MR. CHAPLIN AND A SHILLING DUTY ON CORN.
WE very greatly regret that Mr. Chaplin, speaking at a farmers' dinner in the North a week ago (on August 11th at Wynyard Park), should have been unwise enough to suggest the imposition of a shilling a quarter duty on corn in order to provide the nucleus of a fund for old-age pensions. That a Cabinet Minister should encourage such a proposal, and with an obviously Pro- tectionist intent, is a matter which cannot but be a subject of grave concern to all thoughtful Unionists,— to all Unionists, that is, who care for the essential objects and interests of the party, and who realise how important it is that the ruinous policy of Home-rule, which is not dead but only comatose, should be faced with a united front. It is true that Mr. Chaplin is not a Cabinet Minister of the first rank, and it is by no means probable that his speech has received the sanction of the Prime Minister or of his chief colleagues; nay, it is practically certain that it did not ; but, nevertheless, the speech can- not but have a very disturbing and irritating effect. The present period in the life of every Ministry is always more or less unfavourable. A Ministry is bound to make enemies as it gets through its work, and at the same time the initial enthusiasm is sure to have slightly evaporated. What we want now, then, is concentration, not an eccentric movement. Depend upon it, if Mr. Chaplin's hankerings after a return to Protection—we cannot admit the plea that his faux pas is only a little one—are not sternly repudiated, we shall see a serious split in the party. The Free-traders among the Unionists are not as noisy as the Protectionists, but they form, we believe, the majority of the party, and they would, we are certain, view with the utmost indignation and alarm any im- position of a tax, however small, on the food of the people.
Though we are most strongly opposed to Mr. Chaplin's reckless suggestion, we do not for a moment ask that the matter should be treated on high-and-dry economic grounds, or that it should be set aside with the remark that it is contrary to the principles of Free-trade, and so cannot be considered. We are quite willing to consider it on its merits, for the more it is considered the more clearly will it be seen that the proposal is not only politically dangerous, but that it would be highly injurious to our commerce and industry. We are not, that is, in the least afraid of Mr. Chaplin's proposal being carried, for it will not stand serious discussion, but we are afraid of the fact that it has been put forward by a Cabinet Minister having an injurious effect on the Unionist party. Mr. Chaplin's actual words had, however, better be quoted before we attempt to show how injurious would be the effect of the reimposition of the shilling duty. After deprecating the idea of a five-shilling duty, Mr. Chaplin went on :—" If the gentlemen who made this suggestion had limited themselves to the old shilling duty upon grain it would have been different. He remembered its repeal, in the first year he entered Parliament, by Mr. Lowe. It was notorious that the price of bread did not alter unless and until wheat rose or fell at least four or five shillings. When the shilling was first taken off bread never altered one farthing, nor would it if the shilling were reimposed." The only objection to the tax at that time was purely sentimental, and to get rid of what Mr. Lowe called "the last rag of Protection." But no Chancellor of the Exchequer, continued Mr. Chaplin, would repeal a tax on such grounds now. "He believed he was not far wrong in saying that the shilling duty would produce two millions or more, and that would be a nice little nucleus for any modest scheme of old-age pensions proposed, and well worth considering." It will be noticed that Mr. Chaplin's main argument is that the price of bread would not rise, even though we were raising a couple of millions sterling or more by a duty on corn. If that is so, where, we should like to ask him, would the two millions come from ? Even the policy of Protection will not give us money ready-made, and produce two millions of golden sovereigns out of nothing. Those two millions must be paid by some one. That they will not be paid by the foreigner who grows the wheat is certain. He sells it now as low as he possibly can, owing to the fierce competition for the British market, and he will not be able to lower his price and still make a profit. The money, then, will have to come out of British pockets. But if those pockets will not be the pockets of the consumers of bread, as Mr. Chaplin declares, they must, we suppose, be the pockets of the bakers. But if the bakers are not to sell bread any dearer, and yet are to buy their wheat dearer, they must do one of two things. They must either diminish their profits or else pay their workpeople less. But profits, except in rare cases, are by no means larger in baking than in other trades in which there is free competition, and therefore the taking of the two millions out of profits is by no means easy. It will be no easier to reduce wages, which, of course, are settled not by the gains of the baker, but by competition in the labour market. Under these circumstances, it is far more likely that the Bakers' Associations, which largely control the price of bread, would put up the price. Mr. Chaplin says confidently that bread does not rise or fall even when the price of wheat varies by four or five shillings. That is very possible, because the rise or fall is regarded as only temporary. If, however, a shilling duty is put on, it at once becomes obvious that the rise is permanent, and that there can be no compensating fall to balance it. Hence a rise in the price of a raw material produced by law will produce a rise in the finished article, while a natural rise which is subject to fluctuations may not. But even if we were to assume the truth of Mr. Chaplin's assertion that a shilling duty would not cause a rise in the price of bread, and if the whole of the two millions fell on the bakers, there are still plenty of capital objections to his scheme on the ground of public expediency,—which we repeat is the only ground on which we desire to dispute the matter with him. We must not forget that if wheat, and, we presume, oats, barley, and rye also are taxed, the farmers who use these grains as feeding stuffs, and the breeders and keepers of horses and cattle, will suffer. They must pay another shilling a quarter for all their grain, for they, at any rate, have no convenient bakers on whom to shuffle off the obligation. But that will be a very serious matter. English agricul- ture in pastoral districts has benefited a great deal by the fall in the price of the various grains used as feeding stuffs. Again, wheat, or rather flour—flour must of course be taxed if corn is—is a raw material in several industries, the chief of which is the biscuit industry. British biscuits at present go all over the world, but if the price of the raw material is increased our great biscuit-makers will find competition with foreign biscuit- makers far more difficult. It is even possible that with flour taxed American biscuit-makers might find it profit- able to sell biscuits here,—i.e., to send us wheat in the shape of biscuits, and so avoid our taxation. In that case we should have to put biscuits into the schedule of the new Chaplin tariff ! Even then, on the most superficial examination of the proposal, it is clear that it must inflict a pecuniary loss either on the consumer, or if not, then on the bakers, the farmers who use cheap grain for fatten- ing beasts, and on all those who use flour in large quanti- ties as a raw material.
If these reasons are not strong enough to condemn Mr. Chaplin's proposed revival of the Corn-laws, there is one which should specially interest all Unionists and Imperialists. If we tax corn we must tax the corn of Canada and of Australia. It would be useless to exempt Colonial corn, for if we did so we should collect no money. All the American wheat would be imported as Canadian, and that and the Australian would supply our market. But to tax so important a Colonial product as corn would deal a heavy blow to the Empire. As we have endeavoured to make clear on previous occasions, the Empire rests on Free-trade and on the open market which we keep in these islands. We do not grudge the Colonists their local octroi,s since they are foolish enough to think them a good form of raising revenue, but we keep the door here open to all our Colonies. Hence any one who hae anything good to sell prefers to send it to England, for there he is sure of a free market and of not having to submit himself to the importunities of the Custom House. If we are to do away with this and to begin building tariff walls, nominally for revenue purposes, but really to help the farmer, there can only be one end. The Empire of which we are so justly proud, and to preserve which the best Englishmen would place no limits as regards the sacrifice of life and treasure, will begin to fall in ruin, for its foundations will be sapped.
We have by no means exhausted the reasons against Mr. Chaplin's suggested return to a protective Corn-law. For example, we have said, nothing as to the injury to trade done by the friction of Custom House inter- ference, and the necessity for finding large sums of money in cash before a cargo of corn can be cleared from bond. The Custom House must be paid in gold, and gives no credit. We must, however, be content with what we have said already, and with this one piece of advice to Mr. Chaplin. If he really wants to help British agriculture, let him give up talking about a shilling duty on corn, and inferring that two millions can be raised every year from corn and yet no one be a penny the worse, and keep his attention fixed steadily on the gross injustice to agriculture which still exists in our rating system. There, indeed, is a substantial grievance. As long as the professional man or the retired man of means pays rates only on his living house, and the shopman or manufacturer pays only on his house and premises, and nothing on his stock-in-trade and material, while the farmer pays rates not only on his house and his farm-buildings, but also on half the rateable value of the land, which is a part of the raw material of his trade, so long he is unfairly treated. Let Mr. Chaplin get the Government to take up the whole question of rating and do away with the wrongs endured by real property, and he will not only be acting as justice requires, but doing far more to help the farmer than by a return to Protection not large enough to give a great material aid to the land, and yet large enough to do an injustice to the people at large. Unless and until the idea of Protection by means of new indirect taxes is totally banished from the minds of those who wish to help British agriculture, British agriculture will never really be helped, though doubtless the Unionist party may be greatly injured.
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