812 REPORT — 1887. 



competitiou, the stimulus which the Governments of some foreiyu countries give or 

 attempt to give to particular industries by means on the one hand of higli tariffs 

 keeping out the goods we should otherwise send to such countries, and giving 

 their home industry of the same kind a monopoly which sometimes enables them 

 to produce a surplus they can sell ruinously cheap abroad, and, by means on the 

 other hand of direct bounties wliich enable certain industries to compete in the 

 home market of the United Kingdom itself as well as in foreign markets. But 

 there is a natural foreign competition as well as a stimulated foreign competition 

 to be considered, and it may be the more formidable of the two. 



Dealing first with the stimulated competition, the most obvious criticism on 

 this alleged e.-iplanatiou of the recent decline in the rate of increase of our material 

 progress is that the stimulus given by foreign Governments in recent years has not 

 been increasing, or, at any rate, not materially increasing, so as to account for the 

 change in question. People forget very quickly ; otherwise it would not be lost 

 sight of that after 18G0, as far as European nations are concerned, there was a 

 great reduction of tariff duties — a change, therefore, in the contrary direction to 

 that stimulus which is alleged to have lately caused a change in the rate of our 

 own development. Since about five or six years ago the movement on the Con- 

 tinent seems again to have been in the direction of higher tariffs. France, Italy, 

 Austria, Germany, and Russia have all shown protectionist leanings of a more or 

 less pronounced kind. Some of our colonies, especially Canada, have moved in the 

 same direction. But, on the whole, these causes as yet have been too newly in 

 operation to afiect our industry on a large scale. As a matter of fact, with one 

 exception to be presently noticed, the period irom 18G0 to 1880 was one in which 

 the effect of the operation of foreign Governments in regard to their tariti's could 

 not be to stimulate additional competition of an injurious kind with us in the way 

 above described, but to take away, if anything, from the stimulus previously given. 

 The changes quite lately brought into operation, if big enough, and if really having 

 the effects supposed, might stimulate foreign competition in the way described in 

 the period now commencing ; but, as an explanation of the past facts, it is impos- 

 sible to urge that foreign competition had recently been more stimulated by addi- 

 tions to tariffs than before, and that in consequence of this stimulus our own rate 

 of advance had been checked. 



The one exception to notice is the United States. Immediately after 18G0 the 

 civil war in that country broke out, and that war brought with it the adoption of 

 a very high tariff. Curiously enough, however, that tariff' operated most against 

 us in the very years — that is, the years before 1875 — in which our rate of advance 

 was greater to all appearance than it has lately been. In 1883 there was a great 

 revision of the tariif", having for its general result a slight lowering and not an, 

 enhancement of the tariff', and it is with this reduction — that is, with a diminution 

 of the alleged adverse stimulus— that the diminution in our own rate of advance 

 has occurred. 



Of course the explanation may be that, although Governments have not them- 

 selves been active till quite lately in adding to their tarifl's, yet circumstances have 

 occurred to make the former tariffs more injurious in recent years than they were 

 down to 1875. For instance, it may be said that owing to the fall of prices in recent 

 yeai-9 the burden of specific duties has become higher than it was. The duty is 

 nominally unchanged, but by the fall of prices its proportion to the value of "the 

 article has become higher. This is no doubt- the case to a large extent. On the 

 other hand ad valorem duties have been lowered in ju-eei.-^ely the same way. The>- 

 fall of prices has brought with it a reduction of duty, and especially on articles of 

 English manufacture, where the raw material is obtained from abroad, the reduc- 

 tion of duty, being applicable to the whole price, must certainly have had for effect 

 to render moj-e effective than before the competition of the English manufacturer. 

 Whether on the whole the reduction of ad valorem duties consequent on the fall of 

 prices has been sufficient throughout the range of our foreign trade to compensate 

 the virtual increase of the weight of specific duties from the same cause seems ta 

 be a nice question. This being the case, it must be very difficult indeed to show 

 that, on the whole, the weight of foreign tariffs, apart from the action of foreign 



