increase the ordinary channel by which exchange is conducted, when you pour more gold into a commerce which is becoming impoverished, do you stimulate trade? In the opinion of all economists of eminence you do. And therefore the fact is established, that an increase in the amount of gold in circulation in any country, and the more especially when the amount is increased in all countries, is sufficient to cause a stimulation of the markets.

Thus we see that, subsequent to 1850, and so long as the increased production of gold continued, this addition to the currency acted with free trade and the railways to stimulate trade. Before the gold discovery, free trade acted in conjunction with the railway system to promote the same end.

It is a peculiar fact, then, and, from an economist's view, one very much to be deplored, that during the early part of its progress the principle of free trade at no time acted alone.1 It was at first associated with that impetus which the extension of railways, by cheapening transit, produced. We know that Cobden derided the opinion that the railway system had anything to do with inducing prosperity. Thus, from this simple “intermixture of effects," there was the opportunity presented of drawing false inferences as to causation. Nor was Cobden so unprejudiced as not to use all the popularity he could possibly attain out of so

1 Before the introduction of free trade, the Bank Charter Act had come into operation in 1844. The circulation had been in an "improper" state. By the Act of 1844, the currency became, to all intents and purposes, metallic. The change had no influence on the development of trade. But it had a very important one upon prices, and especially the prices of agricultural products.

confusing a problem, in the noble effort to establish the "righteousness" of free trade. It was righteous, we presume, because it was to advance the interests of all classes of the community-not for a time only, but for ever. In what way was this righteousness to become manifested? In the destruction of foreign manu

factures! Afterwards, free trade is found conjointly with the railway system and the gold discoveries - all these separate forces acting simultaneously and concurrently towards the same object. But in different ways. Thus the railway, by shortening the time and cost of transit ; and the increased amount of gold in circulation, by tending to increase to the normal, a consumption which had fallen below it. It will be perceived, therefore, that neither of these causes of increased trade-activity tended to force demand. What they both of them tended to do was to satisfy a normal demand by a proper supply. In the period of transition between a condition in which all the demand cannot be met, by reason of collateral difficulties, and that condition in which it is efficiently supplied after such difficulties have been overcome, the trade institutions of any nation would gradually grow; and that growth would be a normal one, in so far as it is the outcome of a normal demand. The extra demand being thus supplied, you would say that there is no further source of its increase. But there is, or ought to be one, nevertheless. And it should be provided by the annual increase to our population. If we look back upon the progress of our industries, with but few exceptions, during the protective period, we shall find that, take any year you please, and compare the exports

of that year with any one year before or after it, the years before it always show smaller figures, while the years following it always exhibit larger ones. And this, too, in a gradual, and, as it appears, a normal ratio. In other words, in proportion as our population increased, so did the trade industries of the country. The demand of foreign markets for our manufactures remained still, on the whole, incompletely supplied, in spite of temporary fits of over-speculation. And herein lay a

very potent danger. For it was to meet this demand, in its entirety, that an important measure was framed. If, argued Cobden, who led the manufacturers on the occasion, we can supply all the demand which is thrown upon us, then we shall be stimulating the manufacturing industries of the country. This would be no otherwise than a beneficial procedure; because it would call into activity most of, if not all, the unoccupied labour of the people. But he neglected the influence of railway extension upon labour. He did not inquire how far the railways would consume not only the labour then unoccupied, but that also which would be displaced by any increased production. When the problem is regarded solely with reference to this point, it becomes a matter of speculation how high wages would have risen-for it is certain they must have risen. And this, too, under protection!

Thus the labouring part of the community would gain by the result. But how was that result to be brought about?

The great drawback which prevented the mastermanufacturers of this country from supplying in greater quantity the external markets, was the price of labour.

So they thought, and so Cobden averred.1 But the reason why labour was so expensive resided, or rather was supposed to reside, in the dearness of bread. It was Cobden who drew attention to the phenomenon, that when bread was dear wages were low; and vice versa, that when bread became cheap wages rose to their highest point. "Only make bread cheap," they cried, and we will compete more successfully than we have ever yet done with the world. Thus it appears that the normal progress of our industries under protection was not sufficiently intense enough for the manufacturers; and this the more especially, when they saw before them fields which, under a new set of conditions, they might very easily make their own. Instead, therefore, of following a demand which, under the then state of the manufacturing industries of the world, they monopolised, and, in all human probability, would have continued to do so-instead of remaining content with this natural demand, they ran after an "artificial" one. They commenced that pernicious system of underselling, by means of an artifice, their foreign rivals. Such a system may or may not be regarded as a highly moral one, just according as a political or economical bias may or may not procure it.

You may have before you the picture of all races on this globe striving only to excel each other in the arts of peace-a result which more than one enthusiast has imagined (and many still imagine to this day) can only be effected by the universal application of free trade to

1 “We do not want cheap bread to compete with the foreigner. We already do that. We want cheap bread in order to compete 'better' with him."

the commerce of the world. Or you may have the highest belief in the universal (and purely ideal) proposition that competition drives labour and capital from less to more remunerative channels.1 But neither of these beliefs must blind you to the fact that there is a certain period-which may be called the transition period-ere these most desirable of all results can, if they are ever to happen, be brought into existence. You may believe that competition drives labour from less to more remunerative sources, but is it not matter of very serious consideration, whether you are justified in enforcing this doctrine upon those who are unwilling to receive it? You may even take that doctrine to be an "elementary truth," as one writer 2 in particular calls it, as well as some others of a similar and ideal nature; or you may regard it as "axiomatic," as some recent free-trade critics have styled it. Such abstract reasoners would certainly be listened to, and followed, if what they dealt with consisted of their own ideas merely. But, unfortunately, their ideas do not conform with the actual facts. And thus it is not difficult to perceive that when these facts, which have undergone a considerable alteration since the birth of the theory, assume a fresh aspect, and sometimes a new order, it is absolutely necessary to frame another theory upon which to hang them together, and with which to guide any subsequent policy.

1 That all competition is not beneficial was held by Lord Overstone. He said that competition in the currency was absurd. The public did not get their full share. So in the existing unequal competition, this country does not get her full share.

2 John Stuart Mill.

3 Some newspaper critics on a work recently published by Blackwood & Sons, entitled 'Free Trade.'