George Webb Medley

“ The time they have chosen for galvanising the mummy of Protection is about the worst they could have selected. It is as if some man, undertaking to prove the extinction of the sun, were to choose as the best time for making his assertions and giving his proofs, not the midnight hour—when darkness reigns and seems to lend confirmation to his statements—but the dawn, just when the orb of day begins to brighten creation, and every moment brings with it an accession of light and heat, and serves to prove him either a cunning knave or the victim of a craze. ”

“ The fact is, that it is only in commodities that one nation can discharge the bulk of its debts to another nation, and that if the world owes us money, and makes us its carrier and its general merchant, we must take payment in commodities. And thus you see, at a stroke we get rid of that bugbear to some people, the thing commonly called the Balance of Trade, and which, as commonly understood, is a fallacious and misleading expression.
There is one country which at the present moment stands in marked contrast to us as regards the balance of her imports and exports. I mean the United States. ”

“ As you are all aware, Great Britain stands alone among the nations as a free-trading country. It is natural to inquire how this is the case, how it is that people, acute, thoughtful, and intelligent, as, for instance, the French, the Germans, and the Americans, cling to the doctrines of Protection, while we alone adhere to those of Free Trade? ”

“ So far as I can make out, no one whose opinion is of any scientific value denies that if Free Trade were universal, it would be of infinite advantage to the human race. There are some among us, however, who maintain that partial Free Trade—such as that under which we now live—is prejudicial to the country which opens its ports to foreign productions, and beneficial to the country which, on the other hand, shuts out, as far as it can, by prohibitory duties, the commodities of other nations. ”

“ By buying silks and wines of France, we give her so much purchasing power in the world's markets, a power which, as her trade returns show—she is a large importer upon balance—she fully exercises. Well, if she spends the money she receives from you in those products of foreign countries which she requires, as we know she does, she thereby, in turn, confers on those countries a corresponding purchasing power, and they, in their turn, lay out the money so received among other nations, and, as we are the principal manufacturers, we get the principal share in the business. ”

“ I am happy to say that as regards Free Trade, these efforts have met with but little success, and that as time rolls on there is every reason to expect they will meet with still less. As, day by day, we get over one by one our commercial troubles, and, little by little, find ourselves emerging from a long protracted depression, it will be harder and harder for the advocates of Fair Trade, alias Protection, to delude the people into taxing their right hands a shilling, for the slender chance of getting back sixpence with their left. ”

“ I want to know, in the third place, why our shipbuilders, who last year built 90 iron, and 160 wooden ships for the foreigner, are not to receive the price of those ships, and if so, how they are to be paid? I want to know, in the fourth place, why our merchants and bankers, who advance the capital by which our 700 millions of foreign commerce is put in motion, are not to receive the interest on their capital, and if so, how they are to be paid? ”

“ I do not for one moment deny that some of our interests have suffered. With those sufferings I warmly sympathise, but while I acknowledge them, and condole respecting them, I cannot be driven from the position I take up that the nation, as a whole, is prosperous, the mathematical proof of this being found in the fact that year by year, on the whole, we get in on balance commodities, bullion, and securities. ”

“ If the foreigner taxes our manufactures, we are to tax his; if he admits our goods free, we are to admit his goods free. He contends that if we are compelled, in the first case, to keep out foreign goods, our workmen will step into the place thus left vacant, and supply our home market with these or similar goods. But, there are goods with which we cannot be supplied at home owing to disabilities of soil and climate, to say nothing of race, but which it is of actual necessity, or prime convenience, for us to obtain. ”

“ Now, having thus disposed of the Fair Trader's argument for taxing foreign manufactures, let me say a few words respecting his assertion that our excess of imports is to be considered the measure of our national loss. We now, on the average, import more than we export considerably over 100 millions' worth of commodities annually. We Free Traders say that instead of its being a loss to us, it is a profit to us, and that if we did not get in this excess of value we should be doing a very bad business indeed. ”

“ I would rather proceed to inquire how it is our own people cannot supply us with certain things which now come to us from abroad; for instance, French silks and French woollens. The simple fact is, of course, that from a variety of causes our manufacturers and workmen either cannot, or will not, supply us with these things. Whatever be the cause, I am not here tonight to point out the remedy, but, whatever that may ultimately turn out to be, no Free Trader will allow that it is to be found in taxing the foreign product. ”

“ Prices would of course be raised, and the consumer of these foreign goods would either buy less of them, or he would have to pay more for what he wants of them. In the first case, production on the part of the foreigner is checked, and he either gives up his manufacture, and thus loses his purchasing power in the world's markets, and you lose him as a customer—directly or indirectly, as I shall show you presently; or else, being baffled in your market, he turns his attention to neutral markets, competes with and injures you there, and perhaps drives you out of them. ”

“ From what you have heard you will be able easily to understand how mistakes and fallacies are sure to crop up by doing what the Fair Traders do with the bare figures of trade returns, that is to say, by looking at them without taking into account, or consideration, a number of other facts and circumstances without which they are not only useless, but are absolutely misleading and mischievous. ”

“ In the second case, where our home consumer consents to pay more for the article he wants, it is clear that, whatever the increased price may be, by so much is he directly impoverished—by so much is he less able to buy other commodities. There is less production; less demand for goods, and for labour; less trade; less shipping; less everything which contributes to make up the moral and material well-being of mankind. ”

“ Now, no one has ever seriously propounded the existence of a fourth dimension, and I say that, until the existence of this fourth dimension has been proved, and until the existence of a fourth mode of settling international transactions has been discovered—so long as we get in on balance, in a series of years, the three things I have named—we may depend upon it we are getting richer and not poorer as regards our foreign commerce. ”

“ Protection, on the other hand, is that state of affairs in which the nations are hindered from this free exchange by tariffs imposed for that special purpose.
Well, we all know that Free Trade as thus defined does not exist. We are said to be living under Free Trade, but in a strict sense that is not so. We are living under a system in which our imports alone are free; our exports to some of the principal markets not being free. It is only as regards our imports that we enjoy perfect freedom ”

“ She of late years has been a large exporter on balance, and our Fair Traders have often pointed to this excess of exports as a proof of her prosperity, and of the virtues of her Protective system. When, however, we call to mind the fact that while we are a lending nation, with an excess of capital, and do more than half the ocean carrying trade of the world, and that the United States are a borrowing nation, requiring capital, and ready to pay for the use of it; and that owing to her Protectionist policy foreigners carry more than 80 per cent of her foreign commerce ”

“ But, to be of any advantage to the British manufacturer, the British workman, and the British consumer, the following impossible state of things must occur. In addition to the goods which we now make for the foreigner, we must be ready to supply our home market with much of which the foreigner now supplies us, but of which we now are to cut him out. He is to sit down quietly under this, and buy of you just as much as he did before, although you have taken away so much of his purchasing power by cutting him out! At present, the foreigner makes certain goods better and cheaper than we can. ”

“ The Fair Trader, however, regardless of all such considerations, persists in asserting that every year we buy of the foreigner more than we sell him. The fallacy under which he labours arises, of course, from the use of the terms buy—sell. The Free Trader, with a more just appreciation of what takes place, discards these terms in the sense thus implied, and rightly says:—So far as commodities are concerned, we got in 411 millions of them, and gave out only 286 millions, and if that were all to be considered, it seems to be a mighty fine business. ”

“ They admit that Free Trade tends to achieve the maximum of production at the minimum of cost, but they say that there are other things to be considered besides the accumulation of the greatest possible amount of wealth. One of the things to be considered, they say, is the necessity of educating a community in such arts and manufactures as its resources are naturally fitted for, but of which, except for Protection, it would remain ignorant. ”

“ Trades Unions and Co-operative Companies are doing good service in the way of education respecting them, and are, I trust, preparing the way for the abolition of those disgraces to civilisation, those trade wars called strikes and lock-outs, which are as barbarous in their way as international war is in its way, and are much more inexcusable. ”

“ When he is cut out, our consumers will consent, cheerfully as a matter of course, to pay higher prices for these same goods! Then, on account of the new home business which is to spring up, there is to be no fresh capital required, no fresh plant, no additional workers, or, if there are, there is to be no increased cost in these respects, there is to be no change in any respect whatever, except that our manufacturers will have cut out the foreigner and got the home market in addition to the foreign market! ”

“ No one can get anything like a correct notion of what is going on between nation and nation until he has taken such matters as the following into account:—He must not only look at the bare figures of imports and exports, he must know the rules by which they are computed; and the rules differ in different countries. He must find out whether country A is lending capital to or buying the securities of country B, or whether the contrary is taking place; or whether A is paying off debt, or paying interest on loans and other securities to B ”

“ A similar result is found whether we take ten, or twenty, or any series of years during the Free Trade epoch. I have before me the figures for the last twenty-seven years, that is, going back to 1854, and from them I find that in those twenty-seven years, our excess of commodities imported was 1,742 millions, our excess of bullion imported was 131 millions, and our excess of securities imported was 600 millions, making a grand total of 2,473 millions as profit on our last twenty-seven years' foreign trade.
There can be no question, therefore, that as a nation we have become richer and richer. ”

“ But, before we proceed further, let us define what we mean by the term Free Trade as just used. In the abstract, Free Trade may be defined as that state of affairs in which the nations exchange with each other their various products untrammelled by hostile and prohibitory tariffs. ”

“ The Fair Traders say something like this:—John Bull buys of the foreigner 411 million pounds' worth of goods, and sells him only 286 million pounds' worth, and they deduce from this that there is a balance of trade against him of 125 millions, which is a loss to him, by which he is so much the poorer; and that he is thus losing his wealth to the benefit of the foreigner, who has the best of the trade. ”

“ If we turn to France, we shall find in her trade returns a curious exemplification of the truth of the principles on which I am insisting. As you are aware, the Franco-German war broke out in 1870 and closed in 1871. Well, just before that war, that is in 1869 and 1870, her imports and exports, according to Martin's "Statesman's Year Book," balanced each other almost exactly. You also know that in 1871 France had to pay an indemnity of 200 millions to Germany, and that she appealed abroad for a large loan to aid her to pay that indemnity. Well, in 1871 she imported on balance 21 millions. ”