[TO THR EDITOR OP TIM "SPROTATOR.1
SIR,—As your fairness to those who differ from your views is proverbial, I venture to submit to your attention the following answer to your attack upon Mr. Chamberlain's new fiscal
policy.
You suggest that the commercial greatness of the United Kingdom during the nineteenth century was the result of Free-trade. But here it is surely important to bear in mind the fact that up to 1846 a system of rigid Protection was in force in that kingdom, and that the British silk industry was protected so late as 1860. On examining any diagram which shows the progress of British exports, the following phenomena are to be observed. In the period of Protection, which roughly ended with 1849, there was but a slow advance in our exports, with marked oscillations in the value of those exports. From 1849 to 1872, when Free-trade was in force, there was a prodigious expansion in the export trade. So that at first sight it would look as though Free-trade were the cause of this expansion.
But from 1872 onwards there is practically no advance. Our population increases, but our exports oscillate without rising, and even in 1900, a year of great expenditure from capital in this country (when coal is deducted, and allowance made for the fact that ships were not included in 1872), there is a positive loss as compared with 1872. This loss is a little more than made good in 1902, when the exports, with the necessary corrections indicated, were slightly in excess of those of 1872. In other words, the supposed cause of the great advance between 1849 and 1872 still exists, but it does not produce the effect which has been attributed to it. On further examining the diagram, it will be found that the period of great trade expansion was also the period of wars on the Continent and in the United States, and that with the close of these wars British trade ceases to expand. Other possible causes of the great trade development in 1849-72 were the gold discoveries and increased gold output, leading to a general rise in prices, the application of machinery to manufacture and transport, and the hesitating movement of certain foreign States towards low tariffs. It cannot, then, be affirmed with any cer- tainty that Free-trade produced prosperity in England, or that it was the cause of our trade expansion.
On the other hand, the opposite of Free-trade, Protection, has now been tested in numerous instances. It has not produced the effect opposed to prosperity,—viz., general depression and collapse in trade of the countries which have adopted it. I gather that you regard the United States as a wholly exceptional instance, attributing its prosperity to other causes than Protection. But in that case I meet you thus. I ask whether, granting that other causes than Protection may have produced prosperity in the United States, so in England in 1849-72 other causes than Free- trade may not have likewise produced prosperity ? And I further
ask whether such instances of great advance under Protection as Germany and Sweden afford are also to be pronounced wholly exceptional, and if so, why ?
Another question which has to be considered and answered by Free-traders is this : Granted that, as they assume, each country has some special capacity to produce some particular commodity, what are the commodities that England at the present time is specially fitted to produce ? For this question is all-important. How is our population going to live if our cotton industry is crippled by Southern mills operated with child and negro labour, and supported by a possible American export-duty on cotton, which has been discussed in the United States ? What is to happen to our iron and steel industries when the dumping process is seriously begun by the great works in the United States, which, as Mr. Jeans tells us, can produce far cheaper than the English works ?
If we had fifty years ago taken steps to consolidate the Empire, our Colonies would to-clay be supplying the cotton required, and Lancashire would be independent of American sources of supply, and would not have to ruu her mills short time because of cotton "corners." Even with the food-supply the dependence of this country on the United States is becoming a serious matter, as the Leiter "corner" showed that a bold speculator can take toll in millions of the British people, and send up bread, not a farthing, but three-halfpence. If a duty of two or three shillings a quarter means starvation for the poor, as we are told, what does a rise in prices of ten or twelve shillings through a "corner" mean?
And is it not a terrible indictment of Free-trade to confess that, as Sir Henry Campbell-Bannerman has told us, one-third of our population cannot buy enough bread and food even in this land of cheapness ? Inevitably we are reminded of Johnson's shrewd remark that eggs at twopence a dozen are not "cheap" in the Highlands, because no one has the pence with which to buy them.
144 Elgin Avenue, W.
[Mr. Wilson, like all Protectionists, is in a state of perturba- tion because our exports have not increased,—because, that is, the foreigner, owing to his foolish fiscal policy, has refused to take as good an equivalent for his imports as he might have done. As Mr. Wilson apparently imagines that we are going back as a nation, let him look at our article on " Bleeding to Death," in which he will find proofs of how much the national wealth has increased. As to his question, how are we going to live if our industries are crippled by the foreigner ? we should like to refer him to an admirable article in the Westminster Gazette of Wednesday. There he will see how Free-trade is actually inducing Americans to establish manufactures in these islands. Free-trade acts like the best possible bounty in encouraging all sorts of industries. One more point is worth noticing. Any comparison' of values between the year 1872 and the present time is fallacious, owing to the apprecia- tion of gold. Prices were much higher in 1872 than now. —ED. Spectator.]
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