1

70 million quintals. If the tax worked perfectly, the result should be 70,000,000 quintals × 7 francs, or an annual charge of 490,000,000 francs levied on the consumers of bread, not for the profit of the Budget, but for that of the owners of wheat fields. But, according to an estimate made by M. des Essars, the director of economic studies to the Bank of France, the duty has only averaged half that amount since 1894, viz., 3.50 francs, instead of 7 francs. This gives 245 millions, borne by the consumer, who buys wheat on the market, either to eat in the form of bread, or to use for sowing, or for manufacturing purposes.

A hundred kilos of wheat should yield a hundred kilos of bread. If the 7 franc duty had its full effect the price of every kilo of bread at the baker's would be raised by 7 centimes. The two kilos of bread, which is the indispensable minimum for a French family of four, would at once subtract 14 centimes from the workman's wages. These 14 centimes cannot be regarded as a profit to the 2,235,000 small proprietors of little agricultural holdings of less than one hectare; they go to swell the profits of the 711,000 proprietors of holdings averaging from 10 to 40 hectares, and the 138,000 owners of large estates of over 40 hectares, whose property includes corn land. This is not universally the case, and even when it is, cereals only occupy part of their land.

According to the Agricultural Enquiry of 1892, the cultivation of cereals occupies 29 per cent., or less than one-third, of the area devoted to agriculture. In the departments, where it is greatest, we have these figures:-Ille et Vilaine, 52 per cent.; Eure et Loir, 51 per cent.; Somme, 48 per cent.; Pas de Calais, 47 per cent. The south is obliged to buy wheat.

2

Though there are in France 4,800,000 proprietors of small holdings (below 10 hectares) 2 their total content is only 12,571,000 hectares, whereas medium holdings represent a total of 14,313,000 hectares, and large estates 22,806,000 hectares. Putting small holdings at 100 hectares, the proportionate amount of the others would be 292 hectares, or nearly two-thirds more. But, as regards the number of holdings, the proportion is reversed; for 100 holdings above 10 hectares there are 565 below, and however the duty on wheat works, it must be to the detriment of these 565 small proprietors and the profit of the 100.

So, too, with taxes on live stock. Small holdings of from one to five hectares contain 942,000 hectares of meadow land; and those of from five to ten hectares 977,000, giving a total of 1,919,000 hectares. Medium holdings (10 to 40 hectares) contain 2,388,000 hectares; large estates, 2,039,000; total, 4,427,000 hectares of meadow land. That is to say, the proportion of meadow(1) A quintal equals 100 kilogrammes.

(2) A hectare equals 2 acres.

land in large and small holdings respectively is 223 to 100. Consequently taxes on live stock can only have been imposed for the benefit of the owners of medium and large estates, who are a small minority of persons.

According to the Enquiry of 1892, the area devoted to vines was 1,900,300 hectares, or less than 4 per cent. of the total agricultural area. In only eight departments did the proportion exceed 9 per cent. Formerly France had a natural monopoly of the wine trade; but Protectionists let foreigners know that there were countries where wine could be procured under better conditions, and then France was obliged to protect herself against this competition. At the same time, the Protectionists said to the winegrowers: "Produce wine, no matter of what sort. Frenchmen will be obliged to drink it, as we shall keep out foreign wines."

Hérault and Aude had previously produced strong coloured wines, which were useful for mixing with the light wines of the centre. The vine growers now chose the Aramon, as the best vine, and adopted the tall variety, which gives abundant harvests, but produces weak wine with little alcohol. Spanish wines had to be introduced to mix with this, and then the South cried out at the dull market, without admitting the cause, viz., that Protectionists had diverted wine growers from producing what they ought to have produced. Meanwhile our export trade did not increase. In 1891 we exported 2,350,000 hectolitres, in 1901 2,325,000, and in 1902, 2,358,000. Thus at the end of eleven years, and in spite of abundant harvests, we had made practically no advance.

66

France has not confined itself to a passive policy; we have also embarked on an aggressive Protectionism," to use M. Smet de Naeger's expression, by giving bounties to the sugar industry.' The authors of the Law of 1884, asserted that "French agriculture depends upon the cultivation of beetroot." Yet out of 35,000,000 hectares of arable land, this plant has lately occupied at most 300,000 hectares, or one in 800. 82 per cent of the sugar industry is situated in five departments; the number of sugar manufacturers has fallen from 449 in 1884 to 332 in 1902; these 332 manufacturers had a surplus of 90,436,910 francs in 1900-1, plus 21,330,762 francs in bounties and rebates. As the yield of sugar was less in 1901-2, their surplus was only 87,231,584 francs, plus 12,626,436 francs in bounties and rebates. Deducting a duty of 30 centimes per ton of beetroot, the total of the surplus between the two periods, 1884-5 and 1901-2, amounts to more than 936 million francs upon an industry which is only worth 320 million 1 See The Sugar Industry on the Continent, by Yves Guyot: Journal of the Royal Statistical Society, 30 September, 1902.

francs. These figures do not include the bounties and rebates and the export bounties, nor the 172 million francs which the Colonies have received during the same period for an industry not worth 50 millions.

To secure these advantages the French consumer pays 60 francs consumption duty, and 4 francs tax on refining, making 64 francs per 100 kilos of sugar, without counting the tax of 30 centimes per ton of beets, and the 40 centimes supervision tax on refineries. To this, however, should also be added the export bounty, which further raises the price of sugar to the consumer to an extent equal to the bounty. The French householder has therefore to pay at least 66 francs per 100 kilos for an article which is worth but 30 francs, namely, double its value.

While the consumer pays 66 francs the Treasury receives only 36 fr. 50, the consumer paying therefore 45 per cent. more than the Treasury receives, and this 45 per cent. is imposed for the benefit of private individuals. Instead of contributing to the general expenses of the country in the interest of all, it goes to swell the profits of a small knot of manufacturers. In 1901 the tax on sugar showed a minus value of 42,233,000 francs; the bounties were eating up the duty.

At the same time the prices of beetroot and sugar fell, because the object of the manufacturers was not to sell their produce at a profit, but only to receive a bounty, and the sugar industry would have been involved in a senseless crisis in Germany, Austria, Belgium, and Holland, as well as in France, if the Brussels Conference had not suppressed the bounties from September 1st, 1903.

Having appealed to the interests of the wheat growers, the promoters of the Law of 1884 did not fail to appeal to the interest of the working classes. But here are the facts. In 1884 there were 43,886 men, 6,749 women, and 6,080 children employed in sugar factories. In 1901-2 there were only 42,774 men, 3,196 women, and 2,415 children. Their wages in 1884 were 3fr. 90 for men, 1fr. 92 for women, and 1fr. 73 for children; in 1901-2 they were 3fr. 98 for men, and 1fr. 73 for children. Women alone had risen to 2fr. 20. Such was the negative effect produced by the law from the point of view of wage-earners. As to our exports, sugar has never reached an amount representing more than four per cent. of the whole total.

I shall be told that Mr. Chamberlain does not propose to give any more bounties to any industry. That is true; but bounties are a logical result of a Protectionist system, and the experience of the sugar industry is the clearest demonstration of the contradiction between Protectionist promises and actual fact. These

bounties are paid to two or three hundred manufacturers by the whole mass of consumers; a deficit is created in the Budget; ; the agricultural interest is invoked, though only one hectare in 800 is concerned in the matter; there is talk of the interests of the working classes, and of the national labour power, yet the number of workmen employed remains as stationary as their wages; and the very men who have received close on a milliard from the French consumers would be brought to certain ruin, if the system did not come to an end!

M. des Essars has picked out the catalogue prices of 46 articles sold by the leading grocers of London and Paris, and assuming that the buyer buys one unit of each of these commodities, he finds that he will have to pay 109fr. 95 in Paris, and 84fr. 09 in London, or exactly 30.78 per cent. more in Paris than in London. But the French prices include 11fr. 34 customs and octroi duty, whereas these represent only 1fr. 57 in the English prices, so that the net price of the Paris goods is 98fr. 01, and of the London 82fr. 52, or a difference of 16 francs, making 19 per cent. to the detriment of Paris.

Undoubtedly other elements besides the customs and octroi duty enter into the difference of 30.78 per cent. between the Paris and London prices; but no one can affirm that Protection does not operate in the direction of checking commerce, diverting commodities towards the free markets in preference to the protected ones, and forcing the retail dealers to pay a duty in advance upon which they must make a profit over and above that on the price of the goods themselves.

Protectionists ought to rejoice in this general dearness, since it is the very object of their policy; but consumers tell another story. According to the census of occupations taken in 1896, and published in 1901 by the Ministry of Commerce, agriculture, which counted 60-52 per cent. of the working population in 1866, when the duty on corn was Ofr. 60, now represents only 47 per cent. in spite of a duty of 7 francs; but, as we have seen, most of the proprietors have no interest in Protection. The small holdings which employ only from one to four wage-earners, and have no corn to sell, represent 92 per cent. of the whole. They have no interest in the 7 franc duty. So that it concerns only 8 per cent. of the agricultural proprietors.

Industry represents 35 per cent. of the working population; but the small factories which do not deal with raw material have no interest in Protection, and the number of establishments employing only from one to four wage-earners is 85 per cent. of the whole.

Commerce represents 5 per cent., and merchants and trades

people alike have as great an interest in freedom of exchange as the banks have. It is the same with the liberal professions, which represent 7 per cent.

Then who has an interest in Protection? Eight per cent. of the agriculturists, or about 3 per cent. of the total working population; perhaps half the 15 per cent. who represent industrial establishments employing more than four workpeople, viz., 4 or 5 per cent. of the working population. That is to say, not ten people in a hundred of the working population of France have any interest in Protection.

But even this very modest figure is exaggerated, for it includes wage-earners as well as employers. Now every wage-earner without exception, whether he belongs to a protected industry or not, has an interest in cheap living. Under a Protective system there are nominal wages and real wages. Real wages are the residue that Protection leaves, after it has first subtracted so many quarters of an hour, or in some cases, so many hours of labour, for duties on bread, meat, clothes, boots, warming and lighting. These quarters of an hour, or hours of labour, are taken from the workman, not to support public services, but to pay a private tax to landowners and manufacturers. They represent the feudal dues levied, not in the public interest, but for the profit of individuals. The French workman remains indifferent to the Tariff question, only because he is ignorant of the real state of things; but as soon as his economic education has advanced a little, he will claim his whole wages.

Now out of the eighteen million odd persons of both sexes who form the working population of France, 4,281,000 are wagepayers, and 13,858,000 are wage-earners. Therefore 75 per cent. of the working population has interests opposed to Protection. Commerce is represented by 5 per cent., including both employers and employed. Add the small agriculturists, who are nine-tenths of that industry, and the small manufacturers, employing less than four workmen, who represent four-fifths of the industrial calling, and add further the persons living on their own means, the pensioners, the members of the liberal professions, the officers who want to live cheaply, and the soldiers who have also an interest in cheap living, and we shall not find 5 per cent., not one person in twenty, who has an interest in Protection.

Yet this one person in twenty has persuaded the other nineteen that it was in their interest to let themselves be robbed by him.

V.

The Minority against the Majority in the United States. In a report drawn up for the Institut International de Statistique, on the reflex action of customs duties in the United States,