and war 
 would disappear through want of incentives, resources, motives, 
 pretexts, and popular sympathy. 
 
 I know that I shall be reproached for making interest the basis 
 of the fraternity of nations, — vile and prosaic interest ! People 
 would be better pleased to think that the principles of union 
 rested on charity and love, that it even required some 
 abnegation of self — that while injuring the material well-being 
 of men it could claim the merit of a generous sacrifice. 
 
 ^Ve scout, we despise interest, that is to say, the useful and 
 the good — for to say that all are interested in a thing is to say 
 that this thing is in itself a good — as if interest were not the 
 necessary, eternal, and indestructible spring to which Providence 
 has entrusted human perfectibility. 
 
 After all, it is strange to find the sentiments of the most 
 sublime self-denial brought forward to support spoliation itself. 
 Here then is the end to which this fastidious disinterestedness 
 leads. Men so poetically delicate that they will not have 
 peace itself if it is founded on the vile interests of men, would 
 put their hands into the pockets of others, and, above all, into 
 those of the poor ; for retaliatory duties would raise prices and 
 lessen the demand for labour. Gentlemen, dispose as you 
 please of what belongs to yourselves, but give us leave also
 
 TRADE AND FOREIGN DUTIES. 69 
 
 freely to dispose of the fruits of our labour — to use or to 
 exchange them according to our wishes, 
 
 [This bugbear of our dependence upon foreigners has ever 
 been one of the strong points urged against Free Trade. To 
 expose the utter hollowness of this argument we have only 
 to turn to the pages of history, and what do we find there? In 
 1809-10, when the power of Napoleon had reached its zenith, 
 when his will was law throughout Europe, and when his most 
 strenuous efforts were directed — by the BerUn decrees, which 
 declared the British Isles to be in a state of blockade, closed all 
 harbours against ships coming from Britain to European ports, 
 and rendered all English goods and manufactures found in 
 foreign territories liable to confiscation — to place England 
 in a state of complete commercial isolation, we imported 
 from the continent 2,000,000 quarters of grain, chiefly wheat, 
 and of this, 1,000,000 quarters came to us direct from France, 
 and the Netherlands — the Netherlands being then practically 
 part of the French Empire. And this was no " one- 
 sided" trade, for at that very moment the troops of 
 Napoleon were marching through Europe shod with boots 
 from Northampton, and clad in great coats from Leeds.] 
 
 To reject foreign goods and to destroy machinery are two 
 acts which proceed from one and the same doctrine. 
 
 There are men who clap their hands when a new invention 
 is given to the world, and who, nevertheless, would reject the 
 produce of foreign labour. These men are very inconsistent. 
 
 What objection do they bring against our Free Trade 
 system ? That it is hurtful to national industry. 
 
 In like manner ought they not to object to machinery, 
 which accomplishes by natural agents that which would other- 
 wise be the work of our hands, and consequently injures human 
 labour ? 
 
 The foreign workman, placed in more advantageous cir- 
 cumstances than the English workman, is, with regard to the 
 latter, a real eco7iomic niac/iine, which ruins him by its competi- 
 tion. In like manner a machine which performs a certain 
 operation at a lower price than it can be done by hand is, 
 with regard to hand-labour, a true foreign competitor, which 
 paralyses it by its rivalry. 
 
 If, then, it is advisable to protect ho7ne industry from the 
 competition of foreign indust7y, it is not less advisable to 
 protect manual labour from the rivalry of mechanical labour.
 
 70 poi'ur.AR FALLACiLs ki;c;ardin(; 
 
 Whoever adheres to such a system, if he has any logic in 
 his head, ought not to limit himself to prohibiting foreign 
 1 productions, but should likewise proscribe the productions of 
 the shuttle and the plough. 
 
 I have therefore more respect for the logic of those men 
 who, when they declaim against the invasion of foreign mer- 
 chandise, have the courage likewise to declaim against the 
 excess of production, due to the inventive powers of the human 
 mind. 
 
 If it is true, a priori, tliat the domain of invention and ot 
 industry can only be extended the one at the expense of the 
 other, we ought to find fewest workmen in Lancashire, for 
 example, where there are most machines. And if, on the 
 contrary, we can bring forward as a fact that machinery and 
 human industry co-exist in a greater degree in rich nations 
 than in savage nations, we must necessarily conclude that the 
 two powers are not incompatible. 
 
 I cannot understand how a thinking being can rest satisfied 
 in the presence of this dilemma : — 
 
 Either the mechanical inventions and labour-saving appli- 
 ances of man are not hurtful to liis industry, as general facts 
 attest, since there are more of them to be found among 
 Englishmen and Frenchmen than among the Zulus and Fijiang ; 
 or else the discoveries of the mind put limits to human in- 
 dustry, as particular facts seem to show ; for I every day see 
 a machine take the place of twenty or a hundred workmen. 
 There must therefore be a direct conflict between the intellectual 
 and physical powers of man — between his progress and his well- 
 being ; and I am forced to declare that man ought to have had 
 given him either his reason or his hands, his moral or his phy- 
 sical strength ; but that Providence, by conferring on him at 
 the same time faculties which mutually destroy each other, has 
 made sport of him. 
 
 The difficulty is urgent, and you escape from it by this 
 strange apophthegm : — 
 
 T/iere is no fixed priiiciple in political economy. 
 
 That is to say, in ])lain language, — 
 
 " I do not know what is true or what is false ; I am ignorant 
 of what constitutes the general weal or woe ; I will not give 
 myself the trouble to find it out. The immediate effect of 
 each measure upon my personal welfare is the only law which I 
 consent to recognise."
 
 TRADE AND FOREIGN DUTIES. 71 
 
 There are no such things as principles ! That is as if you 
 were to say that there are no such things as facts ; for principles 
 are only \\\^fonnulce which result from an order of well-attested 
 facts. 
 
 Machinery and importations have certainly some effects. 
 Are these effects good or bad ? We may differ in opinion on 
 this subject ; but whichever view we may adopt, we must 
 accept one of these two principles : that machinery is a benefit, 
 or that machinery is an evil ; that importations are advantageous, 
 or that importations are injurious. 
 
 But to say t/ic/'e are no such things as fixed principles, is to 
 descend to the lowest point of degradation of which the human 
 mind is capable. 
 
 But you will say to me, " Destroy the fallacy. Prove to us 
 that machinery does not injure human i?idustry, nor importa- 
 tions national industry." 
 
 In a work like the present, such demonstrations cannot be 
 very complete. My aim is rather to propose difficulties than to 
 solve them — to incite men to reflect rather than to satisfy their 
 enquiries. Convictions cannot be properly forced on the mind, 
 except by its own workings. I will, however, try to lead the way. 
 
 The adversaries of importation and machinery are deceived, 
 because they judge of them by their immediate and transitory 
 effects, instead of following them out to their general con- 
 sequences. 
 
 The first effect of an ingeniously designed machine is to 
 render a certain amount of manual labour superfluous for the 
 production of a given result. But its effect does not stop here. 
 Inasmuch as the given result has been obtained with less effort, 
 it will be offered to the public at a lower price, and the sum of 
 the savings thus realised by all purchasers enables them to de- 
 mand fresh objects of desire; that is to say, to encourage 
 manual labour in general, precisely to the amount which has 
 been subtracted from the particular industry in which the im- 
 provement has been effected. 
 
 It is not that the demand for labour has lessened, but that 
 the demand for objects of desire has increased. 
 
 Let us make these effects plain by an illustration : — 
 
 I will suppose that England consumes 10,000,000 hats, 
 at ten shillings each. That will produce to the hat manufac- 
 turers ^5,000,000. A machine is invented, by means of 
 which hats can be sold at five shillings each. The returns
 
 72 rOPULAR lALLACIES REGARDING 
 
 of this manufacture will be reduced to ;^2, 500,000, ])roviding 
 the consumption docs not increase. But still the ;^2, 500,000 
 will not be subtracted from the payment of mainial labour. 
 Saved by the buyers of hats, they will use it to satisfy their 
 other wants, and consequently to remunerate general industry 
 all the same. With the five shillings which he has saved, John 
 will buy a pair of shoes, Henry a book, Mdward an article of 
 furniture, &c. Manual labour, taken in the gross, will continue 
 to be encouraged to the amount of ;^5,ooo,ooo ; but this sum 
 will give the same number of hats as before, besides the advan- 
 tages procured by the ^^2, 500,000 saved by the machine. 
 These advantages are the net profit which England will have 
 drawn from the invention. It is a gratuitous gift, a tribute 
 which the genius of man will have drawn from nature. We 
 will not deny that in the course of the transformation a certain 
 amount of labour will have been displaced., but we cannot 
 admit that it will have been destroyed, or even diminished. 
 
 In like manner as to importations. Let us resume the 
 hypothesis. 
 
 England manufactures io,oco,ooo hats, which are sold at 
 ten shillings each. The foreigner invades our market, and 
 sujiplies us with hats at five shillings. I maintain that this will 
 in nowise diminish national industry. For we must produce 
 to the amount of ^2,500,000 in order to pay the foreigner for 
 the 10,000,000 hats at five shillings each. 
 
 And then there will still remain over the five shillings 
 which each purchaser will have saved on liis hat, the total 
 sum of ;^2, 500,000, which will be spent on other purchases 
 — i.e. will pay for other labour. 
 
 The amount of work will remain the same, and the surplus 
 purchases, represented by the ;!£'2, 500,000 economised on the 
 hats, will form the net profit of the importation, or of Free 
 Trade. 
 
 [Some labour will be displaced, but quite as much labour, 
 nay more, will be employed in the aggregate, and every con- 
 .sumer will be benefited. The poor, also, as the largest con- 
 sumers, will be placed in the position of being able to fight 
 the battle of life on more favourable terms than they could 
 before. It is an exploded notion that if you import what you 
 made before, workmen are deprived of labour. It is not so. 
 They are employed on other work to supply the articles which 
 are wanted to pay for the new imports.] 
 
 rv
 
 TRADE AND FOREIGN DUTIES. 73 
 
 CHAPTER XVI. 
 
 " THE FREE IMPORTATION OF RAW MATERIALS." 
 
 It is said the most advantageous trade is that in which 
 manufactured articles are given in exchange for raw materials, 
 for these raw materials afford employment for national labour. 
 
 AVhence it is concluded : — 
 
 That the best system of customs duties would be one 
 that gave the greatest facilities possible to the admittance of 
 raw materials. The Fair Traders fully adopt this principle, and 
 advocate absolute Free Trade in raw materials, while upon all 
 imported foreign manufactured goods they propose to levy 
 duties — 10 per cent., says Sir E. Sullivan. 
 
 There is no fallacy in political economy more widely 
 spread than this fallacy concerning the free importation of raw 
 materials. Not only is this idea entertained by the Fair Trade 
 school, but even by many Free Traders themselves, an unfor- 
 tunate circumstance, for the worst that can happen to a good 
 cause is not that it shall be strongly attacked, but that it should 
 be weakly defended. 
 
 Prove to me that the value of the articles of merchandise 
 which you propose to admit without duties — cotton, wool, 
 skins, copper, &c. — is not due to labour, and I will agree with 
 you that it is useless to place retaliatory duties upon them. 
 
 But, on the other hand, if I demonstrate to you that there 
 is as much labour in J[^^ worth of wool as in j[^^ worth of 
 cloth, you ought to acknowledge that retaliatory duties ought 
 to be levied upon the one as much as upon the other. 
 
 Why is this sack of wool worth ;^5? Is it not because it 
 cost ;Q^ to produce ? And is the cost of production any 
 other thing than the sum which was distributed in wages, 
 manual labour, interest, &:c., to all the workmen and cajDitalists 
 who have joined in its production ? 
 
 The cotton-grower cannot pretend to have created the 
 cotton, but he can pretend to have given to it its value — that 
 is to say, to have transformed. into cotton, by his own labour, 
 and by that of his servants, his horses, and his gatherers, those 
 substances which before did not at all resemble it. What does
 
 74 POPULAR lALLACIES REGARniNC, 
 
 tlie cotton-si)inner do more, who converts it into fabrics, or 
 the draper who makes it into shirts ? 
 
 In order that man may clothe himself in broad cloth a 
 host of operations are requisite. Before the intervention of 
 all human labour, the really primitive or raw materials of this 
 production are air, water, heat, the gases, light, and the salts 
 which enter into its composition. 
 
 Here then are the raw materials which truly are independent 
 of all human labour, since they have no value. But a first 
 labour converts these substances into fodder, a second into 
 wool, a third into yarn, a fourth into cloth, a fifth into garments. 
 
 Who will venture to say that all in this work which gives 
 exchangeable value, is not labour, from the first movement of the 
 plough which begins it, to the last stitch of the needle which 
 terminates it ? 
 
 And because — to obtain more celerity and perfection in 
 the accomplishment of the required work, a garment — the 
 labour is divided among several classes of industry, you would 
 make the order of succession of these labours, by a merely 
 arbitrary distinction, the only measure of their importance, so 
 that the first is supposed not to merit even the name of work, 
 while the last is regarded especially as labour, and is alone 
 deemed worthy of the favour of retaliatory duties. 
 
 The Fair Trade manifesto says truly that " it is the utility 
 of labour which gives exchange value," but it does not explain 
 that all value is due to labour. Nature assists the farmer in 
 the material formation of grain ; I will even admit that this is 
 exclusively her work, but you must allow that the farmer has 
 compelled her to it by his labour ; and when he sells you corn 
 you must remember that he does not make you pay for the 
 work of nature, but for /lis labour. 
 
 The manufacturer is also assisted by nature? Does he 
 not, by the aid of the steam-engine, make himself master of the 
 expansive power of steam, while the farmer, by the help of his 
 ])lough, makes use of the qualities of the soil and air ? Did 
 the manufacturer create the laws of expansion and of the 
 transmission of forces, or the farmer the qualities of the soil 
 and air? 
 
 Coal is certainly the work, and the exclusive work, of 
 nature. That is certainly untouc/icd by any human labour, but 
 labour gives to it its value. 
 
 Copper, too, had no value during the millions of years that
 
 TRADE AND FOREIGN DUTIES. 75 
 
 it remained unknown and buried underground. We are 
 obliged to dig for it ; that is labour. We are obliged to carry it 
 to market ; that again is labour ; and the price which you pay 
 for it in the market is nothing else but remuneration for the 
 labour of raising and transporting it.* 
 
 Thus the value of raw materials, as well as of manufactured 
 goods, depends on the price of production, that is to say, on 
 labour ; for it is impossible to conceive of any article possessing 
 value which shall have been untouched by all humafi labour. 
 
 The point insisted upon by the " Fair Trader " is that it is 
 more advantageous for a nation to import those materials de- 
 nominated raiv, whether they are the produce of labour or 
 not, than to import manufactured articles. 
 
 " Raw materials," they say, " being the elements of labour, 
 ought to be subject to a different system, and admitted ivithout 
 restriction y 
 
 All this is based on an illusion. 
 
 We have seen that all value represents labour; now, it is 
 true that the labour of the manufacturer increases the value 
 of raw material ten-fold or a hundred-fold, that is to say, 
 extends the profits of the nation ten or a hundred times. 
 Therefore we reason thus : — -The production of a ton of iron 
 only brings ^2 to the labourers of all classes ; the conversion 
 of this ton of iron into watch-springs raises their earnings to 
 ;^2,ooo, and can one venture to say that it is not more to the 
 interest of the nation to secure for itself labour to the amount 
 of ^2,000 than to the amount oi ^£2 ? 
 
 We forget that international exchanges, no less than 
 individual exchanges, are not made by weight and measure. 
 We do not exchange a ton of raw iron for a ton of watch- 
 springs, nor a pound of uncombed wool for a pound of wool 
 made into cashmere, but a certain value of one of these things 
 for an equal value of another. Now, to barter equal value for 
 
 * I do not here explicitly mention what part of this remuneration falls to the 
 share of the contractor, the capitalist, &c., for several reasons : Firstly, 
 because if we examine closely we shall discover that their share will always 
 consist of reimbursements of money advanced and for previous labour. 
 Secondly, because under the general term of labour I comprehend not merely 
 the wages of the workman, but the legitimate remuneration for all co-operation 
 ill the work of production. Thirdly, above all, because the production of 
 manufactured articles is just as much burdened with interests and remunera- 
 tions, apart from those of manual labour, as that of raw materials, and the 
 objection, futile in itself, would just as well apply to the most delicate fabric as 
 to the coarsest agricultural produce. 
 
 ^^
 
 76 POPULAR FALLACIES REGARDING 
 
 eciual value is to bnrtcr equal labour against equal labour. 
 'I'hcrefore, it is not true that the nation which sells cashmeres 
 and watch-springs to the value of ^lo gains more than the 
 one which sells ;;^io worth of wool or iron. 
 
 In a country where no law can be passed and no tax 
 levied without the consent of those whom that law is to 
 govern, or on whom that tax is to be imposed, the public 
 cannot be robbed without first being deceived. Our ignorance 
 is the raw material of every extortion to which we are liable to 
 be subjected, and we may be quite sure that every fallacy is 
 but the forerunner of robbery. 1 would warn the public, when 
 they see a fallacy put forward, to put their hands on their 
 pockets, for they are certainly about to be attacked. 
 
 If the Fair Traders were logical, they would propose to 
 levy duties upon raw as well as upon manufactured produce ; 
 but this would probably bring upon them the wrath of the 
 shipping interest, for we can hardly suppose that the shipping 
 interest would regard with complacency any proposal to levy 
 duties on the ^365,000,000 worth of raw produce which we 
 import. 
 
 The Fair Traders, however, avoid this danger by a 
 subtle economic distinction between raw and manufactured 
 produce ! They would impede the imjiortation of finished 
 productions, but allow the more costly transport of raw 
 materials mixed with all their dirt and refuse — this gives 
 more employment to the shipping interest — this is a wise 
 economy ! 
 
 Why not then require that larches should be brought from 
 Russia with their branches, their bark, and their roots ; the 
 gold of California in its crude state ; and the skins of Buenos 
 Ayres still attached to the bones of the decayed carcases? 
 
 If such principles were to prevail, I expect that we should 
 soon find the shareholders in railroads, if they had ever so small 
 a majority in the House of Commons, passing a law forbidding 
 the manufacture at Burton-on-Trent of pale ale to be consumed 
 in London, in order that the transport of the grain, &c., might 
 furnish the industry of London with the indispensable material 
 for labour^ and thus set to work the whole of their locomotive 
 power. 
 
 [M. Lecocq sent us a finished manufactured product — 
 boots (p. 61). "This," say the Fair Traders, "deprives 
 national labour of employment. We do not object to the
 
 TRADE AND FOREIGN DUTIES. 77 
 
 importation of hides from which boots are made, for they 
 would be in the nature of raw produce, and would provide 
 employment for our workpeople." How absurd this now 
 seems. Hides are less valuable than boots, inasmuch as there 
 has been less labour spent upon them. By importing hides, 
 and not boots, we should have consequently less to pay the 
 foreigner for the same quantity of materials. The labour of 
 English shoemakers would be needed to manufacture the 
 boots ; but then, as we should have imported less value, we 
 should have to export less value in payment, and the iron- 
 monger and other foreign buyers of our produce, unable to 
 obtain bills for boots drawn upon us by M. Lecocq, would 
 have to restrict their purchases from the London metal mer- 
 chants to the amount that we might have been indebted to 
 France for hides. 
 
 In short, the more numerous our purchases of foreign 
 manufactured goods, the larger must be the amount of 
 home labour employed for the foreign market, so that it 
 t's iminiportatit whether we ourselves use the products of Jiome 
 labour, or whether we export those products to pay for the 
 foreign products which we import. It is similarly unimportant 
 whether our imports take the form of raw materials or of 
 manufactured goods, for the employment of home labour 
 must be certainly as extensive in the one case as in the 
 other.] 
 
 How long shall we shut our eyes to this simple truth? 
 Industry, naval power, labour, have for their aim the general 
 good — the public good. To create useless branches of 
 industry, to favour superfluous transports of goods, to give 
 employment to unnecessary labour not for the good of the 
 public, but at the expense of the public, is the object, although 
 not clearly perceived by him, of the " Fair Trader." Labour 
 is not in itself a desirable thing : all labour without adequate 
 result is a loss. If you pay sailors to carry useless refuse 
 over the sea, you might as well pay them to play at ducks 
 and drakes with pebbles upon the surface of the water. Thus 
 we arrive at this conclusion, that all eco7io77iic fallacies ■> in spite 
 of their infinite variety, have this in common, that they con- 
 found the means with the end, and develop the one at the 
 expense of the other.
 
 78 lOrULAR 1AI.I.ACIES REGARDING 
 
 CHAPTER XVII. 
 
 METAI'llORS. 
 
 " God preserve us," said Paul Louis, " from the evil spirit nnd 
 from metaphors ! " The sword which malice puts into the 
 hands of the assailants would be jiowerlcss if fallacies did not 
 break the shield on the arm of tlie assailed, and it has been 
 well said that '■'■Error is ike cause of human misery." 
 
 How are men misled on these subjects ? A few words of 
 ambiguous meaning do the mischief. 
 
 Such a word is irwasion. 
 
 An English woollen manufacturer says, "Let us preserve 
 ourselves from the invasion of French woollens." An English 
 landlord exclaims, " Let us repel the invasion of American 
 corn." And they propose to raise barriers between the nations. 
 Barriers occasion non-intercourse ; non-intercourse leads to 
 hatred; hatred to war; war to invasion. *' What matters it?" 
 say they ; " is it not better to be exposed to an eventual invasion 
 than to agree to a certain invasion 1 " And people believe 
 them. 
 
 Yet what analogy is there between an exchange and 
 an itivasion ? AVhat similitude can possibly be established 
 between a ship of war, which comes to scourge our cities with 
 fire and sword; and a merchant-ship, which con:es and offers 
 to barter freely, voluntarily, foreign productions for ours ? 
 
 I shall say the same of the word inundation — " Ftooding our 
 markets," says Sir H. Giffard.* This is taken ordinarily in a 
 bad sense, because it is the general characteristic of inunda- 
 tions to lay waste. If, however, they leave upon the soil a 
 value superior to that which they take away, like the inunda- 
 tions of the Nile, we should be grateful for them, if we did not, 
 after the example of the Egyptians, bless them and deify them. 
 Before, then, declaiming against inundations of foreign products 
 as flooding our markets, before placing in their way trouble- 
 some and costly obstacles, we should ask if they are among 
 those inundations which lay waste, or those which fertilise ? 
 What should we think of the Khedive, if instead of construct- 
 
 * I.nun: ston, Oct. sjtb, i8Si. Western ^foniiig News.
 
 TRADE AND FOREIGN DUTIES. 79 
 
 ing dams across the Nile, in order to extend the region of 
 its tnundation, he were to expend his piastres in deepening its 
 Led, in order that Egypt might not be contaminated by the 
 foreign shme brought down from the Mountains of the Moon ? 
 We exhibit precisely this degree of wisdom and of reason 
 when we wish, by the expenditure of millions, to preserve 
 
 ourselves from what? From sharing the advantages with 
 
 which nature has endowed other countries. 
 
 A celebrated modern philosopher has added to the cate- 
 gories of Aristotle a fallacy which consists in comprising, in 
 one word, a begging of the question. He quotes various 
 examples of it. He might have added the words invasmi and 
 i)iundation, in an economical sense, for certainly they both take 
 the question for granted. 
 
 Such a use of words conveys utterly false ideas to the 
 mind. You might as well say that it is the same to give ^\o 
 perforce to one who has his hand at your throat, as to give 
 it willingly to one who in return supplies you with the object 
 of your wishes. You might as well say that it is a matter of 
 indifference whether you throw your bread into the river or 
 eat it, because in either case the bread is consumed. The vice 
 of such reasoning consists in accepting a complete similitude 
 between two cases by reason of certain points of resemblance, 
 while taking no account of their points of difference. 
 
 CASSELL, FETTER, GALI'IN & CO., BELLE SAUVAGE WORKS, LONDON, E.C.
 
 RECIPROCITY. 
 
 A LETTER 
 
 ADDRESSED TO 
 
 MR. THOMAS BAYLEY POTTER, M.P., 
 
 AS 
 
 Chairman of the Committee of the Cobden Club. 
 
 SIR LOUIS MALLET, C.B. 
 
 c 
 
 PRINTED FOR THE COBDEN CLUB, BY 
 
 CASSELL PETTER & GALPIN, 
 
 LONDON, PARIS & NEW YORK. 
 
 _i^^
 
 March 17 ih, 1879 
 
 Dear Mr. Potter, 
 
 I was asked last year by the Committee 
 of the Cobden Club to write a paper for them on the 
 subject of the recent cry for what has been known by 
 the name of " Reciprocity." 
 
 The constant pressure of other work has hitherto 
 prevented me from complying with this request — but 
 I am bound to add that I have been deterred by 
 another cause. 
 
 Whenever I attempted to address myself to the 
 task, I was confronted with an insuperable difficulty. 
 
 In spite of much reading and a very sincere desire 
 to understand the objects and arguments of the advo- 
 cates of this new commercial policy, I have entirely 
 failed in finding any statement of their case, or any 
 programme of practical measures which will stand 
 the test of serious discussion. 
 
 So that whenever I approached my adversary, I 
 found him to be a man of straw. 
 
 I wish, therefore, frankly to lay my difficulties 
 before the Committee; and, unless they can heln.. 
 
 -ti-
 
 me to a more distinct comprehension of the position 
 which I am asked to assail, to submit to them a pro- 
 posal which may, I hope, have the effect of eliciting 
 the desired information. 
 
 For the present I can only deal with the crude 
 opinions and proposals which have been put forward 
 from time to time in the public press and at public 
 meeting's. 
 
 I take the following statement of the case on the 
 part of the "Modern Reciprocitarian " from a pamph- 
 let by Lord Bateman, entitled, "A Plea for Limited 
 Protection or for Reciprocity." 
 
 " Granted that the theory of free and unrestricted com- 
 merce with all quarters of the universe is as bold as it is 
 magnificent; granted that the idea, by whomsoever originated 
 (and advocated by no one more consistently than by our 
 good and wise Prince Consort), is both grand and glorious 
 in its conception ; granted that to give eftect to it has been 
 the aim, as it has been the long-accepted policy, of suc- 
 cessive Governments ; it cannot be denied that the sting of 
 'want of reciprocity' has from the first checkmated our 
 philanthropic eftbrts, and obliged us now to confess, after 
 thirty years of trial, that in practice our free trade is at best 
 but one-sided ; and that, while we are opening our ports to 
 the commerce and Rianufactures of the world free and 
 unrestricted, other countries, without conferring upon us 
 any reciprocal benefit, are taking advantage, without 
 scruple, of our magnanimous but disastrous (because one- 
 "sided) liberality."
 
 5 
 
 It is necessary here to point out that there is no 
 apparent connection of ideas between the state- 
 ment of facts (even if they were correct) in this 
 paragraph and the conclusions at which it seems 
 to point, viz., that we are suffering not only 
 from restrictions abroad, but from freedom at 
 home. 
 
 No one would, I presume, deny that the system 
 under which British trade is now carried on is not 
 one of free trade, nor that a complete system of free 
 trade is better than a one-sided free trade ; but if, 
 as is alleged, protection is only sought for the sake 
 of reciprocity, it is impossible to understand why a 
 one-sided free trade should not be better than no 
 free trade at all. 
 
 The mutual relaxation of restrictions is a mutual 
 advantage ; the mutual creation of restrictions is a 
 mutual injury. If one tariff is bad, two must be 
 worse. It matters nothing whether the barrier be 
 raised in one country or in another, the effect is 
 precisely the same. It would be as rational, if the 
 French railway from Boulogne to Paris doubled its 
 charges, for the South-Eastern to do the same by 
 way of reciprocity, as for the Br.tish Custom-house 
 to raise the duties on French produce because France 
 raises them on ours. 
 
 It will be said, perhaps, that the railway tar 
 affects the French exports as well as tbjt
 
 imports, and that, therefore, the case is not parallel ; 
 but this is a fallacy. A moment's reflection will 
 show that the T^rench tariff affects French exports 
 as well as British imports. If a French wine-grower 
 is made to pay a higher price for his Lancashire 
 cloth, or, what is the same thing, gets less of it for 
 a "barique" of his wine, he will raise the price of his 
 wine or give less of it in exchange ; and his trade, 
 as well as that of the British manufacturer, will be 
 burdened and restricted by the tax. 
 
 To repeat this process at the English port would 
 simply double the burden on both the French and 
 the English trade. As Sir Robert Peel said long 
 ago, the only way of fighting hostile tariffs is by free 
 imports. 
 
 For what is reciprocity ? The essence of all trade 
 is and must be " reciprocity." Every transaction of 
 commerce by which one man voluntarily sells his 
 produce or property to another is an act of reci- 
 procity, and is complete in itself. The imposition 
 of a duty by one country on the produce or manu- 
 factures of another only affects the transaction by 
 rendering it les.-. profitable both to the seller and to 
 the buyer ; the variations of supply and demand will 
 cause the incidence of the tax to fall upon the seller 
 and the buyer, the producer and the consumer, in 
 ^'^. •.%',n{T degree ; but, in the long run, it will be 
 equa.'.^-i... -^fi between them.
 
 This may be put in a way which leaves no door 
 open for dispute or discussion. It must be admitted 
 that, in principle, the effect must be precisely the 
 same whatever the amount of the tax or the extent 
 of the restriction — whether a duty of lo, 50, or 100 
 per cent, be imposed, there must be a point at which 
 a duty becomes a prohibition. What is true in this 
 extreme is equally true at every point and at every 
 stage of the protective process. To whatever degree 
 a countr}" protects its own productions, it protects 
 in precisely the same degree the productions of the 
 countries with which it trades; for to whatever extent 
 it closes its ports on foreign commodities, it prevents 
 foreign countries from importing its own. 
 
 If this be true, and it cannot be otherwise, it 
 follows that the more nearly the tariffs of foreign 
 countries approach to the limits of prohibition, the 
 more will the British producer be protected in his 
 own market. 
 
 Those, therefore, who desire this kind of recipro- 
 city — viz., the reciprocity of monopoly — must rejoice 
 at every new restriction placed upon British trade 
 abroad, as necessarily involving increased protection 
 to British trade at home. 
 
 I am sometimes almost led to think, in reading 
 the speculations of those who are always raising the 
 cry of alarm at the importation of foreign goods, 
 that they are still under the influence of the exploded
 
 8 
 
 mercantile theory of the Balance of Trade, according 
 to which the advantage of commerce to a country- 
 resides in what it parts witli and not in what it 
 obtains — in its exports and not in its imports, the 
 balance being paid in nionc\', which was supposed 
 to be the only wealth. 
 
 I am unwilling to believe in the survival of this 
 delusion ; but if it still prevails in any quarter, it 
 is so important to dispel it, that I am tempted to 
 quote at some length the clearest exposition which 
 I know of the phenomena of international trade. 
 
 " All intercliange is in substance and effect barter : he 
 who sells his productions for money, and with that money 
 buys other goods, really buys those goods with his own 
 produce. And so of nations : their trade is a mere ex- 
 change of exports for imports ; and whether money is em- 
 ployed or not, things are only in their permanent state 
 when the exports and imports exactly pay for each other. 
 
 "When this is the case, equal sums of money are due 
 from each country to the other ; the debts are settled by 
 bills, and there is no balance to be paid in the precious 
 metals. The trade is in a state like that which is called in 
 mechanics a condition of stable equilibrium."* 
 
 Mr, Mill goes on to show that a country w^hich 
 wants more imports than its exports will pay for has 
 to pay the difference in monc)- ; that by this trans- 
 mission of the precious metals the quantity of the 
 
 * Mill's " Principles of Pol, Econ.," cap. 2\
 
 currency is diminished in such a country and in- 
 creased in the countries with which it trades ; that 
 prices fall in the former and rise in the latter ; and 
 that the imports are checked and the export trade 
 stimulated until the equilibrium of prices is restored, 
 and the imports and exports again balance each 
 other. He adds : — 
 
 " The equation of international demand under a money 
 system, as under a barter system, is the law of international 
 trade. Every country exports and imports the very same 
 things in the very same quantity under the one system as 
 under the other. In a barter system the trade gravitates to 
 the point at v^^hich the sum of imports exactly exchanges for 
 the sum of exports ; in a money system it gravitates to the 
 point at which the sum of the imports and the sum of 
 the exports exchange for the same quantity of money. And 
 since things which are equal to the same are equal to one 
 another, the imports and exports which are equal in money 
 price would, if money were not used, precisely exchange 
 for one another In international as in ordi- 
 nary domestic interchanges, money is to commerce what oil 
 is to machinery, or railways to locomotion, a contrivance to 
 diminish friction." 
 
 Some apology appears to be necessary for thus 
 reproducing a statement of doctrine which I always 
 have thought had been thoroughly understood and 
 accepted by all economists, but there would appear 
 to be a wide-spread belief among certain classics of 
 our countrymen that importing and exporting are
 
 lO 
 
 two totally distinct processes, with no necessary con- 
 nection between them ; and that to place our foreign 
 trade in a thoroughly satisfactory condition we should 
 direct all our efforts to exporting as much as pos- 
 sible, and importing nothing in exchange. It cannot, 
 therefore, be too broadly stated, or too often insisted 
 on, that the two processes are as inseparably con- 
 nected as the ebb and flow of the tide — that without 
 imports there can be no exports, and without exports 
 there can be no imports. 
 
 These two factors do not, of course, show the 
 whole extent of our commercial intercourse with 
 foreign countries; but they are most important ele- 
 ments in it, and their relative value is more easily 
 calculated. We have heard of late a great deal too 
 much about the enormous excess of our imports over 
 our exports, as if this were necessarily a symptom of 
 unsound trade. There can be no greater fallacy. 
 Even if the values of our imports and exports were 
 strictly accurate, which they are very far from 
 being, they w^ould convey no C( '."rect idea of the real 
 conditions of our foreign trade, unless we could be 
 presented with a balance-sheet giving a Dr. and Cr. 
 account of all the items in our dealings with all the 
 countries with which we trade, including capital lent 
 or borrowed, and the interest thereon, both in the 
 form of public loans and private investments, and 
 every particular of international indebtedness.
 
 II 
 
 Without this knowledge it is of little use to talk 
 about our trade accounts ; but upon two points we 
 may feel an absolute certainty — first, that we cannot 
 import without giving a quid pro quo ; and, second, 
 that whatever may be the balance, it is only in cer- 
 tain cases, and within very moderate limits, that it is 
 cancelled by a bullion payment. 
 
 As has been shown above, a country which does not 
 produce the precious metals can never effect its pur- 
 chases in gold or silver, except in liquidation of some 
 comparatively trifling balance. And, as a matter of 
 fact, the imports of gold and silver bullion into 
 the United Kingdom have in recent years exceeded 
 the exports. In 1878 the excess amounted to nearly 
 six millions sterling, and the average annual excess 
 in the last five years has been nearly five millions. 
 
 So far, then, from seeing anything disquieting in 
 what is called an "adverse balance of trade," it 
 appears to me to be a feature on which we have 
 every reason to congratulate ourselves, showing, as it 
 does, that we are liquidating our debts in the least 
 inconvenient way to ourselves, i.e., by means of com- 
 modities which we can produce at less cost than other 
 people. 
 
 If foreign countries are content to accept £^0 
 worth of British goods in exchange for £(^0 worth of 
 their own, are we to complain of their generosity.^ 
 The preachers of the new gospel of reciprocity would
 
 12 
 
 apparently answer in the affirmative. "Our policy," 
 they say, " is to induce foreign countries to take 
 more of our goods and give us less of theirs in 
 return." If this is what is meant by reciprocity, 
 I fear it is not a doctrine which is likely to be very 
 popular either with the producing or with the con- 
 suming classes in the country ; but it would certainly 
 be a better practical illustration of what Lord Bate- 
 man calls "our magnanimous but disastrous liberality" 
 than a system of Free Trade. 
 
 It may then be stated broadly that every English- 
 man who sells or buys in a foreign country, whatever 
 be the tariff of that country or the tariff of his own, 
 is already in the possession of complete reciprocity ; 
 and it must be apparent that the term " reciprocity," 
 if applicable to the object of which we have lately 
 heard so much, must be used in a different and much 
 less accurate sense. 
 
 This sense would not be far to seek were it not 
 for my second difficulty. 
 
 I might have supposed that a policy of reciprocity 
 meant, in a rough-and-ready way, the policy of Mr. 
 Huskisson and his successors in negotiating what 
 were called " reciprocity treaties," by which two 
 countries mutually engaged to relax or remove restric- 
 tions on each other's trade or navigation, and to 
 extend to each other " most favoured nation " treat- 
 ment in a conditional or unconditional form.
 
 In a still more general sense — viz., in that of a 
 simultaneous reduction of tarifts — I might have sup- 
 posed that the commercial policy of Mr. Cobden's 
 Treaty with France in i860 was in the minds of the 
 modern advocates of "reciprocity;" but it was at 
 once apparent that' their aims were very different 
 from those of Mr. Huskisson and Mr. Cobden. 
 
 The kind of reciprocity which Mr. Huskisson and 
 Mr. Cobden had in view, although their methods 
 were different in some essential respects, had this in 
 common, that they both recognised the vital impor- 
 tance, in the cause of Free Trade, of international 
 action. 
 
 Sir Robert Peel, probably very wisely, at the time 
 of his great reforms in our commercial system, re- 
 solved to proceed independently of the co-operation 
 of foreign countries, and trusted not unnaturally to 
 the effect of sound principles, and to the example of 
 success in provoking the reciprocity which he was at 
 the time unable or unwilling to invite. 
 
 I am very far from disputing the wisdom of the 
 course which was then pursued ; on the contrary, I 
 am quite disposed to think that it was the only course 
 which it would at that time have been wise to take ; 
 but it became clear, after twenty years of trial, that 
 great as was its success, the policy of " masterly 
 inactivity" towards other countries had entirely 
 failed in securing their adhesion to the Free Trade
 
 14 
 
 cause, and so far defeated the expectations of its 
 authors. 
 
 It was under these circumstances that, Mr. Cobden 
 was led to consider whether any means could be 
 found of giving a new impulse to tarifif reform and 
 international progress. 
 
 It was impossible to revert to the discriminating 
 system and the conditional engagements of Mr. 
 Huskisson ; this would have been reaction, and not 
 progress : but there could be no deviation from the 
 strictest rules of sound economic policy, on the occa- 
 sion of a sweeping reform of our own Customs system, 
 in securing the co-operation of France with a view to 
 simultaneous reductions which were not intended to 
 be in favour of England and France alone, but to be 
 general in their application. 
 
 Unfortunately, the sound maxim of Sir Robert 
 Peel at the time of his reforms, that the best way of 
 fighting hostile tariffs was by free imports, developed, 
 by some strange process of reasoning in the minds of 
 certain English economists (to say nothing of poli- 
 ticians, from whom anything may be expected and 
 forgiven), into a notion which found ultimate expres- 
 sion in the maxim, " Take care of your imports, and 
 your exports will take care of themselves." 
 
 This school of English Chauvinism has always 
 strenuously denounced aiid resisted all attempts to 
 secure the co-operation of foreign countries in estab-
 
 15 
 
 lishing reciprocity of freedom, as if it were only less 
 objectionable than reciprocity in monopoly, and has 
 succeeded in doing two very mischievous things. 
 
 1. It has prevented the execution of a commercial 
 policy which had been eminently successful in pro- 
 moting freer trade on the Continent of Europe, and 
 which, if completed as it might have been, would 
 have effectually barred the course of the present 
 reaction. 
 
 2. It is to a great degree responsible, if, indeed, 
 it has not directly caused, the present blind cry for 
 reciprocity. By discouraging and discrediting all 
 attempts to obtain reciprocity of free trade, and by 
 ignoring the incontestable truth that you cannot 
 have free trade without reciprocity, the still grosser 
 error has been generated in a section of the 
 public mind that it is better to have reciprocity 
 without free trade. The doctrine that half a trade, 
 is as good as a whole trade has led, logically, to 
 the opinion that no trade is as good as half a 
 trade. 
 
 But in their haste to find rest in a comfortable 
 abstract doctrine which should at once flatter the 
 national vanity by asserting our independence of 
 other countries, and save all further trouble, the 
 advocates of this rule of policy entirely overlooked 
 their facts. They forgot that, until the French 
 Treaty, our tariff was bristling with import duties,
 
 i6 
 
 many of them protective, and that even now we 
 draw a larger revenue from customs than any 
 country in the world, except the United States. 
 They forgot that their own condition was absent — 
 that, in the sense of admitting them free, we do 
 not take care of our imports. 
 
 I am very far from wishing in the slightest degree 
 to palliate the attempts which are now being made 
 by some foreign Governments — and, I regret to add, 
 by Governments of our own possessions with even 
 less excuse — to pursue still further a protective 
 policy, and to plunder their people at large for the 
 benefit of a privileged class. 
 
 On the contrary, I regard these attempts in the 
 present state of Europe as little less than criminal ; 
 and I foresee a day of heavy reckoning, when 
 Socialism, which is the direct offspring of Protection, 
 claims its inheritance, and demands a share for the 
 many in the dishonest gains of the few. 
 
 But if we were unable to raise even half our 
 present Customs' revenue without having recourse to 
 duties which were (as the phrase goes) incidentally 
 protective, and our choice lay between such duties 
 and direct taxation, I fear that there are some 
 among us whose virtue would hardly be equal to 
 the strain. 
 
 In thanking God, then, that he is not as other men, 
 or even as this foreigner, the British Pharisee must
 
 17 
 
 not be allowed to deceive himself by a phrase. So 
 long as we continue to raise half our revenue from 
 customs and excise, our fiscal system may be very 
 convenient, but our trade is not free. We may, if we 
 like, rejoice that our wretched climate enables us to 
 levy millions on wine, tea, and tobacco without 
 recourse to excise duties — and the risk of subsidised 
 domestic industries ; but no trade can be called free 
 till all fiscal impediments to its freedom are removed. 
 
 It is no consolation to the grower of wine in 
 France or of tobacco in America to be told, when 
 he is trying to promote a wider trade in these com- 
 modities, that our duties are imposed " for revenue 
 purposes only," and are, therefore, above criticism. 
 He very naturally replies, " It is true you do not 
 grow wine or tobacco, but I do ; and, on the other 
 hand, there are many things which you do produce, 
 and which I wish to buy of you, but, to enable me 
 to do so, you must accept payment in the only coin 
 which I have to offer — namely, my wine or my 
 tobacco. The more you take of these, the more 
 shall I be able to -take from you in exchange." 
 
 The maxim of "free imports " has never yet been 
 tested, and never can be till our own tariff is purged. 
 
 This kind of reciprocity is, however, clearly not 
 the object of the present agitation, which aims at the 
 contraction and not at the expansion of our foreign 
 trade, and invites us, in spite of the teaching of our
 
 iS 
 
 wisest statesmen and of the conclusive evidence of 
 our own experience, to enter upon a course of retalia- 
 tion and a war of tariffs. 
 
 I must, therefore, ask those who are disposed to 
 listen to this appeal how they would set to work. 
 
 Reciprocity in their sense means, I suppose, that 
 we should treat other countries as they treat us, what- 
 ever the effect upon ourselves — i.e., that we should 
 apply to each foreign country a tariff of duties which 
 would correspond, as nearly as might be, with that 
 which it enforces against us. 
 
 Let us see where this would lead us. 
 
 Our imports may be divided broadly into three 
 classes. 
 
 1. Raw products or raw materials. 
 
 2. Manufactured and half-manufactured goods. 
 
 3. Articles of consumption, as food, drink, or to- 
 bacco, subdivided into (so-called) 
 
 a. Necessaries. 
 
 b. Luxuries. 
 
 The values of our imports in 1877 in each of these 
 classes were : — 
 
 1. Raw products or raw materials ;j^i3o,o4i,o52 
 
 2. Manufactured and half-manufactured 
 
 goods 49,089,241 
 
 3. Articles of Consumption 
 
 a. Necessaries ... ^140,954,110 
 
 b. Luxuries ;^36,37 1,041 
 
 177,325,151 
 
 Articles not classified 37,954,336
 
 19 
 
 I presume that it can only be in respect of the 
 second of these three classes that any new scheme of 
 taxation could be proposed ; for it is improbable that 
 our manufacturing industries would desire to curtail 
 their supply of raw material, or that the people of 
 England will ever again submit to Corn Laws or 
 Sugar Duties, and return to their small loaf and dear 
 grocery, while our so-called luxuries, such as spirits, 
 tobacco, wine, beer, tea, and coffee, are already so 
 heavily taxed that the less we say about them 
 the better. 
 
 It is, therefore, only with an eighth part of our 
 import trade that we are, at the most, free to deal, 
 and from this no inconsiderable deduction must, I 
 presume, be made, for I can hardly believe that our 
 manufacturing interest, as a whole, would desire 
 duties on half-manufactured goods, intended for 
 further processes which employ British capital and 
 labour. 
 
 If, then, for the purpose of a policy of reciprocal 
 restriction, it were proposed to re-impose duties on 
 this small class of our imports, how could that pur- 
 pose be attained .'' 
 
 Let us examine the sources of our supplies, and 
 see how far they correspond with the foreign countries 
 upon which we desire or are able to retaliate by re- 
 strictions on their trade. And first on the list of 
 offenders stand the United States of America.
 
 20 
 
 What manufactures do wc import from them ? 
 In value less than i^2,ooo,ooo sterling, of which more 
 than half consists of tanned and curried hides ! 
 There is little room for reciprocity here, for no one 
 would dream of taxing their raw cotton and bread 
 stufts, and we had better leave them to tan and 
 curry their own hides than attempt to do it for 
 them. 
 
 Next in the illiberality of their tariffs come 
 Russia and the Peninsula. But here the case is 
 even worse, for we import no manufactured goods 
 worthy of enumeration from any of them, while in 
 the case of Spain and Portugal we already tax their 
 wines not only heavily, but in a way which, in 
 practice, affects them differentially, and derive from 
 them a revenue infinitely greater than that which 
 they raise from our exports to them. 
 
 Reciprocity here, therefore, would lead us in a 
 contrary direction altogether from that which is 
 desired. 
 
 But France, it will be said, which sends us every 
 year a value of ^16,000,000 in silks and woollens, 
 shoes, and gloves, and " articles de Paris " and 
 other finished manufactures — surely here at least 
 we can do to others as we do not wish them to do 
 to us. No doubt we could ; but to retaliate on a 
 country which as a rule taxes our imports about 
 20 per cent, or less, while we leave untouched a
 
 21 
 
 country like the United States, which taxes them 
 double, may be good or bad policy, but it is not 
 reciprocity. 
 
 Nor could we give effect to such a policy without 
 a further gross departure from the principle of re- 
 ciprocity, by placing similar taxes on the manufactures 
 of Belgium, Holland, and Switzerland, the tariffs of 
 which are more liberal than those of France ; for in 
 these days of railroads and transit trades the anti- 
 quated machinery of differential duties and certificates 
 of origin could never be made effectual again. 
 
 And what applies to France applies still more to 
 Germany, whose trade must always largely pass 
 through Dutch and Belgian ports, as well as to Russia, 
 whose produce would always find its way through 
 Germany to the sea. 
 
 It may also be as well to ask whether we might 
 not get the worst of it in a game at which two can 
 play, and whether we should not injure ourselves more 
 than we should injure France by a war of tariffs ? 
 
 The following table gives the total value of the 
 trade between France and England in 1859, the year 
 which preceded Mr. Cobden's treaty, and in 1877, the 
 last year for which the account is complete : — 
 
 into rhe°uL^[erK^ng"dom. Exports from the United Kingdom into France. 
 
 TO /-/-or, \ British exports... /"4, 754, 3 '54 ) 
 In 1859, ;,^i6,87o,859 ]^ ^ .^t./of>oot /q, i;6iqi;6 
 
 ^^ > / > 0^ (Re-exports 4,807,602 f x-y'^^'^Vio 
 
 T ,0^- /• - o ( British exports... /'i4,233, 242 ) 
 
 In 1877. ^45,823,324 JR,.e,ports 11,430,360 1 ^^5,663,602
 
 22 
 
 This tabic shows that in that part of our export 
 trade which consists of British produce and manu- 
 factures, the proportionate advance since 1859 has 
 more than kept pace with the progress of the total 
 importations from France, and we have seen that the 
 importations of manufactured goods from France do 
 not greatly exceed the amount of the British exports. 
 Any check which might be imposed on the French 
 trade in silks and woollens would be dearly bought 
 by the corresponding check which a return to 
 the policy of 1859 would place upon our export 
 trade. 
 
 ^'' Ex uno disce omnes !"" It would be tedious to 
 repeat a similar story with respect to other countries 
 on the continent of Europe. I append for reference a 
 lisf^ showing the value of the manufactures which we 
 imported in 1877 from most of the countries with 
 which we trade, from which it will be seen that, even 
 if possible, a policy of retaliation would be utterly 
 futile. 
 
 Of India and China, which for commercial pur- 
 poses must be considered together, it is unneces- 
 sary to speak in connection with this subject, for 
 we levy on one of their products — tea — alone little 
 less than the whole amount of their joint Customs 
 Revenue ! 
 
 I turn to the British Colonies, and take the 
 
 * Appendi.\ A.
 
 23 
 
 Dominion of Canada and the Australian group 
 as the largest and most important of our cus- 
 tomers. 
 
 What is the prospect for this kind of reciprocity 
 here ? We look in vain for a single item in the list 
 of their exports which we could afford to tax, what- 
 ever their treatment of our manufactures may be. 
 Canadian timber and Australian wool have become 
 the breath of our industrial life, and must be admitted 
 free. 
 
 Any attempt, then_, at a discriminating reciprocity 
 of restrictions must be abandoned in despair ; not 
 only would it fail in giving effect to its essential 
 principle, but it would land us in inextricable con- 
 fusion. There is only one course left — viz., that of 
 placing a general import duty of a " moderately " 
 protective character, say lO per cent., upon all foreign 
 manufactures. 
 
 But this cannot be intended, for it would be a 
 simple return to a policy which we have already tried, 
 and which we have abandoned step by step from a 
 bitter experience of its disastrous results ; and I would 
 ask what reason there is for supposing that such a 
 course would be more profitable in the future than it 
 has been in the past. 
 
 If any one wants a proof, let him look at the 
 history of our foreign trade, in that branch of it alone 
 (if he likes) which consists of British exports.
 
 24 
 
 In 1829, soon after Mr. Huskisson's and 
 Mr. Poulett Tliomson's reforms, the 
 declared value of the British and Irish 
 produce exported from the United 
 Kingdom was 
 
 In 1839 it was 
 
 In 1849, just after the repeal of the Corn 
 Laws 
 
 In 1859, the year before the Frencli 
 Treaty 
 
 In 1869, after nine years of the Treaty 
 system, and before the Franco-German 
 war 
 
 And in 1877 
 
 After having risen in 1S72 to the astonish- 
 ing amount of 
 
 ;^35,842,000 
 
 53>233>ooo 
 
 63,596,000 
 
 130,411,000 
 
 189,954,000 
 199,000,000 
 
 256,257,000 
 
 And even now, until quite recently, as Mr. Giffen 
 has shown, it is only the value and not the actual 
 quantity of the goods which has sensibly diminished. 
 
 Another equally good illustration of the immense 
 progress which our export trade has made is to be 
 found in the proportion of the above value per head 
 of population, which stood as follows : — 
 
 In 1829 the value of our exports was ^i 10 6 per head. 
 In 1839 „ „ 208,, 
 
 In 1849 „ „ 2 5 II „ 
 
 In 1859 „ „ 4 II 2 „ 
 
 In 1869 „ „ 627,, 
 
 In 1877 „ „ 5 18 II
 
 25 
 
 I will adduce a few other proofs of the effect of 
 the Free Trade policy on the national prosperity. 
 
 The following are the figures representing the 
 tonnage of the British merchant navy at various 
 periods : — 
 
 British Empire. United Kingdom. 
 
 1840 3,311,000 2,724,000 
 
 1S60 5,710,000 4,586,000 
 
 1870 7,149,000 5,617,000 
 
 1878 8,266,000 6,198,000 
 
 The consumption of the following imported and 
 excisable articles per head of the population was : — 
 
 1852 1877 
 
 Sugar, raw 28"i5lbs 54'o61bs. 
 
 Tea 2'oo ,, 4*52 ,, 
 
 Tobacco I '04 ,, I "49 ,, 
 
 Spirits I'logals i -23 gals. 
 
 Malt I '50 bush i "92 bush. 
 
 Mr. Caird, in his recent valuable work on the 
 landed interest, states that thirty years ago not more 
 than one-third of the people of England consumed 
 animal food more than once a week. Now nearly all 
 of them eat it in meat or cheese or butter once a day, 
 more than doubling the average consumption per 
 head. He adds that within the last twenty-five years 
 the capital value of the live-stock of the United King- 
 dom has risen from ^^146,000,000 to ^260,000,000; 
 and he puts the total gain to the agricultural interest 
 — landowners, farmers and labourers — in rent, farm
 
 26 
 
 capital, and waj^cs, at ;£"445 ,000,000 in the period 
 under review. 
 
 Agricultural wages have risen from 9s. yd. to 
 14s. 6d. since 1850 ; and it is needless to add that the 
 wages of manufacturing labour have increased in a 
 similar manner. 
 
 Among collateral indications of the national pros- 
 perity, which has, at all events, coincided with the 
 adoption of our recent fiscal and commercial policy, 
 I may refer to the growth in the assessments of 
 income tax in Great Britain : — 
 
 In 1843 they were ;^2 5 1,013,000 
 In 1875 „ 535,708,000 
 
 To deposits in savings banks, which were — 
 
 In 1840, ;3^23, 47 1,000, or 17s. Qd. per head of population. 
 In 1876, ;^7o, 280,000, or 42s. Cd. „ „ 
 
 And to the decrease in the percentage in pauperism 
 to the population, which was — 
 
 In 1841 8'2 
 
 In 1876 yi 
 
 And to other facts given in a recent interesting paper 
 on the strength of England in \k\^tFort7iightly Review, 
 by Mr. Farrer. 
 
 Can this be all } or is there yet some undiscovered 
 policy which I have failed to divine .-' 
 
 If not, and if further reciprocity of restrictions is 
 unattainable, I have yet one consolation for its advo-
 
 27 
 
 cates. In a still more general sense, but in a sense 
 very distinctly aft'ecting the conditions of our foreign 
 trade, their policy is actually in force. 
 
 It will, no doubt, be a source of unmixed satis- 
 faction to them to find that our so-called " revenue 
 duties " cannot fail to produce results as injurious to 
 the exporting industries of the countries affected by 
 them as their protective duties cause to our own 
 trade. 
 
 The ;!^20,ooo,ooo which we annually raise in duties 
 on foreign goods may be roughly divided among our 
 different neighbours in the following proportions : — 
 
 The United States of America . . . ;!^6,ooo,ooo 
 
 India and China 3,500,000 
 
 France 1,500,000 
 
 Spain 1,000,000 
 
 Germany 880,000 
 
 Portugal 450,000 
 
 Greece 320,000 
 
 Holland 1 50,000 
 
 Italy 80,000 
 
 British Possessions 4,000,000 
 
 Other Foreign Countries 2,000,000 
 
 And of all these countries there is hardly one 
 which draws as large a revenue from the taxation of 
 British produce. To take only two examples, the 
 United States and France. The total value of 
 British produce exported to the former country in 
 1877 was ;!^ 1 6,300,000 ; making allowance for the
 
 entry of a certain amount of goods duty free, the 
 average rate levied can hardly be put higher than 
 30 per cent., which would give a total revenue of 
 about ;{J"5 ,000,000 ; while in the case of France, the 
 duties actually levied on British goods in the same 
 year amounted to a little over iJ^8oo,ooo. 
 
 What more could the most strenuous advocate of 
 a retaliatory policy desire ? 
 
 There is one ground upon which protective duties 
 have been urged which appears at first sight rather 
 more plausible than those which have been hitherto 
 discussed. I mean the claim set up by our manufac- 
 turers in compensation for restricted hours of labour 
 and exceptional taxation. It is said that if the 
 Legislature chooses to place disabilities on particular 
 industries, the country at large should bear the cost, 
 and not the particular industries. 
 
 Now, in the first place, any such disabilities as are 
 here in view are not imposed intentionally by the 
 Legislature. The assumption has always been that 
 cheap labour is not necessarily efficient labour, and 
 that a system which leads to the degradation of the 
 working class, and prevents them from attaining a 
 certain moral, intellectual, and physical standard, 
 directly impairs their productive energy. 
 
 But if it can be shown that any restrictions on 
 labour or any special disabilities really diminish the 
 efficiency of the industries which they affect, it should
 
 29 
 
 be the object of our reformers to address themselves 
 to the very legitimate task of obtaining relief from 
 unwise or unjust laws, and not to extend their opera- 
 tion to the whole community. 
 
 For to what does the claim amount ? 
 
 Because the cost of production is increased in cer- 
 tain industries by an undue interference with labour, 
 we are asked to raise the cost of living all round to 
 the whole community. 
 
 Because an injustice is done to a section of the 
 people, it is to be extended to all. To enter upon 
 such a course would be to move further in a vicious 
 circle, which could only end in the general impoverish- 
 ment of the nation. 
 
 If the aid of Government is sought to equalise 
 conditions of production at home and abroad, let it 
 at least be invoked to diminish our burdens and not 
 to add to them ! 
 
 But, after all, what a hollow cry this is about 
 foreign competition ! A country which exports her 
 manufactures to a value of iJ^ 15 0,000,000 per annum 
 to rival and neutral markets, is represented to us 
 as on the road to ruin, because she cannot succeed 
 in preventing the importation of ^50,000,000 worth 
 of foreign goods ! 
 
 I have now combated various imaginary proposi- 
 tions, but end as I began, without having discovered 
 one which accounts for the action and laneuac'e of so
 
 many of our countrymen on this matter of reci- 
 procity. 
 
 Will you think me very uncharitable if I say that 
 an unworthy suspicion has sometimes crossed my 
 mind that the policy which we are called upon to 
 adopt might more fitly be called by another and a 
 less innocent name ? 
 
 Can it be that while the hands are Esau's hands, 
 the voice is the voice of Jacob, inviting us, in the 
 name of reciprocity, to barter our Free Trade birth- 
 right for a mess of Protectionist pottage ? 
 
 I prefer to believe that the fault is mine, and to 
 seek for further light. 
 
 The proposal, therefore, which I have to make to 
 the Committee is that they should offer a prize for 
 the best essay explaining the objects of this much- 
 debated policy, and the means by which it is pro- 
 posed to carry it into effect. 
 
 I shall await the result without impatience, but 
 
 not without curiosity, for the prize essayist must 
 
 at least succeed in proving that no bread is better 
 
 than half a loaf, and that because we cannot sell 
 
 in the dearest, we ought not to buy in the cheapest 
 
 market. 
 
 I am always. 
 
 Dear Mr. Potter, 
 
 Yours sincerely, 
 
 LOUIS MALLET.
 
 31 
 
 APPENDIX. 
 
 ORTS OF Manufactures into 
 
 England, 18; 
 
 Front. Amount in Value. 
 
 Russia about ^108,000 
 
 Sweden 
 
 
 
 
 
 1,083,000 
 
 Norway- 
 
 
 
 
 
 39,000 
 
 Denmark 
 
 
 
 
 
 , 27,000 
 
 Germany 
 
 
 
 
 
 , 2,862,000 
 
 Holland 
 
 
 
 
 
 , 6,830,000 
 
 Belgium . 
 
 
 
 
 
 5,312,000 
 
 France 
 
 
 
 
 
 , 16,060,400 
 
 Portugal . 
 
 
 
 
 
 17,000 
 
 Spain 
 
 
 
 
 
 18,000 
 
 Italy... . 
 
 
 
 
 
 , 3 1 8,000 
 
 Austria 
 
 
 
 
 
 33.000 
 
 Turkey . 
 
 
 
 
 
 , 112,000 
 
 Egypt 
 
 
 
 
 
 3,000 
 
 Persia 
 
 
 
 
 
 13,000 
 
 China 
 
 
 
 
 
 , 180,000 
 
 Japan 
 
 .. 
 
 
 
 
 , 5,000 
 
 United St 
 
 ates 
 
 .. 
 
 .. 
 
 
 1,843,000
 
 32 
 
 APPENDIX B. 
 
 Revenue derived by 
 Customs duties, according 
 
 available : — 
 
 United States 
 Great Britain 
 France 
 Germany ... 
 Russia 
 
 Italy 
 
 British India 
 Austria 
 Portugal ... 
 Spain 
 Sweden 
 Denmark ... 
 Belgium ... 
 Holland ... 
 
 various countries from 
 to the latest returns 
 
 ;^2 6, 200,000 
 
 20,000,000 
 
 10,250,000 
 
 5,330,000 
 
 5,300,000 
 
 4,240,000 
 
 2,700,000 
 
 2,320,000 
 
 1,850,000 
 
 1,600,000 
 
 1,200,000 
 
 1,100,000 
 
 865,000 
 
 385,000
 
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