300 THE POPULAR SCIENCE MONTHLY. 



of a great check to their business by reason of the duties on the im- 

 port of cereals. The recent report of the Stuttgart Chamber of Com- 

 merce earnestly urges the Government to improve trade by a return to 

 its former reciprocal conditions.* 



The idea that a few years ago found great acceptance in Europe, 

 and undoubtedly influenced the commercial policy of the different 

 states — namely, that increased restrictions on the importation and 

 competitive sales of foreign products and the resort to bounties on 

 exports would conjointly stimulate industries, relieve their markets 

 from anything like overproduction, and inaugurate a period of general 

 prosperity — has utterly failed of realization, and been entirely differ- 

 ent from what was anticipated. And for the following reasons : The 

 stimulus being artificial, was unnatural. Production rapidly increased, 

 and soon created an additional supply of articles, which were already 

 produced in the localities best fitted for their production, in quantities 

 sufficient, or more than sufiicient, to meet any existing market demand 

 at remunerative prices, thus occasioning an augmentation of the very 

 evils which it was expected the restrictive commercial policy would 

 prevent, and which may be enumerated in their sequential order some- 

 what as follows : 1. Overproduction in the natural seats of produc- 

 tion. 2. Domestic competition to effect sales destructive of all profits. 

 3. Special concessions of prices to effect sales in foreign countries which 

 have been disturbing to the legitimate industries of such countries. 4. 

 A general depression of prices, and the reduction of business profits to 

 a minimum ; all resulting in a condition of affairs which two years ago 

 is said to have drawn out from Count Karolyi, the Prime Minister of 

 Austria, the assertion, that " the European states, by their present re- 

 taliatory tariffs, are doing themselves more injury than the most unre- 

 stricted international competition could possibly inflict." 



It seems to be also now generally conceded in Germany and other 

 states of Europe that the depression of business and the disturbances 

 occasioned by the fall of prices, which were most influential in induc- 

 ing the general reaction in favor of protective duties in 1878, were 

 due to causes that were not to be reached by such remedies, and that 



* " The result of the intensive and extensive development of the protective system," 

 observes the Stuttgart Chamber of Commerce, "notwithstanding its beneficial influences 

 on many branches of industry, has been to doubly increase the international uncertainty 

 which now burdens trade and commerce. Every movement in favor of protective duties 

 results in efforts on the part of each country interested in the matter to outbid its neigh- 

 bor ; and the very duty which is expected to protect a nation produces a reaction on 

 home prices, and causes them to become assimilated to those of international commerce." 

 This Chamber believes that the prospect of a lasting improvement in trade would "be 

 better grounded could only further exactions in international customs tariffs be avoided, 

 and the uncertainty of market-price, which is the outcome of the protective system, be 

 removed by an equitable establishment of mutual customs and commercial relations, by 

 an increased stability and certainty of the duration of tariffs, and by a reciprocal return 

 to former conditions." 



