Mr. Edward Atkinson divides the 29,074,000 persons representing the working population into three classes: CLASS I.-Persons who cannot be subjected to foreign competition, but who pay their proportion of duties on imports, and the enhancement of prices brought into effect by Protection ... ... ... ... 26,077,822 CLASS II.-Persons not subject to foreign competition, whose industry in many branches would be protected by the abatement of duties on materials of foreign origin used by them... CLASS III.-Persons occupied in arts which would require a re-adjustment if all duties were suddenly removed ... ... 2,396,295 600,000 Total, 29,074,117 So that in the United States, as in France, it is only a very small minority which can profit by Protection, and that at the expense of a very large majority. VI. Persons interested in Protection in the United Kingdom. Would the case be any different in the United Kingdom? I take these figures from the Annual Reports of the Inland Revenue: Small estates not exceeding £300, gross value ... ... ... 18,081 8,626 out of a total of 61,393 estates. These represent 43.6 per cent. of the whole number, but in value they represent £6,951,000 out of £288,869,000, or only 2-4 per cent. These small estates, even if they are situated in the country, will reap no benefit from the duties on corn, meat, and live stock; the profit will go to the owners of moderate sized estates, or to the owners of farms of over 25 acres, and especially to those of over 100 acres, which in Great Britain represent less than 20 per cent. of the proprietors, but include 70 per cent. of the agricultural land.' The application of Mr. Chamberlain's programme will supply the advocates of land nationalisation with a fresh argument. If we take the distribution of population in the United Kingdom in 1891, we find: (1) Return as to the number and size of Agricultural Holdings in Great Britain in the year 1895. (Board of Agriculture.) The term "occupied " includes persons retired from business, pensioners, persons living on their own means, and all persons who are following no specified occupation. With the exception of those who hope to get bigger incomes from their invested capital, and they are only a few, the rest of this class has certainly an interest in cheap living. All the professional, domestic, and commercial classes are interested in Free Trade. None of the industrial classes can want to see the prices of food increased. So that to 663 per cent. of the population, or two out of every three persons, taxes on articles of food will be prejudicial. There remains the section of the population called agricultural. But as Mr. Ritchie and Mr. Balfour said, in their arguments in favour of suppressing the duty of 3d. per cwt. on wheat, amongst these agriculturists there are many who want cheap feeding stuffs for their cattle, and many whose welfare as labourers is in exact proportion to the cheapness of what they consume. Lord Rosebery's eloquent utterance on the subject needs no repetition. VII. For the few against the many. Mr. Chamberlain supposes himself a democrat, but his scheme of duties on food is oligarchical. It is a reversal of the formula of Helvetius, imported into England by Priestley, and popularised by Bentham: "the interest of the greatest number." In France, which is a democratic Republic, the representatives of universal suffrage are sacrificing, apparently with the approval of the majority of the electors, the interests of the greatest number of the less well off to those of the small number of rich. Though elected by nearly 11,000,000 electors, they are practising the sort of political economy which belonged rightly to deputies elected by a handful of censitaires, after a double ballot, as at the Restoration, or by the 220,000 censitaires of Louis Philippe's Government. Such a reversal of the natural order of things will be the despair of future historians. Mr. Balfour, in his reply of May 15th, to the deputation led by Mr. Chaplin, said: "The French are, like us, in the very van of civilisation. They are an absolutely democratic community, and yet the French tax every species of food, not merely for national purposes, but for local and municipal purposes, a system which would not be tolerated in this country for an hour, against which you would have a rising en masse of the population." And à propos of the light tax of 3d. a cwt. on wheat, he said:"There is a very strong sentiment against this tax. I am going to say I do not believe that any tax which revives the ancient controversies in a living form can be a permanent part of our general fiscal system." Yet at that very moment Mr. Chamberlain was proposing an aggravation and generalisation of that tax "for national and colonial purposes," confident that the majority of the English electors are no clearer-sighted than the French electors. VIII. Protection and Markets. But at the end of his speech Mr. Chamberlain did not confine his Protectionist policy to articles of food. He extended it to manufactures. He took an example out of Mr. Byng's book on Protection. Mr. Byng was speaking of watches, Mr. Chamberlain substituted pounds sterling; that is the only difference. I quote Mr. Chamberlain : "Let us suppose a manufacturer sells goods to the extent of £50,000 a year, and makes a profit of £5,000. His fixed expenses would be probably £6,000. But now, if he can increase his business and sell £100,000, his profits will be not merely £10,000, but they will be added to by the reduction in the fixed expenses on the second £50,000. His profits upon the £100,000 instead of being £10,000 will probably be £15,000, and the result of that is that he can afford to sell, as compared with his previous conditions, his second £50,000 not only without profit, but at a loss." This argument is not new. We have known for a long time that a manufacturer can reduce his profit almost indefinitely, provided that he can also indefinitely extend his market. Does Mr. Chamberlain mean that Protective duties must be established for the extension of markets? But the manufacturer is first a consumer; the bigger his production the more raw material and plant he will need, the more workpeople he will employ, and the greater, therefore, will be his interest in cheap food. So that, when Protectionism increases the cost of production, far from opening markets, it closes them. But Mr. Chamberlain foresees a danger from America: "If to-morrow there was a depression in the iron trade, it is perfectly certain that quantities of iron will be put down in this country, or the countries we are supplying, at a price we cannot contest." That is possible. When the cotton manufacturers of the Vosges were hampered by the over-production due to the stimulus given to their industry by the Tariff, they had to sell in Manchester at a loss. The transaction did not exactly enrich them, and it was very profitable for the English exporters, who got the goods at less than it would have cost to produce them. Does Mr. Chamberlain propose customs duties which will keep out these cotton goods? If for iron, why not for cotton? But he himself shows the powerlessness of such a proposal by the words, "or the countries we are supplying." VOL. LXXIV. N.S. C In 1901 England exported 2,897,000 tons of different iron and steel wares, worth £25,282,000. Canada took £982,100 worth of these goods; the Cape £1,000,940; Natal £561,800; New South Wales £1,201,000; Victoria £700,300; Queensland £365,000; South Australia £327,600; Western Australia £389,600; Tasmania, £53,400; New Zealand, £743,500; India, £3,020,200. The Colonies therefore absorb eight or nine million pounds sterling out of Great Britain's 25 million pounds export of iron and steel. If Mr. Chamberlain succeeded, he might impose duties both in the United Kingdom and in the Colonies, so as to keep back American iron and steel; but he could not impose those duties in the foreign markets which absorb more than two-thirds of the British export. By driving back American goods he would only glut those markets to such an extent that English goods would find no entrance. IX. Harmony between Material Progress and Free Trade. Mr. Balfour has spoken of the necessity of submitting the question of free exchange to the test of facts; but that test is being applied every day. On the one hand you have the Protectionist experience of France, Germany, and the United States, on the other the Free Trade experience of England, Holland, and, to a great extent, Belgium. For more than half a century England has been bringing its economic system into harmony with the discoveries of science and the progress of industry. The legislators of the other nations have followed a policy which runs counter to every effort made by inventors, manufacturers, bankers, and shippers to lower the cost price of goods. They have closed up markets and doubled the effort required to produce and sell goods; yet they are doomed to perpetual defeat, because they cannot arrest the improvements in means of production and transport. If England adopts a Protectionist system she will encourage other nations to continue it in an aggravated form, and she will lose all the benefit which she gains from her policy of free exchange. Mr. Balfour and Mr. Chamberlain have admitted that the burden of proof against Free Trade rests with those who are urging the electors to abandon it. The search will only succeed in bringing to light new arguments against Protection. YVES GUYOT. WHETHER he is right or wrong Mr. Chamberlain has almost certainly set forces at work which will make Free Trade politically untenable. If he is right he will obviously be remembered as the greatest statesman since Chatham. Were he wrong, he would be the most disastrous statesman since Lord North. In speech and action his methods are so different from the grand style of public men since constitutional Government began, that his ability to cope with the tremendous task he has undertaken might well seem at first sight against all presumption. But he is master of weapons more trenchant than rhetoric. Compared with his dialectical attack the arts of the old oratory seem like impedimenta. If he is far from the stars he is by instinct and experience nearer the mind of the average Englishman than any Minister before. Against the Dantesque, in a word, he sets the Dantonesque. His audacity he has now shown to be quite unparalleled in English politics, and to support it he brings a forensic acuteness, a practical grasp, a combative energy and resource, a power of explaining and confusing issues, and, to sum up, a sheer capacity for action which have never been excelled. He is rash, but if he makes astonishing mistakes at the outset of nearly all his undertakings, he has an unrivalled power of recovering himself in emergency. His present position is compared with that of Mr. Gladstone in springing Home Rule upon the country. But Mr. Gladstone made that attempt at a time when he was at least as much detested by half his countrymen as he was idolised by the remainder. When his influence was already profoundly weakened by his failures in foreign policy the majority of the nation believed him to have made an ignominious surrender to a hated party. Mr. Chamberlain challenges Free Trade after carrying the country through the South African war under circumstances which diminished the reputation of every other first-class statesman, and immensely enhanced his own. He has the position that Palmerston held in England, and he has the support of the Colonies. He expresses the mistrust of free imports which has long been gathering strength in the mind of a large part of the nation, though of how large a part has yet to be shown. If a scheme demanded by the Colonies is rejected by the Mother Country at the polls, the consequences of Mr. Chamberlain's defeat, once he has raised the issue, might compromise the whole future of the Imperial movement as gravely as it would be compromised in the opinion of Free Traders if the policy of preference were carried. |