MERCANTILISM AND COAL
A Short History of Mercantilism. By J. W. Horrocks, D.Lit. .(Methuen and Co. 7s. Gd. net.)
Capitalist Combination in the Coal Industry. By D. J. Williams. (The Labour Publishing Co. 6s.)
HOWEVER you define Mercantilism, whether as the interference of politicians in trade, or as the helP that traders may expect from their Government, in England at any rate it has generally coincided with the policy of Protection. It has nearly always been restrictive. It was so too when. 'on other lines than those usually indicated by the word Protection, it contributed to the loss of the American Colonies, just as it had lost to Spain her Empire. Restriction of trade, particularly of the overseas trade of this island, is economically harmful and only to be justified on grounds of defence, security or . possibly of Imperial sentiment. Abroad Mercantilism has . aimed at expansion too. This in Germany made her Govern- ment and traders alike distrusted, and contributed to the forces that drove her into the Great War. - Quite exceptional men like Colbert have been able to help their countries' trade by using their position to enable merchants or manu- facturers to. take advantage of political events, but .British traders have had greater confidence in themselves than in politicians -where expansion was possible. It would be a Thousand pities if the excellent intentions of our Board of Trade and Department of OVerseas Trade should ever sap the Confidence of the real expert. On the evidence of the past the verdict is that when Mereantilisni has been restrictive and effective, it has been harmful ; when it has attempted to be expansive, it has been harmful or ineffective. This is the lesson of Dr. Horrocks's HistorY. " His book is large enough to trace the outline of his subject in England from Plantagenet times and to deal -with its manifestation on the Continent, in America and briefly in India and Japan. It is not long enough to admit of controversial arguments; and admirers of Mercantilism will criticize the author for not supporting his statements, for example, that Cromwell's Navigation Act did little to give us the lead in the carrying trade. But we have no doubt that Dr. Horrocks could amply prove each statement if he would write a book not limited to " A Short History."
Mercantilism had become an accepted policy which was rarely blamed in theory except by some vox_ clamantis in deserto until .Adatis Smith . astonished._ the world and set it thinking in England and spasmodically elsewhere that perhaps it would be well to let people share their products more freely ; perhaps " good " bargains could be made without loss on one side even' if the other was satisfied, and perhaps the " visible balance " of gold was not worth so much sacrifice. Nowadays The Wealth of Nations is presumably voted vieux feu by those who are too much up to date to read it, and certainly the emphasis of its teaching now needs some shifting. " We are all Socialists now," and the advance of publicity and quick communication ought to render Governments able to help in some directions without harm. The present danger to trade is not lest the State (i.e., ministers or bureaucrats) should openly or secretly interfere with trade in ignorance or for their own ulterior objects, but lest. political _ bodies should for Politieil erida which-May in theniSelvei be good or bad, possible or impossible of attainment, get such control of an industry that they mayin it. A new book on the coal industry lea-ds us to consider the threats to that great national industry froth a new form of the old Mercantilism. Coal is not likely to- be affected by Protection here unless wages and costs of priidiietion rise so high that the consuming 4inblic demand foreign coal and are powerfully resisted by:the miners and coalowners. 1V1f. and_ begins- with an-- skein* of early combinations of -oivhera-, the - NeWeaStle Hostmen
.
and the northern " Vend.": HiS hiStory is interesting and Ife 7 writes on the whole without= -rancour, though:. occasionally there is an unsupportable gibe. •-•-SO- far as we have . been able to test them; hiS facts and fignies of recent combinations in the trade are correct, thOUgh We have a few"criticisms to make on thii side of his work. -First, he shows no con- sideration for the consumer, domestic or commercial, for the general public or other tiaders that need the cheapest fuel.' they can get. Any-gain at the expense of the idle Shareholders, he argues, should go to the miners. He gives no weight
to the principal object, apart from general efficiency, of the frequent combinations between coal companies and the iron and steel trades, which is to avoid the middleman's profit between coal 'producers and their biggest customers. (We -• have often stood up for the much abused middleman, con- tending that he could not exist unless he-did some good service.
Here it is proved that he can be eliminated and his continued presence would be parasitic.) Mr. Williams frequently brings in the names of Lord Rhondda and of D. Davis & Son, as typical combining capitalists, without mentioning
that Alfred Thomas and the first David Davis started with no more capital, except in brains and determination, than any
miner can command. When he writes of capital " watered " by bonus issues out of huge War profits, or of over-capitalization by new issues, we do not dispute his figures, but we doubt his justice. Of any huge profits realized during the Socialistic conditions of War-time control presumably eighty per cent. went to the Treasury as" E.P.D.," and profits due to higher prices were shared with the miners Under the sliding scale.
There cannot have been much left with which to water capital for the shareholders' benefit. In regard to over-capitalization by new issues no account is taken of increased needs. Trial borings and new shafts must cost twice as much as before the War, and all expenses borne by capital before a pit pays profits have increased. If the owners have • sinned in these ways, we will not defend them. The preventive lies in pub- licity and is to hand as Mr. Williams proves by writing his book.
The coal trade has dangers enough before it. At home gas and electricity encroach upon domestic use, providing equal heat from less coal. Oil-fuel is steadily increasing its substitution for steam coal at sea and for locomotion on land. Experienced coalowners will deal best for themselves and for the miners in such a position. It is too speculative for the State. The numbers and political influence of the miners arc great at home ; let them beware of pitting that apparent strength against the marketS of the world which reek nothing of their votes or their power to strike. Mr. Williams' ideal appears in his last sentence :--" The problem for organized labour is not to dissolve the combines but to wrest them from private control." So Mercantilism is his remedy for present evils. We judge him to be fair-minded enough to
gain by a corrective that we venture to prescribe. Let him read The Wealth of Nations and the Short History of Mer- cantilism.
Previous page
