F,—ECONOMIC SCIENCE AND STATISTICS. 169 
And one may go a step further. That, under certain circumstances, 
a tariff might have the effect of causing foreign manufacturers to set up 
_works within the tariff walls has, for some time past, been illustrated by 
numerous and not unimportant examples; and English manufacturers 
_ have not been deterred from yielding to the pressure of foreign tariffs and 
_ establishing works abroad by any personal views of their own as to Free 
“Trade or Protection.7! They have often taken with them a nucleus of 
skilled English workmen. 
But now, in recent years, various Governments have begun once more 
to take notice of the fact that tariffs do, under certain circumstances, 
cause foreign capital to be introduced, and to use it as part of the 
justification of a protective policy. I may give two examples. One can 
get from the Bureau of Commerce and Industry of the Commonwealth of 
Australia a long list of ‘some of the British Manufacturers who have 
established interests in Works and Factories in Australia.’ Among them 
will be found a dozen or more of the best-known English concerns. And 
the list is headed by the following notes :— 
*(1) New names are being added to this list every week, and it shows 
_ that in the opinion of some of the most progressive British manufacturers 
it will pay to bring plant and skilled workers to the raw material in 
Australia... 
*(2) The new Australian Tariff is calculated to bring about the establish- 
ment of every natural and essential industry ; and as the tariff affords 
real protection and opens up excellent prospects tu the efficient, the next 
_ few years will see considerable industrial progress in Australia.’ 
I have no opinion as to the wisdom, in Australian interests, of its 
present tariff. I cite the case simply as showing how impossible it is now 
_to speak as if the capital which a country can have for its manyfactures 
must always be entirely accumulated within the country itself.” 
The other case is even more significant. The new Irish Free State 
appointed last year a Committee of five Irishmen, of whom four were 
economists, to advise it as to its tariff policy. The Committee reported 
in what, with sufficient accuracy, may be called a free trade direction. 
But in that report occurred the following passage: ‘ The more complete 
_ the protection afforded by a tariff, the greater will be the inducement to 
outside competitors to retain their Irish market by coming inside the 
fiseal barrier and establishing factories in the Free State. And in the 
_ existing condition of industry the expenditure will be undertaken by very 
_ large industries in the hope of retaining even a small fraction of their 
existing market. . . . The new competitor will, it is true, in a sense 
establish an Irish industry and provide employment for Irish workers.’ 
___ All that the Committee find to say, by way of demurrer, is that ‘ 
_ this case backward Irish industries will be faced by a home co eiHn 
from a highly organised rival quite as serious as that from which they 
have sought to escape. °73 That is to say, free trade must be maintained 
‘in the interests of ‘ backward Irish industries.’ 
’ 
71 Some examples prior to 1903 are collected in my Tariff Problem, p. 77. 
_ This was Sir Robert Giffen’s line of thought as recently as 1877. In his paper 
on Foreign Competition he argues that ‘the amount of capital required to replace us 
even partially is so great that it must take many years for our competitors to accumulate 
“any such amount’ (Hconomic Inquiries and Studies, II., p. 429). 
*3 Reports of the Fiscal Inquiry Committee, Dublin, 1923, § 126. 
