Sept. 22, 1887] 



NATURE 



491 



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i 



Foreign tarifirs, it may be said, have become more effective 

 for another reason. Manufacturing industry having itself deve- 

 loped abroad, the same amount of protection given to the foreign 

 industry becomes more efficient than it was. But this, of course, 

 raises the question of the effect of natural foreign competition, 

 which will presently be discussed. 



So much for the stimulus to foreign competition due to high 

 tariffs. With regard to bounties, very little need be said. They 

 have been the subject of much discussion and agitation for various 

 reasons, and in what I have to say I propose not to touch on the 

 [practical question whether the-e bounties are injurious, and the 

 nature of the political remedies that may or may not be possible. 

 I limit myself strictly to the point, how far any effect which such 

 bounties can have had would account for a diminution in the rate 

 of material growth of the country generally in the last ten years 

 IS compared with the ten years just before. Dealing with the 

 [uestion in this striclly limited fashion, what I have to observe 

 first is, that hitherto very few bounties have been complained of, 

 except those on sugar production and refining ; and next, that 

 •he whole industries of sugar production and refining, important 

 IS they are in themselves, hardly count in a question of the 

 L^eneral history of the United Kingdom. Even if we refined all 

 the sugar consuaied in the United Kingdom and the maximum 

 amount we have ever exported, the whole income from this 

 -ource, the whole margin, would not exceed about ^^2,030,000 

 mnually, not one six-hundredth part of the income of the people 

 of the United Kingdom ; and of this ^2,000,000 at the worse 

 we only lose a portion by foreign competition, while all that is 

 really lost, it must be remembered, is not the whole income 

 which would have been gained if a certain portion of our labour 

 ind capital had been employed in sugar refining, but only the 

 lifference between that income and the income obtained by the 

 , mployment of the same labour and capital in other directions. 

 The loss to the Empire may be greater, because our colonies are 

 concerned in sugar production to the extent at present prices, of 

 ,-{^5, 000,000 to ^6,000,000 annually, which would probably be 

 omewhat larger but for foreign competition. But it does not 

 eem at all certain that this figure would be increased if foreign 

 bounties were taken away, while in any case the amounts in- 

 -volved are too small to raise any question of foreign bounties 

 having checked the rate of growth of the general industry of the 

 country. 



Per contra, of course, the extra cheapness of sugar, alleged to 

 l)e due to the bounties, must have been so great an advantage 

 to the people of the United Kingdom, saving them perhaps 

 jf 2,000,000 to ;,^3,ooD,ooD per annum, that the stimulus thereby 

 ■given to other industries must apparently have far more than 

 compensated any loss caused by the stimulus of foreign bounties 

 to sugar production and refining abroad. But to enlarge on this 

 point would involve the introduction of controversial matter, 

 which I am anxious to avoid. I am content to show that nothing 

 that can have resulted from sugar bounties could have affected 

 ■riously the general rate of material growth in the country.^ 



Mutatis mutandis, the same remarks apply to other foreign 



unties, of which indeed the only ones that have been at all 



ard of are those on shipping. But as yet, at least, the increase 

 f foreign shipping has not been such as to come into comparison 

 with our own increase, while the portion of the increase that can 

 be connected with the operation of bounties is very small. It 

 would be useless to enter into figures on so small a point ; but 

 few figures are so well known or accessible as those relating to 

 shipping. 



In neither way, then, does there appear to be anything in the 

 assertion that the protectionist action of foreign Governments in 

 recent years can have caused the check alleged to the rate of 

 growth in our industry generally, assuming such a check to have 

 occurred. I may be dispensed, therefore, from entering on the 

 theoretical argument, which I only notice pour m^moire, that in 

 the nature of things no enhancement of foreign tariffs and no 

 grants of foreign bounties could really check our own rate of 

 growth, except by checking foreign growth still more, which is 

 not the case we are considering, because the allegation is that 

 foreign competition is increasing at our expense. That I do not 

 insist on this argument is not to be considered as a sign that it 

 is dropped or that I am not fully sensible of its logical complete- 

 ness. It seems enough, at present, to fortify it by considerations 

 from actual practical facts which no one can dispute. 



The question of an increase of foreign competition from natural 



_ ' See Appendix to "First Report of Royal Commission on Trade Depres- 

 sion," p. 130. 



causes is more difficult. It is beyond all question, as I have 

 pointed out elsewhere, that foreign competition in every direc- 

 tion from natural causes must continue to increase, and that it 

 has increased greatly in recent years. But when the facts are 

 examined, it does not appear that this competition has been the 

 cause of a check to our own rate of growth. One of the facts 

 most commonly dwelt upon in this connexion is the great 

 increase of the imports of foreign manufactured articles into the 

 United Kingdom. But the increase in the last ten years is not 

 more than about ;{^i8,ooo,ooo, taking the facts as recorded in 

 what is known as Mr. Ritchie's Return, viz. from about 

 ^37,000,000 in the quinquennial period 1870-74 to £^<-),qoo,ooo 

 in the quinquennial period 1880-84, or about 50 per cent. Out 

 of ;^i8,ODO,ooo increased imports of such articles it is fair to 

 allow that at least one-half, if not more, is the value of raw 

 material which we should have had to import in any case ; so 

 that only ^^9, 000,000 represents the value of English labour dis- 

 placed by these increased imports. Even the whole of this 

 ;^9,ooo,ooo of course is not lost, only the difference between it 

 and the sum which the capital and labour " displaced " earns in 

 some other employment, which may possibly even be a. plus and 

 not a. minus difference. If we add articles "partly manufac- 

 tured " no difference would be made, for the increase here is 

 only from ;^26,ooo,oo3 to ;^28,ooo,ooo in the ten years. Such 

 differences, it need not be said, hardly count in the general 

 total of the industry of the country. Further, the rate of 

 increase of these imports was just as great in the period when 

 our own rate of growth was greater, as in the last ten years, the 

 increase in manufactured articles between 1860-64 ^nd 1870-74 

 being ;^i9,ooo,ooo, viz. from ^18,000,000 to ^37,000,000, or 

 over loo per cent, as compared with 50 per cent, only in the 

 last ten years, and in articles partly manufactured from 

 ;^17, 000,000 to ;,^26,ooo,ooo, an increase of ;^9, 000, 000 as com- 

 pared with an increase of ;i^2, 000,000 only in the last ten years. 

 Making all allowance for the fail in prices in recent years, these 

 figures will show a greater relative increase of imports of manu- 

 factured articles before 1875 than afterwards. It cannot, there- 

 fore, be the increased import of foreign manufactures which has 

 caused the check to our own growth in the last ten years. 



But foreigners, it is said, exclude us from their own markets 

 and compete with us in foreign markets. Here again, however, 

 we find that any check which may have occurred to our foreign 

 export trade is itself so small that its effect on the general growth 

 of the country would be almost nil. Take it that the check is 

 as great as the diminution in the rate of increase in the move- 

 ments of shipping, viz. from an increase of 55 per cent, to one 

 of 33 per cent, only, that is, broadly speaking, a diminution of 

 one-third in the rate of increase of our foreign trade, whatever 

 that rate may have been. Assuming that rate to have been the 

 same as the rate of increase in the movements of shipping itself, 

 the change would be from a rate of increase equal to one- half in 

 ten years to a rate of increase equal to about one-third only. 

 Applying these proportions to the exports of British and Irish 

 produce and manufactures, which represent the productive 

 energy of the country devoted to working for foreign exchange, 

 and assuming that ten years ago the value of British labour and 

 industry in the produce and manufactures we exported, due 

 deduction being made for the raw material previously imported, 

 was about ;^i40,ooo,ooo (see my " Essays in Finance," first 

 series), then it would appear that if the same range of values 

 had continued, the check to the growth of this trade would 

 have been such that at the end of ten years the British labour 

 represented in it, instead of having increased 50 per cent., viz. 

 from ;^i40,ooo,ooo to /'2io,ooo,oco, would have increased one- 

 third only, or from ;^i40,ooo,ooo to about ^187,000,000. The 

 annual difference to the energy of the country developing itself in 

 the foreign trade would on this showing be about ;J23, 000,000 

 only, an insignificant sum compared with the aggregate income 

 of the people of the country ; while the country, it must be 

 remembered, does not lose the whole of this sum, but only- the 

 difference between it and the sum earned in those employments 

 to which those concerned have resorted, which again may be a 

 plus and not a minus difference. Even, therefore, if foreign 

 competition is the cause of a check to our general growth, yet 

 the figures we are dealing with in our foreign trade are such that 

 any visible check to that trade which can have occurred must 

 have been insufficient to cause that apparent diminution in 

 the rate of our material growth generally which has to be 

 explained. 



It has to be remembered, moreover, that when the figures are 



