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principle of creating interferences? Let the following facts be contemplated, and then you will perceive whether there is justice in the charge. When the cry of distress was raised during protection — and even when the markets were depressed—the export trade steadily and constantly increased. But during freetrade distress, our exports remain stationary. They are standing still, while the population of the country is constantly being increased. Was ever such a phenomenon known under the protective period? We challenge the free-trade theorists to adduce, out of Sir Robert Peel's experience, any single instance of it. We do so fearlessly, because we know that such an occasion cannot be brought forward. And we submit this relation of distress, with decreasing exports, to the consideration of those who, rather than argue from mere facts in the field of economy—a treacherous practice—endeavour to discover the workings of a principle of which these facts or figures are but the indications of its existence.

When this association of actual free-trade distress (in contradistinction to so-called free-trade prosperity) with decreasing exports — absolute} when compared with the export trade under protection, which shows an increase proportioned to the increasing population;

1 Under protection exports increased steadily, and kept pace with increasing population—vide figure in 'Free Trade,' p. 19. Imports were more than balanced by exports. Under free trade: exports, 1850, £153,000,000; 1866, £239,000,000; 1872, £314,000,000; 1885, £271,000,000. Since 1875 there has been no steady increase to meet requirements of additional population. Care must bo taken not to confound increased value under free trade with a proportionate increase of bulk. Bulk and price both rise, but the latter in greater intensity.

relative,1 when contrasted with a population constantly increasing — is properly understood, then we are of the opinion that the charge against free trade interfering with the normal development of the national industries has been sustained, and will pass unchallenged. But it must be remembered that the question concerns free - trade distress, and free - trade distress alone. There has been far too great a leaning on the part of many economists2 to deduce constant beneficial results from free trade. The deduction, we assert, is not founded on real tendencies. Where these economists have erred is, we venture to state, in not supposing that the surrounding conditions, at first existent, of free-trade action, would be liable to fluctuation. These conditions, as every one at the present day cannot but acknowledge, have very materially altered. Where are the " dear " markets of Cobden's days, you may ask of the manufacturers of Manchester? And in what does the utility of cheap markets consist, when the ability to buy is being slowly but increasingly reduced? Eegard the amount of unoccupied labour! Let it be but freely admitted that Cobden's times are not ours, and then you

i From Mr F. T. Haggard, in his pamphlet on 'Demand and Supply': exports + freights + interest, on £100,000,000. 1866-75, £3,664,000,000 ; 1876-85, £3,764,000,000—an increase of 100 millions sterling. Increase of population during 1876-85, 3,720,000. From these can be deduced exports per head—1870, £11.6; 1880, £10.7.

- The authority of writers like J. S. Mill and Professor Cairnes cannot but be diminished by the circumstance that they were biassed by the primary and favourable operation of free trade. They wrote iu the midst of the "unparalleled prosperity" immediately following, but not altogether the consequent of, free trade, liut neither of those economists analysed in detail the causation of that prosperity. Both magnified the action of the free-trade principle.

will open up the way to the inquiry, " Is our present economical policy so adapted to its surroundings as to be beneficial to the nation at large?"

But free trade has not only induced a "major" interruption in the normal course of our trade, it has been the cause of minor interferences as well. Let the quarrel between the master manufacturers and the railway companies attest the accusation. The railway rates are too high. They are one of the causes of the depression of trade. In the opinion of some, they constitute the sole cause. But how long have they been too high, or relatively high? And how is it that the free-trade merchants made their large fortunes when the rates were high? "We think that we may, without falling into any grievous error, divide the career of the free-trade merchant into three periods. The first period was the one in which he was prosperous. His foreign rivals he scorned. He attempted but failed to crush them.1 Free trade detests monopoly, and rejects it as hindering trade. And yet, unhappily, it was the very object of these merchants to obtain a monopoly of foreign markets.2 How is the reconciliation between sentiment and practice to be effected?

But the supremacy of British manufacture was to receive a blow. This blow was struck by other nations who consented to follow in the paths which made England a great commercial country. They determined

1 Sir Robert Peel gloried in the paralysis experienced by some German industries, as one of the immediate effects of British free trade.

- Mr Gladstone in 1843 said that " the free-traders were attempting to break down one monopoly in order that they might establish another." Quoted from Cobden, p. 30.

that, in supporting themselves as far as they could, they were promoting in the best manner their own interests. They resolved that their progress was to reside in the development of towns; and to make these grow, it was clear that they must nourish manufactures. In a word, they are protective.

As foreign manufactures increased, demand for British goods began to diminish. As natural growth even of native industries is slow, so the influence of their development upon the British merchant was gradually reduced, but the effects were cumulative. He began to lose control over those markets which he endeavoured to swamp; but what was this but to lose that artificial demand which he was the means of creating? The "artificial" demand decreasing, his small profits upon greater quantities went on decreasing too. The bulk of his produce, undergoing a relative reduction, as he could not charge a greater price, the growth of his business was inevitably checked. Here, therefore, he ought to have claimed a reduction in railway rates, because that artificial demand which sent up the rates, was becoming more and more reduced. Against such a claim, however, there would have been many objections. Besides, the manufacturers are not unlike their fellow-creatures in "hoping for better times," and in bearing a present small loss in prospect of greater gains in the future. But their hopes were unfulfilled. And thus it happened, the loss of this artificial demand became the cause of a parliamentary inquiry into the proper cost of the transmission of goods by the railway. The railway, indeed, must needs have its proper share. The share received by the railway proprietors during the first period of the free-trade merchant's career was not a "normal" one. The free-trade merchant in his second period cannot pay, with a sufficient profit to himself, the cost of transit. It is excessive. But why excessive? It is excessive because at its present high level he cannot compete successfully with his foreign rival. The tables, then, have been turned, for we know that he competed in the first period very greatly to his benefit. It is frivolous, therefore, to assert that excessive railway rates are the cause of the present depression. Nor is it at all likely that their reduction will be followed by a permanent revival of trade,1 as those maintain who argue that the excessive cost of transit damps the ardour of the merchant, and acts directly in causing a smaller production of goods. The " production of goods" is not dependent in the first instance on the cost of transit; for the cost of transit is included in the price which is paid for those goods. But suppose that price to be lowered, and by these very forces which free trade stimulated; then, indeed, the cost of transit, which is now become excessive by reason of an alteration in one of the surrounding conditions of the free-trade merchant, bears very hardly upon him. But it is the result of his own short-sighted policy. The alteration consists in the fluctuation of price; and price falls from a higher to a lower level. Thus the

1 The reduction in cost of transit will go into the pockets of the manufacturers. They will be certain of some profit then; and the maintenance of their factories will be assured for a while, without, however, any margin for extending their business. But for how long? Just as long as prices are maintained. But we do not know that our foreign rivals cannot produce at even a cheaper rate than they do at present. Besides, they have the advantages of the " bounty " system. What is to help the British manufacturer if prices are still further reduced?

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