SELECT COMMITTEE MOVED FOR

HC Deb 19 July 1864 vol 176 cc1711-49

MR. MAGUIRE*

rose to move for a Select Committee to inquire into the position of the paper manufacture of Great Britain and Ireland with respect to foreign taxation. A great and grievous wrong had, he said, been done by the Government and Parliament to an important branch of British industry, and that industry now appealed through him to the Government and to Parliament for consideration, and, if possible, for redress. The importance of the interest which he represented might be indicated by a few facts and figures. The capital embarked in the paper trade was no less than £7,000,000; it employed directly or indirectly about 100,000 persons, and at least 200,000 persons were, through the workmen and their families, dependent on its continuance and prosperity. If he judged of the wages by the annual production of the trade, he found that from £1,000,000 to £1,500,000 was diffused throughout the rural districts of the country in wages to operatives. Such, then, was the trade which had been sacrificed, not to free trade, but to the mere claptrap-cry of free trade, and, indeed, to what seemed to be rather exceptional and aggressive protection than to real free trade. In the year 1860, or previous to the Government proposal of that year, paper was liable to two duties, the Excise duty and the Customs duty. Three halfpence in the pound represented the Excise duty, and 1d. the Customs duty. The Customs duty was a duty wisely imposed, not as a protection to the British trader, but as an equivalent for the tax imposed by foreigners on rags imported into this country from foreign countries. That duty was revised in 1853, when the present Chancellor of the Exchequer held the office which he now filled; and Mr. Wilson, one of the most determined free traders that ever held office under any free trade Government, considered that 1d. in the pound was only a fair equivalent for the rag duty. Hon. Members who knew anything of the paper trade knew that rags were an essential necessity to the paper manufacturer. In fact, good paper could not be manufactured without rags. Paper could be made from various fibres and other articles, but, to use the words of Mr. Wrigley, "Rags will always be the sheet-anchor of the paper manufacturer." They were the raw material which the manufacturers could most readily obtain, and so long as they continued to be used, so long would a certain quantity or proportion of that material be introduced from other countries to supply the wants of the British paper manufacturers. It took a ton and a half of rags of the best quality to make a ton of fine paper, and it required two tons of the lowest description of rags to make a ton of an inferior class of paper. Therefore, when a duty of £5, £6, or even £9 was imposed on a ton of rags, such a duty must have a considerable effect upon a ton of paper. If a foreigner was able to buy his rags from £5 to £9 a ton lower than the British manufacturer, he must always have an advantage over the British manufacturer which no amount of skill, energy, or capital could overcome. The anticipations of the trade with regard to the disastrous effect of the policy of the Chancellor of the Exchequer, by which they were recklessly exposed to this unfair competition, had been more than fully realized. The rag duty levied at the present moment on the export of rags in Russia was £6 5s. a ton; in Sweden the exportation was free; in Prussia and all through the Zollverein the duty was £9 3s.; in Holland, £4 18s.; in Austria, £7 5s.; in Italy, £3 5s., although formerly only £1 12s. 8d. In France, where the exportation was for- merly prohibited, the duty was now £5 per ton; in Belgium, £5; and in Portugal, £6. Therefore, he was quite correct in saying that the rag duty now ranged from £4 to £9, and upon a ton of paper it necessarily operated as a duty ranging from £6 to £14. In 1860 the right hon. Gentleman the Chancellor of the Exchequer proposed to abolish the Excise duty on paper. He (Mr. Maguire) went with the right hon. Gentleman in that proposal. The only question to be considered at that time was one of revenue—whether it was wise, under the circumstances, to take so much from the taxes or revenue of the country as the right hon. Gentleman proposed to take? It was generally admitted that the question resolved itself into that one narrow point; indeed, the House had on two previous occasions passed a Resolution in favour of the abolition of the duty. He (Mr. Maguire) supported the right hon. Gentleman, because he considered his proposal to be a wise one, and that it would be not only beneficial to the manufacturer but advantageous to the consumer. Circumstances which had occurred since then proved that there had been no loss to the revenue which had not been more than made up by the expanding industry of the country, and it was also proved that the consumer had had the full advantage of the reduction. If the right hon. Gentleman had been wise at that time, there was not one of his prophecies which might not have been realized. But the right hon. Gentleman, by dealing as he did with the question of the Customs duty as against the foreign rag tax, prevented the prophecies he had made from being realized; and so far from doing a benefit to the trade, he inflicted upon it—no doubt unconsciously and in ignorance—one of the greatest evils which was ever inflicted by a British minister upon any branch of native industry. The right hon. Gentleman made an eloquent speech on the occasion of his proposing the abolition of the Excise duty, in the course of which he said that one of the advantages would be that We should not merely stimulate the process of massing people in the great centres of industry, but should create a demand for labour all over the country. Where there are streams, villages, pure air, and tolerable access, there are the places where the paper manufacture tends to establish itself. I want to see, and I do not despair of seeing, these village mills spring up again and flourish. The right hon. Gentleman at that time expressed the greatest sympathy for the smaller class of millowners, for he complained that the trade was gradually being absorbed into the hands of those who were possessed of large capital. It was for the House to say whether the anticipations of the right hon. Gentleman had been realized. When the right hon. Gentleman made that speech, and when it became known afterwards that he was going to abolish the Customs duty, and to leave the British manufacturers at the mercy of foreigners who taxed British manufactures for the benefit of their own people, great alarm was felt in the trade. From that moment the lobby became crowded with persons interested in the trade, whose interests were endangered by the policy of the right hon. Gentleman. They said that they were no enemies to free trade, and he (Mr. Maguire) asserted that they were not. They asked for nothing that would be a violation of the principles of free trade. Without going to Mr. M'Culloch or Mr. Mill, or any of those great authorities, he would simply appeal to his hon. Friend the Member for Rochdale (Mr. Cobden), who might be called the father of free trade in that House, and who in speaking upon the question of the malt tax used these words— I am bound to say that we have never lost sight of the producer in the great changes of the last twenty years. We know Sir Robert Peel held that before we exposed the manufacturers of this country to competition with other nations, we should relieve them from every disadvantage with respect to the articles they require for their raw materials. That was the very principle which the paper manufacturers declared to have been violated in their case. There was this foreign tax imposed upon their raw material, which tax was adverse to their interests, and in favour of the foreign manufacturer, and yet the right hon. Gentleman deliberately did away with the equivalent, which was not a protection, but a compensation for the injury which Foreign Governments inflicted upon British industry. Probably the hon. Member for Rochdale would favour the House with his opinion upon the subject later in the debate, and would be able to say whether the policy of the right hon. Gentleman was not a direct violation of all that he had declared to be necessary. When the right hon. Gentleman addressed himself to the Customs question on the 6th of August, 1860, and also previously to that date, promises were held out, as perhaps they would be held out that night to the paper makers, that the rag duty was to be abolished. Lord John Russell said in that House that, according to his reading of the treaty, there would be no further duty on rags, and the paper manufacturers were told by their friends, who went out into the lobby to see them, and to bring them the welcome intelligence, "Now you may go home; you are all right." The right hon. Gentleman also held out the same promise of redress. The paper makers endeavoured to impress on Members of that House, without distinction of party, that their case was a hard one, that they were treated exceptionally, and that if the country derived benefit from the French Treaty, they at least would be injured. Now, he charged the right hon. Gentleman with not having availed himself of the offer of the French Government, and not maintaining, even for one year longer, the Customs duty, which would have been the means of compelling Foreign Governments to do away with the obnoxious rag tax. In his speech on the 6th of August, 1860, the Chancellor of the Exchequer said— The French Government have made known to us that they will not, if it is our desire, press upon us the immediate fulfilment of the stipulation in regard to paper."—[3 Hansard, clx. 709.] But the Chancellor was apprehensive the "paper makers would suffer if this were delayed," and he added— It is true humanity to let a man loose from being the victim of his own groundless alarms."—[Ibid. 711.] The right hon. Gentleman said he was so confident in the energy, skill, and industry of the British trader that he would not accept the offer of the Emperor of the French. He scoffed at what he called the exaggerated fears and dismal forebodings of the paper makers, and said it was true humanity and the most merciful relief to free men from their mere fanciful chimeras. Statements were then made on the part of the trade in order to show the Chancellor of the Exchequer that the withdrawal of the Customs duty and the flooding of the British market with paper that was artificially cheapened, while paper manufactured here was made artificially dear, would be attended with fatal consequences. The Chancellor of the Exchequer would not believe the trade. At length, in 1861, the pressure was put so strongly on the right hon. Gentleman, that he yielded a Committee, which sat on the 2nd of July, and reported to the House on the 25th of the same month. That Committee reported to the following effect: they said— That, under the circumstances under which the British manufacturer was placed, the most disastrous consequences would ensue, unless some steps were speedily taken to place him on terms of fair competition with those of the Continent. That the removal of the Excise duty will not place the English manufacturer in a position of equity with his Continental rivals so long as the export duties on rags remain in force. That the Committee therefore recommend that the British Government should continue strenuous exertions to effect the removal of all restrictions upon the exports of all paper makers' materials. That was the recommendation of the Committee of that House, and up to this moment nothing had been done; or, if the Government had made any real efforts, no practical result had followed. The anticipations which were expressed in the strongest possible manner before that Committee, and which were also then supported by facts, had been realized up to this time to a most deplorable extent. The right hon. Gentleman made a speech in the present year, and in the course of that speech he referred to the paper trade, and to their alleged sufferings and fancied grievances. His conscience evidently was not easy; he felt that he had done a grievous wrong to a particular branch of industry; and so nervous was he about the matter, that although there was no actual necessity for introducing the question of the paper duty in his financial statement this year, the right hon. Gentleman referred on that occasion at great length to the paper trade. The right hon. Gentleman had, he believed, two letters in his pocket at that time. One of them was from a British paper maker, showing him, by facts and figures, what the deplorable result of his policy had been. The other was a communication from a gentleman whose statement he quoted to the House, and which excited the most extraordinary wonder among the trade. The right hon. Gentleman impressed upon the House that the paper makers did not understand their business; that they did not know what was good for them; that they were like all other men who had grown up under the enervating shadow of protection; that they were foolishly apprehensive of the struggle and competition of free trade; but that the very moment their energies were braced by a healthier atmosphere they conquered every difficulty, and succeeded in acquiring prosperity and independence. "And now," said the right hon. Gentleman, "to prove my case, I will give one important fact." That "important fact" rested on the authority of a gentleman whom he now knew, and about whom he would tell the House something—a gentleman who really did not understand practically what he was dealing with, and who, carried away by his own ideas of his wonderful discovery, had deluded himself and deceived the Chancellor of the Exchequer. The right hon. Gentleman, on the 7th of April, said— His statement is this:—His mill [the mill of this gentleman or the company to which he belonged] is almost a new one. For the four months ending the 31st of October, 1863, he found that he made his paper at a cost of £57 per ton, and that commodity, made at such a cost, did not pay him. He did not complain; he joined in no agitation for the reimposition of the paper duty, or for other purposes, equally unattainable; but he and his partners set themselves to work to see what could be done by improvements in the processes of manufacture and by the more skilful and economical use of chemical agents, so essential in the manufacture of paper. The results, as they have been told me, were surprising indeed. In October, 1863, the firm had produced paper, as I have said, at a cost of £57 per ton; in December they produced at a cost of only £47, and at the present moment they were producing at a cost of £39 per ton; and this gentleman declares to me that the article now produced is better than what he produced last summer for £57 per ton. For my own part I cannot say I believe that the condition of the paper trade essentially depends upon the laws of foreign countries with regard to the export of rags. Those laws, no doubt, form an element, and no unimportant element, in the case of the paper makers, but I am convinced they would be ill-advised if they were taught to depend upon anything but their own energies."—[3 Hansard, clxxiv. 554–5] [THE CHANCELLOR OF THE EXCHEQUER: Hear, hear!] The right hon. Gentleman cheered. Now he held in his hand an advertisement inserted in "Mr. Marsh's periodical sale, Thursday, the 5th of May, 1864." The right hon. Gentleman, it should be remembered, told the paper makers that in order to realize immediate fortunes, all they had to do was to follow the example of that wonderful discoverer. Well, if that gentleman had gone on as he said he had been doing, what would have been the result? Why, the shares of his company would have sold for 200 per cent premium; but what was the fact? They had been sold at 60 per cent discount. The glowing statement was made by the right hon. Gentleman on the 7th of April, and on the 5th of May the shares in that company were sold at over 60 per cent discount by public auction; and, more than that, they were not bought by the public, but by a member of the company. He held in his hand the prospectus of the company; but he did not think it necessary to mention names, either in the present case or in any other. However, he might say that the gentleman in question was known to some hon. Members. The prospectus stated that the object of the company was to take advantage of the repeal of the Excise duty on paper under circumstances that were peculiarly favourable. The capital of the company was £150,000, the whole of which, except £15,000 held in reserve, was paid up; thus £9 out of every £10 share had been called and paid. He had in his hand a copy of a note of the sale of fifteen shares in that company. The fifteen shares, at £9 each, had cost £135, and at the sale they fetched only £3 15s. each, and produced altogether but £55. What, then, did the House think of the statement paraded there at that table by the right hon. Gentleman, and sent forth throughout the United Kingdom—a statement, the object of which was, to dry up in the breast of every hon. Gentleman any sympathy he might have for an oppressed class of his fellow-subjects? He said that statement was a melancholy delusion; he would not go further than that. Four companies had been started under the auspices of the right hon. Gentleman. One of them was dead, another was in difficulties, a third had its shares sold at 60 per cent discount, and here were the facts relative to another. Perhaps the right hon. Gentleman might have access to that document as well as he had. Here was a pretty state of things? A new mill, new energy, ample capital; and what was the result? Disappointment and disaster. This was what the directors stated. He belonged himself to some companies in his own city, and if, as chairman, he had to make such a statement, he should be inclined to leave his city as soon as he possibly could. Thank Heaven, it had never been his lot to read such a Report as that which he was now about to quote. This company was incorporated and started under the auspices of the right hon. Gentleman in March, 1860. [The CHANCELLOR of the EXCHEQUER: Under my auspices?] Mr. Maguire did not mean to say that the right hon. Gentleman contributed any solid coin to the company; he only meant that the right hon. Gentleman had invested in it in an imaginary—in a Parliamentary sense. The right hon. Gentleman had deluded, bewildered, and disappointed many, many in England, as he should prove, and he was sure the right hon. Gentleman was anxious to know the exact state of one of his pet companies. Here was the Report:—The company was called the East Lancashire Paper Mill Company, and The Directors in presenting their Report for the half-year ending December 31, 1863, beg to state that, although in reference to the statement of accounts there appears to be a considerable loss in the working of your concern, yet, at the same time, the shareholders must bear in mind the increasing price of materials, without a corresponding increase in the price of paper, and which has necessarily been a cause of the amount of loss during the past half-year. To commercial men it would appear rather strange that nothing was allowed for depreciation, or for bad debts. Here was the balance sheet: The first half-year there appeared a balance on the wrong side of £301 6s. 3d., and the second half-year there was a balance also on the wrong side of £587 5s, 7½d., making in one year, in consequence of the rag tax—in a case where there was ample capital, new machinery, and every modern improvement—a loss of £888 11s. l0½d. So much for this company. And now, as a matter not of justice to himself, a feeble advocate of a great cause, but to the paper makers of England, he earnestly implored attention to a few extracts from letters written by men smarting under a sense of wrong, and representing the disasters and misery that had overtaken them. He had the original documents in his possession, and would place them, in confidence, at the disposal of the Chancellor of the Exchequer, if he desired to verify the statements which he made. There were nearly forty letters in all, but he would only quote a few of them, without, of course, mentioning names, or even the county where the parties carried on their trade, for he did not wish to destroy the credit of men, many of whom were still struggling under desperate difficulties. He would only observe that nearly every county in England and in Scotland was represented in this appeal to the sympathy of the House. The paper trade had no alternative but to make an appeal to the House. [Mr. COBDEN dissented.] He begged the hon. Member for Rochdale to attend to the statements he was about to read, and then he would ask him to defend his policy, if he adhered to the principles of free trade, which he denied he had done in the case of the paper makers. The hon. Member would find that the case was, at least, deserving of his very deepest sympathy. The right hon. Gentleman up to the present moment had denied the facts stated by the trade. The Chancellor of the Exchequer said there was no distress. [The CHANCELLOR of the EXCHEQUER: No!] The right hon. Gentleman made a statement the other day which could have no other meaning. He said everything depended on themselves—that the foreign rag tax was nothing; all that was required was that they should be industrious and energetic. Did he not talk of imaginary grievances, of dismal pictures of fancied ruin? By every word that came from his lips the right hon. Gentleman had practically denied the existing state of things. Well, then, he asked the House of Commons, when were they to have an inquiry into the operation and result of the Chancellor's fatal policy? The paper trade was told to keep quiet and all would be right. Were they to make no movement till they were crushed to the very earth? Were they to make no demand on the sympathy of the House till forty or fifty of these respectable men were in the Gazette, and thousands of those whom they employed were beggars scattered over the face of the world? When were they to make their appeal if not now? No good had up to the present time resulted from the policy which had been sanctioned by the House; and were not those who suffered from that policy to proclaim their sufferings to the Government and to the country? Here was one statement— Besides paper, we were the largest millboard makers in the—of England, but in consequence of the free import of foreign millboards, while the foreign duty was kept on materials, we have been driven completely out of the market, so that this year we have not made a sheet. The foreign boards are much inferior to our make, but our customers say they cannot give our price when they can make the foreign boards answer the purpose at about half the price. To show that we are not alone in this department, we have just had a letter from a firm who made millboards, offering us their whole stock of utensils. Our net profits, after deducting interest on capital employed, were, in 1859, £1,000; capital employed, £17,000. During the next two years—in consequence of Mr. Gladstone's high eulogiums and our own expectations of the future prosperity of the paper trade, to be caused by the extra demand consequent on the abolition of the Excise duty—we could only work part of our own mill, owing to our making considerable alterations and additions in the building and machinery, so that our profits were necessarily smaller. When at full work with our extra new machinery and buildings we had this result: In 1861–2, profits, £40, capital employed, £31,000; 1862–3, loss, £1,375, 8s. 8d. Since then we have tried all in our power, by increasing our turn-out, and running day and night, to lessen our working expenses per ton of paper produced, and we are sorry lo state with very little better success. If these are not proofs enough for any man that the foreign treaty is an abominable curse to the trade, we are at a loss to know what could be. If we were put on a free trade level with the foreigners, we should not be the least afraid to meet all the Continent in the market; but under this vile protection to the foreigner we can see nothing at all before us but utter ruin, or to sell our works at any sacrifice, while we have the mortification of knowing that our opponents are getting rich at Our expense. Here was another letter, in which two cases were stated— I am very sorry to have to mention that my own mill, which I have had for thirty-nine years, is closed. My reason for closing it is, the utter impossibility of making a profit while foreign paper is allowed to be sent to this country, free of all restrictions, to compete with ours. My mill, which was engaged in the manufacture of printing papers, and upon which I had only just laid out £5,000, has been closed three years, and I have sustained a great loss thereby. I am sorry for the poor people I was compelled to dismiss, for they had very hard work to get occupation, and the trades people here suffered through the closing of the mill. You will be sorry to learn that the men at—mill are under notice to leave. The proprietors find it useless to keep on, foreign paper driving them out of the market. I hope that the Government will really do us justice. Three years must surely be a sufficient time to show that the Government measure respecting our trade has totally failed, and that it is exceedingly unjust and impolitic that our property should be sacrificed and many driven to a state of absolute ruin. Here was another most important statement— At the beginning of last year I found trade exceedingly bad, and I determined to stop one of my mills for a time (finding other employment for my principal hands); and during a stoppage of four months I had the mill put into thorough repair, introducing several modern improvements to economize labour, facilitate the process, and generally to cheapen the production, and as a practical man, I am justified in saying these objects were carried out. I then started the mill again, and up to the end of the year—eight months—I made weekly an increased quantity of better paper, and, therefore, cheapened the production; but my eight months' balance showed a loss of £88. In bringing out that result I have carried to capital account all new machinery and improvements that cannot fairly be placed to working expenses. Now, the entire cause of this ruinous state of things is the high price I have to pay for material, and the low price I am compelled to sell my manufacture at. It is my intention to persevere for another year, in the hope that justice will be done us by the Government; if not, I will have no alternative but close the mill and discharge the workpeople. The paper I have made is for the cheap press. Here was another case— This is a brief statement of my case:—In the year 1882 my actual loss was £100; the year ending 1803 it was £130. The current year, I fear, will be much worse than the two preceding ones. … I have been a good deal on short time during the last two years for want of orders. My rent is £260 per annum, and as soon as my actual loss amounts to that sum I will be compelled to shut down altogether. Here is another case— Mine is a very small concern, but it has been all that I wanted up to the time of the repeal of the duty; since then I have not been able to live by my trade, and if something is not done at once to put us in a fair position with the makers on the Continent I must give up altogether, as the little capital I had to work with is gone. In a letter dated June 4, another gentleman said— Finding in the practical working of paper making under the removal of the home duty and the continuance of the foreign duty on rags that a most severe loss would attend our continuance of the manufacture, we relinquish the trade, submitting to the loss entailed upon premises and plant rather than carry it on to our ruin. Another writer says— In reply to the inclosed letter, received this morning, I beg to say that I have given up the paper trade for the last twelve months, as the trade was so bad it was not worth my notice. Again, another— I am one that is nearly ruined with what Mr. Cobden calls 'free trade.' I only want free trade, if I knew how to get it. My mill is now standing, and has been so ten days. I cannot make printing paper pay, and in a new mill, too, only four years built, to be ready by the time the duty was taken off; but I expected free trade in rags as well as in paper. I did not expect all on one side. The old mill was paying here five years ago, but the duty on rags cost me £120 per week more than the same material costs the foreigner, and I have to sell paper against him in this market. The kind I make is now 2¼d. to 2½d. per lb. less than when the duty was on, or say a disadvantage to me of ¾d>. or 1d. per lb., and rags higher. My last stock taking showed a loss of nearly £400 in three months, in addition to the rent, interest, and use of £15,000 worth of machinery; and still I am told to work on until it gets right. If something is not done it will work me out of my mill, and all I have been working for for the last eighteen years, and all will be lost in what is called free trade. I only want real free trade, and if I have that I will not complain. If nothing is done in the House to give us fair or free trade, I would be glad to take half the cost of my mill, and to get out of the paper trade. All these letters, with one exception, were written in the present year. He had another letter, which he would condense into the following facts. The writer had two mills, one of which was entirely idle, and the other, with two machines, only working half time. He was a loser of several thousands of pounds, in consequence of the present state of things, but he was holding on in the delusive hope that something would be done by the Government in the shape of a correcting and mitigating measure. There were in the paper trade enthusiastic free traders, and the Chancellor of the Exchequer relied upon the evidence of such men, when he asserted that Mr. Wrigley, Mr. Evans, and Mr. Bruce, and other princes of paper manufacture, did not really represent the trade—that these gentlemen were only making political capital for themselves. But he fully relied upon the men who gave opinions contrary to the assertions which had been put forth by those Gentlemen to whom he had alluded. He (Mr. Maguire) had evidence from that quarter. He found it stated by a firm of enthusiastic free traders— That having no fear of the repeal of the duties, they expended in new works from £20,000 to £30,000 'with every newest invention and plant known to the world,' are 'woefully disappointed,' the result being the very opposite of their sanguine anticipations. They now think that 'Free Trade has its limits.' Another firm wrote in somewhat the same spirit. They also had been the victims of the Chancellor's eloquent imaginings. They go on to say that 'yielding to the impulse,' they laid out £6,000 in extensions and improvements; no result but disappointment, materials dearer, and prices lower.' Are 'now fairly at a standstill, not knowing how to live.' He could show that this was a question affecting country gentlemen who were owners of mill property, and to prove that he would read a few lines from a letter dated from a London club— Although not a paper manufacturer I am a sufferer from having paper mill property—namely, two mills unlet, entirely from the unsatisfactory state of the trade. They are eligibly situated both as regards situation for carriage and supply of the purest spring water. I had made all preliminary arrangements with a firm of substance for manufacturing fine paper, but on account of the unsatisfactory state of the law respecting rags they declined embarking in the business. He would only quote one other English authority, and that was a letter which did credit to the gentleman who wrote it. He could not give the name, but it was one which might be proclaimed upon the housetop with honour to the writer of it. The letter, dated on the previous day, said— Without giving names, you are at liberty to state that a (my) paper mill, having therein invested capital to the amount of between £40,000 and £50,000, has for the last twelve months been quite unremunerative—not made one penny of profits—and that the said mills would have been closed in the spring of 1863 had not the proprietors been desirous to prevent some 300 workpeople from being thrown out of employment in the midst of a town whose inhabitants were out of work and in distress owing to the then existing cotton famine. He would next quote one or two cases from Scotland, a land where energy and industry were known to exist, and where economy and prudence in business was as distinguishing a feature in the national character as was hospitality in social intercourse. One Scotch manufacturer wrote— … I am a maker of wrapping papers, and, prior to 1861, was kept in full and regular work at fair prices, leaving me a profit at from 10 to 12½ per cent. Since 1861, though using great personal exertion to keep my trade, I have been necessitated to put my mill on half-time, and can with much difficulty, and at unremunerative prices, keep on even at this reduced make. From various causes our material has got scarce and very dear, while competition from home and from abroad has reduced the value of paper. When in London, three weeks ago, an old customer of mine showed me a paper he was buying from a Dutch mill at £19 a ton free in London, This is a sort I used to make in considerable quantity and to profit, but cannot now touch without serious loss, not mere absence of profit. Yet give me free access to some market for material, and I know I could beat the Dutchman in his paper and price by 50s. and have a fair profit. He, however, has advantage over me of £5 per ton export duty on the material, being, on the 30 to 33 cwt. necessary to produce a ton of paper, some £8. No skill will avail to overcome such a difference. This was from one of those self-reliant men who had been spoken of, and he recommended the succeeding words to the consideration of the Chancellor of the Exchequer. The writer went on to say— For myself, I have not called out till I was hurt, and that most severely. I do not ask more than full and fair free trade in the material as well as in the paper produced, and I am content to compete with any; with full confidence I can keep my former customers from continuing to go abroad for cheap paper, while I shall employ more hands, and be more prosperous and contented, which at present I am not. Another Scotch manufacturer, who paid a rental of £1,000 a year, said— He could not work half-time, or shut for a time, as great loss would be the result. When his loss reaches £2,000 a year he will shut up. On the production of one machine he made some years ago £937. Last year the produce of the same machine sold at a dead loss of £836. The pressure every day becomes worse. The only other Scotch case which he would mention was one that was described in the following terms:— In 1856 they purchased a mill that produced an average of eighteen to twenty tons a week. In 1859 and 1860 had overcome the first difficulties, and were beginning to prosper, but the Repeal of the Customs duty and the retention of the duty on the export of rags were too much to con- tend against, and in 1862 the firm was in the Gazette. The hard and long struggle ended in utter ruin to the proprietors, and 250 people were thrown out of employment, many of whom are still suffering. The property (in 1856) was worth £50,000, and remains unsold to this day. It would be rather a queer thing if, being an Irishman, he neglected to speak of the wrongs of his own country. He would assure the right hon. Gentleman that he had himself entertained the most sanguine hopes that the repeal of the Excise duty upon paper, of course retaining the Customs duty, would have resulted in advantage to Ireland, where labour was plentiful, and where beautiful sites and sweet water abounded. He had been so carried away by the prospects that he saw opened up for the trade, which was so peculiarly suited to Ireland, that he would at that time have undertaken the responsibility of inducing his friends to join him in starting a company to compete with Englishmen in manufacture of paper. Thank God he had not touched it. Belfast was the seat of a great and flourishing industry. The men of Belfast were equal in energy and enterprize to the men of Manchester or the men of any part in England or Scotland. He had a letter from Mr. Archer, of Belfast, whose name he had no delicacy in mentioning, because that gentleman had left the trade. Mr. Archer said— We were in hopes of being able to dispose of the concern, but had no offer from a purchaser, as no one seems inclined to go into the trade in its present state. We had, therefore, no alternative but to shut down our mill and dismiss our hands, of whom we used to employ about 140. We have closed for about six months, and the sorts of paper we made were 'long elephant' for room paper and printings. Although we had every advantage of cheap labour and an excellent concern, we found ourselves totally unable to compete in the London market with the Belgian and French paper manufactured of rags, bought at a price made artificially so much lower than ours, by the heavy export duties which Foreign Governments impose for the benefit of their own paper makers. Two other paper makers in our neighbourhood gave up the business—one of them having been made a bankrupt. It is most galling to us to be obliged to keep our mill idle, and pay the rent of the water-power, besides losing all benefit from the capital we had expended in buildings and machinery. An unfortunate gentleman wrote to say that his father was now out of the paper trade, having lost his reason owing to a failure in business consequent on the repeal of the paper duties. Early in the Session the right hon. Member for the University of Dublin referred to a letter from Mr. Greer, who was a Protestant gentleman from the North of Ireland, who had established himself within some miles of Cork. Mr. Greer was a model of energy, ability, and industry. At one time—that was before the repeal of the Customs duty on foreign paper—he employed 300 hands in two mills, and competed on fair terms with the English manufacturers, so that even during the fearful years of famine the district round his works was like an oasis in the desert. The people employed in these mills were happy, healthy, and contented, while around them on every side there was nothing but misery and despair. Now, however, Mr. Greer had been obliged to dismiss half his people, many of whom had relapsed into abject poverty, while others had emigrated. This, then, was the present actual condition of the paper trade as it was affected by foreign taxation. So far, at all events, he (Mr. Maguire) had not indulged in mere fanciful declamation, but had given facts enough, he hoped, to arrest the attention of the British Parliament. If they waited for ten years more, there would be a larger list of casualties, a longer list of killed and wounded. But Government should bestir themselves at once, for Parliament would never see a meritorious body of men and a large industry sacrificed to carry out what was a hollow mockery of the great principle of free trade. It might be said, and had been said by the right hon. Gentleman, "The British manufacturers have exported largely; how, then, can they be suffering?" But what did the right hon. Gentleman call a large export? Was one-fourteenth of their produce a large export? The paper manufacturers produced paper to the value of £7,000,000 a year, and, according to the Board of Trade, they exported £500,000 worth of that produce. Mr. Wrigley said he was exporting scores and scores of tons of paper, in order to find a new market and break new ground. Men of large capital were obliged to keep their hands and their mills at full work. At present they would not give in, but he had heard men with £200,000 or £300,000 embarked in the trade say, "The time must come when we also must be crushed." The right hon. Gentleman would say, "Oh, but you now have new materials." And an hon. and gallant Friend of his had said to him, "Why, you can get any amount of raw material in India." No doubt of it; but if large quantities of new material were introduced, the result would be to reduce the price of rags; and if the price of rags was reduced, the British manufacturer got no benefit, standing then in exactly the same relative position as before with his rivals in foreign countries. The existing engine of tyranny was so admirably constructed that neither the rise nor the fall in the price of rags was of advantage to the British manufacturer. As a homely illustration, he would take the four wheels in a carriage. Did the House ever see the hind wheel overtake the fore wheel? If the price of rags was low here, it was proportionally low in Belgium, France, and Prussia, with this advantage to the foreign manufacturers—that, behind the protection hedge afforded by their customhouses, the price was lower to them by the amount of the export duty than it stood at in the English market. High or low, it was all the same benefit to the protected foreigner, and all the same injury to the British victim of so-called free trade. Where, then, was the special benefit to the British maker—so far as regarded price—of introducing new raw materials? Another question asked was, "Why cannot rags be as low here as they are in countries where this protective system exists?" The answer, of course, was, "Because we have an open market." When the Americans could buy here to advantage, they took large quantities of rags from this country; at other times they purchased in the continental markets. Thus the price here was kept up to the price of foreign rags plus the duty. Take the waste from jute as an instance how the system worked. Jute was imported hero from India free of duty. A Frenchman came here and took away his jute free of duty. In France it was spun, and sent to Dundee free of duty. But the paper manufacturer at Dundee, who wanted the refuse of this jute from France in order to make his paper, must pay duty upon it at the French custom house. This was our free trade. And what was the opinion of foreigners respecting what we had done for our paper makers? Mr. Potter, a large manufacturer, was travelling some time since in the North of Spain, and fell in with a French gentleman, who said to him, "Your new British legislation seems very favourable to us foreigners." He said that he was going to join two relatives, one of whom knew something about paper making, and that they meant to embark £20,000 apiece in establishing a mill in the South of France; and he added, "We always thought you a clever people, but now our wonder is that you can be such utter fools." This was the opinion of foreigners, who, being themselves protected, were taking every advantage of our blunders, were adopting every improvement in mills and machinery which they could find in this country, and were then sending their paper here to deprive our paper makers of their legitimate profits. The Chancellor of the Exchequer boasted that not only were the six farthings of the abolished Excise duty given to the consumer, but three farthings additional. Whence, then, did these three farthings come? They came out of the trade—out of the capital, the industry, the brain, the energies of these men; but this was not a thing of which a British Government ought to boast. The right hon. Gentleman denied that the manufacturers had suffered. [The CHANCELLOR of the EXCHEQUER: I never denied it.] Did not the right hon. Gentleman say that no harm would result to them from his measures? Did he not say that they were like all the men who fancied that they would become victims to free trade, and that they would be all right by-and-bye? Did he not practically deny that they had suffered when he said in effect some time back that their complaints were not justified by the facts? Well, if the House was still incredulous about the facts, let them grant a Committee. The paper manufacturers had been mocked at in the House of Commons, and derided in Downing Street, and the country was under the belief, which had been expressed by the President of the Board of Trade, that they were manufacturing such large quantities of paper, and were sending such large quantities out of the country, that they could not be badly off. The fact was, however, that all classes of the trade were suffering—that the small manufacturers were being driven into bankruptcy, and that large men were working without profit, or at a loss; and if the same policy were persisted in for the next half-dozen years, very little would be heard of the paper trade in England, and the Government might then make the noble and patriotic boast that they had handed over a large and valuable native industry to foreigners, who had grown rich at our expense. The right hon. Gentleman might say, "What is your policy?" He admitted that this was a very embarrassing question when asked a short time ago; but it was not his business to point out a remedy, for he was only a private Member, not an organized Opposition. The injury done to the trade had not been inflicted by him, but against his earnest and repeated remonstrances. It was the Government who had done the wrong—it was for the Government to find the remedy. The Chancellor of the Exchequer had no more zealous supporter of his treaty policy than he was. He gave the right hon. Gentleman the fullest credit for what he had accomplished in concert with the hon. Member for Rochdale. They had linked the two nations by bonds which were stronger than any other bonds could be; and as long as France and England were united by that mutual interest which sprang from a free interchange of trade, we might diminish our war expenditure, and lessen the number of our iron-clads. The Chancellor of the Exchequer might afford to stand up in that House and admit he had made a blunder in this case. The hon. Member for Rochdale might also afford to stand up and say, "I am the author of free trade; I have conferred blessings on millions of my fellow-countrymen, but I have made a serious mistake in this individual case." The paper manufacturers asked for some redress for their wrongs. He was not in a position to say what the remedy ought to be; but the Government had done them the wrong, and the Government ought to give them an opportunity of proving their case, and ought then to provide a remedy. If the Government did not do this, the evil would grow to such gigantic and appalling dimensions that the time would come when that House would either hurl the present Administration from office, or compel them to obey the will of a generous and just Parliament. He had concluded his task. He asked in the name of those men to be heard before a Committee of that House, in order that they might vindicate their honour and character in the face of Parliament and the country, and prove they had a case which entitled them to redress from the Legislature.

Motion made, and Question proposed, That a Select Committee be appointed to inquire into the present position of the Paper Manufacture of Great Britain and Ireland, with respect to Foreign Taxation."—(Mr. Maguire.)

THE CHANCELLOR OF THE EXCHEQUER

Sir, the Question of the paper trade has for a considerable time passed out of my hands, and is in the Depart- ment of my right hon. Friend near me (Mr. M. Gibson), who will be prepared to state; his views on the subject. But the House will not be surprised if I rise to make a few observations on the speech of the hon. Gentleman. Considering that so much of that speech has been addressed to myself, I should hardly have thought it consistent with due respect to the hon. Gentleman to have remained silent after his remarks. I am, however, bound to say that I cannot enter into a discussion of this question, even on a limited scale, without stating that the hon. Gentleman must be responsible for the result of this debate. As far as Her Majesty's Government are concerned, they have no objection to any inquiry which the House may think fit to direct; but it is my duty to state what I think of the nature, tendency, and result of discussions such as this, and at present I wish, in the interest of the paper makers, to enter on this discussion under a protest. The discussion of this question is raised by themselves, and therefore the Government will not be responsible for any bad results which on their showing may arise from having their affairs debated here. The period at which the hon. Gentleman makes this Motion renders it difficult for one to understand what it is he wishes to do. He speaks on the 19th of July, after the Appropriation Bill has been introduced, and, of course, he cannot expect that a Select Committee can be appointed to undertake such an inquiry as he proposes and report during the present Session.

MR. MAGUIRE

I shall be quite satisfied if the Government will state that, at the opening of next Session, they will accede to the appointment of a Committee without one word of discussion.

THE CHANCELLOR OF THE EXCHEQUER

That is an explicit statement, and I will endeavour to meet it in a manner that will, I trust, be satisfactory to the hon. Gentleman. I do not think it right that any pledge should be given as to the particular course to be taken at a future and somewhat distant time, because, in the meantime, circumstances may occur to render such a course unnecessary; but I have distinctly stated that, whether at that time, at this time, or at any other time, the Government have no wish or desire to prevent any inquiry which the House may think fit to direct; and it is in that spirit, next Session, we shall meet the proposal of the hon. Gentleman. And he makes a stipulation—that the Com- mittee should be appointed without any discussion whatever—to which I have no objection whatever. I think it will be much better for the truth of the case, and for the interests of the parties concerned, that it should be so; and if it should be the wish of the House to have an inquiry they will not find the Government setting themselves against it. Having said so much as to an inquiry, I proceed to notice the remarks of the hon. Gentleman. He says that in 1853 Mr. James Wilson defined the penny Customs duty not as a protection to the paper manufacturer but as an equivalent for the duty on rags; and he says I endorsed that definition. It is difficult to speak from memory of an occurrence which took place eleven years ago; but subject to that reservation, I beg to say that the penny Customs duty proposed by me as Chancellor of the Exchequer in the Earl of Aberdeen's Government was proposed not because we thought it a just compensation for the duty on rags, but because we thought it right to proceed step by step downwards in our transition from a high rate of duty to a state of free trade, and because we thought there was a plea at that time for a reduction of the duty as long as the principle of a Customs duty was not brought in question. But do not let it be supposed that ever there was any recognition of the proposition which has been advanced by the hon. Gentleman. Mr. James Wilson is not here to speak for himself, but I am, and I state that the duty of a penny was proposed entirely on grounds of policy, and without any pledge such as the hon. Gentleman imagines being given in 1853. Then the hon. Gentleman says we have departed from the principle of free trade and of Sir Robert Peel—that principle being that you should not seek to abolish protection for the British manufacturer, and expose him to competition without giving him a free use of the raw material of his manufacture. Now, the hon. Gentleman has fallen into and used language here which is calculated grossly to mislead. What does he mean by free trade? Does he mean to say that we in this country are to base our policy on the principle of free trade, leaving other nations to follow our example as soon as they may see the advantages of doing so, but not depriving our own people of the advantages of free trade because the people of other countries are not sufficiently advanced in the principles of economical science to follow the same policy? Are we to do that, or are we to remain inactive till every other Government abolishes protective duties, and every other country comes up to the same standard of economical knowledge? The principle of Sir Robert Peel was that, as far as the Government could do so, in subjecting the British manufacturer to competition with the manufactures of other nations, they should give them every advantage of raw material; but I challenge the hon. Member to produce from Sir Robert Peel's speeches any statement that free trade in this country was to wait for the halting advances of other countries. Are our people to be deprived of the advantages of free trade, and subject to the evils of protection, because other Governments wont do justice to the people whose affairs they manage? The hon. Gentleman states that I informed the House the duty on rags had been repealed in Italy. That is not quite correct. What I did on the occasion to which the hon. Member refers was to quote from a Parliamentary paper a document in the possession of the House. I believe the inference drawn from that paper was incorrect; but I never pretended to give information not in the possession of the House.

MR. MAGUIRE

You first expressed a doubt; but subsequently, when answering questions, you said, "I had a doubt earlier in the evening, but now I have no doubt. I state it as a fact."

THE CHANCELLOR OF THE EXCHEQUER

No, I did not.

MR. MAGUIRE

I beg the right hon. Gentleman's pardon.

THE CHANCELLOR OF THE EXCHEQUER

I made the statement from reference to a document in the possession of the House. No information on the subject was given by me as a Minister. The hon. Gentleman has also referred to certain figures which I quoted as supplied to me by a gentleman in the paper trade. Those figures went to show a diminution in the cost of manufacture, which I myself described as surprising; but, when I gave those figures to the House, I stated that they were open to others to examine, because the gentleman had kindly allowed me to make use of his name. I am sure the hon. Gentleman will do me the justice to say I quoted those figures as they were given to me. [Mr. MAGUIRE: Hear!] And that they were not presented on my authority; but I must be permitted to observe that, whether they were good or whether they were bad, he has not met them. He only says that in the month of May the shares of the company were at a discount of 61 per cent; but he has not stated what they were at before those figures were made up.

MR. MAGUIRE

The company had not begun then.

THE CHANCELLOR OF THE EXCHEQUER

When did the first sale of shares begin, and at what price? The hon. Gentleman has overlooked the fact that though they might have been at a discount of 60 per cent in May, before then they might have been at a greater discount still.

MR. MAGUIRE

Why, it was a now company.

THE CHANCELLOR OF THE EXCHEQUER

Is there no such thing in this country as the shares of a company being at 60 per cent discount?

MR. BUXTON

It cannot be a very flourishing company.

THE CHANCELLOR OF THE EXCHEQUER

I never said it was very flourishing. Let the matter be examined on its merits, but I only say that the hon. Gentleman has not disposed of the case made out by those figures. The hon. Gentleman said he had given us a great many facts. I may divide the hon. Gentleman's speech into particular statements in the nature of facts—which I do not question, proceeding as they do from him—and general descriptions of the state of the paper trade; but particular statements of facts are one thing, and general descriptions are another. If I complain of anything in the speech of the hon. Member, it is of his repeated and pertinacious assertions that I have always denied the existence of distress in the paper trade. I will take the liberty of quoting what I really did say in my Financial Statement on this point. The language I then used was this— I am very far from representing that the state of the paper making trade is at present one of the prosperity in which we should all desire to see it, because it is affected—I think and hope for the time only—by very serious drawbacks. The hon. Gentleman, therefore, has done me injustice by his repeated assertion that I denied that the paper makers had suffered. But that is only a secondary matter. The statements of the hon. Member which are material refer entirely, not to the condition of the trade generally, but to that of a particular class or particular persons in the trade. That is no proof of the languishing condition of the trade generally. [Mr. MAGUIRE: I might have quoted fifty or sixty cases.] Well, but they are not the whole trade. As far as I was able to follow him, it appears to me that the statements of the hon. Gentleman referred to one particular class of paper makers—the makers of printing papers of middle and ordinary descriptions, which are the papers, undoubtedly, that have been brought into sharp competition with the foreign article. The hon. Gentleman jumps a great deal too fast to his conclusion when he shows a distress among certain paper makers in one particular department of the trade, and then thinks he has proved that the paper trade generally is in a ruinous condition. The hon. Gentleman says, that if we go on as we are for half-a-dozen years we shall have nothing to do except to lament over the ruin of a once flourishing trade. Is that statement borne out by the facts? I do not deny that there exists great distress in the trade; I do not deny that particular branches of the trade are suffering from severe pressure; but it is what happens to all trades in the stage of transition from a state of high protection to that of unrestricted competition with the foreigner. As regards the foreign duty on the export of rags, though it has been enormously and mischievously—for the interests of the paper makers—exaggerated, yet I do not deny that their case is a hard one, and that it is the duty of the Government to endeavour to obtain a remedy, if possible. The hon. Gentleman says that the ruin of the paper trade is that to which we are proceeding, but I say that, though our information is limited and imperfect at present, and though the Government have not the means of stating the case so well as the paper makers, that statement is confuted by the figures on our table. If the paper trade, as a whole, is a dying trade, how can the hon. Gentleman account for the fact that the number of paper makers has ceased to diminish? He says that the paper makers are becoming bankrupt, but if that general statement be a true one it must be represented in the returns we have before us of the number of paper makers. Why has not the hon. Gentleman met the figures I gave in my Financial Statement? Why has he not met the statement that whereas before the repeal of the paper duty the number of paper makers in this country appears to have been steadily and rather rapidly diminishing, the repeal has arrested that diminution. In 1838 there were 525 paper makers in this country, and in 1860 that number had fallen to 384. If the paper trade is on its road to ruin, I ask the hon. Gentleman to explain how it is that rapid diminution in the number of paper makers has been arrested? The hon. Gentleman then referred to the exports, and he says that a fourteenth part of the whole production is no great amount to be exported. But is it not somewhat remarkable that that fourteenth part is sent by the British manufacturer into neutral markets, where it has to meet the Belgian, German, French, and other manufacturers, and yet, notwithstanding that the trade, as we are told, is in a ruinous condition, the hon. Gentleman himself admits that this proportion is exported? He omits, however, altogether the strong point of the case. What is material is not merely the assertion that some portion of the paper manufactured here is exported into neutral markets, but that since the repeal of the duty that portion has greatly increased. In 1859 we exported of paper and paper hangings 115,000 cwt., and in 1864 190,000 cwt. That increase must mean something. Does it mean bankrupt makers, mills deserted, trade going to ruin, or does it mean more hands employed, more capital invested, more mills, or larger mills at work? That is the second question I propose to the hon. Gentleman for his consideration. Another point which the hon. Gentleman has not met is the immense increase in the importation of materials for paper making. His ingenious argument that the British paper maker stands between the American on one side and the foreigner on the other is no answer at all to the figures which I have given before, and which I will repeat. In 1859 we imported of materials for paper making 115,000 cwt., and in 1864 731,000 cwt. Does the hon. Gentleman think he has stated the case of the paper makers when he has overlooked a state of facts such as this? What has become of those 600,000 tons of new material? Have they been kept in warehouses, or have they not been sent into the market and made up, causing the employment of additional industry and increased capital? [Mr. MAGUIRE: But without a profit.] There, the hon. Gentleman goes on chanting the same ancient strain we have heard in all these cases of the removal of protection. It was just the same with shipbuilding when we repealed the Navigation Laws. When we pointed out that shipbuilding did not diminish we were told that it was done without a profit, that there were continual bankruptcies, but that new men came in so ignorant and so foolish as to go on wasting their money on business which yielded them no profit. I must say, therefore, that I am not at all prepared to join with the hon. Member in the dismal anticipations he has raised of the ruin of the paper trade. I submit myself to further information and correction when further information may be forthcoming; but I say that the figures which I have quoted—though not absolutely demonstrative—are a great deal more powerful, and to the purpose, as regards the general state of the trade than anything he has produced on the other side. The hon. Gentleman says that it belongs to the Government to propose a policy in this case, and to discover a remedy for the condition of the paper trade. If we say anything about improvement of processes and about the trade adapting itself to altered circumstances, and endeavouring to meet increased competition by cheaper methods, and by the more effectual application of labour and skill, we are always told that we are heartlessly exulting in the miseries of our fellow-countrymen. I will not, therefore, enter into that line of discussion, but I will enter into the remedies which have been proposed by the paper makers themselves. One was that there should be paid out of the Consolidated Fund to the paper makers a sum equal to the estimated sum they have had to pay in the price of rags brought into this country from abroad. That is a proposal, I think, which will never be made from the place in which I stand, either by myself or any other person who may succeed me; and if any Government were bold enough to make it, I do not think the House of Commons would entertain it. Another proposition was to reimpose the Customs duties on the importation of paper to the extent of 1d. per lb. In my opinion, that measure would be in the long run probably mischievous to the paper makers themselves, and inevitably unjust to the consumer, and therefore I do not think it is a remedy which will ever be applied. The third remedy is to make appeals to Foreign Governments to remove the export duty on rags. Practically that may be taken to mean appeals to the Government of France. Undoubtedly it is the duty of the Government to endeavour to induce Foreign Governments to remove, if possible, if not to reduce, their duty on the export of rags, and we have at all times endeavoured to obtain such a concession. The hon. Gentleman says that we have had no success; and if that were the fact, it is probable that the barren and fruitless agitation constantly carried on in this country by a large number of paper makers has been the main cause of that want of success. The hon. Member thinks himself entitled to assume that those who sit on these Benches are no friends of the paper makers. But I must say that the hon. Gentleman has no right to make any such assumption. I entirely repudiate the accusations which he has brought against us; and while admitting that he is doing what he thinks best for the paper makers, while doing him that justice which he refuses to do to us, I tell him that it is he that is their enemy, and that he is taking a course which is most injurious to the paper manufacturers of this country. The hon. Gentleman says that the foreigner reads what takes place here. What does the foreign paper maker read? Why, he reads that men of high character in this House say that the English manufacturers are beaten out of the market by the high export duty on rags. But the foreign paper makers are not so blind as not to see what their interest is, and the natural result is to induce them to form a combination for the purpose of maintaining the export duty. I think, therefore, that it is their friends—sincere, no doubt, but mistaken—who have been the greatest enemies to the home paper makers. I think the language which the British Government, in dealing with this export duty, would naturally use towards a Foreign Government would be, "If we are going to have a real interchange of advantages, justice demands that you should take off this duty." But the argument of justice does not always in this wicked world carry that force which ought to belong to it, and, consequently, we must say that the argument as to the effect of the export duty has been monstrously exaggerated. No doubt the success of the trade depends in a considerable degree, but for all that in a diminishing degree, on the price of rags. In many cases paper is made without any admixture of rags whatever. In point of fact this cry of the paper makers has about it a good deal of the character of a factitious cry, and is almost suggestive of some policy which is not on the surface. How that is I am not going to say, but I am bound to state that the importance of the question has been immensely exaggerated. At the same time we admit that there is a hardship upon the British paper makers which, in common justice, ought to be removed. The hon. Member says that I made promises; but I did so in strictly limited and cautious words in the financial statement of the present year to this effect—that we were expressly authorized to hope that concessions would be made by the Government of France with regard to the export duty upon rags. Well, on that point, great progress has been made, and I am bound to say that even within two or three weeks a measure on the subject might have been adopted but for the Motion of the hon. Gentleman. Whether that Motion will admit of such a measure being adopted or not I cannot say; but the hon. Member must see that what is good for the goose is good for the gander. If the export duty on rags from France be a disadvantage to the British manufacturer, it must be a corresponding advantage to the French paper maker, and all those speeches and debates which tend to give a factitious importance to the subject tend also to encourage the protected trades in foreign countries to band themselves together for the purpose of maintaining the duty. I do not wish to enter into that subject because I am afraid that by so doing I should only be increasing and not diminishing the obstacles in the way of a reasonable arrangement; nor is it necessary to do so, as we have no practical issue at present before the House. I have frankly contested the statements of the hon. Member. I have frankly admitted that there is considerable distress in particular branches of the trade. I have stated distinctly that there is no disposition on the part of the Government to oppose themselves to any general wish for inquiry which may be entertained by the House—not now, for that is out of the question, but at some future time. At the same time I have thought it but fair, candid, and honest, to say with regard to the parties interested, that I am firmly convinced it would be much better for them to let this matter remain for a while in silence, inasmuch as I do not think the result of this Motion can be anything else than that Her Majesty's Government should make renewed representations to Foreign Governments—representations which it would have been our duty to have made of ourselves, and in that case perhaps with as much probability of success,

MR. SURTEES

said, that after the statement made by the Chancellor of the Exchequer, which he had heard with much pleasure, he did not think it necessary to offer any remarks upon the question.

LORD ROBERT MONTAGU

said, he did not see much good in fighting over again battles which had been already fought on a much larger scale; nor did he think it wise to ask for a Committee of this kind unless there were good grounds for believing that the decision to which the House had come, after long debate and minute consideration, had been erroneous. Moreover he did not think that the hon. Gentleman had made out his case. He rested it very much on the failure of a particular company, the prospectus of which he had exhibited to the House. He had, moreover, read letters written in this year, to prove the destitution of the trade. Yet the company, to which he had alluded, had been formed in 1863. This was a year after the change had been made, and nearly two years after the country were pretty well aware that such a change was imminent. The promoters said their object was to "take advantage of the impulse given to the paper manufacture by the new legislation," and that they were about to "commence operations under circumstances peculiarly favourable." This then was the opinion of the paper makers in June, 1863. Had the trade been utterly ruined in one year? The hon. Gentleman said that this company had failed. But they were not merely a company for making paper, but also for manufacturing manure, for which object they had increased their capital and erected large works. With two such different objects they had very little chance of success. The hon. Gentleman was favourable to the removal of the Excise duty, but held that the Customs duties should have been retained in order to prevent foreign competition. But the effect of that would be to put money into the pocket of the British manufacturer at the expense of the consumer, so that the hon. Gentleman was not fighting the battle of the nation, but of a small fraction of the community. When the manufacturers had to pay an Excise duty, as well as the equivalent Customs duty, they admitted (in the prospectus) that "large fortunes had been made. When both Excise and Customs duties had been removed the balance was not disturbed, and large fortunes might still be expected to be realized. But there was a duty on the export of foreign rags. The effect of that was that rags were increased in price to the British manufacturer, above what they would be if there were no such duty; but it was found that though there was an increase in the price of rags still there was a large margin of profit. Notwithstanding that export duty, our manufacturers had shown that paper could be exported from England with profit, and that they could compete successfully in foreign markets. Under these circumstances he was astonished that the Chancellor of the Exchequer had promised to agree to the nomination of a Select Committee. He was still more astonished that the Chancellor of the Exchequer should have pledged himself to do so next year, when perhaps the same Parliament would not be assembled within these walls.

COLONEL DICKSON

said, he thought that no one who had given an unprejudiced attention to the subject would agree with the noble Lord, for if ever a case for inquiry and redress had been made out it was by the temperate and able speech of the hon. Member for Dungarvan. He regretted that only one Irish representative had hitherto spoken a word for the distressed class whose claims had been urged by the hon. Member. The Chancellor of the Exchequer claimed credit for his frankness in dealing with the subject; but he thought he had never heard a case argued with less frankness. The right hon. Gentleman said that the hon. Member was inflicting injury on the paper maker by proclaiming abroad the knowledge of the injury of which he complained. But any injury done by the hon. Member for Dungarvan could not approach to that inflicted by the right hon. Gentleman in showing the foreign paper maker, as he had done that night, how to utilize the complaints of the English paper makers and turn them to the greatest advantage. The great principle of the late Sir Robert Peel, as was admitted by the right hon. Gentleman, was to secure for the people access to the raw material. That was all that was asked for in that case. The right hon. Gentleman said that only one class of paper makers suffered, but all must be more or less injured by the present state of things, and all would be benefited if they could get their rags from other countries on the same terms as the foreigner. The right hon. Gentleman charged the hon. Member with having embarked in a barren and fruitless agitation. The complaints of the paper makers, however, had been on more than one occasion brought under the notice of the right hon. Gentleman, yet he had never until that night told them that their grievances would probably shortly be redressed. It was true that Parliament could not compel foreign countries to reduce the export duties on their rags, but the Government could introduce a system of give and take in a commercial treaty, and it would be very easy to induce Foreign Governments to adopt a system of reciprocity and of really free trade.

MR. NORRIS

said, that as the Chancellor of the Exchequer had given a promise of a Committee in the next Session, it would not be necessary for him to detain the House at any length; but owing to the unaccountable silence of the hon. Member for Rochdale (Mr. Cobden), to whom allusion had been made, and who might be said to be the apostle of the policy which had been discussed, he thought it necessary to refer to one or two of the statements of the right hon. Gentleman. The country had been taught to believe, and the hon. Member for Rochdale had laid it down as a maxim, that traders and consumers should be enabled to buy in the cheapest market, and the producers were entitled to open up channels of sale in the dearest markets. That was a sound principle, and he was glad that it pervaded all our legislation in modern times; but that legislation ought not to be exceptionally interfered with. If, however, it were true that the English paper maker had been for a long series of years debarred from access to the raw material, the system was not one of free trade but of protection to the foreigner against the English producer of paper. He was astonished to hear the right hon. Gentleman the Chancellor of the Exchequer affirm that the number of letters quoted by the hon. Member for Dungarvan did not prove his case. Of those fifty or sixty paper manufacturers some had gone into the Bankruptcy Court, others were working at a considerable loss, others were working half time, and the whole complained that they were making no profit. By the Board of Trade Return of licences it appeared that the whole number of paper manufacturers was not more than 397 or 400. [Mr. MAGUIRE: That is the number of mills.] It thus appeared that one-eighth of the whole number were in circumstances of difficulty and distress. Such a proportion of the entire number would be sufficient to satisfy any ordinary person that their complaints were not without foundation. A parallel case would be to suppose that, the conflict in America being at an end, the United States Government finding themselves with an exhausted exchequer, determined to put a heavy duty on the export of raw cotton. The manufacture of cotton fabrics in America would then be stimulated, and our cotton manufacturers would have to struggle on the one hand against a heavier export duty on their raw material, and a tree importation of the manufactured article. The whole of the English cotton districts would complain, and the result would be the ruin of the cotton trade. The cotton manufacturers would not be satisfied with a quiet remonstrance in that House against this unjust legislation, but the millions of men who would be thrown out of work and the capitalists would be up in arms. Precisely the same state of things now existed in the production of paper. Or let them take the analogy of the sugar duties. Some time ago the Chancellor of the Exchequer recommended, and the House adopted, a differential scale of duties upon sugar, on the ground that it would place English and foreign refiners upon a complete equality. What was now desired was that the English paper maker, who was only a refiner of rags, should be placed in a similar position with regard to his foreign competitors. The fact that the exportation of paper had increased from 115,000 cwt. in 1859 to nearly 200,000 cwt. in 1864 did not prove that there had been an increase of the quantity of paper produced in this country. The fact was that the home consumers being supplied with paper from Germany, France, and Belgium, our manufacturers had been obliged to seek new markets, and to send their paper almost all over the world, in the hope that somebody would buy it. If, as the Chancellor of the Exchequer said, we were not to wait for other countries, but to set them a glorious example by the complete adoption of free trade principles, he should like to ask the hon. Member for Rochdale how it was that when those great principles were discussed between the Governments of England and France we entered into a treaty in which the raw material was entirely forgotten at the same time that the Customs duty was taken off the manufactured article?

MR. BLACK

said, he wished distinctly to deny the truth of the assertion that the paper question had been settled according to the principles of free trade. It had been settled according to principles of protection, and protection in its worst form. When there was a duty upon corn, it was argued, and justly argued, that the duty raised the price, not only of the corn which was imported, but of all the corn in the country. And the same was the case with regard to paper. The duty upon rags ranged from £5 to £9 per ton, increasing the price of the manufactured article by 30 or 40 per cent. If the duty was taken off, the whole of that 30 or 40 per cent would not be received by the producer. He would get only the regular trade profit, and the greater portion of the duty would be received by the consumer, who would pay less for his paper. The difference between the tax upon corn and the duty on rags was, that while the produce of the former went into our Exchequer, we allowed the latter to go into that of the foreigner. Some time ago we heard very vehement denunciations of the taxes upon knowledge. What had become of those who were so earnest then now that there was a question of reducing the price of rags? No argument could be founded upon the increase of the exportation of paper from this country. The trade was in a state of depression—manufacturers must exert themselves to find markets wherever they could—and the kinds of goods generally exported were writing papers and account books, which went to our own colonies. The fact was that the increase had only been from 91,958 cwt. in 1861 to 129,326 cwt. in 1862, and 154,910 cwt. in 1863, an increase fully accounted for by the increase of the population and wealth of our colonies; and it must not be overlooked that during the same period our importation of paper had increased by 300 per cent. Then again there were some wealthy manufacturers who made the finest paper, but by and bye the foreign manufacturer would supply himself with the best machinery, and be able to compete with them in that branch of the trade. There were those who seemed to look with great complacency on the position of the paper makers, contending that things would right themselves; but how, he would ask, could they do so? We imposed a heavy weight on the home manufacturer, leaving the foreigner unencumbered, and it was under those circumstances easy to see who was likely to win the race. As an illustration of how matters at present stood, he might mention that one mill in his own neighbourhood, which had some years ago been purchased for £45,000, was lying idle, the person who bought it having become a bankrupt, and would gladly be sold for half the money which it had cost. Nor did he for a moment think that the Arcadian view of the Chancellor of the Exchequer was about to be realized, and that those small mills of which he formerly spoke in such eloquent terms were likely to spring up throughout the country. Believing, he might add, that the present was a system of protection of the very worst kind, that it operated with crushing weight on our own manufacturers, he must express a hope that the injury which had been done would as far as possible be remedied.

SIR MINTO FARQUHAR

said, that whether or not, free trade was the question before them, all parties had admitted that a portion of the paper manufacturing trade was in a suffering condition. He could not understand the argument of the Chancellor of the Exchequer when he said that they must look only to the question as a whole. He maintained that it was their duty to listen to all who had a grievance, especially when the grievance had been caused by the legislation of Parliament. He, therefore, thought it was the bounden duty of the House to take into its serious consideration the complaints of those whose grievances had been so ably detailed by the hon. Member for Dungarvan that evening. In answering that speech, the Chancellor of the Exchequer said the duty of doing so did not properly belong to his own department, and then turned round to the President of the Board of Trade, who, after the arguments which had been advanced on both sides of the House, would, one would have supposed, have spoken on the subject. Instead of taking that course, however, the right hon. Gentleman had in American phrase "skedaddled," omitting to say a single word in defence of his own department. Again, the Chancellor of the Exchequer informed the hon. Member for Dungarvan, towards the close of his speech, that if he had not made so mischievous a statement, calculated, as he said it was, to produce so bad an effect on foreign countries, the Government would in a very few days in all probability have been able to announce that France had done something to meet the unfortunate case of the paper manufacturers. But why, under those circumstances, had he not communicated with the hon. Member before he brought the question forward, and assigned as a reason for its postponement that there was a likelihood of France taking immediate steps to meet his wishes? Why, too, he would ask, was the hon. Member for Rochdale silent upon the question, as well as the President of the Board of Trade? He had been given to understand that at the time the hon. Gentleman was negotiating the French Treaty, it was supposed that it would include the reduction of the export duty. He had heard it even stated that the Emperor of the French entertained that notion, but that he had not been able to resist the representations made to him by his own manufacturers, and that he had actually said, "This cannot take place, but I give you leave in consequence to withdraw part of your I pledges." As to the case as it stood, it was impossible, after the statements from Scotland, Ireland, and England, which the hon. Member for Dungarvan had read, that hon. Members could allow these paper manufacturers to sit "like patience on a monument smiling at grief," and not pronounce their opinions on the subject. Indeed, the country was, he thought, greatly indebted to the hon. Member for having brought the matter forward, for it was no question of altering the system of free trade which had been accepted, and of which the French Treaty in fact was itself an abandonment. He was glad to find that since the conclusion of that treaty our commerce with France had increased, and he trusted our friendly relations with the French people might be made to depend, not solely on the political, but also on the commercial interests of the two nations. But while he desired as much as any one that result, he could not refuse to listen to the complaints of our own manufacturers, and it was with satisfaction, therefore, he found that the Chancellor of the Exchequer had expressed his readiness to grant a Committee next year to investigate the matter.

MR. WATKTN

said, that the hon. Gentleman who brought forward the Motion had argued the question as if the raw material out of which English paper was manufactured mainly consisted of foreign rags; and if that were so, there would be a very great deal in what had been said. He was sure, however, that he was not far from the mark when he said that the proportion of those foreign rags, on account of which so much complaint was made of the admirable treaty which the hon. Member for Rochdale had been the means of bringing to a conclusion, did not constitute more than 15 per cent of the materials used in English paper making. The raw material which the English paper makers used in the largest proportion was cotton waste. In consequence of the American war the value of the cotton waste was 400 per cent greater than formerly. The result of that exceptional state of things was that many paper makers must suffer from distress, but instead of showing that they had a strong case of difficulty to encounter, they turned upon the hon. Member for Rochdale, and said that all their distress was the consequence of the export duty on foreign rags, which constituted only an exceedingly small proportion of the whole raw material used in paper making. As there was to be a Committee in connection with the case of these 400 paper manufacturers, it would be right to know the amount of income tax which those gentlemen paid for three, four, or five years before, and subsequent to, the conclusion of the French Treaty; and he believed that an honest and fair return would show, notwithstanding the exceptional circumstance to which he had alluded, that in consequence of the opening of new markets, not only in this country, through cheap literature, but elsewhere, the profits of the paper makers had diminished but little or not at all. If they were to have a Committee on the state of the paper trade, suffering in consequence of the American war, why should there not be a Committee on the state of the cotton manufacturers, who constituted a much larger interest, and who had not come crawling on the floor of that House asking for an inquiry into an exceptional state of things?

MR. MAGUIRE,

in reply, said, that the hon. Member for Stockport might have refrained from indulging in terms so offensive to the paper makers, who did not come crawling to that House in formâ pauperis, but stood up boldly and manfully, and simply demanded justice. The hon. Gentleman seemed to think he had made a wonderful discovery when he said that the foreign rags from France and Germany only constituted 15 per cent of the raw material used in English paper making, but the argument would not have been one bit stronger if the proportion were only 5 per cent; because it was the value of those foreign rags which regulated the entire price of the whole of the raw material which the British paper manufacturer used. His hon. Friend near him (Sir Minto Farquhar) had said that if the Government had stated that they were in negotiation with foreign Powers on the subject, the trade would have been unwise to bring forward the subject now; but he was bound in candour to declare that delusive hopes had been occasionally held out, which time had utterly falsified. He had heard a whisper the other night—in fact, he had been semi-officially advised—that he had better not bring forward the matter; upon which he said that he would confer with the trade, and leave the decision to them; and having left the decision to the trade, they requested him by all means to go on with his Motion, for they had been deceived before, and might be deceived again. The noble Lord the Member for Huntingdonshire said that this was a battle, not for the British public, but for a trade, and that the object was to make paper dear. With every respect for the noble Lord, his assertion was entirely destitute of fact. Reduce the cost of the raw material, and you reduce the price of the manufactured article. Place the British maker on an equal footing in the rag market with the foreigner, and you may leave to the foreigner all his natural advantages—such as cheaper labour—and the British maker will be content to meet him in any market in the world. Give the British manufacturer free access to the rag market, and they would have the manufactured article cheaper than now, with the satisfaction of knowing that the man who made it gained a fair profit by his industry and capital. The hon. Member for Rochdale had said that he did not speak exactly the words he had attributed to him, but there were other words which the hon. Gentleman had not spoken, but deliberately put in writing. There was a controversy between the hon. Gentleman and the editor of The Times. The latter had charged the hon. Gentleman with a blunder in this matter, and the hon. Gentleman in reply laid down a very singular doctrine. He said it was our duty in carrying out the principle of free trade to buy in the cheapest and to sell in the dearest market, and he added, "If Foreign Governments put foolish restrictions on the export of rags, it is an additional reason why we should take their paper." He never heard anything like that in all his life, and he only wished he had alluded to that opinion when the hon. Member was present. [An hon. MEMBER: He is here.] He had the highest esteem for the hon. Gentleman, and sympathized with his general principles and with his splendid triumphs, but he never heard more inconsequential nonsense than this doctrine. He would say a word with respect to his own connection with the present Motion, and also as to the time at which it was brought forward. First as to the time. In March last the trade sent in a memorial to the Government, but the answer to that memorial was not given until May. A Motion for inquiry was to have been made by an hon. Gentleman present, who, from some cause or other, changed his intention—at any rate, did not persevere with it. When that change of intention was made known to the trade, a deputation from the body waited on him (Mr. Maguire), and requested him to bring the question before the House. Sympathizing though he did with their wrongs, he at first refused, and alleged as one of the reasons of his refusal, the necessity of his going to Ireland; but when they urged the matter very strongly upon him, he agreed to do it. He then tried the chance of ballot—and that night was the first free night he could obtain for the present Motion. So that the responsibility of forcing the case upon the attention of the House did not rest with him, but with the trade—who, he might add, thoroughly understood their own interests, and what would serve or what would injure them. It was said that the cases that he had mentioned did not fully represent the state of the trade. His answer was that the trade, with scarcely an exception, endorsed the facts and arguments put forward in those letters. When they met in Manchester in January last, there were one hundred firms then personally represented, and fifty more were represented by letter, and at that meeting statements of the same character were accepted by those present, who might be said to have spoken in the name of six-sevenths of the trade, or production, of the United Kingdom. Why had not more given up, he was asked? He (Mr. Maguire) thought the list was long and sad enough; but it should be remembered that people held on in the hope of better days, and that many were endeavouring by increased production to reduce their fixed charges—for rent, taxes, management, &c.—and thus live by a fractional share of profit. The case of the trade was now before the House and the country, and it could not fail to evoke general sympathy in their behalf. He was quite satisfied with the assurance which had been given by the Government. He did not think the Chancellor of the Exchequer had answered his statement or disproved one tittle of the case he had made out. He (Mr. Maguire) had laid down no principle, or made no assertion which he had not fortified by facts, and he believed he had made a fair and candid speech, and was certainly not open to the charge of having represented British manufacturers in the House of Commons in a crawling spirit. He begged leave to withdraw his Motion.

Motion, by leave, withdrawn.