THE ALLEGED NEED FOR PROTECTION.
(TO THE EDITOR OP THE "SPECTATOR."]
Sin,—Will you allow one who is by no means a Pro- tectionist to make a few observations on your article in the Spectator of July b'th entitled "The Alleged Need for Pro- tection"? You write :—
" As long as we do not forbid the banns by a high tariff, no foreign nation can ever grow rich and prosperous without benefiting us commercially It will either buy our goods with other goods, or else will hire our capital with those goods."
But there is a third alternative conceivable, an alternative which many people believe is already operating on a growing
scale, and may ere long operate on a much larger one. Surely it is possible for the nation which supplies UB with
goods to pay itself with our capital, and so dispense with the costlier alternative of " hiring " (and incidentally paying interest on) its borrowings from us. That as a matter of fact America—the country to which your article specially refers—has been doing this of late years appears indisputable. Putting this aside, however, and admitting for the sake of argument that the creditor nation will have to " hire " our capital with its goods, your words involve a fallacy unless you are prepared to maintain that it is pretty much the same thing to us, as a nation, whether our capital is invested at home by ourselves or abroad by others. This I can hardly believe that you would seriously maintain. I may add that M. Yves Guyot's article in the current Contemporary Review is shot through and through with similar, and even worse, [The proof that we are not living on our capital is to be found in the fact that instead of diminishing, it is increasing every year in amount. If it were wasting, how could not only the Income-tax but the moneys liable to the Death-duties be constantly increasing in amount? Money had far better be profitably invested abroad than unprofitably at home. But, as a matter of fact, there is still plenty of room for the invest- ment of capital at home.—ED. Spectator.]
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