The Reciprocity Craze/Chapter 3

by George Webb Medley

III.

ONE-SIDED FREE TRADE.

Having safely passed our "pons" we will 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, but 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 of 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 contrary, 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 complaint that every nation has a free sale for its products in our home markets. From the terms used, it must be evident that every nation which produces anything, and wishes to sell it to us, has to compete with every other nation wishing to do the same thing. It is therefore impossible for us to get the commodities we want cheaper than we do through this universal competition.

No other nation enjoys the advantages which flow from this state of things. We find constantly that commodities 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. They 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 that ad valorem duties of 50 to 200 per cent. on their productions are inadequate to keep them out of Protectionist markets; so cheaply, 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 would 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. But we are not now considering the interests of humanity, we are trying to see how we can advance the particular interests of Great Britain.

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, that 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 maximum 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 suddenly 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, workshops, 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 commencement 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 millowners and manufacturers; closing of mills and factories, and blowing out of furnaces.
16. Labourers thrown out of employment, and consequent increase of pauperism and crime.
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 they carry 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 shipbuilding 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 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 are, and "let sleeping dogs lie."

But I want to know what 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
„	1860	„	„	„	28,778,411
„	1870	„	„	„	31,205,444
„	1880	„	„	„	34,468,552
„	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 of Imports per head.
		£	s.	d.		£	s.	d.	£	s.	d.
1854	115,821,092	4	3	7	152,389,053	5	10	2	1	6	7
1860	164,521,351	5	14	4	210,530,873	7	7	0	1	12	8
1870	244,080,577	7	16	5	303,257,493	9	14	4	1	17	11
1880	286,414,466	8	6	1	411,229,565	11	18	7	3	12	6

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 the 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.

					1870.		1875.		1880.
Imported only, and exclusive of native.	$\scriptstyle {\left\{{\begin{matrix}\ \\\\\ \\\ \\\ \ \end{matrix}}\right.}$	Bacon	lbs.	...	1.98	...	8.26	...	15.96
		Butter	,,	...	4.15	...	4.92	...	7.42
		Cheese	,,	...	3.67	...	5.46	...	5.66
		Potatoes	,,	...	2.80	...	16.05	...	31.63
		Wheat	,,	...	122.90	...	197.08	...	210.42
		Rice	,,	...	6.74	...	11.68	...	14.14
		Sugar (raw)	,,	...	41.40	...	53.97	...	54.22
		Sugar (refined)	,,	...	5.83	...	8.88	...	9.46
		Tea	,,	...	3.81	...	4.44	...	4.59
		Spirits imported and excisable	gals.	...	1.01	...	1.30	...	1.09
		Malt (British)	bushels	...	1.84	...	1.95	...	1.65	(1879)

Now let us take pauperism.

2.—Pauperism.

Ireland.

1870	$\scriptstyle {\left\{{\begin{matrix}\ \\\ \end{matrix}}\right.}$	Number of Paupers First weeks in January		$\scriptstyle {\left.{\begin{matrix}\ \\\ \end{matrix}}\right\}\,}$	73,921
1873		,,	,,		79,649
1878		,,	,,		85,530
1879		,,	,,		91,807
1880		,,	,,		100,856
1881		,,	,,		109,655

Scotland.

1870	...	14th May	...	126,187
1873	...	,,	...	111,996
1878	...	,,	...	94,671
1879	...	,,	...	97,676
1880	...	,,	...	98,608

England and Wales.

Year.		Population.		No. of Paupers January 1.
1850	...	17,773,324	...	920,543
1860	...	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
1880	...	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 1880 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 800,000, 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.

United Kingdom.

Year.		Population.		Convictions.
1840	...	26,487,026	...	34,030
1850	...	27,523,694	...	41,008
1860	...	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.—Education.

United Kingdom.

Year.		Schools Inspected.		Accommodation.		Average 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
1880	...	20,670	...	4,842,807	...	3,155,534

We thus see that while the material condition of our population has steadily improved, their moral and intellectual 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	1841	the deposits	were	...	...	...	£	24,474,689
„	1851	„	„	...	...	...		30,277,654
„	1861	„	„	...	...	...		41,546,475
„	1871	„	„	...	...	...		55,844,667
„	1879	„	„	...	...	...		75,809,994
„	1880	„	„	...	...	...		77,721,084

6.—Bankruptcy.

In 1879 the insolvencies were in number 13,132, and in amount £29,678,000.

In 1880 the insolvencies were in number 10,298, and in amount £16,188,000.

7. Taxation.

Year.		Population.		Amount Raised.			Per Head.
1865	...	29,861,908	...	£	70,313,436	...	£	2	7	1
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	1
1881	...	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	...	...	...	...	£	797,943,660
„	1874	„	...	...	...	...		776,107,783
„	1880	„	...	...	...	...		774,044,235
„	1851	„	...	...	...	...		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

Bankers' clearing house.

In	1870-71	the total	Clearing	was	...	...	£	4,018,464,000
„	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:—

10.—Railways.

Year.		Miles open.		No. of Passengers.			Total Receipts.			Per Mile.
1870	...	15,537	...	330,004,398	...	£	45,078,143	...	£	2,794
1875	...	16,658	...	506,975,234	...		58,982,753	...		3,541
1879	...	17,696	...	562,732,890	...		59,395,282	...		3,356
1880	...	17,945	...	603,884,752	...		61,958,754	...		3,453

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 1875 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:—

11.—Agriculture.

Year.		Acres under Corn Crops.		Average price of Wheat.			No. of Cattle.		No. of Sheep.
1870	...	11,755,053	...	46s.	10d.	...	9,235,052	...	32,786,783
1877	...	11,103,196	...	56s.	9d.	...	9,731,537	...	32,220,067
1878	...	11,030,175	...	46s.	5d.	...	9,761,288	...	32,571,018
1879	...	10,777,459	...	43s.	10d.	...	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 circumstances, it must be borne in mind that an almost total failure of crops, especially in 1879, was accompanied by very low market prices. The result was disastrous to the agricultural interest, and to every other interest which depended on it.

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." Manufacturers clamour for "Reciprocity." I will discuss these matters in the following chapter.

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