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THE question of Fiscal Reform has sent strong cross-currents of opinion through political parties, including our own. You will have noticed Lord Cowper's letter to the Times of December 1903. With that letter I cordially agree. It deals with that divergence of views amongst Liberal Unionists to which I have alluded. This difference of opinion amongst our Party is my reason for asking your indulgence whilst I trace the train of my own thoughts upon Free Trade and Protection. Belonging to an old Whig family, my boyhood was spent amongst grown-up relatives and family friends who had played a prominent part in the Reform Bill of 1832, and in the Repeal of the Corn Laws in 1846. I learnt to regard them with the respect due to men who had written their names in large letters across the pages of English history. At Oxford I read political economy, and after a lapse of a quarter of a century I cannot think, without a shudder, of the reception with which an essay advocating Protection would have met at the hands of the then head of my College, the late Professor Jowett. I cannot forget his influence, but I recognise that times and tendencies have changed. By birth, tradition and education a Free Trader, I passed from the University into the Army, joyfully abandoning all study of political economy. Then unexpectedly I was called to the ownership and responsibility of a large landed estate. Agriculture at that moment happened to be in a more than usually acute phase of depression. I set myself to try and understand the pressing problems surrounding landed property. Once more I studied the text-books of political economy, once again I read the battle of Free Trade and Protection. In 1895, at a meeting of the Liberal Unionist Association at Thorney, I dealt at length with the history of the Corn Laws, and examined the possibilities of Protection. I recorded my conviction that no departure from Free Trade would ever come within the range of practical politics in this country. I am not at all surprised that I arrived at that conclusion. The state of opinion in this country in 1895 towards Protection is best summed up by the saying of the great Tory Prime Minister, Lord Beaconsfield, “Protection is not only dead, but also damned.” In 1904 a complete change in our fiscal system is the question before the country. Early last summer I was continually asked, “Are you a Protectionist or a Free Trader 7” I always replied, “I have been brought up a Free Trader, but under present circumstances I welcome the inquiry initiated by Mr. Chamberlain.” Then followed the inevitable but inept rejoinder, considered to be contemptuous and crushing, “Then you are going to sit upon the fence.” “Yes, certainly I am going to sit upon the fence until I have heard both sides of the question, and then, and not till then, I shall form a definite opinion.” Mr. Chamberlain has now finished his first campaign. I have read his speeches. I have noted the answers of his opponents, who add nothing to that which has already been written by Adam Smith in 1776. It is true that some advocate technical schools, and others recourse to the metric system, remedies with which I cannot rest content. I have considered economic problems in the face of the conditions existing in 1904, and I have decided to support Mr. Chamberlain. The question of a change in our fiscal policy has not been raised wantonly or hastily. On the contrary, it has been forced upon us by a variety of circumstances. The alarming increase in our national expenditure, an increase which must continue if we are to hold our own—and I cannot accept any other position in the world for Great Britain except that of first—must be met by an increase in taxation, and that increase in taxation must lead in any case to some modification of the present fiscal system. The basis of taxation is too narrow and must be broadened. For years past there has been great uneasiness as to the stability of our industrial prosperity which is evidenced by the increased anxiety regarding technical education. For years past we have watched, first with indifference, then with alarm, the progress made under a different system by our great commercial rivals in Europe and America. For years past we have had before us an object lesson on the effects of unrestricted imports in the comparative ruin of our agricultural industry, accompanied, no doubt, by the advantage of cheap food. Now it is the turn of the manufacturers, who are menaced by the same results through free imports of manufactured produce.

* An Address delivered at Bedford before the Liberal Unionist Associations of the County, January 23, 1904.

The South African War has helped us to realise as we never realised before that we are the centre of a great Imperial system. Ought we not to endeavour to bind the members of our Colonial Empire closer to ourselves, and try to bridge the broadening gulf of fiscal disunion ? The conference of Colonial Prime Ministers and representatives suggested to us a possible policy by means of reformed tariffs. As our present system stands, we must sit idly by while foreign Powers penalise our Colonies into submission and coerce them to abandon tariffs made in favour of the Mother Country. The idea of a change in our fiscal system has then been forced upon us by the necessity for the maintenance of our naval and military forces, by business considerations, and by Imperial sentiment. On what issues will the question be decided to-day between Free Trade and Protection ?

Looking back for a moment at the history of Protection, we find in 1816 peace reigning in Europe after the great French wars, the landed classes in power, and agricultural depression prevailing in England. The ports of the world are once more open, and corn begins to be imported into this country under the sliding scale of the Corn Laws. In 1846 we see Free Trade and the Repeal of the Corn Laws carried by the capitalists and the middle classes, in spite of the opposition of the landed interest. Free Trade was to widen the demand for manufactures, to divert Continental countries from manufacture to agriculture, and to enable the manufacturers to retain the monopoly which they saw slipping from their grasp. The landed interest until 1846 had been the dominant power in English politics. In 1846 we see the advent to power of the commercial and middle classes. The territorial period and the commercial period have been succeeded by the national period. Now, for the first time, democracy is asked to decide on its own fiscal policy. Free Trade, it is said, favours consumers and Protection producers. The distinction is altogether false. Working men are both producers and consumers. They cannot be the one without the other. They cannot eat without first earning the means of purchase. They must produce in order to consume. It is in this double capacity that they will consider the question. I cannot think that they will decide it on those contradictory figures which bewilder all anxious inquirers and discredit statistical science. Each community will in the main be influenced in its decision by the conditions of its daily life. Take, for instance, the workers in the East End of London and the question of Alien Immigration. As you are aware, at present any white, black or yellow man, be he anarchist, mendicant, lunatic, thief, invalid, or loafer, enjoys free entry into this country, while abroad and in the Colonies they sift immigrants by refusing undesirables. Free Traders receive with thanksgiving the products of the sweated labour of the Continent. Their creed enjoins acceptance not only of the products but also of the producers. Most Free Traders draw the line at receiving with open arms pauper alien immigrants. I do not wonder. Pauper aliens cannot be described as desirable. They are twice as criminal as the native-born population. So little are they distinguished for honesty that during the three years ending March 1903 they cost the country on an average £400,ooo a year in fraudulent bankruptcies. They live and work under conditions which to our people are inhuman and degrading, but which enable them to undersell English labour. I cannot think that many East End constituencies, when they are called upon to vote on two policies, one excluding and one admitting pauper aliens, will be influenced by the study of statistics on the decline or expansion of trade. Let me give you another instance. I pass from the toilers of the East End of London to the toilers on the deep blue sea. It is scarcely possible to imagine more dissimilar conditions of life. English fishermen on our south and west coasts when they have a catch of fish on board and cannot, owing to the weather, make the English harbours, are obliged to run for shelter into the French ports. But their labour becomes at once comparatively useless, because of the tax which is clapped upon its produce. Fish is a very perishable article, and thus all their toil is lost. But to the French fishermen all the ports in England are good in a storm. All offer just as good a market as those in France. Moreover, the French Government, recognising the fishing fleet as the most valuable recruiting-ground for their navy, subsidises that industry. The fishermen on the south and west coasts of England will not require to ponder over figures before they give their vote. They will vote for that policy which will put them on equal terms with their neighbours over the Channel. I steer clear of all the fearful fog of figures which overhangs this controversy, because I do not believe that they will determine its issue. Statistics and figures may busy the brains of a few. They cannot satisfy the stomachs of the many. Taking the electorate as a whole, the deciding factor must be ability to procure food. Cheap food is a blessing to the working classes. But there is something more important than cheapness of food, and that is the means of purchase. Cheapness of food is immaterial if a man has no money to buy it. It is an appalling thought that in this country thousands do not know when they may be thrown out of employment or reduced to starvation wages. It is perfectly certain that, if work is taken from the foreigner and given to the Englishman, the latter gets the employment of which the former is deprived. On the other hand, it is empty comfort to the British workman to know that food could not possibly be cheaper when the German artisan is eating the dinner which the Englishman has not the money to buy. Regular and remunerative employment is the one important condition for the working classes, and the problem which they have to solve is the discovery of that policy by which it is most likely to be secured. To increase regular and remunerative employment forms part, and a most important part, of Mr. Chamberlain's scheme. In spite of all that is said by those friends of the working classes, the Free Traders, that the working classes are uneducated, lazy, too fond of eating and drinking, too much addicted to recreation, I would back them against the whole world if it were fair fighting. But our manufacturers and artisans in fighting foreign manufacturers and artisans are fighting tremendous trusts, known as Protectionist governments, elaborately equipped for one object, and that object trade. What manufacturer in England would not sink capital in upto-date machinery, what parent in England would not spend money in the scientific and commercial training of his son, if they had the guarantee of the State that the home market at any rate would be reserved for the people of this country f There are three policies before the country. First, free imports or the so-called Free Trade with its worship of cheapness and its maxim of “Let alone.” Secondly, Preferential Tariffs, with its recognition of national interests and its constructive policy of Imperial consolidation by means of fiscal union. Thirdly, Retaliation, with its policy of retaliative tariffs, which is quite irreconcilable with Free Trade. The ultimate struggle must be between the first and second of these policies. The third is but a half-way house. I am content to move cautiously and gradually. But for the sake of that certainty which is vital to the existence of commerce I wish to meet the real issue and define the ultimate goal. I do not propose to give you a lecture on political economy, but I owe it to you and I owe it to myself to explain why, in my opinion, the change in our fiscal policy is urgently needed. I have learnt to mistrust political economy. Its theories are abstract, sometimes remote from existing conditions. Its world is certainly not the world we live in. It is a hypothetical world. I suspect the business capacity of the academic mind, which

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