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Lord Monteagle
I rise in pursuance of my notice, to bring under your Lordships' consideration a question of no small importance, and in discussing it, I deeply regret that I cannot hope to possess as full a mastery over all the facts of the case as is requisite, and that I cannot flatter myself that I can command sufficient powers of argument, and of persuasion, to lead your Lordships to those conclusions at which I have arrived. But though no one can be more conscious than I am of my own deficiencies, and of my in competency to do full justice to the subject I have undertaken, I yet feel confident that I shall obtain your Lordships' attention, not only from my experience of that indulgence and courtesy on which I have but too frequently relied, and on which I fear also that I have too largely drawn, but from my earnest conviction that my resolution must command your attention, on grounds wholly separate from its relation to the humble individual who recommends it to your adoption. My Lords, the proposition I am about to make, is, that you should institute an immediate inquiry into a subject of the most pressing exigency, and one in which the interests of all classes of Her Majesty's subjects are most deeply involved. However clear and absolute are my own convictions—however undeniable may appear to myself the process of reasoning, by which I reach my own conclusions, I am not so presumptuous as to ask your Lordships to adopt any
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resolution of fact affirming my opinions. Undoubtedly I should not be warranted in urging your Lordships to undertake this inquiry, if I were not myself deeply persuaded that there existed grievances that could be redressed, evils for which the Legislature was bound to discover a remedy. These evils I feel confident I can prove, these remedies I feel sanguine enough to hope I can suggest, if my Motion is carried. But I again pray your Lordships to recollect that you are not called on to affirm any proposition more definite than your willingness to enter into an examination of the evidence I tender you, and if lam not greatly self-deceived, I shall not only succeed in convincing your Lordships of the usefulness of such an inquiry, but I shall lay before you such ground of Parliamentary precedent, and of political expediency, as shall render the rejection of this Motion difficult, and in my judgment highly indefensible. In endeavouring to make out my case, and to demonstrate that Protective Duties have been, and now are, most mischievous in their consequences, more especially at the present time, and in a great commercial community like ours, I fear I may have cause to trespass, at considerable length, on your Lordships' time. However disposed I feel to compress my argument within as narrow a compass, as is consistent with the nature of the case, the facts on which I rely must be fully stated, and the order in which those facts stand in relation to each other, must be presented to your consideration. Perhaps I may have been rash in undertaking so great and difficult a duty, but having undertaken it I should be wholly without excuse, if from personal considerations, or even with a view to your Lordships convenience, I were now to shrink from the performance of a task of no ordinary magnitude and importance. Even if your Lordships should be disposed to condemn me for soliciting your attention to much of abstract reasoning—to an enumeration, which may be tedious, of many commercial, financial, and statistical facts, I venture to promise your Lordships a reward, in the speech which I fully expect to hear from the noble Earl, who will reply to my statements, and who never fails to bring to any subject, which it is his duty to discuss, all the resources which extensive knowledge, and reasoning clear and accurate, never fail to supply. It is my duty, in the first instance, to remove from your Lordships' minds the impression that I bring forward the question of free-trade as a
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party question. Nothing can be more untrue, and it would be alike unjust to myself, and to my argument, if such a delusion were to prevail. My resolution is not moved or recommended on party grounds. I shall appeal to authorities, both among the names of departed and of living Statesmen, who are the pride and the glory of the Tory party— I shall rely on the authority of Pitt, Lord Liverpool, Canning, Huskisson, as well as on that of Members of the present Administration. Similar motions have been frequently made on former occasions, without being considered as being adverse or offensive to an existing Administration. In the year 1820, during the Administration of Lord Liverpool, a proposition infinitely more extensive than mine, was brought forward by a noble Friend, who sits beside me (Lord Lansdowne). The noble Marquess moved for a Select Committee to examine into the whole state of the foreign trade of the Empire. He then stated, as I state now, that "it had long been the mistaken policy of the Government to impose restrictions on certain branches of foreign commerce, the effect of which restrictions being to oppose to foreign commerce, the same sort of impediments and embarrassments that taxation presented to the home trade. The tendency of this was to force trade into channels the most unnatural and unprofitable to the country." Your Lordships will observe, that my noble Friend's proposition was much more unlimited than mine. It was to consider the whole of our commercial laws; mine is to consider the Import Duties only. My noble Friend's enquiry embraced our navigation laws—the laws respecting shipping, and above all, it included a subject then of the greatest delicacy, as it must ever be of the highest importance—I mean the state of our relations with India and China, at a period when the Company's Charter was in full restrictive force. Lord Liverpool and his Cabinet, so far from throwing the slightest difficulty in the way of that inquiry, heartily concurred in it. They did not deal with it as being a party attack. They supported the noble Marquess's Motion. They assisted my noble Friend's inquiries. They profited by the knowledge so acquired, and the principles which were recommended and confirmed by the Reports of 1820 and 1821; for in those years the examinations of judicious and practical witnesses led to important and useful results. Why should not the same course
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be taken at the present moment? and why should it not be attended with similar good consequences? Again, during the Administration of my noble Friend (Lord Melbourne) a proposition more nearly approaching to the present, though in its terms less strictly defined, was made in the other House of Parliament. A Committee on the Import Duties was appointed. That Motion was not construed to mean a party attack, it was not dealt with as a party motion. On the contrary, it was cheerfully acceded to, and its inquiries were facilitated by the Government of the day. Your Lordships well know how fully I am warranted in affirming that the present Administration are the last persons who can condemn that inquiry. They, on the contrary, have given it their full and unhesitating sanction. Indeed, they have not only referred to the Report in terms of high commendation, but they have drawn upon it freely in support of their own policy, and in defence of the most important measures which they have recommended to the adoption of Parliament. In proposing the Tariff to the other House of Parliament, the evidence taken before the Import Duties Committee was largely quoted, and to a considerable extent was relied on as authority. Why should a course thus adopted in 1839, and commended in 1842, be objected to and opposed in 1844? Nor is this all. During Lord Melbourne's Ministry, in relation to a commercial question of the greatest magnitude and importance—our trade with the East Indies—a Committee of Inquiry was asked for, and was willingly granted. It was moved by the noble Baron (Lord Ellen-borough) who, till within these few weeks, has been Governor General of India. The inquiry before that Committee included every question of Oriental commerce; duties of revenue, duties protecting and discriminating; sugar, cotton, coffee, rum, tobacco, our relations with foreign States, and the laws and regulations of other Colonies. Very useful results ensued. My object in referring to these cases (and I could multiply the instances), is to demonstrate conclusively that it is neither fair, nor consistent with the usages and precedents of Parliament, to represent my Motion as of a party character, nor to oppose it as such Her Majesty's Government are not called upon—indeed I may say, they are not justified, in taking this course. Another preliminary consideration I must endeavour to impress on your Lordships' mind. If,
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as I have proved, mine is no party Motion, still less is it a partial one. It comprehends all our productive interests, and cannot be supposed to have any adverse bearing against any class whatsoever. It proposes to investigate principles, and to consider their application as bearing alike on commerce, on manufactures, and on agriculture. On previous occasions, in discussions which, if not identical with the present, were at least analogous, I took the liberty of urging on your consideration the impolicy and injustice of the present Corn Laws. I was then reproached as levelling all my arguments against one peculiar interest, and that, the agricultural interest of England. It was in vain for me to protest that such was far from being my intention; it was in vain for me to protest that I could not mean any injury or insult to the class of landed proprietors, to which I myself belonged, and to that agricultural interest with which all my own hopes and support were identified. Still I could not deny that the propositions I then urged, and all similar ones when limited to the Corn Laws, have a right to be considered, in a certain sense, as partial and one-sided. This objection cannot be raised against my present Motion, which extends wherever the principle of protection is to be found in our laws and usages. I am ready at the outset to admit that there are abuses and follies to be found among protections imposed for the benefit of the commercial and manufacturing, as well as the agricultural classes; "Hiacos intra muros peccatur et extra. "These abuses should be corrected as fully where they apply to manufactured produce, as where they apply to the produce of the soil. And I am fully entitled to say, that to the boldest and most unqualified repeal of protection, as affecting themselves, the commercial classes have given their entire assent. The memorable Petition from London, presented by Mr. Baring in 1820, stated absolutely that" it was against every restrictive regulation of trade not essential to revenue, against all duties merely protective, against foreign competition, and against the excess of such duties as are partly for the purposes of revenue, and partly for the purposes of protection, that the prayer of their petition was directed;" and in 1839 and 1840 it was stated still more distinctly by the Manchester Chamber of Commerce, that "they declared their disapprobation of all restrictive laws whether intended for the protection of the
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manufacturing or agricultural classes." Similar resolutions were adopted at Liverpool, Leeds, Birmingham, Sheffield, Derby, Nottingham, Glasgow, and other towns. I am thus warranted in saying, that not only is the principle for which I contend one which may and ought to be impartially applied, but that its impartial application is asked for and solicited at our hands, by the commercial classes, who have been so frequently charged with asking for protection themselves, whilst they declaim against it if conceded to others. Indeed, my Lords, if there is one principle for which I should most strenuously contend, it is, that our national interests do not admit of any distinct, and still less of any adverse, separation or contrast. Those interests must rise and fall together; and the principles, which are just and expedient in the case of commerce and manufactures, are equally expedient and just, when bearing upon agriculture. But I contend that protection, as such, has not been in either case permanently beneficial. No man has declared more unreservedly than the present First Lord of the Treasury, that "all that legislative protection can do for the agriculture of England is as nothing, when compared with the prosperity of our manufactures and commerce." Mr. Huskisson, in 1824, stated the same principle as unreservedly:
It is to the increasing wealth of the manufacturing population" observed that great man "and not to artificial regulations for creating high prices, that the country must look, not only for relief from present burthens, but for the power of making fresh exertions. It is not in the power of any artificial measures to give relief to agriculture, or to any other mode of occupation, which can only flow from the increasing activity and unceasing industry of the people.
This was said in 1824. In 1820 Lord Liverpool had spoken nearly to the same effect.
The agriculture of the country" he observes "is the basis of its wealth and power. But on the other hand, agriculture would not be what it is, the fortunes of those who have profited by it would not be what they now are, had not agriculture been fostered by manufactures and commerce, and received its most important advantages from the spirit and industry of those engaged in such pursuits.
The result has confirmed these predictions, and concurrently with the development of our commercial and manufacturing system, and notwithstanding a fall in the price of agricultural produce, it appears,
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that the increased annual value of the real property of England and Wales, as assessed to schedule A of the present Property Tax amounts, to no less than the enormous sum of 21,830,006l., or 42 per cent. upon the whole. This increase having taken place since 1815. I have made these statements, my Lords, in order to remove impressions which might be injurious to the fair consideration of this Motion. I proceed to ask on what possible grounds the Motion can be opposed. If parliamentary precedents, as I have shown, are in its favour— if I have disproved, as well as disclaimed the imputation of party motives, I am yet to learn how Her Majesty's Government, or this House, can be justified in rejecting my proposition. Is it upon the ground that the Tariff has been but lately adopted; that we should wait longer to know its real effects, and that we should not as yet propose to inquire into its working, still less propose to alter its enactments? If the Government had themselves taken that course, there would be some cogency and consistency in the argument. But what is the fact. Alterations have already been called for, and have been made in the Tariff. Acts have passed, and Bills are on your Lordships' Table, and are before the other House of Parliament which have made, and which propose making, very extensive alterations in material parts of the Tariff. Coffee, wool, and sugar, have been, and are about to be, the subjects of altered duties, and surely, if it is expedient thus to alter, and I am willing to assume, to amend, various heads of our Customs' duties without examination and inquiry, it cannot be unwise to review it in reference to those fixed principles which will render our commercial system more steady as well as more equitable, and will avert the evils of hasty or ill-considered legislation now or hereafter. But if this anticipated objection is untenable, and if it is disposed of by the reply I have just made, the common-place argument may be urged against inquiry, that it will shake all commercial relations, and will excite a disturbance in our mercantile dealings; it will be said that our traders do not relish this perpetual investigation, this prying into their concerns, and that with a view to these considerations, a Conservative Government is compelled to interfere. My Lords, the argument is but a stale one, and if it had any real force, it would have been still more applicable against my noble Friend's Motion in 1820, when Lord Liverpool was too wise and too candid to urge it. It
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would have been equally fatal to the appointment of the late Import Duties Committee, and to Lord Ellenborough's East India Inquiry, when the Government of the day (Lord Melbourne's) did not rely on any such shallow pretences. Therefore it appears to me, that neither on the ground that the present Tariff is insufficiently tested by experience, nor yet that the interests of trade will be prejudiced by my success, I can the noble Earl opposite (Lord Dulhousie) feel warranted in rejecting my Motion. But if I am thus at a loss to conceive on what grounds I may be opposed, allow me, my Lords with great earnestness, and I might add, with great confidence, to impress upon your Lordships' minds not only the general reasons why this inquiry should be undertaken, but why it is more peculiarly fitting that it should be undertaken at the present time. My Lords, if any reduction of duties should be recommended, and should be adopted, the first effect of such change is likely to be some loss of revenue. It is only after consumption has been stimulated and augmented by a lowered price, an increased supply, and an extending trade, that the revenue recovers itself. All such experiments should therefore be tried, at a period when there is a sufficient surplus to meet the temporary loss without hazard to the public interests. I would ask your Lordships to consider whether we are not in the precise condition to warrant you in making slight and temporary sacrifices. Not only have you resources at your command greater than you had been led to anticipate, but infinitely greater than Her Majesty's Government had declared to be necessary for the public service. When Sir R. Peel introduced those large financial measures with which he began his Administration, the country understood his intention to be to impose an Income Tax estimated at 3,700,000l.. a year, which was to be continued for three years only. This would have realised a sum of 11,100,000l. But I now believe, from admissions publicly made by the Government, the public have no great chance that the Property Tax will expire at the end of the three years. If it should cease sooner, it will be most gratifying to the country, but our pleasure will partake somewhat, of the nature of a surprise. But, however this may be, one thing is certain, that the amount of the tax has vastly exceeded the calculation of the Ministers. The tax has produced five mil-
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lions and a quarter in one year. Therefore in place of an income of 3,700,000l. for three years, the Exchequer will probably receive 5,250,000l. for five years, or 26,000,000l. in place of 11,100,000l. In addition to this, the Treasury has also realized 2,467,000l. by the sale of stock, and has also received 1,800,000l. from China, without taking into account the future remittances under the Chinese Treaty. I have troubled your Lordships with a recapitulation of these facts, in order to prove that if ever there was a period when the peculiar state of the finances admitted of a free investigation of the Import Duties, and of their reduction and correction, so as to enable Parliament to give relief to trade without hazard to public credit, the present is the time, of all others, when such a useful experiment may safely be tried, and where practical relief may be afforded to our productive interests. I have stated, that the scope of my Motion is comprehensive, and is therefore the more important. I invite the House to consider our Import Duties generally, but to consider them particularly also, as they illustrate and exemplify the consequences of protection. I invite your Lordships to investigate, not merely how protective duties bear upon the general interests of the country, but how they must ultimately affect the separate interests of the protected classes. To those classes, I venture to affirm, the system of protection can be proved to hold out the most mischievous and delusive hopes, leading to certain disappointment, and therefore as mischievous to those whom it was sought to favour, as to the public, at whose cost that favour was granted. I shall endeavour to make out this proposition, though I well know how difficult it is to discuss an abstract principle in an assembly like that which I have the honour of addressing; but I hope your Lordships will pardon the dryness of what may appear to be more of a scientific than a political argument. At the cost of being tedious, I feel it to be absolutely necessary to lay down and investigate the general principles on which I rely, and I am the more tempted to do so, when I have heard it laid down on authority which your Lordships will be the last to undervalue or to disown (Sir R. Peel), "that it is important to settle and to adopt general principles in order that you may apply them where and when you can, and approach them as nearly and as speedily as the very complicated state of things around us will permit." My delight
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in hearing this just and statesmanlike declaration was augmented by the words which followed, "and a further beneficial result of laying down such general principles, is the obligation and duty which it imposes on the Legislature, to avoid any new measure which opposes or which derogates from them." This being stated on high and responsible authority, I trust your Lordships will indulge me whilst I investigate the general principles on which I rely in support of the present Motion. Let us examine what are the principles on which a State ought to proceed in the regulation of that branch of its internal economy which comprehends its financial and commercial laws. The financial principle seems to me to be that of obtaining the largest amount of revenue required for the public service, contributed in the manner the least burthensome and vexatious to the whole community; and for this purpose, by its apportionment of taxation, to leave the industry of men and of classes in such a position as to produce the largest amount of wealth. Will it be controverted that men as individuals should be left uncontrolled in the pursuits of their own industry? This appears to me the simplest of all propositions, and it seemed to be recognized by our laws and institutions, so far as individual action is concerned. But in dealing with national interests, ought we not, as far as possible, to deal with them as we should with the interests of individuals? It will scarcely be asserted that individual interest should not be left free. But when we come to consider the productive industry of classes in this vast and active community, we find that in former times, largely, in modern times with more reserve and limitation, but under all circumstances, equally without excuse, bounties and encouragements are given, and burthens and restrictions are imposed, which too frequently leave the word freedom scarcely more than a name. The object of all traffic can only be to extend and to diffuse the command which individuals and communities possess over the comforts and necessaries of life. When I use the word wealth, I use it as expressing those necessaries and comforts—where: I express a desire that one country should increase in riches, I only state my hope, that all classes may be enabled more freely to possess and to enjoy those gifts of Providence and those productions of industry, which mark, and may be said to measure the progress of civilization. Nor will the
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benefits of this increase of wealth be limited to the mere increase of physical comforts. On the contrary, I feel confident that we have much greater facilities in making our fellow countrymen better subjects, and higher moral and intellectual beings, if we protect them from being ground to dust by suffering and destitution, not the less galling if justly represented to be the consequence of unequal and partial laws. I have found a description of the effects of freedom of trade in the writings of the late Mr. Ricardo, which appear to me most admirably to illustrate the comparison which I have drawn between the relations of individuals and those which exist between classes and individuals. This great writer observes:—
Under a system of perfectly free commerce, each country naturally devotes its capital and labour to such employments as are most beneficial to each. The pursuit of individual advantage is admirably connected with the universal good of the whole. By stimulating industry, by rewarding ingenuity, and by using most efficaciously, the peculiar powers bestowed by nature, it distributes labour most effectively and most economically, while, by increasing the general mass of production, it diffuses general benefits, and binds together by one common tie of interest and intercourse, the universal society of nations throughout the civilized world.
Under this system of freedom it is not one who benefits, but all Commerce would not take place, unless it were advantageous to both buyer and seller, for to refer to the authority of another great writer, (Malthus)
Every exchange which lakes place in a country affects a distribution of its produce better adapted to the wants of the society. It is with regard to both parties an exchange of what is wanted less for that which is wanted more, and it must, therefore, raise the value of both products.
I have referred to these high scientific authorities, for the purpose of proving that the same rule which regulates the intercourse of individuals ought to apply between class and class, nation and nation. But it is often and significantly asked, Are you visionary enough to imagine, as a friend of freedom of trade, that nations can abandon all taxation levied on imported produce? My Lords, if that freedom of trade, for which I contend, required such a concession, it could not be found on the face of the civilized earth. I am far from contemplating so fantastic and visionary a result. Customs Duties are amongst the
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most legitimate sources of Revenue. But they are different in nature, in degree, and in their consequences. A duty for the purposes of revenue, if wisely imposed and levied, is that of which few ought to complain, because it is levied for objects productive of benefits to all. It is raised for the purpose of defending national independence and national honour; it is raised for the purpose of defraying those charges, civil, military, and judicial, in which every subject of the Crown has a direct interest, and for which they receive an equivalent. Besides, these duties carry with them their own limitation; as it might be assumed, at least in a free state, that extravagant establishments would not, or ought not, to be allowed, and that the duties thus levied would necessarily be confined within the limits of the necessary public expenditure. To these Revenue Duties no serious objection ought to be raised. The second class of taxation is a Countervailing duty; a duty imposed upon a foreign commodity imported, and equivalent to any peculiar burthens upon the same commodity if produced at home. This again is just in principle. It would obviously be the height of all injustice, were a State to permit the import of articles duty free, to compete with similar home produce, burthened with heavy duty. Such a competition would be ruinous to the revenue, and most unjust to home industry. This principle may be illustrated by the articles of malt and hops. Assuming that the duties are paid by the producers, it would be reasonable to impose an Import Duty on French or Belgian malt and hops, equal to the internal duty collected by our excise. No objection can be raised to such a tax, on the ground of its inconsistency with free trade. If a special tax is levied on a particular class, that class has a right to demand protection against their foreign rivals to the amount of that tax, but to that amount only. Their case must be undeniably proved; mere assertion, however intrepid, will not do; more especially if accompanied by a refusal of all enquiry, and by the non-production of any evidence. On the other hand, no claim to protection can be admitted which merely rests on the grounds of general taxation, borne by all, and not paid exclusively by the particular parties seeking the protection. If a protective duty were conceded on any such grounds, it would be manifestly unjust. Yet this is the claim most loudly put forward, and too gene-
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rally admitted. Poland pays no taxes, it is said; England is heavily taxed, therefore it is just to place a protecting duty on the productions of Poland. I deny this altogether. Let us examine the case. Suppose a community to consist of ten classes, all equally taxed, one of these classes, the hatters for instance, calls for a prohibiting duty on French hats—I assume that the Board of Trade of the day recommends, and Parliament enacts this duty. Its first effect is to keep up the price of hats, for if it does not do this, it is useless altogether. But I assume that it succeeds. The result must he that the wearers of hats, paying a higher price for the article they require, will pay the hatters' taxation as well as their own. I assume for my argument, that there would not be any smuggling, and that capital would not be transferred from some other branch of industry to the trade of hatters, either of which results would render this protection inoperative, though impolitic and unjust. But let us suppose that protection in place of being confined to the hatters, was extended to the nine other classes of producers. What then? In the first place, was it likely that Parliament would at once be so omniscient as well as so impartial, as to apportion the equitable amount of protection, to each, and neither more nor less. But granting that this improbability was a truth, all prices would be equally raised. Every man's income might be severally increased, but his expenditure being raised in the same proportion, his absolute and relative position would be unaltered, and the Legislature dealing with these prohibiting duties, would find its labour lost, and would end just as it begun. The ill consequences of this system would, however, be still more apparent and fatal, if it were applied to a country having a great export trade. The case I have hitherto put would only apply to a country isolated from all others, and without commercial relations. Even in this imaginary case, I have shown that protection would be most cruelly unjust if limited to a favoured case; and if equally apportioned among all, that it would be inoperative and unwise. But it would be fatal to an exporting country like ours. The object of all protection is to raise price. If this, is not accomplished, it cannot realise the hopes of its advocates. But with an export trade like that of England, carried on to the value of forty or fifty millions, and consisting mainly of articles consumed both at home and in foreign countries, it is obvious that a rise of
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price must limit export, must fall back on the manufacturing industry of the country, and ultimately on those who raise the food on which those manufacturers subsist. It would be difficult or impossible for our manufacturers and merchants to meet the competition of their foreign rivals who were not cursed by the same protection. In this case, as in the former one, protection would defeat itself, and its only consequence would be the immediate limitation, and possibly, the ultimate destruction of home industry. The distinction between duties of revenue, and duties of protection, is so truly and forcibly put by a most eloquent Citizen of the United States, that I cannot resist calling your Lordships' attention to his admirable exposition "No two things, Senators," observes Mr. Calhoun, "are more different than duties for revenue and duties for protection"—they are as opposite as light and darkness. The one is friendly, the other is hostile to the importation of the article on which it is imposed. Revenue seeks not to exclude or diminish the amount imported: on the contrary, if that should be the result, it neither designed nor desired it. While it takes, it patronises; and patronises that it may take more. It is the reverse in every respect with protection: it seeks directly exclusion or diminution. That is the desired result; and if it fails in that, it fails in its object. But though hostile in character, they are intimately blended in practice. Every duty imposed on an article manufactured in the country, if it be not raised to a prohibition, will raise some revenue; and every duty laid for revenue, be it ever so low, must afford some protection, as it is called. Government, in adopting the protecting system, is to descend from its high appointed duty, and to become the agent of a portion of the community to extort, under the guise of protection, tribute from the rest of the community, thus defeating the end of its institution, by perverting powers intended for the protection of all into the means of oppressing one portion of mankind for the benefit of another. The tendency of the system is to isolate country from country, neighbourhood from neighbourhood, family from family, with diminished means and increasing poverty, as the circle contracts. The consummation of the system is to produce a Robinson Crusoe in goatskin." How just and how convincing is this statement; and how beautifully does it illustrate that eternal truth, that man cannot, without infinite prejudice to his per-
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manent interests, attempt to counteract that decree of Providence which renders nations like individuals, dependent on each other, and that to their great and mutual benefit. By the laws of nature, neither this, nor, any other country, is enabled to produce all that its inhabitants can require for their sustenance and comfort. It is on these very wants that the social progress of all is made to depend; and so far from viewing large importations of foreign goods with alarm or jealousy, those importations become at once the source of our increased comforts, and the measure of our domestic industry. "The benefit which is derived from exchanging one commodity for another," observes the late James Mill, "arises from the commodity received rather, than from the commodity given. When one country exchanges, or in other words, when one country traffics with another, the whole of its advantage consists in the commodities imported. It benefits by the importation, and nothing else. A protecting duty, which, if it acts at all, limits imports, must limit exports likewise, checking and restraining national industry, and thus diminishing national wealth." Nor let it be said that these are merely the dicta of philosophical theorists, discussing, and perhaps dogmatising, on abstract principles. The same principles are laid down in the evidence of that experienced public servant, the late James Deacon Hume, who had been thirty-eight years at the Board of Customs, and eleven years the Secretary of the Board of Trade—a gentleman of the highest official experience and character. Mr. Deacon Hume, being examined on this subject of protection, said—
I conceive that no general measure could be more beneficial to this country than a removal of all protections, prohibitions, and restrictions. I cannot conceive that a country exporting forty millions' worth of its industry can effectually and beneficially, for any length of time, protect any partial interest whatever. I have always considered that the increase of price in consequence of protection, amounted to a tax. If I am made to pay 1s. 6d. by law for an article which in the absence of that law I could buy for 1s., I consider the 6d. as a tax, and I pay it with regret, because it does not go to the revenue of the country, and therefore I do not in return share the benefit of that payment as a contribution to the revenue. I must be taxed a second time to the state. It is also a misdirection of labour and capital, tempting parties to embark in a trade by factitious support, which in the end may prove a fallacious one. I have often wondered bow any rulers could consent to incur the respon-
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sibility of such a policy. The real question at issue is, do we propose to serve the nation, or to serve particular individuals.
"After having been thus taxed for the benefit of some protected interest," continues Mr. Hume, "a man finds himself taxed a second time for the revenue." Mr. Hume expressed his astonishment that a system so vicious and senseless should have been so long permitted to continue. My Lords, this is only to be accounted for, when we consider the plausible grounds on which a protection is first obtained, and the grounds, still more plausible, by which, when unfortunately conceded, its continuance is defended. These protections find eager advocates through our representative system, and mix up most unhappily in our party disputes. In how many cases have we been driven from a wise course of legislation to adopt colonial discriminating duties, which ought never to have been granted, but which Her Majesty's present Government have most absurdly and indefensibly endeavoured in many cases to extend and perpetuate. How many of these discriminating duties are there, which were evils when first enacted, which have produced no benefit when continued, and yet which are made a fruitful source of discontent when withdrawn! This sometimes takes place even in reference to articles which a colony never has produced, and never is likely to produce; or which, if it did produce, the article in question was high in price and bad in quality. Yet these, so miscalled colonial and domestic interests, became the war-cry and watch-word of party. Nothing, in my judgment, can be more fatal to the fair adjustment of questions neutral in their character, and which ought to be approached with calmness and impartiality. It is however seen, that a great party has bound itself, most unfortunately, to the absurdity which it once adopted as a symbol of faith. I may best exemplify them by our present system of Corn Laws. I venture to ask any noble Lord, or any writer of character, whether they believe that twelve gentlemen of sense or experience could now be found out of the Cabinet, or even within it, who would seriously defend, or adhere to, the Sliding Scale of Duties, if they were not politically pledged to do so. Give me but a jury of any twelve men of calculation and of understanding— let them either be all agriculturists or all merchants, or select a jury de mediatate if you will—no verdict will be obtained in favour of so flagrant an absurdity. I will
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allow the choice of the court to be left with the Government. I will allow them to set aside or challenge jurors as freely as the Irish Attorney General himself can advise, the result would still be the same. Had it not been, that, these questions of revenue and protection were found the most convenient topics by which to produce a change of Government in 1841, I cannot believe that any one would now be found to defend the Sliding Scale. When I have occasion hereafter to remark on the commercial system of the United States, I shall illustrate this argument further; but in the meanwhile, I may be allowed to give your Lordships an American anecdote, which is equally applicable to our own case. When one of the restrictive American Tariffs was fiercely contested in Congress, it was asked— "Call you this a Bill for the protection of American manufactures? It only protects one single manufacture, the manufacture of a President of the United States." So, I may be, permitted to say, these protecting duties are to protect, not domestic interests, but the political interests of the Conservative party. I admit that we have made, and are now making progress towards an improved system. I admit that we owe large concessions in principle, and no unimportant concessions in practice, to them. Even within the last few days, by repealing the wool-tax, they have wisely abandoned at once a home protection and a colonial discrimination. They have done so with equal advantage to all parties— the producers, the manufacturers, the merchants, and the consumers. In coffee, too, I see with satisfaction, that they have reduced by 50 per cent. the colonial protection enacted but last year. These concessions, however, only serve to prove more strongly the necessity of my proposed inquiry. I entreat the Government to consent to a Committee, for the purpose of examining how far their own principles are realized in practice. Let not their abstract declarations remain a dead letter, or be reluctantly or partially applied. I cannot see many traces of their full development in the present Tariff; indeed our book of rates still continues, in many particulars, to deserve the censure passed upon it more than sixty years ago, by the author of the Wealth of Nations. What were the observations of Adam Smith on this subject?—
The taxes which are at present imposed on
696
foreign manufactures, if we except a few principal ones, have been the greater part imposed for the purpose, not of revenue, but of monopoly, or to give our own merchants an advantage in the home market. By removing all prohibitions, and by subjecting all foreign manufactures to such moderate taxes as it was found from experience, afforded on each article the greatest revenue to the public, our own workmen might still have a considerable advantage in the home market, and many articles some of which afford no revenue to Government, and others a very inconsiderable, might afford a very great one.
Our Tariff included many hundred articles, and produced in 1843 a revenue of 22,636,000l. But of this enormous amount 20,300,000l. were levied on 13 articles only, and the remaining 2,300,000l. included a receipt of nearly 800,000l. of corn duties, which the Government were pleased to disclaim as an article of revenue, though they had no scruple in carrying to their credit in the Exchequer. Most of the lesser articles were valueless and unproductive as heads of revenue, many of them were maintained solely as absurd and indefensible protections. But this system was attended with a multiplication of restrictions and of penalties, and a mystification of our whole commercial system, rendering the operations of commerce complicated and hazardous. On these grounds, I feel, I am authorized to ask for this inquiry, and I ask it with the more confidence, because I undertake to prove that, in many instances, this system is wholly at variance with the principles laid down for his Government, and given to the world in a printed and authentic form by the first Lord of the Treasury. A single case will prove my assertion. The principles laid down by Sir R. Peel in 1842 were these—1. "The removal of all prohibitions and the relaxation of prohibitory duties. 2. The reduction of the duty on the raw material used in manufactures in some cases to an economical duty, and so that they should not exceed in any case 5 per cent. 3. The reduction of duty on articles partially manufactured, so as not to exceed 12 per cent. The reduction of the duties on manufactured articles to 20 per cent.; and The reduction of colonial duties." I ask the noble Earl opposite, whether he can say that these principles are fully and practically carried out? Let us apply ourselves, for instance, to the promised reduction
697
of the duty on raw materials, to a sum not exceeding 5 per cent. What is the present duty on raw cotton? Why, during the last year it has exceeded 8 per cent. ad valorem; hut as it is taken by weight, it imposes a burthen much more oppressive than that amount on the particular branch of cotton manufactures exported, on which it operates most injuriously. I refer to cotton-goods exported to the foreign market. As a great proportion of the raw material enters into those articles which we export, such as yarns, the consequence is that we cast upon our manufacturers, not only the extra expense of freight and insurance, but also a high duty on the raw material, to which these exports are subject, without the allowance of any drawback. The cotton-trade is only one instance, but it serves my argument if it proves a single departure from the principles laid down by the Government, in one of our first articles of manufacture; thus, even if I restricted myself to this case alone, it can hardly be denied that I have laid sufficient ground for asking for the appointment of a Committee. I have already frankly and gratefully admitted, that on these subjects we owe much to the present Government. In making this acknowledgment, I feel that I shall at once awake the hostility, and extract a disclaimer from my noble Friend on the Cross Benches, (the Duke of Richmond.) When induced to approve, it must he admitted, that we are very inconsistent woers of the present Cabinet. I humbly entreat them to advance, he sternly commands them to retreat, or at least to halt. Whatever I receive with gratitude at their hands, my noble Friend rejects with scorn and with disgust. This was exemplified in the two instances to which I have so lately adverted. We have made a very considerable advance this year, by the repeal of the duty on wool. If ever there was a measure which was thoroughly right, which was right alike for the benefit of the manufacturer, of the trader, and of every other interest connected with the subject, it was the repeal of the duty on wool. But that repeal involved, as I have already stated, the repeal of all protection, on an article of agricultural home produce, and the repeal of the discriminating duties on colonial produce. But I like it all the better on that ground, because I believe the change can produce nothing except benefit to those who have hitherto enjoyed the so-called protection) and because the interest
698
of the Colonies themselves will be benefited by the repeal of the discriminating duties. It is on the practical effect of the alteration that I found my praise. Again, with respect to coffee, the Government have made an advance towards the equalization, or the diminution of the discriminating duty, of last year. They are going further now, and I believe, they will not fare worse. The Government have taken a wise step, they would increase the revenue and, at the same time, would confer a benefit on the people. But if the steps were wise which had been already taken, was the whole subject an unwise one for investigation? I should be sorry to think that these alterations were made too late, though it must be admitted that they have all been injudiciously delayed; in some cases, I fear, our own industry runs a risk, of being destroyed and paralyzed by the obstinate adherence to a protective system. When we apply our remedies, at last, our commercial vitality in some branches may be gone, and we shall discover to our cost how true is the ancient maxim, "Re-media non agunt in cadaver." In stating that these salutary alterations should have been made sooner, I admit that many of them ought to have been made by the Whig Government as well as by the present; before the Committee I undertake to show the necessity of applying the same sound doctrine, without delay to cotton as well as to wool, and to other articles much more important than either. I also propose to show the total absurdity of some of these protections. Enamored as we seem to be of the principle, we apply it under circumstances, which admit neither of excuse nor of palliation. What can be said in defence of imposing import duties upon articles of the same class, which we export largely, and sell advantageously in the foreign market, even encumbered with the charges of freight, insurance, and mercantile profit. We export cotton goods to the official value of 69,000,000l., and cotton yarn to the value of 12,000,000l.; yet we take, on the import of similar foreign articles, a duty of 10 per cent. Our exports of brass and copper amount to 1,920,000l., and of iron, to 6,000,000l., yet foreign manufactures of the same kind are subject to 15 per cent. import duty. Woollen goods and yarns exported are valued at 8,800,000l., the import duty is 15 per cent. also. A similar duty is with equal absurdity imposed on foreign linens and yarns, of which our exports exceed 5,500,000l. It must
699
not be supposed that this is a mere innocent absurdity. When coupled with other laws, more mischievously operative, it seems to indicate a hostility to all foreign industry, and it seems to affirm that cur leading manufactures require the support of these indefensible protections. We thus give an example to other countries, only too ready to profit by the lesson we have unwisely given. Foreign countries often attribute to particular circumstances what is wholly owing to natural causes; and countries which cannot compete with us in cotton, or in linen, which cannot rival us in woollens, in brass, or in hardware, imagine that if we had not these protecting duties in England, they would rise equal to us in manufacturing success, and they forthwith follow our bad example. [The Earl of Ripon: " No."] My noble Friend may deny the evil consequences of all this. But he can hardly controvert the fact. If he does so I shall refer him to his noble Colleague, the Secretary for Foreign Affairs (Lord Aberdeen), who may place in his hands a recent correspondence with Baron Billow, to the great cordiality and friendliness of which, the British Tariff has not very much contributed. My noble Friend will find, that not only on that, but on other occasions, and with other Powers, our own conduct was pleaded—I do not say always very fairly pleaded—as an excuse for similar acts of absurdity and of injustice, and it was thrown in our teeth in every country on the face of the earth, that we, the first commercial community in the world, adhere firmly to what was most justly stigmatized as an indefensible Tariff. We do this also at a time when we venture to profess the doctrines of freedom of trade. If it were at all offensive to my noble Friend (the Earl of Ripon) to find fault with the Tariff, in the formation of which, however, he had taken a leading part, it must be more so, to mention the Corn Laws, of many of which my noble Friend might be termed the prolific parent—I might say the Saturnian parent —guilty, as he was, of the Titanian crime of devouring his own offspring. I know that my noble Friend, in 1815, gave the farmers the pledge that they should have a price of 80s. [The Earl of Ripon: I have always said exactly the reverse.] I am sorry to hear it, for I had always thought that my noble Friend enjoyed the confidence of the agricultural body; and if he had told the farmers that they would not get 80s., they never believed his assertion; they
700
fondly trusted that they would get 80s. a quarter for their wheat; and they still continued to act as if every Corn Law had the power of fixing a minimum price for corn. They are in error, I willingly admit, but this only shows the deceptive and mischievous principle of our Corn Laws. But I shall proceed to illustrate the evil consequences of this protective system, by an example drawn from a foreign country. In June, 1820, the Spanish Cortes thought fit in their wisdom to enact a Law of Customs, the most restrictive and prohibitory. It was an exaggerated specimen of all the mischiefs of the protective system. This strange piece of legislation was brought under the review of an eminent philosophical writer, the late Mr. Bentham, who exposed its errors with his usual force and sagacity. "The Spanish Tariff," this author observes, "is open to eight specific objections, which may be stated as follows: —1. It seeks to substitute dearer for cheaper commodities. 2. It substitutes inferior for better articles. 3. It limits home production, by diminishing export in exchange for articles imported. 4. It produces a loss of revenue. 5. It encourages smuggling. 6. It sows the seeds of internal divisions. 7. It creates foreign jealousies, and leads to contentious and adverse diplomacy. 8. It. deprives the Government and the Legislature of the confidence of the people." Such were the objections taken by Mr. Bentham, to the Spanish Tariff, of June, 1820. I do not pretend to say, that these objections apply, to the same extent or degree, to our present laws, but I undertake to prove that there is not one of these censures to which we are not liable. Even in the course of the present discussion, I undertake, with your Lordships' permission, to work out this demonstration. But how much more satisfactorily could I attain my object, if allowed to call witnesses and tender evidence before the Committee, which I entreat your Lordships to appoint. I proceed in my inquiry. Have we no case before us in which we substitute dearer commodities for cheaper? Are not your Lordships familiar with a question to which public attention is at the present moment directed with intense anxiety? I allude to the Sugar Duties. Let the price of foreign sugar in bond be compared with the price of British colonial sugar. Do we not, by the imposition of a prohibitory duty of 63s. on the former, as compared with a revenue duty of 24s. on colonial produce, create a monopoly in
701
favour of the latter, at the cost of the people of England? This monopoly is even closer than in former times, for the discriminating duty acts more severely since the duty on colonial sugar has been reduced from 27s. to 24s. At the present prices, the prohibition is complete, and it produces that which deserved the condemnation of Mr. Bentham, it substitutes a dearer production for a cheaper one. I know it may be repeated, as on former occasions, "You only propose to reduce the duty by some fraction—¼d. or ½d. in the pound—and this can give no relief to the consumer." A greater fallacy than this was never uttered, or to use a favourite word, was never "ventilated" abroad. The question was not the amount of duty charged, but the amount of sugar excluded. A small sum might do this as effectually as a great one, as an Italian poignard might cause death as surely as a Highland claymore. A particle of dust almost imperceptible, might stop the movement of the most powerful machine, and it would not be reasonable to say that the mischief it produced could be calculated by its absolute weight. But the present differential duty is not unimportant. It amounts, with the additional 5 per cent., to 41s., or 4½d. per lb.; and, looking at the effect produced on consumption, by a variation of price, it seems evident that a reduction or diminution of this difference of 41s., would produce an immediate effect on consumption. In 1831, the lowest price of sugar was 23s. 8d., and the consumption has been estimated at 20 lbs. per head. In 1840, the highest price was 48s. 7d., and the consumption fell to 15 2/10 lbs., or nearly 25 per cent. Between the years 1831 and 1841, a difference in price of 1½d. per lb., was followed by a falling-off in consumption of 745,222 cwt. But experience enabled us to judge of the consequences of the reduction of duty. This had been first shown in the consequences of reducing the duties on the sugar of Mauritius. It was shown still more conclusively, as consequent on the equalization of East and West India sugars, effected by myself, as Chancellor of the Exchequer, in 1836. The table which I hold in my hand, exhibits the result of a measure, which, though for many years resisted by the West Indians, as ruinous to their interests, was at length carried, as easily as if it had been a common Turnpike Bill, and it is now relied on by its former opponents as essential to their best interests:—
702
| IMPORTS OF EAST-INDIAN SUGARS. |
|
Cwts. |
|
| 1831 |
113,000 |
Duty 34s. |
| 1832 |
79,000 |
| 1833 |
98,000 |
| 1834 |
121,000 |
| 1835 |
98,000 |
| 1836 |
110,000. |
|
619,000 |
or average 103,166 cwt. |
| Duty received in six years, at 34s. £1,052,300 |
|
Cwts. |
|
| 1837 |
270,000 |
Duty 24s. |
| 1838 |
418,000 |
| 1839 |
477,000 |
| 1840 |
518,000 |
| 1841 |
1,066,000 |
| 1842 |
935,000 |
| 1843 |
1,101,000 |
|
4,785,000 |
or average 683,571 cwt. |
| Duty received in seven years |
£5,742,000 |
| Increased Import |
4,785,000cwt. |
| Increased Revenue |
£4,509,000 |
| Duty received in 1836, at 34s. |
£166,600 |
| Duty received in 1843, at 24s. |
£1,331,000 |
| Increase of Revenue |
£1,164,400 |
We thus see that the country has gained by this limited application of sound principles, an increased import of nearly 4,800,000 cwts. of sugar, representing so much industry created in the East Indies; and that the revenue has profited to the extent of 4,500,000l. At an estimated consumption of 281bs. per head, the increased consumption would be 1,400,000 cwts., and the increased revenue 1,680,000l. But, even comparing the years 1831 and 1843, had the consumption been equal, we should have received at the Exchequer an additional sum of 795,000l. I have thus proved, that in the article of sugar, we are justly exposed to the censure of Mr. Bentham, in substituting a dearer article for a cheaper, to the loss of the consumer, the merchant, and the revenue. And on what plea is this absurdity defended? From our horror for slavery and the Slave Trade. It should, however, be remembered, that these distinctive duties existed when we were slave-traders and slaveholders. Their real origin, like that of other protections, will be found in monopoly, and not in any humane feelings. But it is convenient to put forward a new argument, when our former argument is no longer maintainable; and it is remarkable, and almost marvellous, to find the drafts which were made successfully upon the credulity of mankind. We submitted
703
to the present prohibitory duties, out of compassion for the slave, and we were told, if we consumed a single pound of slave-grown sugar, that we were responsible both to God and man. What, however, did we do? How did we pay our debts to Russia? In slave-grown sugar. We traded all over the world, we dealt with the Brazils, we pressed the Brazilians to t8ke our manufactures, and they gave us in return foreign slave-grown sugar, which we sold in the best market. We were rejoiced to receive and to sell it, if we could do so to a profit. We took it to St. Petersburgh, to Hamburgh, and all over the world; nay, we took it into our own ports, and consumed it here, if the price only rose sufficiently high; we, a high-principled people, so sensitive as to refuse touching slave-grown sugar, permitted our principles to disappear with the rise in price, and the consequence is, that we might use every pound weight of Brazilian or of Cuba sugar, imported if the price in the market was so high to make it advantageous that we should pay for it. We went further still; we brought the slave-grown sugar to England, we refined it, and we sent it out to our own Colonies. We said, that the consumption in England would be degrading, but it was a practice good enough for the planters of Demerara, and Jamaica. We condescended to consume nothing but pure sugar in our tea, unpolluted by slavery, but we sent back the slave-grown sugar across the Atlantic, as being good enough for the palates and souls of our Colonists. Our conscience is thus localized, and limited by geographical boundaries. This absurdity is, however, scarcely equalled by another which we are to be called on by the Government to adopt. We are to be called upon to favour what is termed free-labour sugar, whilst we refuse to receive sugar cultivated by slaves. Louisiana sugar, we shall, however, be called upon to receive, by virtue of our Commercial Treaty with America. How do we dispose of our humanity in this case? If we investigate the state of slavery in Louisiana, the slave-breeding establishments in Virginia and other States of the Union, we cannot hut feel some surprise, that to the United States should be accorded any favour in this branch of commerce, more especially when we are called on to legislate on the principles of humanity. That the United States will send us sugar, I shall endeavour to prove on another occasion, when the Sugar Duties are brought forward.
704
But, independently of this it is clear that in proportion as we shall take into consumption free-labour Sugar, now excluded by our prohibitory duties, in that same degree shall we raise the price of sugar on the Continent; and thus afford as direct an encouragement to slavery and the Slave Trade, as if we dealt direct with Cuba and the Brazils.
My anti-slavery friend," observes Mr. Laird, "would admit all free-grown sugar; that is, the sugar of Java, Manilla, Siam, and China. Now, as this sugar must be withdrawn from the general European market, the price would immediately rise, and a greater demand for Brazil and Cuba sugars would take place. By the very act of opening our ports to free-labour sugar, we thus stimulate the Slave Trade as effectually as if we admitted slave-grown sugar ourselves.
I am unwilling to call the distinction attempted to be drawn by the Government a hypocritical device, but it is, at least, a delusion into which the Cabinet has been betrayed, by their errors on this subject of protection. They seek to protect the Colonies, they next affect to protect the interests of humanity; the one endeavour will be as ineffectual as the other. I shall now proceed to consider whether our own Tariff does not afford an example, liable to Mr. Bentham's second objection, "the substitution of an inferior for a better article." Perhaps this meant the same thing as the first objection; but the analytical writer, to whom I have referred, drew the distinction. What shall we say of the preference given to wine from the Cape of Good Hope over the Wines of France, Germany, and the Peninsula? How can we defend the high duties till now imposed on foreign vinegar, as compared with that levied by our home Excise. Are we prepared to justify a duty of 22s. a gallon on pure brandy, whilst less than half that amount is imposed on British grain spirit. Here we see the protection of inferior commodities, as substitutes for superior, forced into consumption, made the very foundation of our commercial policy. But a still stronger example is to be found in the Timber Duties, and I must say, in passing, that so imperfect and objectionable a measure, as that proposed by the Government, and carried through, never could have obtained the assent of Parliament, had it been preceded by inquiry. I must guard myself from the supposition of disapproving of some change in the former Timber Duties, On the contrary, no
705
possible alteration was more called for; I only object to the particular change made by Sir R. Peel. It was quite right to remove what Lord Plunket had called, and rightly called, an impediment to civilization. The subject of timber was a just subject for the consideration of Parliament. But how did the Government deal with it? If the matter had been under the examination of any fair Committee, whatever the course recommended might have been, it could not possibly have been the course taken by Her Majesty's Government. They had continued a discriminating duty, which had not been originally imposed for the protection of the Colonies. Its origin was thus stated by Lord Liverpool:—
When in 1809, we were shut out of all trade to the Continent, and even likely to experience a great want of timber, which, as respected our Navy, was very alarming, Government sought to avert so serious a national calamity. Several merchants engaged, in consideration of a protecting duty promised to them, to embark their capital in the transport and carriage of American timber. Such was the origin of the protecting duty, proposed, not for the purposes of revenue, but to induce certain merchants to embark in a new trade. It was, nevertheless, a temporary measure, and I perfectly agree, that at the time of its adoption, any positive assurance of its continuance was refused.
So great was the protection, and so absurd was the discriminating duty, that timber had been sent from the Baltic to Miramachee and New Brunswick, and imported thence at a profit, the increased freight of this double voyage being more than compensated by the reduced duty to which it became subject under the false description of colonial produce. This absurdity, it is true, had been corrected some years back. But fresh errors were committed. We repealed altogether the duties on colonial timber, at a period when the steadily increasing receipts demonstrated that the existing duties did not check consumption. It was a trade which had gone on increasing from 1832 to 1841. The amount of duty had doubled, and had reached in the latter period, almost to 500,000l.
| Amount of Duty received in each of the last Ten Years on British North American Timber was as under: — |
| 1832 |
£267,000 |
| 1833 |
259,000 |
| 1834 |
271,000 |
| 1835 |
340,000 |
706
| 1836 |
323,000 |
| 1837 |
335,000 |
| 1838 |
346,000 |
| 1839 |
367,000 |
| 1840 |
459,000 |
| 1841 |
455,000 |
The Government had thus thrown away, recklessly, and without necessity, the whole of the duty on British colonial timber, in a manner which I am prepared to show, is productive of no benefit to the Colonies or to us. As far as revenue was concerned, they substituted an article which paid a duty merely nominal, for one which paid duty to a considerable amount. And the effect of the alteration of the Timber Duties by Sir Robert Peel's Tariff has been a greater loss to the revenue than he anticipated. The duty received in
| 1839 was |
£1,526,000 |
|
|
| 1840 |
1,691,000 |
|
|
| 1841 |
1,488,000 |
|
|
|
4,705,000 |
|
|
| Average |
1,568,000 |
|
1,568,000 |
| Duty in 1843 |
703,000 |
In 1842 |
975,000 |
| The loss of duty |
865,000 |
|
593,000 |
Quantity of timber imported, as indicated by the official value has been as follows:—
|
Great Britain. |
Ireland. |
United Kingdom. |
| 1841 |
£913,000 |
£332,000 |
£1,245,000 |
| 1842 |
580,000 |
182,000 |
762,000 |
| 1843 |
813,000 |
63,474 |
876,000 |
| Sir R. Peel calculated his loss of duty, first year |
£601,000 |
| Second year |
589,000 |
|
1,190,000 |
| Actual loss of Revenue |
£1,458,000 |
| Making a loss of Revenue beyond Sir R. Peel's estimate |
£268,000 |
The colonial timber, though good for special purposes, and able to bear a duty, was not fit for fabrics of durability and importance; and Parliament was, therefore, injuring the revenue and substituting an inferior article. We might be somewhat more reconciled to this sacrifice, if we could be convinced that it had been productive of benefits to our North American possessions. But such does not appear to be the case. In contradiction to this supposition, I shall refer to official Reports, to Parliamentary evidence, and to a late pub-
707
lication of high authority. Mr. M'Gregor, in his valuable work on Commercial Statistics, has said:—
The evidence of Registry Offices in British North America, and the recorded judgments of Courts of Law prove that the numerous judgments, mortgages, and sales of land have been the consequence of farmers and others engaging in the protected timber-trade. The farmers, on the other hand, who applied their industry to clearing their lands, and to agriculture alone, were, at the same time, when they were making sure yearly gains, transforming their woodlands into valuable arable and pasturage estates.
What was the effect of the discriminating duties on the Colonists themselves? Again, I may refer to the same witness, Mr. M'Gregor's evidence given on his return to Europe, after having been employed many years in Canada, where he had full opportunities of judging for himself. In his evidence before the House of Commons' Committee of 1835, he said:—
The wages or gains of the timber-trade, unlike the cultivation of the soil, were immediate; but the labour applied to the latter was creating a valuable estate, as well as moderate, though not quick returns. Mr. Peters pointed out several farms the possessors lost by the timber business, and several members of Council have spoken to me in a similar way. All state that the farmers, and many others engaged extensively in the timber-trade, have been dispossessed of their property, or hold it mortgaged. The advertisements for the last eight years of farms for sale, under these burthens, prove the statement; the consequence is, that the long settled agriculturists at the present moment consider the timber-trade no great advantage to them in the Colonies. I have correspondence to justify me in saying that three-fourths of the French Canadians, a majority of the population of Upper Canada, a great portion of those of Nova Scotia, and nearly all of Prince Edward's Island, will justify me in what I say.
Mr. Richards, in his Report on the timber-trade, anticipates Canadian improvement as the consequence, not of the increase of the timber-trade, but of its abandonment, "When time or chance shall compel or induce the inhabitants to desist from this employment, then agriculture will begin to raise its head." Let me now inquire what had been the effect of this discriminating duty on the trade with Sweden and Norway? The value of British exports to Sweden, in 1814, had been 511,000l.; in 1819, only 46,000l.. British exports to Norway, in 1815, amounted to
708
199,000l.; in 1819, only 64,000l.. After the Peace we had pursued a system which had nearly extinguished the trade of Sweden and Norway. On this subject I beg to call the attention to the evidence of Mr. Consul Home, on the effects produced by our discriminating duties on our trade with Norway. " I do not know any countries in the world so well adapted for beneficial commercial intercourse as England and Norway. Yet England has been the first to throw us out, compelling us to look for connexions with France, who would admit the produce of our soil on more favourable conditions. In lieu of articles of British and Irish manufactures, we are obliged by a spontaneous act of your own Legislature, to use the linen cotton belonging to the German League, and even the coffee and sugar we annually consume. The port of Dram, before 1807, exported frequently upwards of 100 cargos of wood to Ireland, now it rarely exports three." As connected with the Timber Duties, on which the Government have erred so egregiously, I shall allude to the duty on staves and the case of the Coopers. This, it is true, is but an incidental matter; it is important, however, as showing the difference between dealing with these subjects after mature consideration, and dealing with them on an unsettled principle. In the repeal of the Timber Duties, there had been an inconsiderate abandonment of duty, because these duties might have been altered to the great advantage of the revenue, and without injury to the consumer. Yet the Government had gratuitously sacrificed revenue, and in doing so, had cruelly injured a deserving body of men—the Coopers. Let them not undervalue this class; a more industrious or praiseworthy order of tradesmen was not to be found in the country. What had been done in respect to them? We repealed the duty absolutely on staves imported into the Colonies; we might wish to encourage the Colonies, and of that I do not complain, but at the same time, we left most complicated discriminating duties on staves imported into this country, and this without allowing a drawback on the exportation either of staves or casks; the result was, that a trade which had existed with the Colonies, and indeed with foreign countries, for instance, the export of butts to Madeira—had been destroyed; Parliament had thus encouraged the importation into the Colonies of the manufactured articles from other places, and had checked the exportation from
709
hence. By the law which the ingenuity of the Government had thus applied, they deprived the poor Coopers of a valuable market for their industry, and left them burthened with a duty to attempt a ruinous competition with foreigners who were freed from the duty altogether in the article of staves, and who paid a reduced duty even on the importation of manufactured casks. This injustice had deprived several hundred most industrious men of their usual occupation and of its reward. Such Was the consequence of inadvertent legislation. I could multiply such instances, were I not desirous of limiting my demand on your Lordships' time and attention. The next point to which I shall apply myself is" the effect of protecting duties in limiting our Export Trade." I assume for the present that there is no smuggling, for if smuggling is produced, protection is to the same extent defeated. This proposition is so clear, that it might almost be left to explain itself. If imports were allowed, exports must necessarily follow, unless foreign countries became so disinterested as to sell without receiving payment in return. In every case the State admitting articles produced by other countries must, in the long run, either directly or indirectly obtain the means of paying for all it received. I have already shown the diminished value of our exports to Sweden and Norway, as produced by our discriminatitig duties. But the same principle might receive other and still stronger illustrations. The loss of revenue, to which Mr. Bentham adverts, can be conclusively demonstrated on the evidence of Mr. Deacon Hume:—
I have no doubt, (he stated to the Import Duty Committee) that if there were no protecting duties, the revenue would flow in with a great increase and with great ease.
He, indeed, considered that one class of these protecting duties was equal to a tax of 36,000,000l. which the public were paying as effectually as if it were paid into the Exchequer:—
Under a freedom of trade, I can scarcely believe that the effect would not be to raise the produce of the revenue one-quarter or one-third greater than it now is, and that without laying on one additional duty.
Mr. Hume calculated on an increased recept of 1,000,000l. on sugar; an additional increase of 1,000,000l. on timber. Mr. M'Culloch states conclusive reasons for expecting an increase of 1,000,000l.
710
on brandy, and Mr. M'Gregor suggests alterations in the Tariff, which, he conceives, would raise the Customs' revenue to 29,000,000l.. In these anticipations they were fully borne out by the practice of one of the greatest free-traders, as a Minister, which this country had ever possessed, not excepting Mr. Huskisson himself; I allude to Mr. Pitt, who had laid down free-trade doctrines more broadly, and had applied them more boldly, than almost any other statesman upon record. He began this system in the year 1786, and has left us no reason to doubt but that he continued steady to these principles to the end of his career. In 1786 Mr. Pitt reduced the duties on brandy and Geneva one-half, and he quadrupled the consumption. From 1800 to 1803, at a duty of 9s. 2d., the consumption of foreign spirits amounted to 2,700,000 gallons. In 1843 the consumption was only 1,038,000 gallons, the duty being 22s. 6d., and this on an article not worth more than 3s. to 5s. in bond. The "increase of smuggling" is a consequence of protecting duties, which connects itself closely with the loss of revenue. This is, perhaps, more strongly exhibited in foreign countries than our own, because the more exaggerated are the efforts made to produce protection, the greater will be the determination to defeat them. We shall find our most striking example of this in Spain, where we see industry checked and the revenue ruined by the system of prohibitions and protections.
Smuggling in Spain is so well organized (observes Mr. M'Gregor, in his Commercial Statistics) that there are estimated to be 100,000 armed men engaged in it, and more than 300,000 persons engaged in this mode of life, having scarcely any other occupation but the contraband trade. The cotton manufacturers themselves, and several members of the Cortes, are represented as actively engaged in it.
Marliani, in his Influence of the Prohibitory System, makes the following striking statement:—
Since 1769, when the cotton manufacture commenced in Catalonia, the trade enjoyed a monopoly. What has been the result? From 1834 to 1840, we have an average importation of 9,900,000lbs. of cotton, or 1/60 of the importation into England in a single year. Has the prohibitory system really afforded any protection to the Catalonian manufacturers? Most certainly not. One-third of the French export trade is smuggled into Spain. The whole smuggling trade is as follows; —
711
| Imports from France (by Government Returns) |
£1,331,608 |
| Imports from England through Spanish Ports |
34,637 |
| Imports from England by Gibraltar |
608,581 |
| Imports from England by Portugal |
540,000 |
| Imports from England by Leghorn, Genoa, &c. |
500,000 |
|
£3,014,826 |
It is computed that the prohibitory system costs Spain 360,000,000 reals, or 4,000,000l. annually. Here we find an example, in the case of a country which ought to be a great one, of a sacrifice of its wealth and its public credit, in an abortive attempt at protection. In France the result has been much the same, and it might afford some consolation to noble Lords who recently apprehended the importation of cattle to a great extent under the new Tariff, to be informed that a number of beasts have been seized and condemned in France, on the ground that they had been smuggled into that country. This is admitted in the following extract from the Encyclopédíe du Commercent by M. Blanqui, a work which I have seen quoted as being one of authority;—
The contraband trade is the only resource left to the industrious classes to procure foreign articles, the use of which they consider indispensable, but which are either absolutely prohibited by law, or by the high duty which law imposes. The notorious increase of smuggling in extent and management, proves that the legislation respecting the Customs should be in harmony with the wants of the people. If the import duties were moderate, the risks and penalties of smuggling would never be incurred. That system must be indeed defective, which ruins conscientious men who obey the laws, and which enriches the smuggler who disregards them.
Such is the state of things in France, but I may be told that no such evils prevail in England,—my Lords, do not be too confident on this point. Smuggling to the same extent does not exist in England it is true, but there is good reason for knowing that it is carried on very extensively. The examination of Mr. Porter showed that 1,730,000 lbs. of silk were annually exported from France, which never paid duty in this Kingdom.
|
lbs. |
| The silk goods entered at the French Customs House as exported to England amounted to |
3,500,000 |
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| The silk goods entered at the English Custom House as imported from France did not exceed |
1,875,000 |
| Amount of silk smuggled from France |
1,713,000 |
To make the statement more intelligible, I shall proceed to show the amount lost to the Revenue—
|
£ |
| Had the full duty been paid on the imported silk, it would have amounted to |
3,754,000 |
| The amount of duty received was only |
1,961,000 |
| The amount of duty evaded, was |
1,792,000 |
In every 100 cases of importation of silk, it may be concluded that fifty-two are entered at the Custom House, and that forty-eight are contraband. It is thus our laws are defeated, even in a case where the duties have been considerably, though not adequately, reduced. How much worse would it have been had the former duties been allowed to remain unaltered! If further proof was wanting of the evil consequences of protection, your Lordships might look at the Statute Book for the odious, unjust, and oppressive laws necessarily passed to prevent smuggling. A story was current relating to the late Chief Justice, Lord Ellenborough ["No, no," from Lord Colchester.] I only allude to this as an anecdote, not at all discreditable to the Nobleman in question, to whom, no blame could be imputed, but as an example of the system. It has been asserted that a quantity of smuggled lace belonging to one of his family or suite, had been seized in Lord Ellenboroughs carriage, and, if so, according to strict law, the carriage, horses, and everything else became forfeit. What had happened to Lord Ellenborough might have occurred to anybody else. So impossible was it to make laws against the contraband trade without violating all constituted and great principles. The effect of all this is further shewn by a return on the Table of the House. The number of prosecutions against smugglers in 1842 and 1843, have been as follows:—
|
1842 |
1843 |
| England |
815 |
1147 |
| Scotland |
64 |
107 |
| Ireland |
86 |
206 |
|
965 |
1460 |
In addition to all this the State is called
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on to incur the following enormous charge for our Preventive Force—
| Harbour Vessels |
£. 4,040 |
| Cruisers |
101,534 |
| Preventive Guard |
391,584 |
| Land Guard |
19,048 |
| Annual Charge |
£517,106 |
To which may justly be added above 50,000l. for the Excise Police. Another of the evils of protecting duties was, the internal divisions those duties had notoriously produced. This was true at all times, but most especially exemplified at the present moment. The wounds occasioned by prohibitory duties on the subject of Irish woollen goods and cattle were not yet healed, and they had recently been used as topics of agitation and disturbance. The repealers reminded their countrymen that the import of Irish cattle had been voted a grievance, and that William III. had answered his faithful Commons in 1697, that he would do all in his power to discourage the woollen manufactures in Ireland. But without reference to Ireland, were we quite free from internal dissensions nearer home, and on the same account? Did not the Anti-Corn-Law League and the Protection Societies arise out of protecting duties? And if protecting duties were imposed in favour of the governing classes, by those very classes themselves commanding, as they do, majorities in both Houses of Parliament, was not this a state of things deserving the best attention of the Administration; for could it be denied that it was a case leading to the greatest discontents, and open to the most just suspicion? I have stated, from Bentham, as one of the evil consequences of the protective system, the embarrassments of all political relations between nation and nation. I believe that the obstinate contests between France and Holland, in the reign of Louis XIV. were greatly embittered, if not created by the anti-commercial system of Colbert, whose Tariff, however, was in some respects less restrictive than our own. But in later times, if we consider the foreign jealousies arising out of the same cause, nobody could view our own diplomatic relations without seeing practically in our own, as well as historically in past times, the mischief that had been produced. Look at our unavailing, but most irritating diplomacy with France, with Spain, with Naples, with Portugal, and with the Brazils! Most of these difficulties seem to me to have arisen from our desire to contend in favour of do-
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mestic protection. This could not be the case if our Customs Tariff were of a different character. If duties were only imposed for purposes of revenue, no foreign State has a right to complain of them; but if the object of our duties is admitted to be the protection of a peculiar interest at home, to the injury of a similar interest abroad, it is no wonder that complaints are made, and that such a system of legislation should be held up to the indignation and scorn of Europe. I am far from denying that where a system like ours has grown up for centuries, it requires a sound discretion to guide us in applying the principles of practical reform. It might certainly be much easier to form a new system which was right, than to correct an old and injurious system, the growth, perhaps, of centauries, to which the wants, industry, and interests of the people might to some extent have adapted themselves; and I am quite ready to admit that in solving many of these difficulties, it is necessary to approach them cautiously, with a due consideration for excited hopes, and for interests which that system itself has called into existence. These considerations, however, are not to prevent the adoption of a right course, at a right time, and, should your Lordships consent to an inquiry into the subject, whilst the first object of the investigation would be, to consider what were the sound principles of commercial policy, the second would be, how it would be most fit, safely, honestly, and impartially, to introduce a new and improved system. But we cannot enforce this by retaliations, or by diplomatic astuteness. On the contrary, I believe it to be wiser, on the whole, that we should act independently for ourselves, that we should legislate liberally and wisely, thereby promoting our own interests, and leaving foreign governments either to suffer from their ignorance, or to profit by our example. I am aware that this notion of making what are called concessions, without stipulating for equivalents, is startling and unpopular. But I perceive with pleasure that it has obtained the sanction of this Government. They last year repealed the duty on the export of machinery gratuitously, though this was one of the points for which France had expressed her readiness to make a reciprocal concession. They had in the present Session wholly repealed the duty on wool, without seeking from the wool-growing countries any corresponding advantage. I do not deny that if we could secure the
715
improvement of our neighbours' Tariff, we should add to the benefits attending the improvement of our own. But we ought not to refuse ourselves one benefit, because we are unable to obtain two. Such were the opinions of that enlightened man, James Deacon Hume, on whose authority I have so frequently had occasion to rely. His views were so strongly stated before the Import Duty Committee, that I must be permitted to refer to them more at large. The questions and answers are as follows:
Would you remove our own protection without any foreign country removing theirs?— Most certainly, and without even asking them. I dislike treating with foreign countries upon any subject of this kind except navigation.
Do you not consider a retaliatory duty as adding to the injury which the duty imposed by the foreign country is likely to occasion?— I have always thought so. I have disliked all treating in the matter. I would take what I wanted, and leave them to feel the value of our custom. I do not think our mode of dealing with Neapolitan oil was the best mode of gaining our object. The Neapolitans taxed some of our goods, and we retaliated by in effect taxing others. We made woollens suffer here, because they made our cottons and hard wares suffer there.
I think we should settle our commerce better amongst ourselves, than by attempting to make treaties with other countries. We make proposals to them; they do not agree to those. We then feel repugnance to doing that which we ought, perhaps, in the first instance to have done of our own accord, and I go upon the principle that it is impossible for us to import too much, that we may be quite sure that the export will follow in some way or other.
Nor is it only a practical Officer of Customs, and the adviser of Mr. Huskisson who adopts these conclusions. An eminent writer, who has rendered valuable services to the cause of economical science (Mr. M'Culloch), states his convictions with equal force. In his notes on the Wealth of Nations, he observes:—
The French Government, by an unwise and impolitic legislation, prevent the introduction of the cheap and superior cottons of England into France, and consequently force their subjects to misemploy a large proportion of their capital, and to purchase inferior articles at comparatively a high price. But, need it be said, that this is a line of conduct to be avoided—not followed. The fact, that a foreign government does an injury to its own subjects by making them pay an artificially enhanced price for cottons and hardware, can be no apology for the Government of England injuring those entitled to its protection, by excluding them from the cheapest
716
market for wines, brandies, and silks. To act thus, is not to retaliate on the French, but on ourselves. It is erecting the blind and brutal impulses of revenge, into maxims of state policy."—M'Culloch (Note XIII).
I could carry this argument much further, and illustrate the evil effects even of what, in their time, have been considered as advantageous diplomatic arrangements, such as the Methuen Treaty for example; but, that I am desirous of passing to the last of Mr. Bentham's observations. The protective system, he remarks, produces a diminished confidence in the wisdom and the justice of the Legislature, and of the Government. My Lords, have we no evidence of this most dangerous result around us? Let me ask, what are the judgments formed by the great masses of the poorer classes, and of the middle classes also, on the justice and wisdom of a Parliament, which maintains the protecting system, and more especially the Corn Laws. The object of all these regulations is to raise prices artificially. By this, as far at least as agricultural produce is concerned, we are considered to profit as landlords; but the pressure is thrown upon the most necessitous and suffering classes. I will not carry this argument further. It is almost too important to be used as a mere illustration, but it ought to dwell on your Lordships' minds, as I am convinced it dwells on the minds of your countrymen. I have thus completed my argument, so far as it relates to Mr. Bentham's condemnation of the Spanish Tariff, and I have endeavoured to prove that every objection which he has raised, applies to our existing system. The next branch of my observations will bring before your Lordships a more general view of the same question, still leading to the same results. Perhaps, I may have more chance of carrying with me your Lordships' convictions, as I mean to take a review of the mistaken policy of some foreign states. It is extraordinary how much more readily we admit a truth, when it applies to our neighbours, than when it requires from ourselves any sacrifice of our own preconceptions or interests. The first, and the most instructive example, is that of the United States. From the year 1789 to 1807, the foreign commerce of the States was almost unfettered. The principle of protection was so little known, there was scarcely any one article of import, subject to a higher duty than 15 per cent. Yet it was, during those very years, that the progress of the United States in wealth, commerce,
717
and population was the most signal. I entreat the attention of the House to this fact. It is important. No argument is more frequent or plausible than this:—we are told that though protection may not be necessary in the maturity of a state, it still is required in its infancy. I deny this, being firmly of opinion, that in the infancy of a state the system of protection is most objectionable, and the case of the United States may be taken as an illustration of my doctrine. We know from experience, that if the principle of protection is once admitted, it is very difficult afterwards to abandon it. In 1790, the value of the imports was but 23,000,000 dollars, and of the exports, but 20,000,000 dollars. The population was 3,929,000, and the value of imports to the population was about 5.3 dollars per head. In the ten subsequent years, during which there was some near approach to freedom of trade, the imports rose from 23,000,000 of dollars to 91,000,000; the exports from 20,000,000 to 70,000,000 dollars, and the consumption of foreign produce from 5.3 to 16.5 dollars per head. In 1807, occurred the embargo, in 1809, the Non-Intercourse Act, in 1812, the war, and in 1814, the Treaty of Ghent. Towards the latter period, the duties were doubled. In 1816, commenced the restrictive and prohibitory system, which was carried out to its full extent of mischief to America in 1828. Now, let us see the consequences of the change. The exports which, we have seen, were in 1800, 91,000,000 dollars, fell in 1830, to 70,876,000 dollars, although the population had augmented from 5,309,000 to 12,838,000, and the consumption of foreign produce by each American citizen, fell off to 5.6 from 16.5 dollars. The House will doubtless remember the feuds and civil dissensions which were the consequence of this most impolitic system. The permanence of the Union was endangered; the cry of nullification was raised; civil war seemed to be on the point of breaking out, and the following violent and threatening resolutions were adopted in Carolina:—
If we have the common pride of men, or the determination of freemen, we must resist the imposition of this Tariff. In advising an attitude of resistance to the law, we deem it due to the occasion, to state our constitutional faith. Let the legislatures of Virginia, the Carolinas, Alibama, and Georgia, meet and prohibit the introduction of horses, mules, cattle, pigs from Tennessee, Ohio, Kentucky, and Indiana; whiskey and cheese, from New
718
York and Pennsylvania. We shall soon see what they have gained by their Tariff.
But, I pass over the political argument, to revert to that which more closely bears on the subject I have in hand, revenue and commerce. In 1833, the Compromise Act passed, providing for a gradual reduction of the Import Duties. What was the consequence? Why, the value of imports rose between 1830 and 1840, from 70,000,000 to 127,000,000 dollars, the exports from 73,000,000 to 121,000,000 dollars, and in place of 12,800,000 inhabitants, consuming foreign goods to the average value of 5.6 dollars per head, the population increasing from 12,838,000 to 17,063,000, and the consumption of imports from 5.6 to 7.8 dollars. But this is not all. If any further illustration is requisite, it has been given in the effects of the last Tariff, more oppressive still than that of 1828. In three years, the imports again fell from 127,000,000 to 89,000,000 dollars, with a population, which, in the meanwhile, had rapidly increased. I have taken my statements from the works of Mr. Raguet. But, I find the strongest confirmation of his statements, in the speeches of Mr. Calhoun made in Senate. On the question of the Tariff in 1842, that very eloquent statesman, made the following observations:—
I have shown from the commercial tables and other authentic sources, that during the eight years of high duties, the increase of our foreign commerce and of our tonnage, both foreign and coastwise, was almost entirely arrested; that the exports of domestic manufactures actually fell off. I also showed, that the eight years of the reduction of duties which followed, were marked by an extraordinary impulse given to every branch of industry, agricultural, commercial, manufacturing, and navigating. Our exports of domestic productions, our tonnage increased fully one-third, and our manufactures still more. It was under these circumstances that the Bill of 1828, which so greatly increased the duties, was introduced, and became law—an act of legislative folly and wickedness, almost without example. Well has the community paid the penalty. The real complaint of the friends of the Tariff is, that merchants can furnish the market cheaper than the manufacturer, and what, in truth, is asked, is, that the cheaper process of supplying the market should be taxed, by imposing higher duties on importation, in order to give the dearer articles a monopoly, that they may be sold for higher prices.
Such were the views of Mr. Calhoun, and we have thus seen exemplified by the history of a series of years, the consequences
719
of a false system. A more conclusive instance of the kind could scarcely be pointed out. Restrictions are dangerous in a despotic state, but the despot might by some happy accident, be an enlightened one; but in a Republican state, a restrictive policy is liable to be made subservient to the lowest, vilest, and most transitory personal and party interests. Reverting to a period before the Compromise Act, when the manufacturing interest was not sufficiently strong to maintain its protection; it called to its aid other interests, those of Louisiana and Kentucky, and offered as an inducement for political support similar protection to the sugar of the one, and to the sacking of the other. This system of policy was very happily ridiculed, not indeed by a State Paper, but by a document drawn up in the United States, which I take leave to read, as some relief to the dry details which it had been necessary for me to introduce. It was a supposed petition to Congress, from the oystermen and other inhabitants adjoining the Delaware, and it ran in the following terms:—
Respectfully represent that they have been long engaged in the business of catching rock-fish and perch, in raking oysters, and shooting wild duck, for the Philadelphia market; and in pursuit of their respective occupations have set in motion a great quantity of American industry employed in fishing, shooting, boat-building, and navigating. That your petitioners are great admirers of the American system, inasmuch as it teaches the glorious truth that home industry ought to be protected. That your petitioners view with regret the completion of the Delaware and Chesapeak Canal, which, owing to the superior abundance of fish, oysters, and wild duck on the Chesapeak, enables the fishermen, oystermen, and duck shooters of Maryland, a foreign state, to undersell your petitioners; thus creating an unfavourable balance of trade against Philadelphia, by which a large amount of specie will be drained from her.
Here were all the arguments fairly Stated and employed on the behalf of the oystermen of the Delaware: they were, however, of equal validity, as many, which your Lordships are well accustomed to hear, whether applied to the manufacturers, on the one side, or to the agriculturists on the other. In the present Session of Congress a better system seemed for a time likely to prevail, and a Committee of Ways and Means appointed to consider the Tariff, made a Report containing the following very important admissions:—
An examination of the present Tariff-law,
720
and of the Import-tables, have demonstrated to us a proposition we believe not controverted in any quarter; that to obtain increased revenue from the imports charged with duties under the existing law, the rates of duty established by that law must, in the general, be reduced.
The practical recommendations of this Committee were, that duties of 25 per cent., ad valorem, should be imposed on woollens, linens, silks; 20 to 25 per cent. on metals, and 30 per cent. on wine, being a reduction of about one-third of the present duties. Even this amount of duty appeared indefensible as a permanent system, for the Committee proceed to remark:—
We cannot consent to the continuance of this degree of protection but on the condition that the demands of the Treasury require the higher duties, and only as long as that necessity shall continue to require them.
A branch of manufacture which cannot sustain itself against foreign competition under a protection of from 25 to 30 per cent., must be in a very sickly state, almost too sickly to authorise higher taxation upon an industrious people to sustain it.
As a reply to the document from which I have quoted, a Report was made to Congress by the Committee of manufactures, which took the very opposite side of the question. And how did they justify a protective policy? Not so much by American experience,—for that would have told the other way,—as by the example which we of the British Senate have so unfortunately and unwisely given. The Committee ask, with but too much of reason,—
What is the free-trade which England tenders to us? She imposes the following rates of duty on our products:—Salt beef 60 per cent., bacon 109 per cent., butter 70 per cent., Indian corn 32 per cent., flour 32 per cent., manufactured tobacco 1,200 per cent., un-manufactured tobacco 1,000 per cent. On fourteen articles she imposes an average duty of 355 per cent., a duty vastly larger than we impose on any of her fabrics. Her policy is also seen in the differential duties she imposes.
The mischievous effects produced on American interests created by their injudicious restraints created by the Tariff is most strikingly exemplified by a paper I hold in my hand, which shows the average value of imports in 1840, 1841, and 1842, and comprises that average with the actual receipts in the first three quarters of the year 1843. The results are as follows;—
721
| VALUE OF PRINCIPAL ARTICLES IMPORTED INTO THE UNITED STATES OF AMERICA. |
|
Average Value, 1840, 1841, 1842. |
Import for 3–4ths of a year at that average. |
Actual Import 3–4ths of the year 1843. |
|
Dollars. |
Dollars. |
Dollars. |
| Woollens, except Carpeting |
5,676,000 |
4,257,000 |
1,472,000 |
| Worsted |
2,033,000 |
1,524,000 |
456,000 |
| Cottons |
8,710,000 |
6,525,000 |
2,733,000 |
| Silks |
12,705,000 |
9,534,000 |
2,719.000 |
| Linen |
4,569,000 |
3,426,000 |
l,202,000 |
From this table it is apparent that the import trade, which would in all probability have amounted to 25,266,000 dollars, has been, by bad laws, reduced by two-thirds, or to a sum of about 85,000,000. Thus, the consumption of all the great articles of commercial industry and enterprise have suffered, under the weight of unwise protection. To the system of protection the Americans may trace the loss of their trade; and thus a country, kindred in blood, and which ought to be progressive in commercial prosperity, had been grievously injured by the same cause which, to a certain extent, had afflicted Great Britain. [The Duke of Richmond: They ought to pay their debts.] I fully agree with my noble Friend: "they ought to pay their debts;" but there is one debt they are bound more especially to pay. Congress owe a debt to the people of America, and this debt they could only pay by adopting a very different system of commercial and financial policy. Let them revert to a wiser system, and they will discharge an obligation due to foreign nations, as well as to their own citizens. Neither let them think that this course is recommended from this side of the Atlantic only. The opinions which I have expressed are fully supported by the following striking sentences from their great statesman, Mr. Jefferson:—
Instead of embarrassing commerce under piles of regulations, duties, and prohibitions, could it be relieved from all shackles in all parts of the world; could every country be employed in producing that which nature has best fitted her to produce, and each be free to exchange with others mutual surpluses for mutual wants, the greatest mass, then, would be produced of those things which contribute to human life and human happiness, the number of mankind would be increased, and their condition bettered.
In an inquiry like the present, it is impossible wholly to overlook the case of France, with which country, if an equal and just system of Revenue Laws prevailed,
722
our commerce would be enormous, and equally profitable to both parties. Such was the opinion of Mr. Pitt, when called upon to vindicate the Treaty of Versailles:—
France, he observed, was, by the peculiar dispensation of Providence, gifted, perhaps, more than any other country on the face of the earth, with all that render life desirable in point of soil, climate, and natural productions. It had the most fertile vineyards and the richest harvests. The greatest luxuries of life were produced in it with little cost and with mode-derate labour. Britain was not thus blessed by nature; but, on the other hand, it possessed, through the happy freedom of its Constitution, and the equal security of its laws, an energy in its enterprise, and a stability in its exertions, which have gradually raised it to a high state of commercial grandeur; and not being so bountifully gifted by Heaven, it had recourse to labour and art, by which it had acquired the ability of supplying its neighbours with all the artificial embellishments of life in exchange for their natural luxuries.
Unluckily for the world, neither country has practically adopted those principles which would have given effect to the generous wishes and anticipations of Mr. Pitt. What had been the conduct of France, and what its effects? To protect her forest interest France imposed heavy duties on British iron, thereby ruining that which ought to have become one of her staple interests, the wine-trade of the south and east. In order originally to create and now to protect her "filatures," she next imposed oppressive duties on yarn; this reduced the labour of her weavers. To assist them and the spinner, she finds her deficiency is a want of machinery. England repeals her prohibition, and the French manufacturer thinks his fortune is made. But no; a new interest steps in and demands protection in its turn; the French mechanist, also requires that, for his sake, increased duty should be imposed on the import of machinery. His prayer is heard; but when he undertakes entering into competition with his English rival, he finds his efforts frustrated by the first duty to which I adverted, the tax on iron, and thus every step in this vicious circle demonstrates that it is impossible to apply protection, without incurring, I will not say, the risk, but the certainty of doing more harm than good; the good was at best transient—the injury permanent. Mr. Porter estimates the tax which France imposes on the consumers of iron to amount to 80 per cent., and this at a time when her interests as well as her
723
vanities are so deeply involved in the extension of railway communication. In respect to yarns, it may so happen that the smuggler should in some slight degree, remedy the evils of a bad system of laws. It looks at least suspicious, that our export of yarns to Hamburgh has increased in proportion to the augmented pressure of the French import duties. The export of yarns to northern Germany has increased in the following ratio: —
| 1841 |
904,0001bs. |
| 1842 |
1,831,000lbs. |
| 1843 |
3,504,000lbs. |
How much of this may find its way into France I have not the means of judging, but that a large smuggling trade is likely to exist in an article so valuable, so portable, and so highly taxed, can hardly be doubted. The deplorable state of the wine-trade was described by the wine-growers so far back as the year 1828, in the memorial of the proprietors of vineyards in the Gironde. The following passage is a translation of one part of their very touching representation:—
What is the basis of the prohibitory system? A delusion which seeks to sell to the foreigner without buying in return.
Our industry required for its increase no monopoly, nor those multiplied protections which oppress the country. A wise freedom of trade was our only want. A contrary system has prevailed.
The ruin of one of our most important departments, the distress of all the neighbouring departments, the decay of the south of France, an immense population limited in the means of support, an enormous capital endangered, a difficulty in levying our taxation a reduced consumption, a stagnation of commerce, such are the bitter fruits of the system of which we are the principal victims.
Since the date of this memorial, and more especially since 1830, some important changes have been made for the better in the laws regulating our trade with France. I rejoice to think that in our intercourse with France, we have recently made advances however slight towards an improvement of the system. We flattered ourselves that the days of absurd and illiberal jealousy were happily gone by, and in the year 1831 the duty on French wines was reduced; all wines were then put on the same footing, excepting Cape wine, which last article, as I have shown, affords a happy instance of the substitution of a worse article for a better, and of an article paying a low duty for an article paying a high duty. What has been the result of the change of policy as to
724
French wines? The consumption has very considerably increased. In 1830, the high duty of 7s. 3d. only yielded a revenue of 110,000l. on a consumption of somewhat more than 300,000 gallons. In 1842, the reduced duties on French wines have produced within a trifle of the same sum, the consumption being 489,000 gallons. The export trade which we carry on with France is in a still more satisfactory state, and that great country is becoming rapidly, even in spite of many remaining most unwise taxes on both sides, one of our greatest customers. The following accounts exhibit these gratifying results—
| British Produce in Declared Value. |
|
£ |
| 1833 |
848,000 |
| 1834 |
1,116,000 |
| 1835 |
1,453,000 |
| 1836 |
1,591,000 |
| 1837 |
1,643,000 |
| 1838 |
1,314,000 |
| 1839 |
2,298,000 |
| 1840 |
2,378,000 |
| 1841 |
2,902,000 |
| 1842 |
3,193,000 |
To which should also be added a considerable export trade in colonial and foreign produce. Rapid as has been this progress, how much more rapid would it have been on both sides, had England and France adopted in concert a wiser and more enlarged line of commercial policy? It will be a more agreeable duty, and it affords me an equally forcible argument, after having pointed out to your Lordships the cases, unhappily but too numerous, in which a neglect of sound principles has led to the discouragement of national industry, and the diminution of national wealth, to proceed to notice some instances of a contrary kind. These examples will tend to prove that where we have cast off the fetters of ignorance and prejudice, and have applied sounder doctrines, the consequences have been most satisfactory, commerce and industry have prospered and extended, and this, even where we have shrunk from carrying out our doctrines to their legitimate extent. If a Committee were granted, I am prepared to show that the improvements to which I am about to advert are justly attributable to this cause. We have hitherto looked at the darker side of the picture. If I do not deceive myself, I have established the evils of the protective system; but fortunately, and very much owing to the spirit of better and modern times, and in many cases to the le-
725
gislation of noble Lords opposite, instances are afforded of the advantages arising from the application of better principles. I shall give your Lordships many instances, all resting upon facts, and not upon abstract reasoning. My first example shall be drawn from the Silk trade. The progress of this manufacture is perfectly astonishing, since those ancient days when silk was literally worth its weight in gold, to the present time, when it enters largely into the clothing of the higher and middle classes. This has not been the effect of protection. This trade was not originally so burthened. From 1685 to 1692, the trade was so far free, that we imported silks from the Continent to a considerable annual amount. In 1697 and 1701, the prohibitory system was introduced. What was the consequence? Smuggling;—you proceeded further,—to give a special and local protection to London, you passed your absurd Spitalfields Act. Combinations of workmen, riots and violation of the law ensued, and your trade was driven from London to Lancashire and Cheshire. You erected the silk manufactories of Macclesfield and Manchester. Yet, so late as 1820, so extraordinary were the opinions entertained on this subject, even by practical statesmen, that Lord Liverpool, in his speech on foreign trade, on the 26th of May, deprecated the application of a more liberal system to the silk-trade, and said, " I allow the silk manufacture is not natural. I wish we never had a silk manufactory. The trade is natural to France. It would have been better if French silks had been exchanged for English cottons." Now it should be borne in mind that the silk-trade of England, so undervalued in 1820, now amounts to about 12,000,000l. a-year sterling; a great proportion of which goes in payment of wages; yet I have shown you that in the year 1820, the Prime Minister of this country was so led astray by the doctrine of protection, that he expressed his strange wish, that this manufacture, now one of our staples, had never existed. In the time of Mr. Huskisson, a better system was adopted. The raw material and the half-manufactured material, the thrown silk, were brought more abundantly into the manufacturing market, by a reduction of duty; protective duties were repealed, duties more moderate, though still excessive, were imposed, and the result was, an immediate extension of the trade. Our consumption of raw silk on the average of the three years
726
1821, 1822, and 1823, before the reduction of duty, did not quite amount to 2,400,000 lbs. In 1831,1832, and 1833, the average rose to 4,565,000 lbs. We now export silks largely, and are even enabled to dispose of our silks to a profit in the French market itself. Yet when these alterations, now proved to have been so beneficial, were at first proposed, the alarm was as great and the anticipations of ruin were as confident as they are now, if it is proposed to some agriculturists, to abandon the Sliding Scale. The truth is about equal in both cases. Mr. Huskisson fortunately lived to see the success of his own measures, and the silk weavers of Macclesfield, who had declared themselves ruined by his measures in 1825, drew his carriage in triumph through their town in 1830. I shall now draw an illustration from another trade, that of linen. We might have imagined that no trade could be more natural to this country, and that no trade less required interference, and yet no trade has been more the object of protection. It was, however, well suited to our country and to the habits of the people, and therefore, in spite of all protection, it has survived. Yet regulations of all kinds were made to disturb the market. Buying and selling were all settled by law. Salesmasters, Inspectors, Alnagers, were appointed, and restrictions and penalties were fixed on every operation of trade. But what was the advantage of all this protection? A transit duty was put upon the import of the linens of all other countries; although it was necessary to have foreign linens combined in assorted cargoes with English linens, in order to promote their sales in foreign markets. In the very same speech from which I have already quoted, Lord Liverpool said, "What would be the effect on Ireland if the transit duties on foreign linens were repealed? It would destroy the peace and the tranquillity of the most prosperous part of that country." These duties, I rejoice to think, have now been for many years wisely repealed, the peace of Ulster has not been endangered, and the linen-trade has improved and still is improving. But we were as lavish of our money as we were of our restrictive legislation. Mr. M'Culloch states his belief that the public money wasted in bounties and other grants, would, very nearly, amount in value to the whole linen-trade of the Empire. Be this as it may, the enormous sums uselessly expended cannot be controverted. From the year 1814, to
727
the year 1833, there had been paid 4,011,235l., as bounties on the export of linen manufactures. From the time of the Union, up to 1820, there was half a million, or more paid to the linen-trade of Ireland, for the encouragement of this trade. The Linen Board was kept up to make Reports and appoint officers at an annual charge of about 20,000l. This system has been abandoned; there are no longer any transit duties levied on foreign linens. Having withdrawn all encouragement of this kind, what has been the result? I believe that at the present moment the application of capital, skill, and science in the north of Ireland has made the linen-trade more profitable in that country than at any antecedent period. I may state with confidence that, after this withdrawal of all this artificial encouragement and protection, the trade of Ulster, having found its level without receiving a farthing of the 4,000,000l. of bounty money, has reached an extent of prosperity, of which the history of that part of the country never before afforded any example. It is true that the character of the trade has changed, but its prosperity has augmented. A noble Friend informed me, that an order had been recently executed in the north of Ireland for a quantity of Cambric to be exported to Cambray itself. The official value of linens and yarns exported for the years from 1838 to 1843, was as follows:—
|
LINEN. |
YARN. |
|
£ |
£ |
| 1838 |
4,330,000 |
708,000 |
| 1839 |
4,777,000 |
846,000 |
| 1840 |
4,931,000 |
961,000 |
| 1841 |
5,195,000 |
1,530,000 |
| 1842 |
4,016,000 |
1,935,000 |
| 1843 |
4,906,000 |
1,578,000 |
Yet these alterations, like those in the silk trade, were strenuously opposed, and successive Parliamentary Committees deprecated the change in language quite as forcible as that which is now used by the Agricultural Protection Societies. In 1822 the Committee of the House of Commons reported, that—
The trade has apparently advanced under these encouragements, and the evidence of all who have been examined on the subject, pronounce the continuance of the bounties to be essential to the interests of the manufacturer in England, Scotland, and Ireland.
With respect to wool, the Legislature
728
has already acknowledged the absurdity of their prohibitory laws on the subject, having passed acts which have swept them all away. This good work, too long delayed, and the necessity of which I urged upon your Lordships in the two preceeding Sessions, has now been fully accomplished. The export of British wool, the import of foreign wool, the home protection and the Colonial discrimination, are abandoned by Her Majesty's Government, and the Legislature, to the great relief of all the parties concerned. Well did Mr. Gott, of Leeds, reply to a question put to him in your Lordships' Committee several years ago; on his being asked, whether the price of British Wool would have been higher had the duty of 6d. per lb. been continued on foreign wool? he answered—
My opinion is, that the price of British wool would have been much less, British manufactures would have been shut out of every foreign market, and the stock of wool would have accumulated, as it will do, if ever that duty is imposed again.
I trust that the time is not remote when we shall look back to protections to which we still obstinately cling, as we now do to the barbarous legislation which protected our woollen manufactures by the enactment of capital felonies, and which, after exhausting all the encouragement the living could afford, actually drew on the resources of the dead, and directed under a severe penalty, that all corpses should be buried in woollens (30 Charles II) and that none should make coverlets in Yorkshire save only the citizens of York!!! The effect of the reduction of duties on coffee is a still more convincing demonstration of the truth of all the principles for which I have been contending. In 1801, a duty of 1s. 6d. per lb. produced only a revenue of 106,076l. and a consumption of 750,000lbs. This duty was reduced in 1811 and the revenue doubled. In 1821 the excessive duties of 1s., 1s. 6d., to 2s. 6d., being imposed, the revenue collected was 384,000l. In 1843 the duties were fixed at 4d. on British and 8d. on foreign coffee, an injudicious discrimination this year abandoned, but still a salutary relief to the consumer. What has been the consequence? The consumption of coffee has risen to 30,031,000 lbs., and the revenue to 697,000l. Test the consequences of this; the value of coffee consumed in 1824, taken at 100s. in bond, was equal to 368,000l.; the same amount taken in 1840, but estimated at 80s., not 100s., exceeds 1,000,000l.
729
To pay for this additional coffee, upwards of 600,000l. of British manufactures must have been exported, and home industry must have been to that extent promoted, besides the benefits afforded to the consumer, by increasing more than threefold one of the comforts and necessaries of life. The duty received in 1824, was 420,000l., in 1841, was 888,000l., proving that trade could be extended and consumers benefited, whilst the revenue raised on a taxed article was doubled. The Sugar Duties form a still more important branch of the subject, rendered peculiarly interesting from the extraordinary and indefensible proposition submitted to Parliament by Her Majesty's Government. But on these I have already enlarged, and shall have occasion to enlarge upon them again, when called on to discuss the current Sugar Duties. Another very satisfactory example both of the evil and of its remedy is to be found in the article of Spelter or Zinc; a duty of 28s. 6d., almost prohibitive, was imposed on this article for the protection of a few very inferior and insignificant zinc-works in England. Most wisely has this duty been reduced to 2s.; the effect has been a greatly increased activity in our manufactures of brass, as well as in the working of spelter itself. The increased importation is shown by the official value or quantity of spelter imported. The amount is as follows:—
| Year. |
Official Value. |
|
£ |
| 1838 |
268,000 |
| 1839 |
409,000 |
| 1840 |
253,000 |
| 1841 |
325,000 |
| 1842 |
306,000 |
| 1843 |
508,000 |
Your Lordships cannot drive by the New Road, or through many other streets of this great city, you cannot even inspect your own establishments without becoming aware of the extensive use of zinc, of the innumerable purposes to which it is applied and the employment to which it has led, I feel some personal reluctance in referring to the consequences of the abandonment by the Government of the additional duty on Irish spirits, as I may attach an undue importance to a measure in some degree originating with myself. The imposition of an exorbitant revenue duty produces many of the consequences of other undue restrictions, and its repeal is in fact an approach pro tanto to freedom of trade. The paper which I am about to read to your Lordships will
730
show that in consequence of the increased tax imposed by the Government, the Irish spirits which paid duty, fell off more than 1,500,000 gallons, between 1841 and 1842, and that a repeal of the additional duty has brought up the consumption more than one million of gallons, with an increase of revenue.
| IRISH SPIRITS PAYING EXCISE DUTY. |
| Date. |
Gallons. |
Duty. |
|
|
£ |
| 1840 |
6,830,000 |
864,000 |
| 1841 |
6,526,000 |
889,000 |
| 1842 |
4,818,000 |
882,000 |
| 1843 |
5,915,000 |
942,000 |
I have now concluded the long, and I fear but too tedious statement, which I have felt it to be my duty to make. I hope I have proved to the judgment of men who may take a dispassionate view of the argument, the indefensible character of many of the taxes on which I have animadverted, I feel confident that I have made out a decisive case for the appointment of a Committee to consider their tendency and effects. Your Lordships will remember that my Motion does not call upon your Lordships to condemn any one part of the system, it only affirms that the whole is a fitting subject for serious examination. Do you deny this? If you do I pray your Lordships to enquire into the correctness and accuracy of my statements of fact, and to test the soundness of the principles which I have advanced, by the evidence which I proffer to you, the evidence of men whose authority is infinitely greater than mine—of men of practical experience, habits of business and comprehensive views; of men whose character and position in society are fully entitled to your Lordships' confidence and that of the public. I ask for inquiry and no more. I have proved to your Lordships that the precedents of Parliament give an authority for the course I presume to recommend. I have shown that it will not lead to any disturbance of trade; that it is not connected with any party object; and, therefore, I humbly entreat your Lordships to give me your support. The exigency is great. Time presses. If such an inquiry was justifiable in 1820, much more is that inquiry demanded now. Fortunately twenty-three years of general peace has since elapsed. But those twenty-three years have given rise to a vast accu-
731
mutation of capital, and to great competition on the part of foreign nations. The United States of America, as well as European Continental powers, are actively competing with the manufactures of this country. I do not believe that their competition can, under any fair circumstances, be successful. I believe that the skill, the industry, the capital, and the unconquerable perseverance of the industrious classes of this country will, if the Legislature give them fair play, be more than a match for the competition of all the countries on the earth. I feel myself warranted in saying this. I take no desponding view of the state of the country, but at the same time the competition that is going on ought to determine your Lordships to do justice to British industry, and to give a just encouragement to British enterprise. It is thus alone that we can be enabled to stand against all competition. The result of an inquiry Would, I fully believe, remove a mass of rubbish from the Statute Book that is a disgrace to it, it would relieve our industry from a pressure which is almost insupportable, while it would at the same time free the minds of the protected interests, whether agricultural or manufacturing, from a mass of delusion which is no less an injury than a disgrace. While reflecting upon this subject, I have been much struck with an eloquent passage in the works of Channing, in his "Thoughts on Greatness of Character," With which I shall conclude:—
The influence of political institutions (or of Government) on property or wealth is chiefly negative. Government enriches a people by removing obstructions to their progress, by defending them from wrong, and thus giving them an opportunity of enriching themselves. Government is not the spring of the wealth of nations, that spring must be sought in their own sagacity, industry, enterprise, and force of character. To leave a people to themselves is generally the best service their rulers can render. Time was when Sovereigns fixed prices and wages, regulated industry and expences, and imagined that a nation would starve and perish if it were not guided and guarded like an infant. But we have learned that men are their own best guardians, and that property is safest under its owner's care. The great lesson for men to learn is that their happiness is in their own hands, and that it is to be wrought out by faithfulness to God and to their own consciences.
I most earnestly entreat your Lordships to teach your fellow-countrymen this great and salutary lesson. I thank your Lordships for the attention with which you
732
have honoured me, and apologising for having occupied so much of your time, I beg to move, in the terms of my notice,
That a select Committee be appointed on the Import Duties, with the view of considering the effect produced by Protecting Duties on the foreign commerce, the home industry, the Revenue, and the general prosperity of the British Empire.