COMMERCIAL CONDITION OF FRANCE.
THE Chamber of Commerce of Rouen is at its wits' end. Baffled in its attempt to trace out the causes of the crisis which " at this moment is raging over the commerce and industry of a great part of France," and hopeless of finding a remedy, the Chamber, in its despair, has called in a foreign physician. The foreign physician is only too happy to respond to the call. Long since he has watched the progress of a serious disease on the other side of the water, of which both the causes and the cure appeared to him as clear as day: At the same time, the native treatment applied to it had offended against every article of his scientific creed. How fortunate, then, to be called in to prescribe It is highly amusing to observe the honest zest with which the Liverpool Chamber of Commerce replied the other day to the inquiry from Rouen. It summed up the causes of the French crisis in two words--politics and protection. No Evangelical minister called in by the family to prescribe for a young lady suffering under a Ritualistic regime, could improve the occasion with greater gusto and unction than the Liverpool Free-Traders in their answer to the suffering Protectionists. Free Trade supplies the flourish for the opening-paragraph--" Commerce being nothing more than an exchange of the superfluous pro- ducts of one country for those of another, the less restricted their exchange is by prohibitive or so-called restrictive duties, the greater will be its amount." Free Trade supplies the flourish for the end—" Finally, a remedy, as we believe, is to be found in the universal adoption of Free Trade." And in the middle, where the causes of commercial suffering common to both countries are set forth, Protection supplies the chief material for the list, though in this case the responsibility for the disastrous results of high duties is civilly transferred to the shoulders of the United States. The gist of the English answer is this ; you complain of depression, and can neither understand nor cure it. The immediate and temporary cause may be the results of the American war, and the high tariff of the United States ; possibly, also, some financial influence, of which you can best judge yourselves. But your energies will not be elastic, your depression cannot be shaken off till free trade is universally adopted, and armaments are reduced. The subjects of the Sovereign who, more than any one else, as self-constituted arbiter of European affairs, has been responsi- ble for the enormous military expenditure of the last fifteen years, are significantly reminded that Europe is at this moment maintaining unproductively nearly three million soldiers, at a cost of about 80,000,0001. per annum. The sentences in which the certain local and temporary causes affecting English trade alone are described read like mere " padding." They are marked by a dry callousness which contrasts remarkably with the eloquent warmth displayed in the remainder of the document.
We do not ourselves quarrel with any of the sentiments of the able President of the Liverpool Chamber of Commerce.- They are of the purest orthodox type. At first sight, it is true, the crisis in France, which gives rise to the inquiry, appears to have been somewhat exaggerated. A superficial glance at the official barometers of national prosperity, the state of the revenue, and the tables of exports and imports, might possibly suggest a doubt whether the general condition of trade and industry in France could be as disastrous as the cotton-spinners of Rouen lead us to suppose. The same might be said of the French revenue and trade accounts, as was said by some of our contemporaries with regard to those of the United Kingdom. They seem to point to stationary, but not to retrograde prosperity ; to a check in that rapid movement in advance to which both countries have so long been accustomed, but not to a state of alarming crisis. The indirect taxes in France produced in the first eight months of this year are about 19,440,0001., against 19,640,0001. in 1866, showing a decrease of only 200,0001., or 1 per cent.—a differ- ence so slight as to justify us in saying that this branch of the revenue was practicably stationary. The tables of imports and exports for the same period (exclusive of the move- ments of the precious metals) show, on the aggregate- transactions with foreign countries, a falling-off of about 2,720,0001. on a total of about 160,000,0001., or less. than 1 per cent. Again an infinitesimal reduction on so large an amount. But a closer inspection of these tables does certainly reveal some very unsatisfactory features. It is not enough to look at the totals. There are some importations which, far from being favourable symptoms of advancing com- merce and increased activity, simply point to short crops and disappointed hopes at home. The fractional decrease in the total of the French foreign trade arises thus : excess in imports, 9,640,000/. ; decline in exports, 6,920,0001. ; balance of deficiency over excess, 2,720,000/. Thus it appears that the falling-off in the exports is rather serious,—it amounts to 8 per cent., while there is a considerable increase in the imports. But what is the nature of the increase ? The item of "grain and flour " alone accounts for upwards of four millions sterling, an excess which proves nothing beyond a deficient harvest at home ; and the unfavourable impression is height- ened by the fact that the exports show a decline of nearly five millions sterling in the same item, " grain and flour." Thus, in the first eight months in the year, France has had to buy food to the value of four millions sterling more, and to sell food to the amount of Sve millions less, making an aggregate of nine millions against her, without any compen- sating element. Again, in the exports, there is another similar unfavourable item. France sold 1,800,000/. less of brandies and wine in 1867—another indication of bad crops—while, on the other hand, she was obliged to import considerably more cattle. Thus the agricultural interests seem to have been hard hit in every direction, and their sufferings would naturally react on general trade. As to the manufacturing interests, the silk trade seems to have suffered most, the importation of raw silk, it is true, shows an excess of about 700,0001;, but most of this was re-exported in its raw state, the export of raw silk showing also an increase of about 600,0001. The export of silk tissues, on the other hand, shows the very serious decline of about 1,200,0001., a heavy blow for Lyons. On refer- ence to our own Board of Trade Returns for the same period, we find that we ourselves have imported 500,0001. less of silk manufactured goods, while, like the French, we have imported a large addition of the raw material, amounting to upwards of a million sterling in value. But the Rouen Chamber of Com- merce are mainly interested in cotton. The French imported 3,000,0001. worth less of cotton than last year. The quanti- ties not being given, we are unable to judge what part of this Bain is due to the lower price of the raw material, which is a favourable circumstance, and what part to the stagnation of trade and the difficulty of selling the manufactured article, which is an unfavourable circumstance. In England, where there is also a very heavy falling-off in the same item, we calculate that half is due to price and half to diminished quantities, the quantity imported showing a decline of only 16 per cent., while the deficiency in value amounts to 33 per cent. But, irrespective of the number of bales imported or of the price of the raw material, the Rouen manufacturers can point to a decline in the amount of manufactured goods which foreigners have taken from them. They have sold 500,0001. less of cotton goods this year, or 20 per cent. less than in 1866 ; and in this respect they have individually suffered much more than their English competitors ; for, though the export of cotton piece goods from England has diminished by the large sum of 3,500,000/., this sum is a decline, not of 20 per cent., as in France, but of less than 10 per cent. But though the position of the individual manufacturer in France may be worse, the blow to English trade from this source is infinitely heavier, in proportion to the number of hands employed and the predominant position held by the cotton trade in English industry.
The result of a closer inspection of the French tables of imports and exports evidently suggests a more serious retro- grade movement than appears at first sight. The results of bad crops are most apparent, and present by far the highest totals, while the figures which especially point to losses affect- ing the manufacturing interests seem in themselves low com- pared with the immense resources of France, though the per- centages of decline to the total trade are in many cases very high. Ten per cent. less on silk tissues and 20 per cent. on cotton tissues represent very bad times. We are not sur- prised that the organs of French commerce are dissatisfied. There is evidently much stagnation. If, however, they call the present state of things a " most serious crisis," though we make an allowance for a bias on the part of the cotton interest, which has suffered most heavily, we suspect that there must be influences at work beyond those which appear in published returns. The Liverpool Chamber of Commerce was ready at once, as we have seen, with an explanation. " This is merely a culminating outbreak of your constitutional dis- order, Protection, heightened by the results of gigantic unpro- ductive expenditure or standing armies."
The President of the Rouen Chamber is not unlikely to say to himself, on receipt of the English reply, " My dear colleague seems to ignore that there have been many years when, living under this same system of Protection, we have thriven to our hearts' content. To us this year is evidently exceptional, and we wished to be informed, not on the first principles of political economy, but on the special circumstance which must now be at work. We do not believe that Free Trade would have averted the present crisis, and you say nothing to prove it beyond well known generalities."
We do not deny that such an observation might be unjust ; but then Protectionists are proverbially unjust, and have an awkward habit of misinterpretation. If we might follow the example of the Liverpool reply, and also " improve the occa- sion," we would say to many of the zealous propagandists of free trade that, in one respect, they often fail to do justice to their cause. They are so convinced of the universal truth of their own doctrines, that they refuse to put themselves for a moment into the position of their adversaries. Consequently, they cannot put their finger on the precise fallacy which interferes with the adoption of their creed. Inability or unwillingness to understand your opponent's case precludes success in convincing him. Opinion in the United States, at this moment, is in a state of transition which makes it pecu- liarly important for good free traders to render all possible assistance to the converts who are beginning to perceive the truth. What, above all, is necessary, is to study the appli- i cation of free-trade principles to the particular circumstances of different countries. Few of the rankest heretics dispute the truth of the abstract principles, and every intelligent American admits their application to our own case. But as, in the United States, the blessing of free trade is more likely to come significantly home to the farmers of the West than to the manufacturers of the East, so it is clearly possible thae free-trade appeals more convincingly to one country than to another. Mr. Mill's authority is often quoted in support of the view that in young countries Protection may be serviceable at a certain period. Again, it is clear that the peculiar tem- perament of capital in different countries will determine whether new industries are best likely to grow under a certain amount of protection, or under the freest liberty to enterprise. Where capital is bold and prophetic, it will perceive its advantage better than a paternal government ; but in other countries capital shrinks from what is new. So, again, the corner-stone of the free-trade system is the benefit of the con- sumer. And the more, in any given country, the interests of the consumers are all-pervading, while there is a large non- producing class, either above or below the producing classes, or both, the more readily will free trade become a national faith. Where everybody is a pro- ducer himself, there is far more likelihood of the im- mediate advantage to himself, from Protection obscuring his vision as to the advantage to be derived from buying all he has to buy cheap. The more a country has to buy, the more it is likely to worship Free Trade ; the more it has to sell, the more slowly is it likely to come round to the truth. Far be it from us to dispute the universal advantage to be derived by all nations from the freest interchange of goods, but the argu- ments to be used in enforcing its adoption must deal with the special circumstances of every country. The reiteration of the bare, the abstract principles, makes others believe that their own case is misunderstood, and that their exceptional circumstances are overlooked. England has been most suc- cessful in gaining converts when the opportunity has been given for going thoroughly into detail. The presence of the enthusiastic but most intelligent free traders who represented us at Vienna bore excellent fruit, because their special know- ledge enabled them to convince the Austrians in the spirit of Austrian interests. So-called commercial treaties have this great advantage—they are victories of conversion. We secure no immediate profit, we do not barter advantages. They are the seal impressed upon those whom we have converted to our creed.
Our space prevents us from dealing now with the other causes assigned by the Liverpool Chamber to the present derangement of trade in France and at home. We reserve their discussion for another occasion.
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