"FREE TRADE."
(TO THE EDITOR OF THE .SPECTATOR?')
Srs,—On the 28th of last March you permitted me to ask a question on this subject in your columns, and you were also good enough to answer it. Will you permit me to ask another ?
You stated your opinion that a system of bounties on exporta- tion "must be a bad system, and so far as we can induce other -nations to relinquish it, we should be doing the whole world an economical service." The question now is, how are other nations to be so induced, and to what length is the effort to be carried?
At first sight, it will probably be said that if treaty engage- ments and the interests of their own revenues will not induce -them to stop such a practice, we have no alternative but to let them take their own course. The only way to meet this argu- ment is to point out the result to this country, if other nations -were to apply the system of bounties on exportation to all their leading articles of produce and manufacture. For it would not be fair, in discussing a principle, to say that because the sugar trade is the only one which happens at present to be the sufferer, it must take its chance as long as the consumer reaps the benefit. Let us suppose that the other countries of Europe became so ,enamoured of the system of export bounties which they now apply to sugar, as to extend it to the rest of their produce and manufactures. It is clear that the ultimate result would be the ruin of every British industry, and consequently so great a re- duction in the number as almost to amount to the extinction of those very consumers who, according to some political economists, should enjoy the benefit of such a system, regardless of its effect on the trade of the country.
If I am right in this conclusion, it surely becomes a serious question, and one which ought to interest all true free-traders, what steps this country should take in inducing, as you put it, other nations to relinquish so bad a system. How is a commercial treaty to be enforced ? We cannot go to war about it. We can, however, as a last resource, go to commercial war, and though it may at first sound a strange and heterodox proposal to free-trade ears, it will, I believe, be admitted, on close examination of the subject, to be perfectly sound policy, all other efforts to check the practice having failed, to levy a duty on any commodity which is exported from a foreign country under a system of bounties.
In the extreme case which I have put, how could the inevitable disaster to this country be otherwise averted ? If the principle be sound in the extreme case, is it not equally sound if applied to the existing case of sugar ?—I am, Sir, &c., A. W. GADESDEN.
[It seems to us perfectly clear that, economically speaking, there can be nothing but an advantage in countervailing the evil system -of bounties on exports by exactly equivalent duties on imports. But of Course this would apply solely to imports coming from the countries which granted the bounties, and not to imports of the same class brought from elsewhere. And of course, again, it is always a great question whether the general disturbance caused to trade by the bounties is severe enough to warrant the imposition of countervailing import duties in what would other- wise be a free port.—En. Spectator.]
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