CORN-DUTIES AND THE PRICE OF WHEAT.
[To THE EDITOR OF THE "SPECTATOR.']
SIR,—You did me the favour to insert in the Spectator of June 20th a letter in which I sought to prove from a com- parison of wheat prices in Paris, Berlin, and Liverpool that the import-duty could be shown to have been paid by the consumer in Paris and Berlin, and that, inferentially, our small duty of ls. per quarter had been paid by the consumer in ,Great Britain. It was impossible to prove directly that our .duty of Is. had been paid in Great Britain, because, in an article which fluctuates frequently many shillings per month, le. per quarter easily disappears in the fluctuations. It is like a needle in a stack of hay; one is sure it is there, although one cannot lay one's hand on it.
In referring to Paris and Berlin I used the words that they were importing wheat" at present" because it is clear that when France and Germany are not importing wheat, the price within those countries is subject to other influences. A "Revenue Official," Writing to the Times, and averaging the periods when France is importing with the periods when France is not importing, gives egares to show that for the whole of the last five years the average price of wheat in France was only 9s. higher than the iverage price in England, while the French import-duty is 12s. 2d. per quarter, and from those figures he infers " that import- duties on articles which can be produced within the. country do not raise the prices of those articles by the full amount of the duties. Consequently, a part, in many cases almost the whole, of the import-duty is paid by the foreign producer." Presumably his object is to show that Great Britain may safely put an import-duty on wheat because it is probable that a part, or perhaps the whole, may be paid by the foreign producer. Now, "Revenue Official" does not say how much wheat France pro- duced within the last five years, and how- much France imported, but the figureaare as follows :- Wheat grown in France daring the live years 18984902 212,997,000 qrs. of 480 lb. Wheat imported into France during the five years 1898-1902 9,645,000 qrs. of 480 lb.
Consequently, the French consumer paid to the French Govern- ment in the form of import-duty on wheat during the last five
years a sum of £5,867,375, and to the French producers a sum of .295,803,650 above the open market price. The case of France, however, does not correspond at all to the case of Great Britain, and that is where "Revenue Official's" figures, drawn from an average of five years, are not at all applicable to our case. By no stretch of imagination is it possible to conceive of the United Kingdom ever being nearly self-supporting as France is. We are invariably importers, France is an occasional importer, and the market reports show that when France is importing the French consumer invariably pays the open market price, plus the entire duty, and the same thing can be shown to be true of all high Protectionist countries.
Another curious misconception is still being made to do duty as an argument. Granted that the import-duty is paid by the importer of the grain, it is asserted that it does not find its way to the consumer of bread, being paid• in some mysterious way as yet unexplained, either by the grain merchant, miller, or baker, and support has been claimed for this theory from the fact that the price of bread in Scotland did not advance when the duty was imposed over a year ago. At the same time there has been a dead silence as to the price of bread in Ireland. Now, the facts are that when the duty was imposed the price of bread in Scotland was 1d. per 4 lb. loaf higher than it was over the greater part of Ireland, and there was more than a possibility that the price of bread in Scotland would soon drop to the Irish level. The converse took place when the duty was imposed, and flour was advanced ls. per sack of 280 lb. as a necessary con- sequence. The shilling was sufficient to turn the scale in Ireland, and the price of bread was promptly advanced to the Scottish level. Another interesting fact may be stated for the benefit of those who think that the price of bread does not closely follow the price of wheat. From the year 1880 onwards to the year 1894 the price of wheat steadily declined. The average price of No. 1 Northern, American wheat, which in 1880 was 49s. 3d. per quarter, gradually dropped until in 1894 it stood at 24s. 9d. per quarter. The average price of English wheat in 1880 was 44s. per quarter • in 1894 it had dropped to 22s. The price of the standard loaf in Glasgow was 71d. in 1880, and in 1894 it was 41d. The difference between the price in 1880 and the price in 1894 does not show a decline quite equal to the price of wheat, but during that time the cost of baking and distribution had considerably increased. It seems to be overlooked that bread is sold by the quartern loaf of 4 lb., and the smallest unit is a half-loaf of 2 lb. As 1d. is the smallest coin of the realm, it is impossible to divide it ; therefore, bakers are compelled to raise and lower the price of bread by id. per 4 lb. loaf, or }d. per 2 lb. loaf, which means as nearly as possible 4s. on the 280 lb. sack of flour. They must, consequently, raise or lower the price by the equivalent of 4s. per sack, and they are in the habit of meeting the movement up or down by an alteration in the quality of their bread, so that when their margin of profit is small the quality is somewhat lowered, and when it is large the quality is improved.
Previous page
