of that country. While the River Plate and Peru are countries whose trade demands we stimulated by loans in former years, which stimulus we have now withdrawn. With China our export trade has also fallen off. But in China, there has been for several years a famine in some districts of the severest character, very much worse than what our Indian Empire has passed through, and the starving population is to be reckoned by many millions. This fact probably accounts for the falling off in our exports to China. As regards our trade with our own possessions, while there has been an important increase in our exports to India and to Australasia, there has been a considerable falling off in our exports to Canada. The condition of Canada is necessarily affected by the condition of the United States, and the causes which have reduced our exports to the latter country have similarly influenced our exports to Canada. A clear proof of the condition of the United States and of Canada is given in the figures as to emigration and as to mercantile failures. The number of emigrants from our shores to those countries was in 1876 only one-third of the number in 1872. As regards business failures,† the average total liabilities of the firms failing in Canada, in the years 1875, 1876, and 1877, was three times the average for the years 1872, 1873, and 1874. And in the United States the average for 1875, 1876, and 1877 was double the average for 1870, 1871, and 1872. These figures need no comment. Looking through the table of our imports, it will be seen that the great items are food‡ and raw materials. The whole value of manufactured articles that we import is comparatively small, and the increase unimportant. The value of raw materials imported has declined since 1872, but this is chiefly due to a reduction in price. We imported rather more cotton for £40,000,000 in 1876 than we imported in 1872 for £53,000,000, and 50 per cent. more than we imported in 1865 for £66,000,000. Jute, silk, and wool have also fallen in price, and part of the falling off in the value of our exports is due to this decline in the price of raw materials. The Board of Trade Returns, indeed, show that we exported a larger *See Board of Trade Returns. See the Annual Report for 1877, of Messrs. Dun Barlow and Co.'s Mercantile Agency. If there should hereafter be a large falling off in our imports of food, not due to the abundance of our harvests at home, it will be a clear proof that our means of living are diminishing, and will, in my opinion, be a much more serious indication of national decline than a falling off in our exports. quantity of cotton goods in 1877 than in any previous year. The great increase in our food importations is partly due to the necessities of an increasing population, partly, in recent years, to bad harvests, and partly to the improved circumstances and increased means of living of the working classes. So far as the capital saved by the nation has been invested in re-productive works at home, instead of being lent to foreigners, or invested abroad, and has thereby increased the demand for foreign food supplies to sustain the workmen engaged in these reproductive works, or to purchase raw material for their construction, the nation has sustained no loss by the increased consumption, and the disparity between the imports and the exports caused by such operations means simply a safe investment of capital at home. The four years from 1872 to 1876 were years of great activity in works of this kind at home. Railways, tramways, waterworks, gas works, drainage works, and large schemes of street improvement have absorbed a large proportion of the savings of the nation, and all capital thus invested at home instead of abroad, as in some previous years, has maintained our imports at the expense of our exports, to the permanent advantage of the country. Taking all these matters into consideration, I do not believe that the nation is by any means eating into its capital. But, at the same time, I believe that we have not been accumulating capital so rapidly since 1872 as we were during the previous years. To whatever extent the working population is, by means of shortened hours of labour, or trade combinations, or idleness, producing less per man and consuming more, the nation is becoming poorer. This is the root of the matter. Over-production, some people say, is what ails us; and the leaders of the working-men propose to improve matters by reducing the output of coal and the production of iron per workman employed, in order that the rate of wages may be maintained. This is the form of protection that will ruin British commerce, and which no import duties or reciprocity treaties can prevent British commerce from being ruined by. Over-production in particular trades may reduce the rate of profit or turn it into a loss in such trades; but the way to cure the evil is to transfer the labour and capital to some other trade, not to reduce the produce per man or per pound of capital; or, better still, to find fresh outlets for the goods, whatever they may be. Enhancing the price by artificial means is not the way to attract customers. Wealth is not produced by buying and selling; commerce is only the transfer of property from person to person, from place to place, or from country to country; it is the exchange of commodities between those who have too much and those who have too little-the overplus of one supplying the want of the other. Wealth is created by the labour of men who turn the gifts of Nature to their own uses, by agriculture, mining, or manufacture. If the wealth of the world is diminishing, it is either because Nature is less bountiful or man less industrious. More production is what we want, and not less, if our condition is to improve. The seasons in some countries have been unpropitious, and we have had bad harvests in Europe and famines in Asiabut these alternations we have known before. In Europe, in my opinion, men are producing less and consuming more, and this is largely the cause of our depression. Trade combinations of working men are pursuing the false track of demanding more money for less production, and the nations of Europe have withdrawn millions of men from peaceful industry, who are in time of peace consuming, and in time of war both consuming and destroying, the fruits of the labour of others. Labour and capital are transferred from works of production to works of destruction, and the burden is becoming too heavy for Europe to bear. The false idea that manufactures are of more importance than agriculture, which is the basis of much of the Protectionist views of the day, has taken possession of the United States and other new countries. Nature has provided vast tracts of virgin land waiting for the plough and the seed, and ready to supply the food which millions of men in Europe will gladly give their labour to buy; but in order to build up hives of manufacturing industry, which are more consonant with man's pride than fields of waving corn, labour and capital are diverted from the fruitful field of action to which nature invites them into unprofitable paths, which are kept open only by the artificial means of heavy protective duties. Now, when we in these countries are feeling the effects of the distress of other nations, we are offered, not more food and more clothing, but the solace of this new measure of Limited Protection. What does it mean? It means, I suppose, that we are to go round the nations of the earth and say to each, "If you won't buy our goods, neither will we buy your goods." "If you put a duty on our productions, we will put a duty on your productions." Is this to be an empty threat, to be proclaimed as a "spirited policy" if it succeeds, but quietly backed out of if it does not, or is it to be acted on? Did we adopt a Free Trade policy because we believed in it as a great political truth, or is its truth to be measured by its acceptance by others, instead of by its results as regards ourselves? It is actually argued that we are to surrender our opinions because they are not adopted by others, not because they have been proved to be false. If we are isolated in our Free Trade policy, it is an isolation based on a fixed principle. And where is the proof that our policy has failed? Look at the vast increase of our commerce, of our capital, of our income since our Free Trade policy was adopted, see the whole world put under contribution to supply our wants— our merchant ships on every sea, carrying the produce of all the nations of the earth as well as of our own-our superabundant wealth lent out in every land to increase its productive power, and to enable it the better to supply our wants, and to repay the labour of our men. Are the great results of thirty years of freedom to be jeopardized because the temporary poverty of other nations disables them from buying our productions to quite so great an extent as in some previous years, and because our always small importations of foreign manufactures have somewhat increased? No one suggests that we should put a tax on food; but why are our farmers not to be protected just as much as our manufacturers? and how is this plan of reciprocity to be carried out unless our food supplies are to be taxed? The greatest offender of all is the United States, so far as taxing our productions is concerned. Are we to force her into submission by putting a tax on her wheat, her Indian corn, her bacon, and her beef; are we to tax her cotton or her timber? Take our own colonies. own colonies. They put import duties-some for revenue, some for protection-on our productions. Are we to tax Australian gold and wool, Canadian wheat and timber? Come home to Europe. Are we to say to France, which taxes our commodities, "We want reciprocity, and if you won't agree, we shall force you by taxing your productions." Suppose France says, "Very well, begin by doing away with your import duty on my wine and brandy." Are you prepared to surrender so much revenue? Can you admit brandy and claret free, and still tax port and sherry, beer and whiskey? Go through the whole list of countries and articles, and the moment you begin to work out your scheme of enforced reciprocity you will find it break down. The more you study any form of Protection, the more you will find that you cannot make it work justly. The United States taxes everything. Farm produce to begin with, and so raw wool is taxed, and there is an extra heavy duty put on woollen goods to make up to the manufacturers for not being able to import Australian or River Plate wool free. Of course, at first the woollen manufacture was very prosperous, until too many I went into it. Now it is so overdone that it is one of the worst trades in the United States, and the nation is taxed to maintain a number of woollen manufacturers in a state of chronic bankruptcy. Shipping is so protected in the United States that its carrying trade with foreign countries, which was once almost wholly in the hands of American shipowners, has now almost completely passed out of their hands, and, for the most part, into the hands of British shipowners. There were in 1840 over 1,000 articles subject to import duty in the United Kingdom, and a whole army of custom-house officers engaged, at the expense of the nation, in putting friction on the wheels of commerce, by collecting the duty on them. Now, the number of dutiable articles may be counted on one's fingers. In the United States there are now 2,500 articles subject to import duty, and they produce to the United States about the same revenue that the few articles do to our Government, but at a much greater cost of collection. At fifty ports the receipts are actually less than the expenses.* This idea of enforced reciprocity is based on the delusion that our Free Trade system is one sided in its effects because other countries have not followed our example. There can be no such thing as one-sided commerce. The very essence of commerce is that it is reciprocally advantageous. Trade, like mercy, is twice blessed. It blesseth him that buys and him that sells. We buy nothing from other nations, no matter what their fiscal arrangements may be, that we do not find from experience it is advantageous to us to buy from them, and we sell them nothing but what they find it to their advantage to buy from us. The exchange * See the Anglo-American Times, 25th January, 1878. |