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junction with other forces operated to effect that sudden rise which characterised the year 1850, and which was maintained with but slight variation till 1866. What proportion of this increase was due to the stimulating influence of the free-trade principle? For it is now abundantly clear that not all this remarkable addition was caused by free trade.

How did free trade effect an increased circulation in the markets of this country, and those of foreign ones as well? Was this "increase" to the normal trade circulation of the nation liable to be checked by external forces, capable of being called into existence by surrounding States? And if so (and subsequent events have proved that such an assumption, entertained by the protectionists during the free-trade agitation, was no trivial and unfounded one), as the principle of free trade, partially carried out by this country, is thus shown to be well within the sphere of other forces, over which our Government cannot possibly have any control, under its present commercial code,-as the principle of free trade, therefore, from these circumstances tends to fluctuate in its action, it becomes a very interesting question from the scientific view of the problem, but a very vital one from the national point, to settle what determines that it shall be beneficial; whether surrounding conditions have so altered since the prosperous period alluded to above, as to oppose a successful barrier to its power of continuing that prosperity; and whether, if this partial application of free trade to international commerce in the face of a commercial depression1 which is assuming symptoms of an increasingly 1 "The depression in trade has ceased to be a mere oscillation, and

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itate the transit of goods from the producer to the consumer; it did not directly stimulate the circulation of the markets. It did nothing of these things. And if free trade in its unequal operation had acted alone, we should have seen it limited, in the first instance, to one phenomenon-that of increased production. But this increased production, without the means of its rapid exchange, and a stimulus to the flow of the medium by which that exchange is effected, must very soon have declined from the want of requisites to nourish it. And those requisites are

1. Increased facilities in carrying off goods, so that they shall be within the range of the consumer in a shorter time than before; and

2. Additions to the currency, so that the whole amount of coin in circulation shall be largely increased.1 But all these goods were sent to America, where they were neither sold nor consumed, but despatched in exchange for bank and railway shares and State bonds. This is not legitimate trade; it is over-speculation: the goods are not paid for. . . . This was a fictitious prosperity. . . . Can Sir Robert Peel raise up a real prosperity, or if not, a fictitious one In the latter case it will only lead to a recoil which will be infinitely more disastrous than that under which we are now suffering."

But the exports of 1850-1866 were not paid for by imports, and as no money passed, according to the late Professor Bonamy Price, they must have been exchanged for the stock of the indebted countries. Hence, according to Cobden, this prosperity was fictitious.

It is evident that Cobden did not distinguish minutely enough between fictitious and real prosperity. He called that "fictitious" which, in reality, was a normal prosperity. But then it was his part to denounce the protective system. He never alludes to commercial depression with stationary exports; for this unfortunate association never occurred during protection. He might have asked himself the question, "Can a nation be said to be involved in serious danger when exports are not only constantly increasing, but increasing proportionately to the increment of population?”

1 It had been held that an influx of gold would have an extravagant

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the former: the increase in their consumption being simply explained by the fact that exchange is stimulated by an increase in the rapidity of transit.

But the time of the appearance of the other factor was not within the means of human calculation; though its influence when in existence ought, it should seem to us, to have been taken into consideration. The gold discovery of 1850 was unforeseen; and its power of stimulating enterprise did not at once enter into the estimates of the free-trade causation of prosperity. Like many other causes, it had to bide its time. It would, then, only take its place when, by reason of the fact that commercial prosperity was beginning to decline, attention was impartially turned to the question. It thus became apparent that the sudden rise in the export trade of 1850 was out of all proportion to that increase which had already begun to mark our exports under the combined operation of our railway system and free trade. To account for that sudden rise, for that additional increase to our already increased and increasing exports under free trade 1 and railway extension, we look for another cause. For the causes then in operation were not adequate, according to a subsequent analysis, to effect the result to be accounted for. But no sooner had the gold-mines of California and Australia been discovered than the phenomenal rise began to take effect. The question, therefore, which remains for discussion is the following one-When you

1

1 The reader must, at the outset, carefully distinguish between the "moral" and "material" influence exercised by free trade. It will be shown afterwards that the influence of free trade at this time was purely a moral one.

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