§ LORD BATEMAN
rose to call the attention of the House to the past and present operation of the Free Trade policy of this country without Reciprocity, and to its effect on the various Home and Colonial industries, and on the Revenue and Taxation of the Kingdom; and to move Resolutions in favour of Reciprocity and Parliamentary inquiry. The noble Lord said that, in venturing to bring so momentous a subject before their Lordships, he hardly knew whether he was most appalled at the magnitude of the question or overwhelmed by his boldness in taking it up. Before him he saw the noble Earl the Leader of the Opposition, supported by a phalanx of 1357 Free Traders—all, no doubt, prepared to speak and vote against him; around him were the Members of the Party with whom he had acted since 1852—and if antecedents were to go for anything he should receive their cordial support, though whether he should or not remained to be seen. Under these circumstances, he threw himself on the indulgence of their Lordships while he dealt with a subject which it was most difficult for a man who was not in trade or acquainted with commercial pursuits to tackle. Having taken the matter up he could not, in justice to those who had previously supported him, shrink from again bringing it under the notice of Parliament. He should hardly be expected to dilate at length on the blessings of so-called Free Trade. He never was an admirer of Free Trade, and still less of Free Trade as it stood at present. He would leave the blessings of Free Trade to be extolled by the noble Earl the Mover of the Amendment, who could speak of them with more grace and nerve, because he approved Free Trade as at present exercised. The object of his first Resolution was to assort that we had no real Free Trade—that that which existed was not real, fair, and unrestricted Free Trade. He admitted frankly that this country had derived very great benefits from the adoption, to a certain extent, of Free Trade. He was old enough to remember the debates on the repeal of the Corn Laws in 1849, and in that year he seconded the Address from the other side of the House. At that day he was no Free Trader. Although he was a general supporter of the Government of Lord John Russell, the question of Free Trade was one on which he could not go with the Party he had previously supported. He reserved his opinion on the question in the speech he made in 1849, and he had never regretted the course he then took. Still, he was bound to say that the experience of 30 years had convinced him that the repeal of the Corn Laws, carried as it was at a time of great depression and threatened starvation, was a wise and beneficent measure, from which the working classes and the people of this country had derived such benefits as he did not at the time contemplate or calculate upon. He owed this admission to the memory of the late Sir George Cornewall Lewis, to the eloquence and 1358 foresight of the right hon. Member for Birmingham (Mr. Bright), to Mr. Charles Villiers, the Member for Wolverhampton, and others who advocated the measure and carried it. When he spoke of the benefits which had resulted from the repeal of the Corn Laws, it did not follow that Free Trade had been a real benefit as it had been carried out since that time—and for this reason. Free Trade, as suggested and proposed by Mr. Cobden, was supposed to be universal Free Trade. It was not expected to be Free Trade which was to be confined to this country and rejected by all others; nothing of the sort. The Free Trade Mr. Cobden wished to establish was Free Trade all over the world—unrestricted, fair Free Trade—a universal system of exchange and barter all over the world. Nothing could be more glorious than such an idea if it had been carried out—nothing could be more conducive to peace and prosperity among the nations generally than unrestricted Free Trade. But it was perfectly clear and well understood that the system had not been carried out. It was true that by Commercial Treaties an attempt had been made to carry out the principles of Free Trade; but there was no denying the fact that this country stood alone in its Free Trade policy. But this was not Free Trade at all; it was Free Trade on the part of England and protective duties on the part of nearly every other country. We could not get the countries of Europe to adopt it and to enter into Commercial Treaties with us. Franco denounced the Treaty with her; and, although one had been concluded with the little Kingdom of Servia, none had been entered into with Germany, Russia, or the United States. What had this one-sided Free Trade brought us? He supposed that for many years we had not experienced so much depression, distress, and misery as now, when so many classes were on the verge of ruin. Go whore you would, among the factory, shipping, railway, mining, and agricultural interests, there was nothing but the same cry all round. How could we call that satisfactory Free Trade, when nothing could be worse than the condition of things it had produced? Every branch of trade was depressed. Whether the Exchequer would be able to make both ends meet he would not stop to inquire. Enterprize was languishing, and 1359 the imports from other countries were overstocking our markets. Great Britain stood alone in her Free Trade theories. Not a single country in Europe, beginning with France and Germany and ending with Spain and Switzerland—to say nothing of the United States or our Australian Colonies, and he might now add the Dominion of Canada—could be cajoled by the most specious temptations to follow our example by opening their ports unrestricted by safeguards in the shape of duties to protect their native industry. Was that a good result of the Free Trade policy of this country? The noble Earl opposite (the Earl of Airlie) was going to move an Amendment to his 1st Resolution by expunging the word "real"—if the noble Earl thought that "real" Free Trade he could not agree with him. What had convinced him during the last 30 years that the repeal of the Corn Laws was a wise measure was the fact mentioned by Lord Macaulay in a very remarkable passage in his book, which was a perfectly true description of the state of Stockport in 1841. More than half the master spinners had failed before the close of 1842, dwelling-houses to the number of 3,000 were shut up, and the occupiers of many were unable to pay the rates; 5,000 of the inhabitants were in deep distress, and Government funds were sent down to relieve the inhabitants. That was the state of things which induced the repeal of the Corn Laws. At that time, he admitted, the measure was justified by its results. But Sir Robert Peel went further than this; he carried out what was called Free Trade in regard to manufactures. No doubt, that also was productive of great prosperity to the mercantile classes; but that prosperity, after all, was of an ephemeral character, being founded on no real good basis, and undoubtedly it was accompanied by very severe depression of the agricultural interests. Proceeding by what had since been called "leaps and bounds," the inflation of trade was not altogether due to the repeal of the import duties and the establishment of Free Trade in manufactures. Shortly afterwards a most unexpected discovery was made. The discovery of gold in California and Australia entirely altered the aspect of things. He believed if that discovery had not been made, the present state of things would have occurred shortly after 1360 the repeal of the Import Duties by Sir Robert Peel; but as a consequence of the discovery of gold much speculation was excited, and an impetus was given to trade, which for a time was in a healthy and flourishing state; but it was not founded on a firm and durable basis. The gold mines were not producing so much as they did, and hence the serious effect on the trade of the country, which had already begun. In addition to the discovery of gold, there were the invention of the electric telegraph, improvements in steam, and a great development in railways, all producing a mania for rushing into trade and speculation to a large extent. But, although that continued for some time, it had no fair or true basis. Then there was the great inflation of trade in 1873. What was the history of that? There was a confederation of large producers of iron and coal, and manufacturers to run up prices. What was the consequence? Everything except bread was run up to famine prices, and the consumers had to pay for it. Great fortunes were made at the expense of the consumer, and large profits in every direction. It was impossible that that could last; and now that state of things was coming to an end—the Free Trade, the over-speculation of those years were now bearing their legitimate fruits, manufacturers were crying out that trade in all its branches was depressed; and it was impossible to foretell what might happen in the next 12 months. What was real Free Trade? They had still very heavy duties in force in the country. On what principle of Free Trade did they impose a duty on tea, on coffee, on chicory, or dried fruits? £4,000,000 a-year was raised from the duty on tea, and £8,000,000 a-year from the malt tax. This last tax came from the pockets of those who grew barley, and the farmers were certainly entitled to a repeal, if not of the whole, at least of half, that duty. He did not call it Free Trade when we maintained duties on articles of consumption. He would like to see the duties on articles of consumption within the reach of the working classes wholly removed. He thought the idea of the right hon. Member for Birmingham (Mr. Bright) as to "a free breakfast table" was a good one, and one more likely to attach the working classes to those with whom they were 1361 connected than anything else that could be devised. As long as we taxed tea, coffee, chicory—things which entered into the consumption of every old woman in the country—we were taxing those who ought not to be taxed—we were taxing the working classes, for whose benefit he would like to remove every one of those taxes. To tax the food of the people was a mistake; and that was the reason why, after 30 years' experience, he retired from the opposition he once gave to the repeal of the Corn Laws and to a Free Trade policy. He had received a letter on this subject from a very old man, which he would like to read. [The noble Lord then read the letter, which was to the effect that Free Trade, as laid down by Adam Smith, was beyond question, but only on the assumption that it was generally adopted by other nations, and that could not be done except when the Rulers of those countries acted on one principle.] When Free Trade was introduced in this country the precautions of Adam Smith were disregarded—Great Britain was to be the workshop of the world, and all other nations humble customers; but now we imported £150,000,000 more than our exports, and no previous accumulations could long stand such a strain. The political consequences were even worse; England was possessed of the largest and at the same time the most scattered Empire in the world, and the result of the adoption of the Free Trade policy had to some extent the effect of alienating them from us. Our Colonies, acting upon the principle of protecting their own industries, separated themselves completely from Free Trade, and the only tie that remained to bind them to the Mother Country was family affection and love for the old country. This was to be seen exemplified in the course that had been adopted in Canada, in the Australian Colonies, and in one-half of our Dependencies, who found it impossible to follow our lead, and who had adopted a defensive, if not a hostile, commercial policy. That was a very serious thing. He held that we had done wrong to loose our hold over the Colonies, and he hoped to live to see the day when the Colonies and the Mother Country would form far more binding ties than those which existed between them at this moment. [The noble Lord 1362 then proceeded to refer to a book of Professor Fawcett's, which, he said, was one of the cleverest books he had ever read from the Professor's point of view.] Though he had not the pleasure of knowing Professor Fawcett, he felt bound to congratulate him on the ability with which he advocated his views. But it was all very well for the Professor to say that the prosperity of a country consisted in her imports. He (Lord Bateman) had always understood that the greatness of a country consisted in her exports, which meant her own products. But it appeared by Mr. Fawcett's book that he considered that the imports coming into a country were as valuable an indication of prosperity as the exports going out of it. Here were a few statistics which would show how largely, while our imports had increased, our exports had fallen off. In the four years 1871–1874—the period of the greatest inflation of Free Trade and commercial prosperity—the gross value of our imports amounted to £1,427,000,000; in the next period of four years, 1875–78, their gross value was £1,511,000,000. Consequently, the excess was no less than £84,000,000 gross value in the latter four years. The gross value of the exports of British produce in 1871–1874 was £974,000,000; in 1875–1878 it was £817,000,000; showing a diminution in the gross value during the latter period of £157,000,000. The value of the exports of foreign and Colonial products for 1871–1874 was £233,000,000, and for the second period £220,000,000. The gross value of the imports in the first period being £1,427,000,000, and the gross value of the exports, British, Colonial, and foreign, £1,207,000,000; that gave an excess in the gross value of imports over exports for that period of £220,000,000. If that was a proof of the prosperity of the country, all he could say was, it was a new theory. At the present moment Prince Bismarck was busy with the German tariff, which would probably increase the protective duties in Germany to a very large extent; and it was well known that there was very little chance of a Commercial Treaty, in any form, being revived with France. Therefore, before the end of the year 1879, trade would probably be very much worse than it was at present. Then there was the old exploded theory, according to Sir Louis Mallet and others, 1363 of what was vulgarly called "the balance of trade." It appeared to him that this balance of trade was a great test of a country; but they did not hold that opinion. They had, in fact, forgotten what Adam Smith called the balance of annual produce and consumption. This was what Adam Smith said—There is another balance, indeed, which has already been explained, very different from the balance of trade, and which, according as it happens to be either favourable or unfavourable, necessarily occasions the prosperity or decay of every nation. This is the balance of the annual produce and consumption. If the exchangeable value of the annual produce, it has already been observed, exceeds that of the annual consumption, the capital of the society must annually increase in proportion to this excess. The society in this case lives within its revenue, and what is annually saved out of its revenue is naturally added to its capital, and employed so as to increase still further the annual produce. If the exchangeable value of the annual produce, on the contrary, fall short of the annual consumption, the capital of the society must annually decay in proportion to this deficiency. The expense of the society in this case exceeds its revenue, and necessarily encroaches upon its capital; its capital, therefore, must necessarily decay, and, together with it, the exchangeable value of the annual produce of its industry."—(Smith's Wealth of Nations, Book 4, chap. 3, p. 250.)A Board of Trade Return showed that of 13 articles of importation, raw and manufactured, we had imported during the three years of our severe depression, from 1875 to 1877, £60,000,000 worth more than in the so-called period of prosperity, from 1871 to 1873. The noble Earl (the Earl of Airlie) who was going to move an Amendment to his Resolution said he was perfectly satisfied with Free Trade as it stood. But the very fact of making Commercial Treaties was neither more nor less than an abandonment of Free Trade. This, he (Lord Bateman) thought, could not possibly be denied. Commercial Treaties were entered into by the Government of the time, simply because no other country in Europe would accept a policy which was supposed to be so grand and so universal. This was a severe blow to the policy initiated and intended to be carried into effect by Mr. Cobden. If that hon. Gentleman were alive at this moment, no man would be so deeply hurt at the failure of his doctrine of universal Free Trade. The doctrine which Mr. Cobden thought would be universally adopted had been rejected, scoffed at, and entirely put on 1364 one side by every foreign nation. Mr. Cobden went to Paris, and, failing to secure the adoption of his Free Trade policy, he entered into the Commercial Treaty as a sort of pis aller or makeshift. What were the results of the French Treaty? Article 5 of the Preliminary Treaty of January 23, 1860, stated that Her Britannic Majesty engaged to recommend Parliament to abolish the duties on the importation of foreign articles, including the entire range of manufactures of whatever description. What did England get in consideration of this great concession? His Imperial Majesty the Emperor of the French engaged that on articles of British production and manufacture imported from the United Kingdom to France, the duties should in no case exceed 30 percent. Nothing on one side, and 30 percent on the other! France took care to exercise the power given her under that Treaty. In the year 1877 the balance of trade against England was £20,000,000. He asked the Secretary of State for Foreign Affairs what had become of that Treaty? He did not think that we should see any more French Commercial Treaties. He did not believe that our manufacturers themselves wished to have a Commercial Treaty with France, or with any other nation, because their views and aspirations tended in a totally different direction. But was there any likelihood of our having Free Trade with France? Not a bit of it. The French would put us off with the most polite promises that the matter would be considered, and so on; but they would keep our manufacturers in a state of suspense, which would be worse than if they had a Commercial Treaty that was entirely hostile. He need hardly call attention to what was going on in Germany. The Times newspaper had called him a dodo, and asked out of what Cave of the Seven Sleepers he had emerged, for having advanced certain views which he thought were sound, and would be acceptable to the country; and it was attempted in that way to put an end entirely to the humble individual who was now addressing their Lordships. But he still survived; and the day had come when, he was happy to say, he had redeemed the promise, which he had previously made, that he would bring the question before the notice of 1365 Parliament—with what success he loft in their Lordships' hands. If he was a dodo, what was Prince Bismarck, of whom, in the same article, The Times made a present to him? Prince Bismarck, it was said, was of Lord Bate-man's way of thinking. That was in 1877. The Times might as well have added that they made him a present of the late M. Thiers also, on the same grounds; for both of those great foreign statesmen might, by the same reasoning, be described as equally imbecile and antiquarian with himself on that subject. They were so stupid, and so thick-headed, that they did not see the advantages of Free Trade. Englishmen supposed they were the great pioneers of Free Trade, and assumed to themselves the greatest superiority over other nations, whether they deserved it or not. They were rather apt to under-estimate not only their enemies, as in Zululand, but those who were in competition with them. That was John Bull all over. But it was hardly rational to shut our eyes to facts, and to say that the French, the Germans, the Austrians, the Americans, and all who held Protectionist principles were a pack of fools. There was not a single country on the Continent of Europe, beginning with Prance and Germany, and ending with Switzerland and Spain, which would be persuaded or cajoled to open its ports to the free and unrestricted trade of all the world, or into accepting the injurious tenets of the Free Trade Party. Again, we had for a long time past been throwing away, in the most gratuitous manner, many millions sterling of Customs duties, which had been either repealed or reduced, simply as sops to the Free Traders, or as occasional sops to disarm opposition.
He now came to the subject of Reciprocity; and, before proceeding further, he wished to explain to their Lordships what meaning he attached to that word. It appeared to him that many persons had given their own versions, and explanations, and ideas of that word; but nobody had hoard his, and he had taken considerable pains that no one should. For instance, a noble Earl had called it Protection in a fancy dress. That, however, was only an amusing figure of speech; and as the speaker was the grandson of the great Sir Robert Peel, he could, of course, be nothing else 1366 than a Free Trader. The noble Earl the late Secretary of State for Foreign Affairs (the Earl of Derby), whom they were all sorry to see sitting on the cross-benches, in a speech delivered at Rochdale, described Reciprocity as a disastrous folly. That was not the way to speak of a policy which, oven although it happened to have been initiated by Lord Bateman, had taken deep hold of the people. [A laugh.] Their Lordships, he was convinced, were laughing not at the policy, but at Lord Bateman. The right hon. Member for Birmingham, in speaking on the subject, had, in language going beyond Anglo-Saxon, called those who agreed with him lunatics and simpletons. Had the noble Earl, instead of calling his proposal a disastrous folly, moved the Amendment which his noble Father brought forward in 1849, he would have done better service to his country. And as to the denunciation of Mr. Bright, he considered it rather the expression of a scold, than becoming the high-principled man he was. He (Lord Bateman), however, had the courage of his convictions as well as the noble Earl. His own definition of Reciprocity was that it was not necessarily Protection, and that it was in reality mutual interchange and barter for the benefit of both parties. They had reciprocity in fooling of love, and the only thing in which there was not Reciprocity was in commercial affairs, he did not ask for Protection; but he contended that if there were no Reciprocity there could be no Free Trade. Reciprocity ought to be regarded as the coping-stone of the Free Trade system. It was the one thing wanting to the establishment of that universal Free Trade which everyone desired, but which had not yet been secured. He would illustrate the meaning of Reciprocity by referring to the duties on tea. Out of the £4,000,000 raised by the duties on tea, £1,000,000 was derived from our own Indian Empire. Now, the other day we had remitted £200,000 of cotton duties—that was to say, we made the Indian Empire pay £1,000,000 on tea, and £200,000for the cotton imported from this country. This was unfair. If we had done away with the £200,000 on cotton, and had, at the same time, relieved our Empire from the £1,000,000 that was derived from tea, we should have been illustrating the principle of Reciprocity. He held in his hand 1367 two letters which bore upon the subject of Reciprocity—one from the right hon. Gentleman the Member for Greenwich (Mr. Gladstone), and the other from Sir Stafford Northcote. These letters expressed very diverse views, and, curiously enough, it was the Chancellor of the Exchequer who condemned Reciprocity, and the right hon. Gentleman the Member for Greenwich who spoke in its favour. The right hon. Gentleman said he had no doubt that the increased benefit from Reciprocity in Free Trade would be very great. The noble Earl the present Prime Minister had given this principle a still more powerful support. The time of depression through which we were passing had been very severe and prolonged, and he thought it would be a wise thing to do at once what would eventually be forced upon them—namely, to institute an inquiry into the causes of that depression, and the best mode of remedying it. They would delude themselves if they thought the policy of Reciprocity was not worth discussing. If he was not mistaken, it would be a powerful cry at the next General Election. But it might be asked what was his idea of Reciprocity—how did he propose to carry it out? Well, in the first place, he would propose a close federation between England and her Colonies in all parts of the world, establishing between them Free Trade in the most unrestricted sense. In New Zealand there were hundreds of thousands of quarters of wheat annually used as manure, or thrown into the sea, simply because California being nearer to this country than New Zealand, the New Zealander found it impossible to send his wheat to us under present circumstances at a profit. That was not a state of things which ought to exist, and by the addition of a very small import duty, which could hardly be considered a duty at all, and which would not be felt, we could secure our trade with New Zealand. Again, could anything be more disastrous or more painful to witness than the position occupied by Canada at the present moment? There was no doubt that the Canadian tariff would act most injuriously on the trade of this country; and it was by no means certain that the Colony of Victoria would not follow suit. There was no cohesion between the Mother Country and its Dependencies, such as 1368 ought to exist. We relied upon foreign imports, and shut out entirely our own Colonies from trading with us. Under the system he proposed, every scrap of import duty on Colonial produce would be abolished, and the result, he believed, would be that we should be able to snap our fingers at all foreign countries, being no longer dependent upon them. A small deficiency of Revenue would, of course, have to be met; but it might easily be made up by a tax upon intoxicating liquors, which would, at the same time, have a beneficial effect upon the country by diminishing drunkenness, which was the curse of this country. If that were not enough, some other small indirect tax might be levied. He was advocating, not Protection, but Reciprocity—which meant a mutual exchange of benefits. They should urge it upon all foreign nations, and if those foreign nations accepted it, they might be invited to enter into the federation of which he had spoken with our own Colonies. If they refused it, the question of import duties would, of course, arise. But he did not wish to talk about Protection. He did not wish to mention the word. At the same time he would admit that, in his opinion, if foreign nations would not accept the principle of Reciprocity, we ought, by way of inducing them to do it, to impose a certain small restriction—he did not care how small—on foreign imports. The inquiry he asked for was expected by both the manufacturing and agricultural classes of this country, because it was impossible to ignore the existing distress, amounting in some places almost to starvation, and he trusted it would be conceded, not only in sympathy, but as a matter of justice. The noble Lord concluded by moving the Resolutions.
Moved to resolve—
1. That this House, fully recognizing the benefits which would result to the community if a system of real free trade were universally adopted, is of opinion that it is expedient in all future commercial negotiations with other countries to advocate a policy of Reciprocity between all inter-trading nations; and
2. That the long continued depressed state of the commercial, manufacturing, and agricultural interests should form the subject of a full Parliamentary inquiry, with the view of ascertaining the causes, the best means of redress, and of counteracting the injurious effects of the excessive tariffs levied by foreign nations against the produce and manufactures of this country."—(The Lord Bateman.)
THE EARL OF AIRLIE
My Lords, before I touch upon the arguments by which my noble Friend (Lord Bateman) has supported his Resolutions, I ought, perhaps, to state why it is that I propose to ask your Lordships to amend them, instead of contenting myself with voting in favour of a Motion to negative them. The two Resolutions are widely different in character. The 1st Resolution appears to me to be almost harmless as it stands; and if your Lordships should be pleased to modify it in the manner I have suggested, I think it will become altogether innocuous. I had at first some doubts whether it was worth while to object to the word "real" in the 1st Resolution. But those doubts were removed when I heard the speech of my noble Friend. He evidently thinks that the trade of this country is not really free, if other countries do not admit our goods on the same terms as we admit theirs; or if we impose Customs duties of any kind, even though those duties may be imposed simply for purposes of Revenue, and on articles which are not produced here. I differ from him on both those points; and, therefore, I propose to leave out the word "real." As regards the words at the end of the 1st Resolution, I think the Resolution is hardly consistent with itself. My noble Friend starts with a very ambitious programme; he aims at nothing loss than universal Free Trade. But the Resolution concludes by affirming that we ought to advocate a policy, not of Free Trade, but of Reciprocity. And though my noble Friend set out by declaring that what he meant by Reciprocity was neither Protection nor retaliation, yet when he discloses the means by which he intends to give effect to his policy of Reciprocity, it appears that he has recourse both to retaliation and Protection. He tells us that he has become a convert to Free Trade in corn. Yet he proposes to put a duty on American wheat, in order to balance the extra cost of carriage of Australian wheat.
THE EARL OF AIRLIE
It matters not by what name you call it; the duty, or Customs entry, is imposed in order to handicap American wheat in the competition with Australian produce. My noble Friend told us that Reciprocity meant the free interchange of commodities. That is what we all desire; but 1370 if foreign countries should decline to admit our goods on the terms which he thinks just, then he proposes to bring them to a better frame of mind by placing protective duties on the articles which we import from them. That is retaliation; and I contend, therefore, that I have shown that the scheme of my noble Friend involves both Protection and retaliation. If your Lordships should agree to the Amendment which I propose at the end of the 1st Resolution, it will then simply amount to a recommendation that we shall avail ourselves of all suitable opportunities to induce foreign countries to relax their protective duties. I know there are some persons who object to Commercial Treaties as being opposed to the principles of Free Trade. I do not share their opinions. The affairs of this world cannot be conducted altogether in accordance with abstract principles. We have to be guided also by practical considerations. I think, for example, that the Treaty with Franco was productive, while it lasted, of great benefits to this country. I am very sorry that it was denounced; and I trust that it may be renewed, if possible, on better terms. Besides, whether or not we consider Commercial Treaties to be in accordance with the abstract principles of Free Trade, the question has ceased to be a practical one; we have negotiated many Commercial Treaties, and it is too late now to recede. My Lords, while I think the 1st Resolution, amended as I suggest, will be harmless, I do not think it is very urgently called for. I am not a supporter of Her Majesty's Government, I am no admirer of their foreign policy; but I am bound to say that I do not think they have been slack in endeavouring to obtain commercial advantages for this country. And as regards the Department specially charged with the negotiation of Commercial Treaties, over which the noble Marquess (the Marquess of Salisbury) presides, I think anyone who has watched the public career of my noble Friend, who has read the speeches which from time to time he has addressed to deputations on commercial matters, or who has looked at the Correspondence which has been laid on the Table with respect, for instance, to the renewal of the Treaty with France, the Correspondence as to the duties on Spanish wines, on the importation of 1371 mineral oils into France, and other matters of that kind, must see that the noble Marquess is very earnest in endeavouring to obtain the relaxation of tariffs which operate injuriously to this country. The 2nd Resolution stands on entirely different ground from the first. It is full of mischief. I object to that Resolution from the first line to the last letter. The Resolution begins by demanding a full Parliamentary inquiry into the cause "of the present depression, with the view of ascertaining the causes and the best means of redress." Now, I agree entirely with what the Prime Minister is reported to have said in a speech delivered in this House before the Easter Recess. I had not the advantage of hearing that speech, but I read the report of it with great attention. The noble Earl is reported to have said that he did not think an inquiry was necessary, and that it was not in the power of the Government or the Legislature to apply a remedy. I entirely concur in those views. I think a Parliamentary inquiry would be not only useless, but mischievous, as it would tend to excite hopes which could not be realized. The Resolution goes on to sayThat it would be expedient to counteract the injurious effects of the excessive tariff's levied by foreign countries against the produce and manufactures of this country.This concluding paragraph points distinctly to a policy of retaliation; and I hope to be able to show your Lordships that such a policy would be both mischievous and impracticable. The noble Lord is very much distressed because the value of the imports has of late years considerably exceeded the value of the exports. I hope he will forgive my saying that the passage he has quoted from Adam Smith has really no bearing on this matter. Adam Smith says that a nation which consumes more than it produces is in a bad way, just as an individual is in a bad way if his expenditure exceeds his income. But that has not necessarily anything to do with the relative value of imports and exports. I do not care to dwell on the fact that the value of imported articles appears to be higher than that of those which are exported, because in the one case the valuation is made after the cost of freight, insurance, and other charges has been added, whereas there are no such additions in the case of exports. But I contend that it is a necessary con- 1372 dition of any profitable foreign trade that the imports should exceed the exports in value. The trade of this country, that which figures in the Board of Trade Returns, is, after all, only the aggregate of the operations of individual traders. Now, suppose a merchant exports to France or the United States goods which have cost him, say, £10,000, and receives in exchange goods which he is able to sell for £15,000, would anyone say that this man is likely to find his way into The Gazette because he has received in exchange for the goods he has sent abroad articles which he can sell here for a higher price than the goods he has exported have cost him? Take the case of that which is perhaps the most profitable trade of any, though probably not a very largo capital is embarked in it—I mean the trade carried on by barter with savage nations. A merchant purchases in England glass beads, gaudy cheap cloths, and other things of that kind, and consigns them to his agent at Lagos, or somewhere else on the African Coast. He receives in exchange for these articles ivory, palm oil, and other articles, probably worth at least ten times what he has sent out. His imports exceed his exports in value enormously; but would anyone say that he was, therefore, in a fair way to be ruined? Well, then, I want to know, if individual operations of that kind are profitable, do they become diastrous when multiplied by 1,000, or 10,000, or 20,000? My noble Friend had no difficulty in showing, what we all admit and deplore, that there exists in this country, and has existed for some time, great depression and stagnation of trade; but I think he altogether failed to show that this state of things was owing to the fact that we had adopted the principle of Free Trade. He went back to the years 1871–2–3, which he himself admitted had been years of great, indeed of unprecedented, prosperity, and he pointed out that since that time there had been great depression in trade. But he might have remembered that Free Trade has been in full operation, not for five years only, but for more than 30 years; and I therefore fail to understand by what process of reasoning he has arrived at the conclusion that the present depression is owing to Free Trade. If, indeed, he had compared the condition of this country with the condition of those coun- 1373 tries which enjoy what I suppose he would call the advantages of Protection, and if he had shown us that the protected countries were in a better state than ourselves, or if he had compared the condition of this country now with what it was under the system of Protection, and had shown that we were worse off now than then, I admit that in that case he might have made out a primâ facie case for inquiry. But my noble Friend did not institute any such comparisons. I will endeavour in some slight degree to supply his omissions. As regards foreign countries, we know that in Prance, some 18 months ago, the manufacturers called for and obtained a Commission to inquire into the depressed state of their manufacturing industries. They complained that they were being undersold by English goods in their own markets. This, at any rate, does not look as if we were suffering grievously from the competition of France. As to Germany, we all know how severe the depression has been in that country. In Italy, the state of trade is not much better; and in Russia there exists what may be described as a state of complete paralysis and prostration. It may be said that to compare the condition of this country with that of European nations is hardly fair; that we enjoy exceptional advantages; that we do not keep on foot those enormous standing Armies, to maintain which a vast number of men is withdrawn from productive labour. I admit the force of the objection. We do enjoy exceptional advantages, though whether we shall continue to enjoy them when our new policy of Imperialism has been fully developed is perhaps open to question. But now let me compare our condition with that of a country which, as regards the necessity of keeping largo armaments on foot, is oven better off than ourselves. I mean the United States. They know that no one wishes to interfere with them, and they have very wisely up to this time refrained from interfering in the affairs of Europe. The Army, therefore, which they have to maintain is very small, even as compared with ours. They have an industrious and energetic population, an immense extent of fertile land, and from the size of their territory and the variety of their climate they can produce within their own borders almost anything they require. They have the 1374 most stringent protective tariff in the world. If, then, the theory is a sound one, that Protection is a panacea against commercial distress, they might be expected to enjoy a course of unbroken prosperity. But what are the facts? In the first place, the depression of which we are now complaining began in America at least a year before it was felt in this country. It was in the autumn of 1873 that we first heard of the great failures in New York. As regards the severity of the depression, it is not very easy to institute an exact comparison between the intensity of distress here and in the United States; but from all I can learn, the depression has been at least as severe—I am inclined to think it has been more severe—in America than in this country. We heard of wealthy families being reduced to indigence, of great meetings of starving workmen in Now York, in Chicago, and elsewhere. In Pittsburgh the riots caused by the resistance offered by the workmen to the reduction in their wages, which the Railway Companies were compelled to make in consequence of the falling-off in their traffic, was more formidable by far than anything which has ever been known here. The town for some days presented the appearance of a besieged city—positions were taken by the rioters and re-taken by the troops, and property to the value of millions sterling was destroyed. I have here an extract from the papers of the American Iron and Steel Institute, a society which, I believe, collects very accurate statistics. It would appear from this Return that in 1878, out of 700 furnaces in the United States, only 260 were in blast. That does not look like a very prosperous state of things, though, no doubt, there has lately been a slight revival in the American iron trade. But, perhaps, the most remarkable indications of the nature of the crisis through which the trade of the United States has been passing are the statistics of the emigration to and from that country, quoted by Professor Fawcett. He informs us that, whereas from 1869 to 1873 about 200,000 persons on an average of each of those years emigrated to the United States from this country, in 1874 the number of those who went to the United States only exceeded the number who left it by about 1,000. Large numbers of work- 1375 men returned from America to England, I because they found themselves better off here than in the United States. Professor Fawcett observes, also, that while in this country a considerable number of persons attribute the present commercial depression to Free Trade, there are many people in the United States who ascribe the stagnation which prevails there to the system of Protection which they have adopted. I own that I am disposed to attribute the present state of things, in the main, neither to Free Trade nor Protection, but to causes independent of either. Now, let us see how the condition of this country at the present time compares with what it was under the system of Protection. It was in 1842 that Sir Robert Peel commenced his reform of the tariff. If we look at the Board of Trade Returns for 1840–1–2, we find that the average value of our exports in each of those years amounted to about £66,000,000. In 1878, that year of extreme depression, that year which some persons tell us afforded an example of the disastrous effects of Free Trade, the value of our exports was £193,000,000, exclusive of foreign and Colonial produce re-exported. No doubt, the population had increased in the interval; but the increase in our export trade was out of all proportion to the increase of population. The population of this country doubles itself in about 100 years; but in the last 37 years our exports had increased nearly threefold. In 1842 the tonnage of British shipping was 6,100,000; in 1878 it was 30,000,000, nearly a fivefold increase. In 1842 the income tax produced about £750,000 for every penny in the pound; in 1878 a penny produced about £1,800,000, though a large number of persons are now exempted who formerly paid the tax. As regards the Excise, which affords a tolerably good test of the condition of the working classes, in 1842 it yielded about £15,000,000; last year it amounted to £27,000,000, and this in the face of large reductions of some Excise duties and the total remission of many others. The Revenue, which in 1842 was about £52,000,000, in the year just ended it has considerably exceeded £80,000,000. Therefore, whether we take the producing power of the country, as shown by the exports; or the volume of our foreign trade, as shown by the tonnage of our shipping; or the con- 1376 dition of the different classes of the people, as exhibited by the yield of the income tax and Excise; or the state of our finances, as illustrated by the amount of Revenue raised within the year, it will be seen that, even in 1878—which everyone admits to have been a year of extreme depression—we are in a far better position now, under a system of Free Trade, than we were in 1842 under Protection. No doubt, the distress at present is very great in many places; But I cannot believe that it is at all equal to that which prevailed in 1842 and 1843. If your Lordships will permit me, I will read, in proof of this assertion, an extract quoted by Professor Fawcett from Miss Martineau's History of the Past (vol. ii., pp. 520–1). The passage is as follows:—The distress had now so deepened in the manufacturing districts as to render it clearly inevitable that many must die and a multitude be lowered to a state of sickness and irritability from want of food, while there seemed no chance of any members of the manufacturing classes coming out of the struggle with a vestige of property wherewith to begin the world again. 5,000 persons were walking the streets of Stockport in compulsory idleness, and the Burnley Guardians wrote to the Secretary of State that the distress was far beyond their management; so that a Government Commissioner and Government funds were sent down without delay.That, I am happy to say, is a state of things of which we have as yet had no experience. The other day the Home Secretary stated that he had made inquiry, and had been informed that there was no distress which the Boards of Guardians could not cope with. And now a word as to the remedies which are proposed by those who advocate Reciprocity. They say, if foreign countries will not admit our goods, we must tax theirs. Now, out of articles to the value of £366,000,000, which we imported last year, by far the greater proportion consisted either of food, or of raw materials which are worked up here by our manufacturers. Only about 10 per cent consisted of manufactured articles. As regards taxing food, I will not discuss that question, because even my noble Friend disclaimed any intention of levying a tax of that kind, though he was not altogether consistent with himself. But how do you propose to proceed as regards these retaliatory taxes? I take the case of the United States, whose tariff is the most severely protective of all. You 1377 tell us you will not impose duties on corn or cattle coming from the States. Will you tax raw materials? We imported, last year, cotton from the United States to the value of about £22,000,000. Are you going to tax that? If you do, you raise the cost of manufacturing cotton against yourselves, and, practically, you will be giving a bonus both to the manufacturers of New England and to the European manufacturers who compete with you. You may say you will tax American manufactured goods. But, out of £78,000,000 which we imported from the United States in 1877, only about £8,000,000 was represented by manufactured articles. Do you really think that, by taxing this small proportion of their exports, you are likely to force the United States to adopt a more liberal tariff Y Bear in mind that, while we imported about £8,000,000 worth, we exported to the United States—even in the face of their heavy tariff—goods to the value of £26,000,000; more than three times the amount which they sent us. I think it is much more likely, if you resort to retaliation, that the United States will endeavour to shut out this £26,000,000 worth of goods which we now send them. Moreover, if we adopt this system of retaliation now, every country in the world will say that we have given up our faith in the polity of Free Trade. The doctrine held by Tree Traders, by the great majority, as I believe, on both sides of this House, is that protective duties are injurious to the country which imposes them; that the removal of those duties is beneficial, because it enables us to purchase at the lowest prices articles which we cannot produce so cheaply at homo; and that if we were to impose protective duties because other countries impose them, we should be injuring ourselves, and, therefore, doing an exceedingly foolish thing. The doctrine of those who advocate Reciprocity, as I understand it, is that in removing protective duties a country is making a sacrifice, which can only be compensated by corresponding sacrifices on the part of other countries. If then, we adopt this retaliating system, other nations will say—and will be justified in saying—that we have abandoned those opinions which, for more than 30 years, we have maintained in the face of the world, and that we have been converted to the views held by those who advocate 1378 Protection. I cannot, therefore, conceive any course that would be better calculated to postpone indefinitely the relaxation of hostile tariffs to confirm in their views those nations who hold to Protection, and in the case of those who may be wavering between Protection and Free Trade, to incline the balance heavily in favour of Protection. My Lords, in times of distress, people are apt to think that any change must be for the better. At such times, there will always be persons who are ready to advocate empirical remedies, and people who are credulous enough to take their advice. We have lately had an instance on the other side of the Atlantic. During the distress which prevailed in the United States, many persons there said that the depression was all owing to the attempt to resume specie payments, and that all would be well if only they could have an unlimited issue of paper money. Those Inflationists, as they were called, won some victories at the Elections, and, for a time, it seemed that there might be a possibility of their ultimate success. But the good sense of the American people came to the rescue, and they have now succeeded, in the face of considerable difficulties, in placing their currency on a sound basis. And so I believe that the good sense, the energy, the courage, and the industry of the people of England will carry them through their present difficulties, as those qualities have carried them through far greater difficulties in times past; that they will set aside these nostrums of Reciprocity, and other fanciful remedies of that kind, and that they will adhere to that policy of Free Trade which they have adopted after full deliberation, and under which they have attained to a height of commercial greatness, and have enjoyed an amount of prosperity and material well-being, without example, as I believe, in the history of the world.
§ THE DUKE OF RUTLAND
, in supporting the Resolution, said, that, according to the noble Earl (the Earl of Airlie), the larger our imports and the smaller our exports, the better for the country. That was not the opinion of Adam Smith. What said Adam Smith? The noble Lord (Lord Bateman) had read a passage from Adam Smith, to which he was so anxious that the attention of the House and the country should be drawn, that he would ven- 1379 ture to detain the House by again reading it. His noble Friend (Lord Bate-man) had stated that the excess in value of our imports over our exports in the four years—1875–78—was no less than £474,000,000. He would ask the noble Earl if that was a safe position for this country to occupy? His noble Friend, who, in introducing this subject to their Lordships' notice, had almost exhausted the arguments which could be used on this occasion, referred to a letter of Mr. Bright. He (the Duke of Rutland) did not desire to go over the same ground, but he also was anxious to refer to that letter. He had always a very high opinion of Mr. Bright, though he differed in toto from his view of economical principles. His noble Friend had said, very rightly, that it was not in accordance with the general courtesy observed in the Houses of Parliament to call each other such names as "simpletons;" but Mr. Bright said that the Reciprocity notion was exactly adopted to catch a considerable class of simpletons. That was abuse rather than argument. Mr. Bright stated that the distress in the country in the period from 1839 to 1842 was ten times greater than it was now. Now, he (the Duke of Rutland) believed that the distress was ten times greater now than it was from 1839 to 1842. But what was it that caused the distress of those times? It was the change from hand-loom weaving to the power-loom, and the economical circumstance that there was not then so much gold in the country. He now wished to refer to a speech of the noble Marquess below him (the Marquess of Salisbury). Mr. Bright had asserted that in the United States—the most protected nation in the world—the distress during the last five years had been more prolonged, more widely spread, and more intense than in England. That assertion was repeated, he believed, by the noble Earl who last addressed the House. But his noble Friend (the Marquess of Salisbury) delivered, two or three weeks ago, a speech which showed that he and Mr. Bright totally differed in their views upon this question, for he said that there was a revival of prosperity in the United States. The fact was that America kept her own markets to herself, and she had also the English markets to come to free from any taxation. Further, it was impossible that our manu- 1380 facturers should compete with hostile tariffs while they were hampered by the operation of the Factory Acts. How could a country, where the operatives worked 56 hours a-week, compete with countries where they worked 72 hours a-week? Plainly, they should either do away with the Factory Acts, or put a duty on the importation of those textile fabrics that came into competition with our own. He would have no taxation on raw material. His noble Friend remarked that everywhere Governments were in want of money; that the easiest way to raise money was by indirect taxation; and that when the manufacturers wanted protection by indirect taxation the Government and the manufacturers came together, and there was a force which nothing could withstand. He asked whether Her Majesty's Government did not now want money. He understood that they wanted something between £5,000,000 and £8,000,000. The great mistake of Free Traders was this—No doubt, we were all consumers, and we were not all of us producers; but the consumer who was really of value in the country was the consumer who was also a producer. A man who was only a consumer added nothing to the wealth of the country. He was of no use except to himself. The only man who really benefited by Free Trade was the man who consumed merely and who produced nothing. A man with a fixed income derived the greatest possible benefit from having everything cheap; but a man who had to depend upon his production in order to obtain the necessaries of life did not, if he were unable to get anything for his productiveness, benefit by the cheapness. It was like the case of a poor boy looking at a shop window and seeing a penny bun. The bun might be very cheap; but if the boy had not a penny in his pocket, it was impossible for him to purchase it. He would beg to refer their Lordships to a speech made in that House in 1846 by the late Lord Derby, then Lord Stanley, in reference to the remark attributed to Mr. Cobden, that "a system of protection is a system of mutual robbery." Lord Derby said—I admit that it is 'a mutual system;' it is a system in accordance with which each surrenders some advantage to himself for the purpose of partaking in the general advantage of all—it is a system by which each sacrifices 1381 something of the profits of his own trade for the purpose of insuring a reciprocal advantage from others.Lord Derby went on to say—I am not sure that it would not be found in the end to be a certain reciprocity of profits, a system under which both parties gain—both parties are secured against hostile interference, against foreign intrusion—against foreign caprice and foreign hostility—would, in fact, in the long run, be that of which they heard so much, 'buying in the cheapest market and soiling in the dearest.' That, whatever may be the small amount added to the cost on the British article under a protecting duty, still the disadvantage is amply compensated by the extension of our power over the wide world—by securing for us in every quarter friends and allies—by securing for our people certain employment, and certainty of consumption, uninterfered with by foreign competition."—[3 Hansard, lxxxvi. 1166.]The present First Lord of the Admiralty, speaking on that subject, had said that if he had to run a race with an American he would not put on a great coat and fill his pockets with stones. But that was in effect exactly what we were doing. We were admitting American goods free of all duty, while the Americans refused to admit our goods except at a duty of some 30 per cent. We wore, in fact, over-weighted in the race. The noble Lord who introduced that discussion had referred to our Colonies, and said—very wisely, as he thought—that it would be a great thing for this country if we could enter into a kind of Zollverein, so that the whole of our Dominions should be brought under one grand system. We should have some 300,000,000 of people, and we could put our taxes on foreign imports, and benefit ourselves by taking them off our own. The late Lord Derby, in the same speech he (the Duke of Rutland) had referred to previously, said that Mr. Greg, one of the Leaders of the Anti-Corn Law League, frankly intimatedThat the last chance of the success of what was called Free Trade resolved itself into the reduction of wages and the cheapness of food;"—[Ibid. 1171.]and described the evil results which were likely to follow from a system which was the acme of human folly. What Lord Derby predicted in 1846 was what we were experiencing now. He could not, before sitting down, refrain from some allusion to the distress at present existing in the agricultural districts. He had always maintained, 1382 and he maintained still, that they could not injure their manufacturing and commercial interests without also injuring the agricultural interest. The two were so woven together that it was impossible to separate them. If they granted protection to their manufacturing interest, they would confer a been on the agricultural interest. And if £5,000,000 were raised, as it easily might be, by putting a moderate duty on textile fabrics imported into this country, he saw no reason why that should not be given in relief of agricultural distress—that was, in relief of the burdens which now pressed on the landed interest. It might be said—"Oh, this distress is only the result of four bad seasons, and if we now have a good year all will come right." He did not believe that a good year would give prosperity to the agricultural interest. Suppose we had a good year or two, and grew and saved more corn, other countries would do the same, and the result would be that corn would be cheaper. The growing of wheat at 40s. per quarter could not be made to pay its cost on the great majority of lands in this country. It was said—"Why not turn your land into grass?" But here, again, we were mot by importations from abroad. America sent meat here a great deal cheaper than it could be produced in this country. As a result of Free Trade, land was going out of grain cultivation and being turned into grass. Mr. Caird said that within the last 10 years 2,000,000 of acres had been thrown out of corn cultivation in this country. Was that a safe or a profitable thing? Was it safe to rely on the caprice of the foreigner for our food supply? After the adoption of Free Trade a Is. import duty on corn was retained, which produced £1,000,000 sterling of Revenue; but that small duty had since been gratuitously repealed. Why should that have gone to appease the frantic Free Traders? The truth was that it was, in the present circumstances, impossible to grow beef or corn except at a loss. Ten years ago, nine-tenths of the moat we consumed was of home growth, whereas only one-third was produced at home at the present time. It was an alarming fact that each English family sent abroad £15 annually for food alone. In these circumstances, he could not understand why the Committee which 1383 the noble Lord asked for, to inquire into the truth of the matter and the remedy for the evils he had described, should be refused. The noble Lord had shown the impending shipwreck of all the industries of the country—he had shown that the distress was not limited to one trade or profession. The same dismal tale applied to agriculture as to our trade in cotton, silk, coal, or iron; every one of those industries was depressed, and the wages of the workmen were being reduced. Was there any prospect or hope of revival? He could see none.Roll on, thou deep and dark blue ocean, roll,Ten thousand fleets sweep over thee in vain,Man marks the earth with ruin; his controlStops with thy shore; upon the boundless mainThe wrecks are all thine own, nor doth remain,One shadow of man's ravage save his own,When in a moment, like a drop of rain,He sinks into the deep with bubbling groan,Without a grave, unknell'd, uncoffin'd and unknown.That would be our fate if we refused to do anything to avert the impending calamity. It never had been, and he hoped it never would be, the nature of Englishmen to succumb without a struggle, and a struggle they intended to make. They should look first of all to the Government to be their protector; if they failed them, they must look to the Opposition; and if both failed them, they must look to the constituencies at the coming Election. He ventured to tell the House that they had a vast majority of the people of the country with them, and that the agricultural labourers, the artizans, and the manufacturers would send them back victorious to the next Parliament, determined that the industries of this great Empire should be saved from destruction.
THE EARL OF DUNRAVEN
said, he believed that the results of Free Trade and of Protection, if either were universally adopted, would be pretty much the same as regarded the interchangeable value of productions. With perfect and universal freedom of trade, the very poorest among the population would perhaps pay nothing towards the taxation of the country; whereas, with Protection, everyone, from the highest to the lowest, would have to pay his quota towards it. 1384 The consequence was, therefore, that the question resolved itself into a difference of opinion as to what was the best and most proper method of raising our Revenue. It was not because we had committed ourselves to Free Trade that if we found we had made a mistake we should be ashamed of retracing our steps—because this country was two wise and too great not to renounce an error if it had fallen into one. In considering this question it must not be forgotten that the whole world was opposed to us in our ideas of Free Trade, and that even our Colonies were against us. He did not know that there was anything in the atmospheric arrangements that surrounded us, and which constituted what we were pleased to call our climate, that peculiarly fitted us to determine this question. Englishmen were equally capable of judging of this question and of holding sound views with reference to principles of political economy, whether they lived in this country, or in Canada, or in Australia. The truth was that Free Trade should be looked upon as it affected each particular nation and almost each particular trade. Inquiry had been granted in reference to sugar refining, and he did not see why it should be withheld in the present instance. Sugar refining in this country might sink without leaving scarcely a ripple on the surface of our trade; but if Cheshire or Lancashire were to sink, they would drag an enormous amount of wreck down with them; and the Returns of pauperism for February showed a terrible increase. There had been many causes in operation to produce the depression under which the country was now labouring. Extravagance was one chief cause. When times were good profits were used to extend business unduly, over-production resulted, and the markets were glutted. But worse times had come, and the purchasing power of the world had fallen off. A great part of Europe was almost ruined, and the rest of Europe seemed inclined to ruin itself as fast as possible. The vitals of foreign countries were being eaten out by the enormous Armies they maintained. The difficulties in the East, and the Alsace and Lorraine complication, which was of still greater moment, were among the principal causes of our suffering. Then, too, our workmen were improvident. Between 1869 and 1873 wages had risen from 50 to 1385 100 per cent, and now they had fallen again to very nearly their former level. But the workmen had been imprudent. He feared there was no such improvident as ours upon the face of the earth. In all foreign countries men worked longer hours than in England, and this extra time represented an enormous sum of money, which must be written off as a dead loss as against this country. Strikes had told in the same direction. In principle he was not opposed to strikes, believing them to be the only available method of adjusting the differences between capital and labour; but it was certain they had cost the country very dear. Our workmen seemed to have formed the mistaken idea that England was the only workshop in the world, and they had consequently done their best to hand over to others that monopoly in trade which they might have enjoyed themselves. In addition to all this, there was a perturbation going on in the commercial world. Trade was changing its centres and capital was shifting. He did not believe that Protection would do any good to trade, which would ultimately right itself. So far he had only spoken of commerce; but the agricultural interests were equally badly off. There had been a succession of bad harvests, and land had risen to enormous prices. This was almost the only case in which legislation might do some good. The malt tax might be repealed in order that the cultivation of barley might be rendered profitable. If that measure was desirable at any time it was more especially so now, when it was impossible for our farmers to compete with the American growers of wheat. Again, no commodity in the world had so many restrictions laid upon its sale as land in the United Kingdom, and it seemed to him that any measure which would disembarrass land from as many of these legal restraints as possible would be an immense benefit to all classes, except, perhaps, the Legal Profession. These, he believed, were some of the causes of the depression which existed. We were a manufacturing nation, and if our manufactures could not compete against those of foreign nations without some protection, they ought to have protection. But he believed we could compete successfully with other nations and at the same time enjoy the fruits of their labours, without paying the additional sum in- 1386 volved in a protective duty. We had special facilities for conveying goods and an abundant supply of coal, and as long as coal was the one thing used for fuel and to produce the motive-power necessary for working-up raw materials, so long should we be able to compete with other nations, if we worked as hard and lived as economically as they did. He had heard no proof given which showed that Free Trade was a cause of the present depression. We were suffering partly from our own faults and partly from causes which would right themselves. The present was the worst time for adopting a policy of Protection, which was at best a stimulant and drug that required most cautious use, and only in case of absolute necessity.
THE EARL OF MORLEY
said, he had listened carefully to the speech of the noble Lord who introduced this question (Lord Bateman); but he must confess he had some difficulty in making out whether he was advocating Protection or Free Trade. The noble Lord had advocated a uniform Protection in every nation as the best thing; but then he admitted that in the absence of this the next best thing was uniform Free Trade. But uniform Protection was hardly worth discussing as a practical question, and, therefore, he thought they might fairly claim the noble Lord as a supporter of Free Trade. According to the proverb, it was better to have half a loaf than no bread; but what the noble Lord contended was, that if we could not have a whole loaf we had better have none at all—in other words, if we could not have Free Trade everywhere we had better have it nowhere. No doubt, foreign protective tariffs were injurious to this country; but retaliation would only double the evil, and would be a most suicidal policy. Thanks to our present system, the depression now prevailing in the country had been mitigated, as depression never was mitigated in former times, by low prices; but if the noble Lord the Mover of the Resolution had his way, the price of almost all the products consumed in this country would be raised. And not only the "consumer," but the producer in this country would be injured; for although a protective tariff might for a time benefit the producer of certain commodities, it was quite certain that by 1387 raising the price of all commodities it would place him in a worse position than he occupied before. Thus the farmer might benefit by some protective duty for a time; but a tax on iron would run up the price of his agricultural instruments. What did Reciprocity mean? He asked, because it had not been described, and no one knew exactly what it meant. Then, how was the scheme of the noble Lord ever to be started? These were questions to which he had as yet heard no satisfactory answer. Did the noble Lord propose to tax raw products imported? If so, foreign manufacturers would more than ever have an advantage over us. By enhancing the prices at which we could manufacture articles and goods, we should positively be handicapping ourselves against the very nations with whom we wished to compete. As to food the same argument applied. By retaliatory duties, we should do ourselves infinitely more harm than the countries we wished to injure. A duty on American cotton would do far greater harm in Manchester and Liverpool than in America. It might be proposed to tax not raw products, but manufactured or semi-manufactured articles. These, however, only represented £39,000,000 out of the £400,000,000 of our imports annually, and a tax upon them would have no appreciable effect upon our foreign commerce as a whole. A tax upon American sewing-machines, for instance, could not be expected to influence materially our trade with America. The fact was, the whole theory of Reciprocity rested upon a false economic principle—namely, that the injury of one nation was the benefit of another. Was it not evident that if a tax upon French wines reduced the exports of France, by so much the less would that country be able to take our products in return? Reciprocity, in a word, was suicidal in theory, and impracticable, so to speak, in practice. At the present time, when we saw foreign nations over-burdened with their armaments, and obliged to have recourse to import duties, and when the United States and some of our Colonies were relapsing into the false economic principles from which we had happily been free for a generation, it would be more than disastrous for England to countenance Reciprocity or Protection. Now, 1388 if ever, it was necessary for us strenuously to maintain the principles under which our trade had flourished, and under which, in spite of all the noble Lord had said, it still remained preeminent in the world.
§ THE EARL OF BEACONSFIELD
My Lords, it cannot be denied that a state of great national prosperity is quite consistent and compatible with legislation in favour of the protection of native industry. That proposition, years ago, was denied; but, viewing the position of things around us, with the experience we have had of France and the United States of America—the two most flourishing communities probably in existence—it cannot for a moment be maintained that the existence of a protective system to the industry of an ancient country is inconsistent with a flourishing condition. Well, my Lords, many years ago—nearly 40—this country, which no one can say for a moment did not flourish under the old system of Protection, deemed it necessary to revise the principles upon which its commerce was conducted. There were three courses—to use a Parliamentary phrase common to those times—which were then open to the eminent man to whom it fell to solve this problem. Sir Robert Peel might, in the first place, have re-constructed our commercial system on a scale of low duties, but applied generally to every item in the tariff. In the second place, he might have endeavoured to re-construct our commercial system by those Commercial Treaties of which we have heard so much to-night. And lastly, it lay before him to take a third course, which was at once to determine to fight hostile tariffs with free imports. It is impossible to say what may have been the reasons that ultimately induced that great statesman to take the course which he pursued. I dare say, if we knew it, it probably was that the difficulties of the two other courses, with our complicated and Parliamentary system, were such that it was impossible to carry them through—that he could not found a system upon a scheme of small and universal duties, and that the attempt to negotiate Commercial Treaties at that moment upon the scale and in the number that were requisite was not possible at that particular time, and with the passionate feelings which the changes then proposed would naturally excite. 1389 The scheme that was adopted was this—that we were to fight hostile tariffs with free imports. I was among those who looked upon that policy with fear—I believed it to be one very perilous; and these feelings were shared by numerous parties in both Houses of Parliament, and by a numerous and influential party in the country. The decision of England on the question was a decision which was not hurried. Opportunity was offered to discuss it; a whole Session of Parliament was devoted to it—before the Bill which commenced, and I may say was the crown of the system, the repeal of the Corn Laws, was carried. After that, two or three years passed when the country experienced great distress in its industry—a distress perhaps not inferior to that it is now going through. There was, of course, much discontent. There was, on the part of those who had opposed the recent change, an earnest and anxious desire naturally to avail themselves of this sharp experience of the country, and obtain a reversal of the policy which, in their opinion, had produced those evils—but which were naturally not produced by the commercial changes of that day, for time had not elapsed after they had been carried to have produced the evils which were then suffered by the country. The question of Free Trade was again discussed in both Houses of Parliament. It enlisted the abilities of leading men on both sides. It was put before the country by the Press in all its forms. A Dissolution of Parliament then occurred. At the very time when there was great public distress the country had thus the opportunity of rescinding the national resolution on which the new system was based—and the country refrained from taking that opportunity to pass a verdict which would have forced a re-consideration of the new commercial policy. Many of your Lordships must know from your own individual experience that, under these circumstances, it was impossible for public men, whatever might have been their opinions upon these great commercial questions when these important changes were first introduced, to have had an open controversy for a quarter of a century. The government of the country could not have been carried on. It was necessary to bow to the decision of Parliament and the country expressed by its Representatives in both 1390 Houses, and ultimately by an appeal to the whole nation itself. That has been the state of affairs as regards the two great parties in the State, however they may have differed originally upon this subject. We have watched, not without anxiety, all that has occurred during this long period; we have modified our opinions with great precaution; we have felt the great sacrifices that were to be made for the sake of the country to the expression of the sentiments of the majority. We have not been unaware of the remarkable circumstances, such as the gold discoveries and others, that happened, which could not have been taken into calculation either by those who proposed or those who opposed the great commercial change. The country is now in a state of much suffering and some perplexity; and it is not unnatural your Lordships should be asked to consider whether the principles upon which for the last 35 years we have acted are really sound and true. The question has been brought before us by my noble Friend (Lord Bateman), who for some time has given his attention to the subject. My noble Friend read to us some extracts from a pamphlet he has written. We know he has been in active communication with experienced persons who are suffering in the present state of the country. Though I cannot agree that my noble Friend addressed us—as I fear I shall have to show—in a manner amounting to logical conviction, he at least showed us by the manner in which he treated the subject generally that it was one with which he was familiar, and on which he was perfectly justified in putting his opinions before the House. I regret to say that with most of his statements I cannot agree. I was very much struck by the course my noble Friend took. I listened to him with an attention which I am sure was not surpassed by any of your Lordships. My noble Friend took an early opportunity of saying that he was in favour of the repeal of the Corn Laws, and nothing would induce him to agree to any recurrence to our old legislation upon the subject. This statement did not seem to be endorsed by the recent remarks of the noble Duke (the Duke of Rutland), who seemed to look forward to the placing of an import duty on 1391 corn as one of the measures which might extricate us from our present difficulty and perplexity. The noble Lord who has devoted himself to this subject commenced his speech with the most formal declaration that, whatever relief might be devised for the suffering classes and trades of this country, the landowner and the farmer are to have no share in the solace and assistance which are to be found in a duty upon corn. My noble Friend proceeded to state that he was entirely opposed to all duties that were levied for Revenue, provided that they concerned the food and sustenance of the people; and he gave us one example—one of a group—sufficient in itself, the duty on tea. That, he said, is quite indefensible—why not repeal the duty on tea and put it on spirits? Four millions is a sum which I believe the most sanguine Chancellor of the Exchequer would hardly anticipate that he could raise by an increase of duties on spirits—particularly at this moment, as it is a declining revenue. My noble Friend asked why a duty on tea should be defensible, if a duty on corn of the same amount was not? I remind him that by his own position the duty on tea is a duty for Revenue, and a duty of the same amount on corn would be a duty for Protection. Having told us that he will not bring back the corn duties; that he is prepared to put an end to all duties for Revenue: and then denounced Commercial Treaties because he considered we have nothing to offer, and we never get anything by them; and having concluded that it is not by any of these the country can be saved, the noble Lord said it could be saved only by the principle of Reciprocity. Your Lordships must have hung upon the accents of the noble Lord when he promised to tell us what Reciprocity is. At one moment I thought we were to be enlightened on the subject. He gave a picturesque description of a person who had crossed his path in these investigations—he had probably lost his way—the opportunity seemed to have arrived; but it passed and it never recurred again. So far as I understand him, Reciprocity is barter. I have always understood that barter was the first evidence of civilization—that it was exactly that state of human exchange that separated civilization from savagery; and if Reciprocity is only barter, I fear that would hardly 1392 help us out of our difficulty. My noble Friend read some extracts from the speeches of those who had the misfortune to be in Parliament at that time, and he honoured me by reading an extract from the speech I then made in the other House of Parliament. That was a speech in favour of Reciprocity—a speech which defined what was then thought to be Reciprocity, and indicated the means by which Reciprocity could be obtained. I do not want to enter into the discussion whether the principle was right or wrong—but it was acknowledged in public life, favoured and pursued by many statesmen who conceived that by the negotiation of a Treaty of Commerce, by reciprocal exchange and the lowering of duties, the products of the two negotiating countries would find a freer access and consumption in the two countries than they formerly possessed. But when my noble Friend taunts me with a quotation of some, musty phrases of mine 40 years ago, I must remind him that we had elements then on which Treaties of Reciprocity could be negotiated. At that time, although the great changes of Sir Robert Peel had taken place, there were 168 articles in the tariff which were materials by which you. could have negotiated, if that was a wise and desirable policy, Commercial Treaties of Reciprocity. What is the number you now have in the tariff? Twenty-two. Those who talk of negotiating Treaties of Reciprocity, have they the materials for negotiating Treaties of Reciprocity? You have lost the opportunity. I do not want to enter into the argument, at the present moment, whether this was, wise or not; but the policy which was long ago abandoned you cannot now resume. You have, at this moment, a great number of Commercial Treaties. I will not charge my memory with stating the exact number of Commercial Treaties we have, but they are very numerous; but this I know—you have nearly 40 Commercial Treaties with some of the most considerable countries in the w?orld—the United States, Germany, and others—in which "the most favoured nation clause" is included. Well, suppose you are for a system of Reciprocity, as my noble Friend proposes. He enters into negotiations with a State; he says—"You complain of our high duties on some particular articles. We have not 1393 many, we have a few left; we shall make some great sacrifice to induce you to enter into a Treaty for an exchange of products." But the moment you contemplate agreeing with the State that you will make concessions by lowering some duties on the few articles remaining, every other of the 40 States with "the most favoured nation clause" claims exactly the same privilege. The fact is, practically speaking, Reciprocity, whatever its merits, is dead. You cannot, if you would, build up a reciprocal system of Commercial Treaties. You have lost the power; you have given up the means by which you could before obtain such a result as my noble Friend desires. But he has no other scheme to put before us but the scheme of Reciprocity, which I wish to show your Lordships does not exist. The noble Lord sneered at our last Treaty with Servia. It secures us the advantage of "the most favoured nation clause." the noble Earl who last addressed us (the Earl of Morley), showed, according to his views, the fallacy of the principle of commercial Reciprocity. I do not want to go into that part of the case. I hold myself free on that subject. But here it is a phantom. There are no means and no men, from whatever side the Government of the country may be drawn, whatever Members may form it, who can come forward now with a large system of commercial exchange founded on the principle of Reciprocity. The opportunity, like the means, has been relinquished; and if that is the only mode in which we are to extricate ourselves from the great distress which prevails, our situation is hopeless. I should be very sorry to say, whatever the condition of the country, its condition is hopeless. I have had the opportunity, and it was my duty during the last six months, to investigate the real condition of some of the principal industries of this country, and I cannot trace to our great commercial changes any of the depression and evils which they experience and complain of—except, I admit, in the case of land. I cannot for a moment doubt that the repeal of the Corn Laws—on the policy of which I do not enter—has materially affected the condition of those who are interested in land. I do not mean to say that is the only cause of landed distress. There are other reasons—general distress, the metallic changes, 1394 have all had an effect; but I cannot shut my eyes to the conviction that the termination of Protection to the landed interests has materially tended to the condition in which it finds itself. But that is no reason why we should come suddenly to an opinion that we should retrace our steps, and authorize and sanction any violent changes. This state of affairs is one which which has long threatened—it has been contemplated by many high authorities. It has arrived. I cannot shut my eyes to the fact, and we must consider every step we take with reference to it. I cannot give up the expectation that the energy of this country will bring about a condition of affairs more favourable to the various classes which form the great landed interest of this country. I should look upon it as a great misfortune to this country that the character, and power, and influence of the lauded interest and its valuable industry should be diminished and should experience anything like a fatal and final blow. It would, in my opinion, be a misfortune, not to this country alone, but to the world, for it has contributed to the spirit of liberty and order more than any other class that has existed in modern times. My Lords, I have put before you the remarks that have occurred to me on the Motion of my noble Friend. He has got hold of a very good question in the national distress; but it appears to me that before he proceeds in his adventure of finding the remedy for it, it is absolutely necessary that he should study more precision, both of thought and of language. I listened with much attention to his agreeable speech; but I really do not know what he requires. He is against Protection. I understand the views of my noble Friend the noble Duke (the Duke of Rutland). They are consistent. They are the same he expressed when seated on my right hand, 40 years ago, and he is still ready to act upon them. He is prepared to propose, and carry out, if he can, a certain degree of Protection to the land. But my noble Friend who asks us to pass this Resolution utterly disclaims that; he utterly disclaims everything but a phantom. I cannot support my noble Friend when he asks us to pass Resolutions of this grave character, and when he himself disclaims the very grounds on which he might have framed, not what I think was 1395 a correct, but a plausible case. It is a very unwise course, in my opinion, when the country is not in a state so satisfactory as we could wish, when all classes, no doubt, of the industry of the country are in a position of uneasiness—it is, in my opinion, an unwise course to propose any inquiry which has not either some definite object, or is likely to lead to some action on the part of those who bring it forward. I think it would be most unwise for us to come to a resolution to have inquiry into the causes of public distress when that inquiry is evidently one which would end only in asking questions. It would lead to great disappointment and uneasiness on the part of the country; and the classes who are trying to realize the exact difficulties they have to encounter and devising the best means to overpower and change them, would relapse into a lax state which might render them incapable of making the exertions it is necessary for them to make. Therefore, I cannot sanction, so far as my vote is concerned, the course recommended by my noble Friend. Looking into the state of the country, I do not see that there is any great mystery in the causes which have produced a state of which there is undoubted general complaint. What has happened in our commercial fortunes during the last 10 years will explain it. The great collapse which naturally followed the convulsion of prosperity which seemed to deluge the world, and not merely this country—the fact that other countries have been placed in an equally disagreeable situation, though their commercial systems were founded upon principles the contrary of our own—these are circumstances which appear to me to render it quite unnecessary to enter into an inquiry on this subject. I do not mean to say that there are not moments—that there are not circumstances—in which an inquiry by Parliament or by a Royal Commission into the causes of national distress may not be allowable—may not be necessary; but it must be a distress of a very different kind from that which we are experiencing. We must have the consciousness that the great body of the people are in a situation intolerable to them, and that no persons with any sense of responsibility would think they had done their duty without examining and reporting on the causes of it. That 1396 is not the condition of the people. That there is great suffering—that the leading personages of all classes are suffering—I admit; but the bulk of the people are in a condition which everyone must acknowledge it would be absurd to describe as one of distress and despair. I hope myself, and firmly believe, although I know that many of great authority in this matter are sceptical—I believe that there is a change for the better in the condition of the industrial world; and though, after what has been said to-night, I do not care again to talk about America, much that I hear from America confirms that belief. I am sure there will be no want of sympathy in this House with the sufferings of the people of this country; and if, to-night, your Lordships do not accept the proposition of my noble Friend, it is because—and the country will understand what is meant—it is because it is a proposition which can lead to no public benefit.
§ EARL GRANVILLE
My Lords, in the remarks I am about to make, I promise not to detain your Lordships five minutes. I listened with great attention to what fell from the Prime Minister this evening. He began by the statement that it was impossible now that anyone could deny that a nation with Protection might enjoy great prosperity. I do not deny that fact; but I equally assert my conviction that a nation enjoys much less prosperity, and suffers from greater distress, if there should be Protection instead of Free Trade at a time of depression. The noble Earl gave us an interesting account of what occurred at the time of Sir Robert Peel's commercial reforms. I did not know Sir Robert Peel at all intimately until the last years of his life; but I own I very much doubt what the noble Earl stated—namely, that it was impossible to tell why, having three courses to select from, he decided to combat hostile tariffs by free imports. My firm conviction is, though the change came gradually upon him, that Sir Robert Peel had the strongest conviction that the principles of absolute Free Trade were the right economical principles, and that their application would prove the greatest practical benefit to the country—as I am sure they have proved. The noble Earl made an apology for the inaction of his Party for the 1397 quarter of a century which followed the great change in our commercial legislation. I cannot conceive, under the circumstances of the case, that any other possible course was open to the Conservative Party. With regard to the question which has been raised this evening, I do not wish to go into the arguments which have been advanced. The noble Earl characterized the speech of the noble Lord in introducing the Resolution as an agreeable speech, though not very logical; and the noble Duke (the Duke of Rutland) stated that the noble Lord had absolutely exhausted all the arguments in favour of the course which he pursued. I am rather glad to hear that admission, because those arguments did not appear absolutely conclusive to my mind. I am a very old Free Trader now. I am not sure that I am an older Free Trader than the noble Earl, who, I believe, flirted with Free Trade before Sir Robert Peel adopted it; but my love has been of a more constant character. More than 40 years ago, in opposition to the opinions of my political Friends, I voted for the total repeal of the Corn Laws, and I never after gave a vote contrary to those principles. It is a great temptation, but I will not follow the example of some previous speakers. I am not going over again the arguments as to the exploded fallacy of the balance of trade. I do not wish to argue whether abundance is not better than scarcity—whether it is injurious to a country to have greater imports than exports. There is no question now whether abundance is better than scarcity, and whether commerce is not likely to flourish most when it is left to that free action of countries which act without any obstacle between them. I do not wish to ask whether the noble Earl was right, 40 years ago, in recommending a policy of Reciprocity. I am very grateful that that policy has not been carried out; but I am equally grateful to the noble Earl for the manner in which he exposed the proposals of the noble Lord, and for having shown that it would be utterly impossible for his Government, or any Government, no matter from which side of the House it was drawn, to have recourse, for the purpose of meeting a temporary depression of trade, to anything- so delusive as the Reciprocity recommended to us tonight. The noble Earl stated that the landed interest was exceptional, and 1398 that it was still suffering from the repeal of the Corn Laws. I will not argue this joint. The noble Earl did not give his reasons for the statement. But, primâ facie, considering the distressed state of the agricultural interest for 20 years under Protection, and the great prosperity of that interest for the last 30 years, I do not see, after a series of bad harvests, after the great perturbation, not only of Europe, but of the world—because there is great depression nowwhichcannotbedenied—Ido not see, I say, that it can be traced to the legislation of 30 years ago. Her Majesty's Government have taken rather a sanguine view of the depression which undoubtedly prevails. I think, 18 months ago, the Chancellor of the Exchequer spoke of the piece of blue sky, which has hardly since been obvious to the non-professional eye. The noble Earl treated the depression in a hopeful way, and if they will only continue to hold out hopes, at some time or other those hopes will be fulfilled. I agree with him that the depression has not been as great and severe as at some former times. There are redeeming circumstances in it, and sooner or later—it may be later, for it must depend upon political as well as other circumstances—we shall recover from a depression not peculiar to ourselves, but universal among the other nations of the whole world, and I trust we shall gradually arrive at the prosperity of a former day. The noble Earl alluded to one bright spot in the United States. I believe there is a bright spot there owing to a good harvest, while we have had a succession of bad harvests in this country. I trust that improvement may grow. At all events, I am perfectly sure that the Prime Minister has done good service this evening in putting his foot down so distinctly and so decidedly on the proposals of the noble Lord, and in showing that Her Majesty's Government does not intend to hold out any fallacious hopes in dealing with matters which must be dealt with in a different manner. Therefore, I agree with the noble Earl in negativing the Resolution.
§ LORD BATEMAN
said, that, after the speech of the Prime Minister, he should not divide the House? His main object in bringing forward the subject was to provoke discussion upon it.
§ On Question? Resolved in the Negative.