HC Deb 23 May 1865 vol 179 cc745-67
MR. MAGUIRE

, in moving a Resolution on the subject of the abolition of the unjust duty on foreign paper, said, he was about to ask the House and the Government to do an act of common justice, and before doing so, it would be his duty to place before them a case of as grievous hardship as, he believed, had at any time occupied the attention of the Parliament. In private life if one individual wronged another he was bound by every law of gentlemanly feeling, as well as by justice and morality, to repair to the best of his power the wrong he had done. He did not think that a Government or Parliament should be guided by different rules. He thought he would be able to show that in 1860 a step attended with most disastrous results to one of the most important and interesting trades of the United Kingdom had been taken by the Government and the Parliament of this 'country. He believed he could adduce the most incontrovertible proofs that Parliament had inflicted a great hardship on the British manufacturers of paper, and had acted towards them in distinct contravention of that very principle of free trade to which they proposed to give effect. One of the most important features in the Budget of that year was the proposal with respect to the Excise duty on paper. Wisely, the Chancellor of the Exchequer abolished that duty; but, at the same time, in the face of urgent remonstrances from the trade and of Motions in which his attention was directed to the injury which such a measure would inflict on the trade, the right hon. Gentleman repealed the differential Customs' duty on paper. The whole injury to the trade arose from that most rash, unwise, and blundering proceeding. The right hon. Gentleman was reminded that the penny duty had been arranged under a free trade Government; and that it had been imposed as an equivalent to the tax which foreign Governments continued to impose on the export of rags for the advantage of the foreign papermakers. The weight of raw material used annually by the paper manufacturers of the United Kingdom was 200,000 tons, and of that as much as 140,000 tons were rags. The weight of rags produced in this country was about 120,000 tons; it was necessary that the trade should supplement their supply of rags by going abroad for some, and there was an export tax imposed on that, say 10,000 tons, which they brought from the Continent. As long as the tax upon rags continued it was utterly impossible for the English paper manufacturer to compete with the foreigner. Of what use were energy, invention, capital, and perseverance when the rival manufacturer had an advantage of 20 per cent on the raw material? When the free traders were endeavouring to accomplish the re peal of the Corn Laws they argued that of itself the tax of £1 per quarter upon the 1,000,000 quarters imported was not the evil they complained of, but the real grievance was that by means of that tax the price of the whole 60,000,000 quarters grown in this country was correspondingly raised; so that, instead of there being a tax of £1,000,000, there was a tax of £60,000,000 upon the people's food. That was the cry raised by Mr. Cobden and Sir Robert Peel at Birmingham, Leeds, and other places. For his own part, be wished it to be known that while he was a free trader he was also a fair trader. Let him apply the old free traders' argument to the paper trade. The injury to the papetrade of this country was not to be measured by the amount paid by the manufacturer upon the 10,000 tons of foreign rags imported, but by the fact that in con sequence of that tax the price of rags throughout this country was raised to the price of foreign rags. The price of rags throughout the British dominions was 20, 30, or even 50 per cent above that of the Belgian and Prussian markets. What was the reason that the interest of the British paper manufacturer had been disregarded when the French Treaty was made? It was through the great desire of the Government at that time to throw themselves at the feet of the French people. No doubt the French Treaty was most admirable as far as it went, and would lead to the best results; but the interests of the British paper manufacturer were altogether forgotten at a time when Government had the power to improve their condition most materially. But the Government abandoned their opportunity; they surrendered their power, and left the English manufacturer from that day to this at the mercy of foreign Governments and of foreign manufacturers. There were many Gentlemen present who professed to admire the principles of free trade—he could mention their names, but he had no desire to be invidious—who expressed great sympathy with the English papermakers, who voted for them in July, 1860, and who promised them their support at the time of the making of the French Treaty, but the matter was then made a Cabinet question, and the trade was sacrificed to the interests of a party. Again, there were many good men who voted against the papermakers in the belief that the doleful anticipation of the English makers were without foundation: but four terrible years had since passed, and every anticipation of disaster had been fulfilled. In 1861 the Government consented that an inquiry should take place into the causes of the complaints which came from all parts of the country. A Committee was appointed, consisting of Members from both sides of the House, most fairly selected, and, after serious consideration, they came to the solemn conclusion that the position of the papermakers was deplorable, and that unless Government took their case up and persuaded foreign Governments to abolish the tax upon rags, the most disastrous consequences would result. No notice whatever was taken of that recommendation, and since that time matters had become worse and worse. The answer made to their repeated applications for relief was that they were doing splendidly; that their exports and imports were rapidly increasing, and that therefore they could have no cause for complaint. But of what use was it for a man to make and sell twelve tons instead of ten tons per week of an article by which he realized no profit? It was impossible for the manufacturer to reduce the price of the raw material he used; all he could do was to increase the amount of his production, and thereby comparatively to reduce the amount of his fixed charges It was to an effort of this sort that the wonderful impulse in the trade was owing. Out of the £8,000,000 worth of paper made in this country, only £500,000 worth, or one-sixteenth, was exported; and this would scarcely be taken as a proof of the great prosperity of the trade. The other side of the picture showed that while in 1859, the foreigner sent only 700 tons of rags might be reduced, their cost in of paper into this country, he now sent this country mu3t always exceed their cost 12,000 tons per annum, while the value in Belgium by the amount of the duty was raised during the same period from which was laid upon the exportation from £35,000 to £600,000. Was there any that country. If the price in this country further increase under that head? It I was so greatly diminished that rags could appeared from the official Returns of the Board of Trade that in the first quarter, ending the 31st of March, 1864, the importation of foreign paper amounted to 36,416 cwt., while in the corresponding quarter of 1865 it had been raised to 48,000, showing an increase of 32 per cent, On the other hand, the exports of British paper amounted in 1859 to 126,000 cwt., of the value of £525,000, while last year it amounted to 165,000 cwt. of the value of £556,000, showing an increase of 32 per cent in quantity and of only 5¾per cent in value. Comparing the present year with the last, he found that for the first quarter of 1864 English paper was exported to the amount of 37,366 cwt., of the value of £120,000; while for the corresponding quarter of this year it was 37,318 cwt., of the value of £117,000. In 1859 the quantity of foreign paper exported from Great Britain was 5,000 and odd cwt.; in 1864 it was 28,000 cwt., showing an increase of 476 per cent. Let not the hon. Gentleman imagine that lie was complaining of the quantity of paper which came into England. What he complained of was that the British trader was unable to meet the foreigner and to make a profit. That he was not able to do so was not his fault, but that of those who sacrificed a trade lo the exigencies of a Government. The grand point of the right hon. Gentleman by-and-by would be that there was an ample supply of new material. The principal now material was esparto, or Spanish grass, and of that only 40,000 tons were imported last year, which would produce only 15,000 tons of paper. The effect of the export duty upon rags had been to raise the price of esparto from £2or £3 to £7 per ton. Now, as 2¼ tons of esparto were required for the manufacture of a ton of paper, the cost of the material required in the making of that quantity of paper was £15 15s., say in round numbers £16. But the Belgian manufacturer, who was protected by his Government, could get rags from which he could make paper to rival that manufactured from esparto for from £13 to £14 per ton. Perhaps, the right hon. Gentleman might say that the effect of the introduction of esparto had been to bring down the price of rags. That might be so; but, however, the price of rags might be reduced, their cost in I this country mu3t always exceed their cost in Belgium by the amount of the duty which was laid upon the exportation from I that country. If the price in this country was so greatly diminished that rags could be obtained more cheaply here than in Belgium, the American manufacturer would come into the market, and thus the price of British rags would be raised to the stan- dard of the taxed article. Who had benefited by this Act of munificent liberality performed by the Government at the expense of other people? The trade had, it was admitted, given the whole amount of the Excise duty to the public; and the Chancellor of the Exchequer boasted that they had been also compelled to give up three farthings a pound, but that three farthings came out of the legitimate profits of the trade, whereas if the tax had been abolished, and the Government had the means of procuring its abolition, the consumer would have obtained the article at the same price, and the manufacturer would have been able to make a profit out of it. But who besides had got the advantage of the Chancellor of the Exchequer's liberality? The penny press. ["Hear, hear!"and a laugh.] He was glad that that advantage had been given to them. There was a laugh as if he had made a slip, but he had done nothing of the kind. If the Government had been commonly wise, that boon might have been given to the penny press without doing any injury to British manufacturers. Four newspapers, one of them a very large one, had, ac cording to documents in his hands, gained to the extent of £100,000 from the liberality and care of the Chancellor of the Exchequer and the President of the Board of Trade. To one paper in London, £34,000 was given in the shape of re mission of the Excise duty, and adding the three farthings which had been taken from the pockets of the British paper-maker, amounting to £17,000, it appeared that that paper had gained by the policy of the Government £51,000 or £52,000 per annum, or about £200,000 since the change was made. Let him show to that press, influential and powerful as it was, and among which he found some of the most formidable clamourers against the trade, what would be the difference of the state of things which he was anxious to promote, and which the Government might have secured by other means. Suppose the proprietor of a London newspaper got half his paper from Belgium and half from a neighbour in England, he would not advance the interests of his neighbour at all, because the British trader must sell at the same price as the foreigner, or else walk out of the market. Let him show how this tax of three farthings in the pound operated upon the British manufacturer. In the case of a man who manufactured only ten tons a week it amounted to a tax of £3,640 a year. What was the policy that was laid down by Sir Robert Peel, Mr. Cobden, and the present Chancellor of the Exchequer? Mr. Cobden, quoting Sir Robert Peel,said— Before you expose the manufacturers of this country to competition with those of other nations you should relieve them from any disadvantages in respect to their raw material, and in respect to the process of manufacture. And the Chancellor of the Exchequer, in his speech on the sugar duties, said— We are not willing to give any premium upon the employment of labour and capital in England, but certainly we are not willing to be parties to discouraging the employment of labour and capital in England as compared with other countries. Now, he put it to the consciences of the Government themselves, and to the common sense of any of their supporters, whether they had not in regard to the paper trade imposed a penalty upon the industry of their own country and given an undue ad vantage to the foreigner? The effect of that was that the agents of foreign houses were to be found everywhere, and that, with the exception of some special articles, such as high class writing paper, account books, and envelopes, they could undersell the British manufacturer with regard to' all kinds of paper. The Chancellor of the Exchequer drew a glowing picture of the seats of industry which would, after the repeal of the paper duty, spring up in the rural districts of England, Scotland, and Ireland, and of the companies which would spring up. Now, he challenged the President of the Board of Trade, who he knew had been making inquiries, to deny the truth of his statement when he asserted that all the companies which had been established under the auspices of the right hon. Gentleman, as the result of that glowing picture, had failed. One gentleman was, although he sat opposite to the right hon. Gentleman, so carried away by that picture that he put £10,000 into one of these concerns, and from that day to this he had not received one farthing of interest upon his money. From that day to the present not one farthing of interest on his £10,000 had that gentleman seen. But it was in the power of the Government to make that money fructify so as to produce a fair return if they had only the courage to give up their clap-trap with regard to the question, and to adopt the policy which he suggested. He could lay before the House the balance-sheets of various companies engaged in the paper trade to show that some had been obliged to stop business; that the business of others did not realize a single farthing, and that the prospect of being able to secure 2 per cent was the most cheering prospect to which more than one could look forward after a struggle of four years. He regretted to be obliged to trespass on the time of the House; but it was absolutely necessary that hon. Members should hear the voices of the sufferers themselves, and he should therefore read a few extracts from letters which he had received from England and Scotland—he was sorry to say from Ireland also, because in the case of the Irish manufacturer the calamity arising out of the course taken by the Government operated with peculiar severity. He had done, and would continue to do, his best to promote manufactures in Ireland, but the policy of the Chancellor of the Exchequer had led to the shutting up of mill after mill in that country, to the throwing of hundreds of people out of employment, and, in short, had rendered the paper trade there one desperate struggle against adversity. But let him lay before the House a few of the extracts to which he referred. The first was from the letter of an honest, industrious man, who said— I have had a correspondence with some and interviews with other paper manufacturers, and every one of them says that the entire ruin of the trade is only a mere question of time if the pre sent system continues. It matter little what class of paper is manufactured; so long as things re main as they are paper manufacturers cannot make a profit. We are called Protectionists, but a more unjust accusation could not be made. For my own part, I have not gained 6d. profit for the last four years. The next was a letter from Yorkshire, and the statement of the writer was— We are makers of coarse paper, and have about £10,000 invested in buildings and machinery. For twenty years, ending December, 1861, we were kept going on full time, with orders chiefly for the London market, at a moderate profit. Since then, however, we have been compelled to run half-time and reduce our prices from £2 to £3 per ton to meet Belgian and Dutch manufacturers; in other words, our profit has disappeared. We have good machinery and cheap coals, yet cannot compete with those who have their raw material protected by express duties. The wholesale stationers in the City know this; and we look with confidence to the Government taking prompt measures to put the trade in a fair and sound position. Another communication was one from a gentleman who had written to him last year—a Kent manufacturer, who wrote as follows:— In my letter to you last autumn, an extract from which you read in the House of Commons, I stated I had stopped one of my mills for four months for general repairs and the introduction of several improvements, with a view to economize and increase out-turn; that after eight months' working my loss was £88, and that I determined to persevere for twelve months longer. This I have done, but regret to find a serious loss. I am compelled to stop the mill and discharge my hands. I cannot compete with that class of paper—namely, common printing—coming from abroad with a difference of 30 to 40 per cent in the rag material. I have used a proportion of esparto, to which there are many drawbacks, one being the pollution of the stream on which my mills are situated; therefore, without I obtain fair trade in rags, my mill is useless, and a property which should be worth £10,000 not worth as many hundreds. The same writer, referring to the stoppage of a mill in Kent, another in Derbyshire, and a third in Westmoreland, said— Since I last wrote to you I have been compelled to stop one of my mills, having a mill full of paper, and no longer able to compete. There is another and a much larger mill than mine that has had to do the same. Mr.—(Westmoreland) has a two-machine mill which has been standing for fully a month. The mill of Messrs.—(Derbyshire), a two-machine mill, has had one of its machines stopped for some time. The next case was one which involved the complete sacrifice of a property of £25,000, in the letter referring to which the writer stated— I have been engaged as a paper manufacturer for forty years. I embarked the whole of my property in the business, and by great exertions I succeeded in purchasing the mill, from which I got a moderate living, enabling me to bring up a large family respectably. Previous to the late Excise duty being taken off we were then being subjected to competition with the foreigners, and the only way to meet that competition was by erecting new and improved machinery; this cost me £5,000. Mr. Gladstone then admitted foreign paper duty free, without stipulating that the foreigner should take the duty off their rags, and the consequence was that my business was ruined. I have expended £25,000 on my mill, and now can neither work it, nor let it, nor sell it; and, although it is not bringing me in any money, I am called on to pay rates, or have my goods seized. My property is, in a manner, confiscated by the Government. I found it a hopeless contest, and was obliged to close my mill two years and a half ago. It has made a sad change in the neighbourhood, and more especially to myself, since I find that after forty years of most arduous attention to business my capital and all my earnings are sacrificed. Then followed a few lines from Lancashire, the seat of free trade:— We sent you a statement of our concern on the 14th of July last, 1864, which you mentioned in your speech. We have ever since been struggling hard in turning out more paper, and making every alteration we could possibly think of, and must say that we see no further chance of our trade becoming a really good and beneficial one; and, unless through your strenuous efforts, or some other cause, we get put on a fair and equitable footing, we shall certainly be forced to give up this detestable paper making, and try some thing else, before our capital and energies are thoroughly worn out. He would now ask the House to listen to a voice from Scotland, and it was that of an enterprizing manufacturer in the county of Fife, who said— The effect of these measures—miscalled free trade—is simply to approve of a heavy foreign tax being levied on all paper made in Great Britain; which tax is applied for the benefit and protection of the foreign paper maker, whose paper is expressly freed from this duty. It is needless to say that the pressure of so unequal and unjust a system of taxation has been disastrous to those who, like ourselves, had the greater part of their capital invested in paper mills and machinery. For ourselves, we can truly declare that ever since that evening when the Chancellor of the Exchequer announced his plan of restoring prosperity to the rural paper mills we have found our trade regularly getting worse, and last year we had a positive loss. We are at our wits'-end to know what to do with our mills; and this change is the more striking, too, seeing that for about half a century previously these mills had been carried on profitably. If we were to shut them down we should still be liable in heavy rent and taxes, while this would then throw out of employment 210 hands. We never believed these measures would have been persisted in so long by an enlightened Legislature, and still feel quite assured that if we could get these high fiscal duties abolished on our raw material we could compete successfully with any foreign rivals Let both foreign and British paper be either equally free or equalled taxed, and we do not fear the result. Again, there was another writer from Scotland, whose letter furnished evidence of a very bad case. His statement was— I have been actively engaged in paper-making for nearly forty years, and have experienced both brisk and dull times, but have never had such a battle to contend with as that which I have had to fight since October, 1861. Since that date I have not to complain of dull trade, far from it, so long as I offer at the same price as the foreigner, who, by artificial means, can buy his rags £4 or £5 cheaper than I can, and against whom it is impossible to compete with the most remote chance of success, seeing his advantage is so great over me in the cost of his rags. So far from things adjusting themselves, my experience is quite the reverse. Since 1861 each balance-sheet has shown a greater loss than the former; and now that my capital has nearly disappeared I shall be obliged to succumb, unless something be done for our trade by the Government, from whom alone redress can come. The next case, however, was, in his opinion, the worst of all. It also occurred in Scot land, but he would not mention the name of the gentleman who brought it under his notice, because he might thus be doing injury to his credit. If, at the same time, there was any doubt as to the truth of the statement or the character of the person by whom it was supplied, he should have no objection to lay the letter containing it before the Chancellor of the Exchequer. The writer said— We have been asked to send you, under confidence, what our experience has been as to the result of the foreign treaty, as far as papermakers are concerned. I now, in the name of my partners, reply, that the year previous to the treaty we showed a profit of about £2,000, and that last year, after watching so long for the 'fine days' that Mr. Gladstone said were coming to us, we had the mortification to find, on closing our books, that we had, instead of being gainers by the treaty, been losers to the amount of nearly £2,000. This sort of thing has been going on among the papermakers ever since the treaty came into operation. It is a question of time, no doubt; but as surely as the sun rises, so surely will the papermakers of this country decay and be swept off by the protection given to foreigners, by that most consistent of all—["Hear, hear!"and a laugh.] Had it not been that I and my partners have other sources of income, we should have been by this time in the bankrupt list; so no thanks to the Chancellor and his friends that we are not in that unpleasant position. He had now done with England and Scot land. The next letter was from Belfast, written by Mr. Archer, a man of large means, who stated that he was obliged to close his mills in consequence of the operation of the present system, finding it quite impossible to compete with foreign makers who bought rags at a rate made low by their heavy export duty. The Dunadry mills, but a few miles from those of Mr. Archer, were also silent. There was another and very important mill owned by a gentleman who once paid a fifth of the whole Excise duties in Ireland and gave employment to 300 persons. Fortunately for himself, Mr. Greer was a man of property, and his wife also enjoyed a separate income; but as far as the means of livelihood of these 300 persons was concerned they had been destroyed by the action of the Government. Mr. Greer, writing on the 10th instant, said— Since I wrote you upon the same subject last Session I have shut down my Dripsey paper mills, after having suffered a very heavy loss, indeed, in a hopeless competition with the foreign manufacturers. It is not necessary for me to enter upon the merits of this question, the simple fact being that now, after having given constant employment for thirty years to near 300 hands, and having spent large sums of money upon buildings and machinery, I am at length driven out of the market by the operation of the late mistaken legislation, by which the results of the industry of a large portion of my life have been sacrificed. My wife and I have done our utmost to alleviate the distress of our late workers, some of whom have emigrated to America; many have gone to Scotland, Mrs. Greer in every instance having paid their fare and otherwise supplied their wants. We hear frequent and good accounts of most of them. I enclose an address which my wife has lately sent to each of them, to encourage them on their way in their life struggle. Prosperity and contentment bad reigned at those mills even when prospects in other parts of the country were most dismal; but now, through the operation of measures for which the Government were responsible, the mills were closed and the late workers in them were scattered far and wide. Without wearying the House by reading other letters, he might state that he had received one from Mr. Routledge, two from other manufacturers who used esparto, and two from gentlemen who used straw. All these would be willing to avail them selves of the proposition which he was about to make to the Government. The right hon. Gentleman would, no doubt, repeat that it was only a part of the trade which was injured; but if he wanted to know how a barrister was getting on, would not the best person to ask be an attorney in good practice? And paper-makers of experience on this side of the Channel concurred in the belief that 75 per cent of the trade were struggling in a hopeless contest 15 per cent, probably, of the traders were above all risk of competition, being engaged in the manufacture of a special quality of paper; but day after day their position was getting worse, be cause they were jostled by others driven to manufacture in these higher branches to save themselves from utter ruin. 75 per cent of the trade were struggling, 50 per cent were in desperate difficulties, and 40 per cent were on the brink of ruin. If the Government continued insensible to the position of the trade, they would have at least the glory of deserving that statues should be erected to their honour in Belgium, in Holland, and in Prussia, though at home the prospect confined it self to ruined mills and scattered populations. The object of the proposal he was about to make was that the British manufacturer should be placed on the same level with the foreigner with regard to the raw material. This would not increase the price, as some supposed, but would enable him to lower it, at the same time that the press would be protected, and manufacturers would work at a profit. £60,000 was the amount of the tax, but it effected a trade of £700,000 a year. He pro posed that when a ton of rags came into England with a foreign tax upon it the Government should hand those rags over to the manufacturer clear of the tax, not, however, charging the amount, so remitted upon the Consolidated Fund, but receiving it again from the manufacturers after a sufficient interval. The trade were quite willing that when the rags were manufactured the amount of the tax should be assessed upon the manufactured article, and so levied from them. He believed he was right in saying that the question of principle apart, the financial details of this arrangement could be worked out in a very few days. Under the present system Americans came in, and by purchasing in our market, were continually raising the price of English rags towards the amount of the taxed rags. The trade said, "Stop the export of rags from our ports, or put on a tax equivalent to the amount imposed by foreign Governments." The request was a very small one, extending to 2,000 tons of rags only, or about £10,000. It might be said that he was attempting to get in "the thin end of the wedge." He hoped that when the facts pointed so clearly all one way the House would not be misled by this miser able delusion, this wretched clap-trap, by which too many were at all times ready to be deceived. No injury would be done to America by his proposal, because the markets of Belgium would still be open; and what did we owe to America in this case? The Americans imposed a prohibitory duty of 30 per cent on British paper at the very time that they were carrying British rags away from this country. The result would be to equalize the price of rags, and the British manufacturers would be able to meet their competitors in any market in the world. Otherwise they must inevitably go to the wall. The time might come when the Lancashire men, who were now opposing this demand of the papermakers, would feel the shoe pinch them in the same way. Inevitably there would be an export duty on their raw material, and if when the resources of that great continent across the Atlantic were turned to the pursuits of peace and commerce, the attempt to produce their great staple manufacture as cheaply there as here were successful, the Lancashire manufacturers would most certainly come down and demand the interference of the Government to keep out the foreign article. His proposal was that the trade should not be sacrificed; that the Chancellor of the Exchequer should be put in a position to realize that glorious picture which he had drawn; and that Eng land, Scotland, and Ireland should have the opportunity of developing an important industry. The Government had al ready established one or two precedents for what he suggested. In the matter of the Scheldt dues they had paid half a million to put the shipowners of this country on a level with those of a small country like Belgium, and they had given advantages to the sugar refiners and others. It was a delusion to go on expecting foreign Governments to relinquish the duties on rags, for in fact they decided not to do it. No trade, even if it were guided by the genius of the Treasury Bench, supported by the wealth of the Bank of England, and aided by the hundred hands of Briareus, could stand against this 25 per cent burden. Unless the Government would address themselves to the relief of the wrongs which they had deliberately imposed on this trade year after year the complaints would be more deplorable, until at last there would be but one cry of calamity from what was once a prosperous and thriving industry. The hon. Gentleman concluded with his Motion.

MR. HENNESSY

seconded the Motion.

Motion made, and Question proposed, That the position in which the British Paper Trade has been placed by the abolition of the Import Duty on Foreign Paper, leaving the Foreign Export Duty on Rags in full operation, is one of great hardship to the British Manufacturer, and calls for prompt legislative interference, with the view of placing the Home Manufacturer on terms of fair and equitable competition with Continental Manufacturers."—(Mr. Maguire)

MR. MILNER GIBSON

Sir, I am afraid I shall find it somewhat difficult to follow the hon. and learned Gentleman through his somewhat discursive speech on the position of the paper trade; but I am glad that, after depicting so eloquently the hardships under which he says the trade is suffering, he finished his speech by telling us what is the remedy. I do not, however, understand how that remedy would repair the wrong which he says has been done. He commenced his speech by saying that a great wrong had been committed when the House abolished the customs duty on foreign paper, but in the course of his observations he never proposed to re-enact that duty. Now, the whole case was before Parliament, when it deliberately confirmed the proposal of the executive Government to repeal the duty on foreign paper in conformity with the express stipulations of the French Treaty. If a wrong therefore was committed, it was not a wrong committed by the executive Government, but a deli berate proceeding of the Parliament of England at a time when the papermakers had a stronger case than at present—when there was an absolute prohibition upon the export of rags from France and other countries which had now been replaced by a somewhat moderate duty. When the excise duty on paper was abolished, to have retained the duty on foreign paper would have been totally inconsistent with the French Treaty. In the correspondence which took place about the French Treaty, I remember the British Government bound itself not to impose any duty for the protection of English manufactures as against articles of French production, and there fore to have retained the import duty on foreign paper would have been inconsistent with the spirit and meaning of that treaty. The spirit of the French Treaty, as announced in the Correspondence which was published at the time, was that the British Government should bind itself to impose no import duties on foreign productions for the purpose of protecting similar articles produced at home, but only for fiscal purposes. The customs duty on paper was therefore reduced to the same rate as the excise duty; and when the latter was abolished it would have been impossible to retain the former. You may, therefore, dismiss from your consideration the re-imposition of the duty, as it is not before you, and I do not see how it is possible for the House deliberately to entertain so grave a proposition as a departure from the distinct spirit of the French Treaty. But the hon. Gentleman makes a proposal by which he says the English manufacturer will be placed on a level with the foreigner without any protection. He proposes that the State is to pay to the importer of rags the export duty which he has paid on those rags in a foreign country. The importer having brought a lot of rags into this country is to send his Bill in to the Chancellor of the Exchequer for export duties—duties paid in foreign countries—and the Chancellor of the Exchequer is to recoup him for these duties. Then, in the course of a few weeks, the Chancellor of the Exchequer is to send his Bill in to the paper trade, and they are to pay him the sum he has advanced for them. The trade are to do in the end what other wise they would have done at the beginning; but I cannot understand in what different position that would place the paper-makers. The fact of a sum of money having been advanced by the Chancellor of the Exchequer would, as far as I see, make no difference except in saving to the trade the interest for a limited period on the money which has been advanced. The dealer in English rags will still know that foreign rags cannot be obtained at less than a certain price, plus the export duty, and he will therefore stand out, as it is said he does now, for the same price. I believe the papermakers have about 130,000 tons of rags free of duty, and that they have to pay upon 10,000 tons of rags a duty of £60,000; so that the whole of the difficulties and calamities sketched by the hon. Gentleman are caused to the paper trade by having to pay £60,000 on 10,000 tons of rags. The hon. Gentleman says the effect of his proposal would be so to lower the price of rags as to benefit the trade to the extent of £600,000 or £700,000. I very much doubt that pro position. I doubt whether a large quantity like 130,000 tons could be reduced in price to any great extent by operating on a limited supply of 10,000 tons, especially as that supply could not be indefinitely increased. It must really be a question of supply and demand. The supply of foreign rags is limited, and the English holders of rags when asked to take less than they had received be fore would say, "I know you cannot import an indefinite weight, because the foreign supply is limited." Unless the foreign supply could be kept up so as to replace the English rags it could not have the effect which the hon. Gentleman supposes. It is impossible to suppose that France and Belgium, which are paper-making countries, could keep up an indefinite supply of rags to England. But if the advance of £60,000 to the paper-makers can save them £600,000 or £700,000, why call in the assistance of Parliament at all? Why cannot a great trade like the papermakers of this country raise the money themselves? Why should they hesitate to embark in so profitable a transaction? But if we are to enter upon a scheme of this kind let us have some understanding that the trade itself is unanimous upon the point. We are to pay £60,000 to the importer of foreign rags, and then we are to collect this £60,000 from the papermakers according to the amount of paper they make. Now, I have received a letter from a papermaker who, alluding to this scheme, says— We beg leave to submit to you the very serious and unjust consequences that will arise to those papermakers who, like ourselves, use no rags, and nothing but raw fibres, if the proposal made to you by those of the trade who use rags largely be carried out. It is to levy some sort of excise duty, of about 10s. per ton, on all paper, to recoup the expense of the proposed import bounty on rags. We make thirty tons of paper weekly, and we should thus be mulcted in a yearly fine of £750, which would go into the profits of our rivals in trade, and thus give them, a double advantage. We believe there are about 200 tons of paper made purely from raw fibres weekly. We cannot think you would assent to such an unfair and unequal proposal when its true nature is brought under your notice. The writer would be happy at anytime to enter into any further explanations, either personally or by letter, should you feel it desirable to have them submitted to you.

MR. MAGUIRE

Will the right hon. Gentleman give the name of the writer of the letter?

MR. MILNER GIBSON

I will give the letter to the hon. and learned Member.

MR. MAGUIRE

Has not the person written another letter explaining his former one?

MR. MILNER GIBSON

The hon. and learned Gentleman is quite right. This second letter was written in reference to a plan to put an import duty on foreign paper, proposed by the hon. and learned Member, but which he has not stated to the House. This correspondent wrote to me that he had changed his mind, and that he should not so much mind paying 10s. per ton to make up the £60,000 provided there was an import duty put upon all foreign paper. He objected to pay his £750 a year in order to pay rag duty for those who import foreign rags pure and simple; but when he was told that a part of the plan was an import duty on foreign paper, then he said— I do not mind if my paper, made from straw and esparto, is to be prevented from foreign competition. In that case I shall be recouped, and therefore I shall join in the plan. The first letter I read applies to the plan as it is now before the House. The writer objected to the Chancellor of the Exchequer being recouped for his advances to pay the import duty on rags by a charge levied on all English manufactured paper, whether made of rags or of esparto or some other fibre; but when he heard of an import duty on foreign paper, he thought there would be something to counterbalance such an impost on the English manufacturers. Now, I do not deny that there may be sufferings in a portion of the trade, but when the hon. and learned Gentleman said he repeated the representations of great paper-makers and others, it struck me that there was a marked deficiency of representations from consumers, and I think there would be considerable jealousy if any plan were introduced to enable papermakers to carry on their business under the arrangements of some Act of Parliament. Now there is another proposition of the hon. and learned Member, and that is that you are to put an export duty on British rags. Let me ask has the rag collector been consulted upon that point? I am prepared to contend that the rag collector is entitled to sell in the dearest market and buy in the cheapest, and that the hon. Member and his Friends have no right to deprive the rag collector from getting the best price he can for his industry. What sort of a position should we be put in if we were to put an export duty on rags? Have we not been asking from time to time that foreign countries should reduce their export duty on rags, and told them that it was for their own interest as well as for the general interests of the trade of the world that there should be no such duty? We have been preaching a doctrine as to the necessity of free trade in rags, yet we are now advised, when we have made some progress in that direction, to take the most retrograde and objectionable step of putting an export duty on our own rags. I believe the House of Commons will not consent to that proposal. It is a mistake to say no thing has been done. The Government have not been unmindful of the recommendation of the Committee to which reference has been made. The only real recommendation of that Committee was that Government should make an endeavour to influence foreign Governments to abolish the export duty on their rags. Government has acted on that suggestion. Let us see what has taken place in Europe! Russia has not done much in that direction, but she has done a little. Sweden, however, from a duty of 1s. 4d. per cwt. has abolished it altogether. Nor way from 3s. 10d. a cwt. has abolished it altogether. Denmark at present has not made any reduction, but there is every reason to suppose she will do so. In the Zollverein, the duty, which was 9s. 2d. a cwt. in 1859 is to be reduced in July, 1865, to 5s. 1d. In Hamburg rags have always been free. In Holland the duty on rags has been reduced from 8s. 6d. to 4s. 3d. a cwt. since 1859. In Belgium there was a prohibition in 1859, whereas now there is a duty of 4s. 10½d. only. In France there was also a prohibition, and there is now a duty of 4s. 10½d., which is to be reduced year by year, until in the year 1869 it will arrive at the moderate duty of 1s. 7½d. per cwt. In Spain and Portugal there has been no change, but Naples and Sicily have made a considerable reduction—namely, from 13s, 2d. to 3s. 3d. Austria has not made any reduction, but there are hopes that she will do so as the question is under consideration. Turkey has reduced her duty from 10 per cent ad valorem to 5 per cent ad valorem. In fact, I may say, considering the difficulties that there are in the opposition of protected interests, that considerable progress has been made, and it is my firm conviction, knowing what the opinions of some of the leading men in Belgium and France are, that if the English papermakers had been more quiet, and had not kept up one general agitation about the rag question, which had roused the opposition of the papermakers abroad, it is far from improbable that we should have made greater progress than we have done. The hon. and learned Gentleman talked about the importance of the export of paper. He told us that the great paper making trade produced about,£8,000,000 worth per year, and that the value of the imported paper is £500,000. The fact is that the value of foreign paper imported in 1864, less exports, was £453,447. Now I want to know whether the trade of £6,000,000 or £7,000,000 is to be laid prostrate by an import of that extent. But then the hon. and learned Gentleman has stated there is a considerable export of British made paper. I find that the value of the export of British made paper is £550,092, so that there is £100,000 worth more ex ported than imported. When we find that we have exported in value as much as we have imported, how can you lay prostrate this great interest? The hon. and learned Member says the British papermaker meets the foreign manufacturer in neutral markets, but he can only succeed in selling the highest qualities of paper in competition with the foreigner there. But that is just the description of paper in which there is the largest quantity of rags. I believe it is true that the paper in regard to which competition is most felt is precisely that in which the least quantity of rags is used. I quite admit that a very considerable portion of paper—writing and printingpaper—has fallen more than the excise. The hon. and learned Gentleman says it has fallen ¾d. more than the excise, and that the cheap press has got the benefit of that. I entirely sympathize with him on that point, and am very glad that the cheap press has got the excise duty, and ¾d. into the bargain. That has been a great public benefit which has been conferred, and I am glad to hear from the hon. and learned Gentleman that in his plan he does not intend to take away that ¾d. I will now take the imports and exports in quantity. The Returns quoted by the hon. and learned Member were Returns of all kinds of paper, much of which formed no part of the question. What we have to deal with is rag made paper. There was a fair quantity of rags in the foreign paper imported for printing and writing. During three years that foreign paper amounted to 345,000 cwt., and I suppose that the whole make of paper must be 200,000,000 cwt. a year in England. The British paper exported during the same three years, ending 1864, amounted to 314,403 cwt.; so really what is the difference between one and the other? I find that the paper imported was only worth £2 11s. per cwt., while the English papermaker got for the paper he exported £3 11s.; so that there really was, in point of value, a greater amount of paper exported than there was imported, and as far as the quantity was concerned the ex ports of British paper and the imports of foreign paper were upon a par. The hon. and learned Gentleman said the great in crease in the manufacture of paper in this country was quite consistent with the existence of great distress in the trade. The hon. and learned Gentleman said that the papermakers had improved their machinery and had made their plant produce a larger quantity of the manufactured article. Why, there cannot be a more wholesome result of competition. It appears to me that if there ever was an argument more suited than another to prove the wisdom of the policy that has been pursued it is the statement of the hon. and learned Gentleman, that, with the same plant and the same machinery, the effect of competition has been to produce a larger quantity of the manufactured article. Does the hon. and learned Gentleman want any plan which may enable the papermakers to obtain pro fit by producing less? Because it appears to me that that must be a plan not either conducive to the interest of the trade or those of the public. As the hon. and learned Gentleman has read letters, I shall take the liberty of reading a short extract from a letter of a very leading firm in London, which consumes a large quantity of paper, Messrs. Cassell, Petter, and Galpin. They say— We consider that the outcry as to the adverse influence of the export duties levied on rags by foreign Governments proceeds from misapprehension of the state of the case. The facts of our own experience in reference to this question may be interesting and useful. Our firm are large consumers of paper of the very sorts concerning which the makers were most gloomy in their forebodings, and with regard to which they are most open to the competition of our Continental neighbours. The principle upon which we con duct our establishment is to buy in the cheapest market for cash, and we receive offers from all quarters for the supply of our staple material as printers and publishers, but foreigners and their agents here are unable to successfully compete with the English producer. With an average weekly consumption of about twenty-three tons of printing paper for our various publications, the proportion of foreign paper in this quantity is not more than one-sixteenth. It should not be lost sight of in the course of this controversy that esparto and other materials are fast superseding rags in the manufacture of a large proportion of the paper now produced. Even those papers which the foreigner has the best chance of disposing of in this market are made up, not of rags, but of ingredients not in any way affected by the question of duties. Machine and hand made writings, of which rags form the principal constituent, are produced by English makers without fear of competition; while the cheaper class of printings, concerning which they show the greatest timidity, are a description of article in which rags come to be a minor element. A large proportion of the paper used in the course of our trade contains no rags at all. … The consumption of paper in the business of our firm has nearly doubled since the repeal of the tax, and we venture to say that a smaller quantity of rags is used in the whole of our present supply than was consumed in the lesser supply which sufficed for our needs four or five years ago. The truth is, that a change is taking place in the trade in respect to both the means of production and the conditions under which it can be best carried on.' This shows that we ought not precipitately to bind ourselves by any abstract Resolution to meddle with the paper trade of this country. A great change is taking place, I believe for the better; great improvements have already been adopted; and I think, if you were to interfere by any legislative support to an old system of manufacture, you would check invention, and you would be the means of throwing back that progress which I confidently believe is now going on, and which will end in placing the paper trade on a more safe and sure foundation than it has ever rested on before. I cannot believe that any man can seriously entertain the scheme proposed by the hon. Member. There is some plan of protection, rely upon it, in the background; and it would be, in my opinion, the greatest possible injustice to all other interests which have been subjected to free competition if we were to make an exception in favour of this manufacture. There is scarcely an argument used on behalf of the papermaker that I could not use, I believe with greater force, on behalf of the grower of wheat. I could show you that lands were cheaper, that labour was cheaper, and that local rates were less in some foreign countries from which wheat is allowed to be imported into this country than these things are in Eng land; but Parliament did not listen to these statements of special burdens; it applied the principle of free competition to all the interests of the country, and I contend that we must adhere to the principle we have hitherto acted upon, and not make the paper trade an exception. If the hon. and learned Gentleman be serious in desiring this plan of recouping the merchant importer of rags for the import duties paid upon them in foreign countries, he should, instead of asking the House to pledge itself to an abstract Resolution in favour of legislative interference, have brought in a Bill to effect his object. If the hon. Gentleman had brought in a Bill and had attempted to put into the clauses the details of his plan for paying the merchant importer of rags, he would have found himself beset by insuperable difficulties. Who is to say when rags come from Ham burg whether they are Hamburg rags free, or paid the export duties in Prussia or Russia? You cannot tell, and we know from our old experience of certificates of origin that nothing is more open to fraud; and I contend that if you were to adopt any plan of paying these duties, which importers of rags said had been paid by them in foreign countries, and for which payment some sort of voucher might be produced, you would open the door to a very flourishing trade at the expense of the Chancellor of the Exchequer. In fact, the whole plan is beset with so many difficulties, and in itself appears so delusive, that I hope the House of Commons will not give any countenance to it by agreeing to the Resolution. The papermakers in their printed statement have not gone so far as to say that this £60,000 was equal to £600,000 on all the rags; they only say that it affects the price of all the rags in this country to a greater or less extent. My belief is that the rags in this country are raised in price by the effective demand of our papermakers, who are anxious to execute their orders and make their profits. They raise the price of English rags by their demands, and their desire to have a large trade renders it profitable to import foreign rags with their export duty, but it is at their own option. They are not compelled by any law to embark in the importation of foreign rags. There is no country so full of the raw material for paper making as England. We have a large population and an immense mercantile marine, and other sources of supply, and it appears to me that the papermakers must be left free and unfettered to carry on their trade as best they can. We have never regulated the laws of this country by the laws of foreign countries. We must act for ourselves, and to put on any duties by the way of retaliation, with the hope of getting certain returns, experience has proved to be delusive; and therefore I trust that, under these circumstances, the House of Commons will not reverse the policy which has been already accepted by the present Parliament by very large and repeated majorities.

MR. MAGUIRE

said, that there would be no difficulty in proving whether the export duty had been paid upon rags by means of a certificate signed by the Consul at the port of shipment. A sufficient reason for his not asking leave to intro duce a Bill upon this subject was to be found in the circumstance that, according to the practice of the House, a private Member was not allowed to introduce a measure affecting trade. The right hon. Gentleman had expressed a desire that the paper trade should be free and unfettered. That was all that he wanted, and he believed that more would be done to wards the attainment of such a result by the adoption of the plan which he proposed than would be accomplished by the negotiations of the Government in a dozen years.

Question put, That the position in which the British Paper Trade has been placed by the abolition of the Import Duty on Foreign Paper, leaving the Foreign Export Duty on Rags in full operation, is one of great hardship to the British Manufacturer, and calls for prompt legislative interference, with the view of placing the Home Manufacturer on terms of fair and equitable competition with Continental Manufacturers.

The House divided:—Ayes 95; Noes 140: Majority 45.