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simplest kind, for that the only means of paying for what you buy, (at least, of what you buy from the foreigner,) is by selling British goods in return. This was maintained for long in spite of the hard fact that the amount of British goods sold and exported every year fell short of the amount of foreign goods imported by more than one hundred millions of money. There is an end of this contention now, however, for, in answer to some arguments which I ventured to suggest against the truth of it, Mr. Medley, the chosen champion of the Cobden Club, writing in the Nineteenth Century Review, in the month of June 1886, admitted that it was not the fact; and that, on the contrary, the foreigner was sometimes paid for his goods by what he spoke of as “securities." I
pass this by, therefore, and proceed to consider whether in any other respect, or for any other reason, it is right to conclude that buying foreign goods leads to selling British goods. I think I can show where the truth lies in this matter, and lay bare the reasons which underlie the Free Trade belief that it is so. pose I will quote a passage from one of the pamphlets of the Cobden Club, England under Free Trade :
“By buying French silks we give France so much purchasing power in the World's markets. If she uses this power on the productions of other countries, that enriches them, and adds to their purchasing power ; and in the end, as we are the great manufacturers, we shall be the chief gainers in this general enrichment, to say nothing of the fact that we are the great carriers, and consequently great gainers by all increased trade.”
Thus runs the "Free Trade " argument, and it is thus, and thus only, that the buying of foreign goods can lead to the sale of British goods. After what I have above written as to the way in which employment propagates employment, and the purchase from a man of his work puts him in funds to give employment to others, I need hardly say that I agree in the general ideas embodied in this passage.
The effect upon this country of adding to the purchasing power of the foreigner by buying his goods can, however, only be beneficial to us if there is no bar to his exercising that power in our favour, and this he can only freely and efficiently do if our goods are freely permitted to enter the foreign ports and be there sold.
This reasoning, then, would be quite satisfactory if trade were free all the world over, and those who first employed it did so in the absolute conviction that trade would be everywhere free if this country would only set the example. But the truth it enforces is only a truth in the absence of protective and prohibitory duties abroad, and the comfort it holds out to us is only reasonable so long as there is any hope that those duties will be abandoned.
It was upon this method of reasoning that the “Free Trader” of 1846 took his stand; he bid us raise our eyes from any petty advantage to be secured by a protective duty, and look rather to swelling the great volume of the world's trade in which we should ultimately find our account.
The proposed system was fascinating in its breadth of view, it had an ineffable charm in its simplicity and its universality; furthermore, it offered the solid footing of a natural and self-acting law as the basis of our commerce, in place of an artificial device, and the recognition of its superiority seemed to bespeak wisdom as contrasted with dexterity.
It is easy to be so dazzled by these attractions as to lose sight of the condition which underlies the whole structure; the indispensable condition that all interchange of produce be unfettered and free. And this is just what has happened to the teachers of the “Free Trade" doctrine.
Still, it is really a matter of surprise that the advocates of "Free Trade” or rather "Free Imports," should so wholly fail, as they do, to take account of the complete subversion of their theory which the vast increase in protective duties all over the world has wrought.
I cannot do better to show their state of mind than quote from the very able exposition of “Free Trade” principles written for the Cobden Club, by so high an authority as Sir Thomas Farrer. His pamphlet Free Trade v. Fair Trade, is full of the most valuable and reliable statistics, and contains the most temperate statement of the Free Trade creed. I propose to quote only the opening sentences, as they suffice to show the state of mind in which he approaches his subject.
The first chapter is headed : “ Difficulty of Knowing what to Answer," and he thus commences :
When I was asked by the president of the Cobden Club to write something in defence of Free Trade, it seemed to me-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 Eaclid, 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 anwise 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 ng 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 Decobsarily 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
It is impossible to read these sentences without perceiving that the writer is contemplating a state of things in which trade is really free; these “elementary truths” take no account of the actual state of things, which involves a trade free on one side and heavily fettered on the other.
The pamphlet was written in 1882, long after all reasonable hope had fled that other nations would remove these fetters, and had shown their determination to largely increase instead of withdrawing their protective duties. Nay, more, the growth of these duties was present to the writer's mind, for the book contains a most interesting chapter in which the growing adoption by each country of protective duties is investigated and described. And yet the writer does not hesitate to assert that a law which would prevent England from dealing with America is “in no essential respect different” from a law which would prevent the people of Middlesex from dealing with the people in Surrey.
“ In no essential respect different.” The fact then that Surrey is free to buy of Middlesex in return, while America is prohibited from buying of England in return, makes no difference whatever-it is just the same thing.
How utterly and completely the injury suffered by our manufacturers by the closing of the American market to such a vast trade, for instance, as that in iron and steel is here wholly ignored. Yes, it is ignored; the difference in actual fact, created by the existence of prohibitory import duties in America is not taken account of, and then argued upon or explained away and shown to make no difference in the result, or in the principles upon which we ought to act. The existence of any essential difference in fact is simply passed by without recognition or acknowledgment, and the dealings between two English counties which are absolutely unrestricted on both sides, are put forward as an apt and complete illustration of the trade between England and America.
No wonder that to those who thus close their eyes to the existing state of things, we, who venture to question the wisdom of Free Imports, appear to be dull and stupid. Starting upon the assumption that trade is, in point of fact, as free all the world over as it is between Surrey and Middlesex, no wonder that Sir Thomas Farrer had a difficulty in “knowing what he had to answer," and, treating this perfect freedom of interchange "as an elementary truth,” did “not know where to begin.”
Thus do the Free Traders, whose minds were saturated with the principles which found acceptance forty years ago, continue complacently to tell off upon their fingers' ends the elementary truths which were enforced by Mr. Cobden at that period. And they were elementary truths, upon the assumption always that things were left by other countries as well as ourselves to take their natural course in the matter of trade and commerce. If, at that time, it chanced to be pointed out that the removal of protective prohibitions in other countries was a necessary condition to the working of these principles with effect, the answer was ready to hand: “You have no more right to doubt," said Mr. Cobden, “that the sun will rise to-morrow than you have to doubt that in less than ten years from the time when England inaugurates the glorious era of commercial freedom, every civilized community will be Free Traders to the backbone.” More than forty years have passed away, protective laws have largely increased in stringency, and have hardened into a policy which, owing to the success which has attended them, is on the road to become permanent. And yet these reasoners of 1846 cannot be got to regard this vital change in the conditions under which their principles have to work, from those under which they were originally conceived and accepted. It is useless to reason with them; they will not be at the trouble of what they cannot help regarding as a useless re-opening of the subject. It is not to this generation of believers that our suffering workers of the present day must look for relief. Those amongst the present adherents to Free Trade doctrines who have accepted the faith somewhat upon trust—somewhat as an item in the creed of a political partywho were captivated by the prosperous times which happened to follow their adoption, and whose minds are free now to contemplate and reason upon the patent facts which attend our onesided system, stand in a different position. To such people (and they are, I believe, the majority) it may be pointed out, and perhaps not in vain, that what it might have been wise to do in the abstract, and while the hope was still open to us of establishing a trade universally and really free, it may become very foolish to adhere to in the actual condition of the world of commerce.
If it were to be granted that a protective duty, with all its apparent advantages, is really the cause of evils greater than the benefits it is designed to effect, and, therefore, undesirable in the abstract, it may still be that the conduct of other nations has placed such fetters upon our trade as to compel us to resort to it in self-defence. It is in this light that its adoption demands our most serious and unprejudiced consideration at the present day.
What we may be said to need, then, is “Protection” against “Protection"; for it is only through “ Protection” at home that, as it seems to me, we have any prospect of abating “Protective" duties abroad.
“ Protection,” in this aspect, is demanded not so much against the competition of the foreigner, as against those laws which interVOL. X.
pose and forbid us to compete with the foreigner—“ Protection" against a system which permits the foreigner to compete freely with us in our own markets, and forbids us to compete with him in his. He is thus enabled to select the articles in which he will compete with us, and to rival us successfully in those manufactures or productions in which he excels, while we are forbidden to compete with him for the custom of his countrymen in those in which our superiority is manifest. Can anything be more obviously one-sided and injurious ? Can we long hope to maintain our ground in a contest so obviously unequal ?
And to think that this is the final result of that much-yaunted system which we adopted, under the name of “Free Trade” in 1846, the leading idea and chief merit of which was proclaimed to be that each nation should in future devote itself and restrict itself to the production of those things which soil, climate, and national aptitudes qualified it to produce in the greatest excellence !
“Only allow all trade to be free," said the founders of the new system, “and each nation will inevitably be drawn into the production of those things alone which it is best suited to produce, to the manifest weal of mankind.” “ Why waste labour and energy to produce, under difficulties, and with indifferent success, something which another nation can produce far better and cheaper, and will be only too glad to barter with you for some of those things which he produces with difficulty, and you with economy and ease ?” This was the crowning merit, the prominent and most captivating feature of “Free Trade” when first preached to the people of this country. Whatever the benefits secured by “Protection ” might be, how much greater would have been the prosperity which would have sprung up under a system of trade universally free! But, alas! how cruelly the course of events has belied this expectation !—not from any defect in the reasoning on which it rested, but simply from the erroneous measure that was taken of the action of foreign Governments. Their refusal to trade freely, and their enhancement of protective duties, has not only robbed the world at large of the benefits then so confidently contemplated, but it has turned our projected system into a weapon of offence against ourselves, and brought about the prosperity of those only who did not adopt it, at the expense of those who did.
In the result it has thus come about that we who, before 1846, were far ahead of all other nations in energy, machinery, and all sorts of manufacturing industry, have failed to maintain the supremacy we then held. While the rest of the world during the last fifty years, Mr. Mullhall tells us, have increased their commerce eight-fold, we have only increased ours seven-fold—and