Free Trade 
 
 Under Protection 
 
 Richard Gill 
 
The original of tliis book is in 
 tine Cornell University Library. 
 
 There are no known copyright restrictions in 
 the United States on the use of the text. 
 
 http://www.archive.org/details/cu31924031187838 
 
Cornell University Library 
 
 oHn.a„? ^924 031 187 838 
 
FEEE TEADE UNDEE PEOTECTION 
 
" We do not expect perfection either in the New World or 
 in the Old. All we ask is, that when an abuse is pointed out, 
 it may be fairly and openly inquired into, and, if it be 
 proved to be an abuse, honestly abated." — John Beight 
 (Dec. 19, 1845— Speeches, p. 418). 
 
FREE TRADE UNDER 
 PROTECTION 
 
 EICHAED GILL 
 
 AUTHOB. OF 
 ' FREE TRADE ; AN INQUIRY INTO THE NATURE OF ITS OPERATION ' 
 
 WILLIAM BLACKWOOD AND SONS 
 
 EDINBUEGH AND LONDON 
 
 MDCCCLXXXIX 
 
PEEFACE. 
 
 The development of free trade may be considered 
 relatively or absolutely. "Free trade under protec- 
 tion " was the system pursued by our statesmen up to 
 1846. Amongst them, William Huskisson stood pre- 
 eminent as the first of our commercial reformers. The 
 repeal of the Corn Laws inaugurated an entirely new 
 policy. The principle of free trade, instead of being 
 controlled by the protective system, was left to act 
 without restraint of any kind. It influenced, with 
 •varying and not known degrees of power, all those in- 
 dustries which, in course of time, were brought within 
 scope of its operation. It affects our trade and com- 
 merce nowadays generally — the exceptions being some 
 few industries "protected" for the purposes of State 
 revenue. 
 
 Now there were certain steps in the process of 
 making trade more free under the system of protec- 
 tion, very liable to be overlooked. The first was the 
 subversion of the policy of prohibition. The second 
 
VI PREFACE. 
 
 was the determination of that " due and proper " pro- 
 tection which was essential to the maintenance and 
 growth of each several industry. And this is the sum 
 of Huskisson's reforms. He replaced a system of 
 monopoly (where acting injuriously to the national 
 interests) by one of protection : he defined, with refer- 
 ence to the conditions with which he had to deal, the 
 " due and proper " support which, in his opinion, was 
 necessary. But these conditions were mutable. Hence 
 the degree of protection was to be subject to alteration. 
 The more stable " young and growing " industries be- 
 came, the less would be the support they required. 
 
 But there was much confusion in Huskisson's time 
 as to the nature of his reforms. That confusion arose 
 either from the immediate misconception of the system 
 of making trade more free under protection ; or from 
 the inference that Huskisson, because he advocated 
 and carried out with advantage — always excepting the 
 silk duties — the policy of free trade under protection,, 
 was therefore an abstract free-trader — i.e., one who 
 would allow the principle of free trade to operate 
 without restrictions, if he were powerful enough to 
 effect the change. 
 
 That such was not the fact, is proved by the en- 
 deavours which Huskisson made to remove all sources 
 of misinterpretation. On one occasion he spoke as fol- 
 lows : " Looking at these difficulties with the strong- 
 est conviction of the necessity of a revision of the 
 
PKEFACE. Vll 
 
 Corn Laws, I still fear to precipitate any alteration, 
 lest it should have the effect of prejudicing the people 
 against that system which I hope to see yet accom- 
 plished, of a /ree trade in corn under due and proper 
 protection" (vol. ii. p. 387). On another occasion he 
 had to point out the difference between a free trade 
 with, and a free trade without, duties. " My hon. 
 friend has argued the question of free trade as if it 
 were the removal of all restrictions thrown in the way 
 of the supply of foreign productions to the people of 
 this country. Now this, sir, is not my view of the 
 question" (vol. ii. p. 551). 
 
 These passages suflBce to show the perplexities in 
 which the question of opening up the trade of the 
 nation was involved, as also the false notions generally 
 entertained about Huskisson's innovations. He was 
 charged with being a free-trader in the abstract. This 
 he repudiated in language both clear and distinct. The 
 free-traders claimed him as one of their adherents. He 
 replied that "his free trade" did not tally with the 
 ideas of those who condemned altogether the imposi- 
 tion of duties. 
 
 On the other hand, the protectionists accused him 
 of revolutionary innovations. As matter of fact, the 
 alterations which Huskisson effected were revolutionary, 
 but not in the sense in which the protectionists used 
 the attribute. But he simply answered, " All innova- 
 tions were not injurious." 
 
Vlll PREFACE. 
 
 Thus Huskisson was in reality no man's friend. His 
 own party feared him as a reformer, — they regarded his 
 schemes with alarm ; while the free-traders made it 
 appear as if Huskisson was one with them on the 
 matter of duties. Now nothing is more certain than 
 that his practical policy had no resemblance whatever 
 to the theoretical policy of the free-traders. 
 
 Yet an erroneous impression continues to exist on 
 this point. What is the explanation of it ? 
 
 Cobden, when (1842) he discussed the position of 
 Huskisson with reference to the Corn Laws, relied upon 
 a single statement, which he cut out of a speech (that 
 had been delivered in 1830 under extraordinary circum- 
 stances), to prove that Huskisson was in favour of the 
 repeal of the Corn Laws. It was the last utterance of 
 the great commercial reformer. An opinion had been 
 disseminated that Huskisson vacillated in his attitude 
 to the Corn Laws. That opinion had been supported 
 by what Sir Eobert Peel said concerning him. Here, 
 then, was a splendid opportunity for a man who was 
 constructing a case for free trade to drag Huskisson to 
 his side. So Cobden stated that he had found the last 
 codicil to Huskisson's will. He discovered, indeed, a 
 treatment that was likely enough to be popular. But 
 he promulgated an error that was certain to be grievous. 
 
 In fact, Cobden was guilty of just the same unfair 
 conduct as that of which he accused the protectionists. 
 They demonstrated that Adam Smith was a protec- 
 
PREFACE. IX 
 
 tionist. " Yes," Cobden said, " but only by cutting out 
 certain passages, and violently placing them together." 
 Cobden proved that Huskisson was a free-trader. How ? 
 Not by a close examination of his work, but by taking 
 a superficial and prejudiced view of it. 
 
 Circumstances in Cobden's days were favourable to 
 the success of this faulty means. There had always 
 been a party of men in sympathy with an absolute free- 
 trade policy. Such would ever be ready to accept the 
 slightest or any proof at all, so long as it advanced 
 their ends. But there was another reason why the 
 opinions of great men were subordinated to the 
 prevalent feeling engendered by the free-trade agita- 
 tion. It resided in the increased wellbeing which 
 would immediately accrue to the labouring classes 
 from the gigantic attempt of their masters to blight 
 the manufacturing industries of their rivals in all parts 
 of the world. This could not be, unless the master- 
 manufacturers had superior advantages. Thus it was 
 the interest of the town-labourers to follow the fortunes 
 of their masters, and vote for the cheap loaf. The 
 manufacturers would get what they wanted — cheaper 
 labour; the operatives — an increased value of wages. 
 For a time, then, all would work smoothly enough. 
 But how long would it • last ? 
 
 This was the turning-point of the question. The 
 labouring community was told by the protectionists 
 that, in the long-run, the foreigner would only take 
 
X PKEFACE. 
 
 gold in return for his corn. This position was laughed 
 at by Cobden, who replied that if we did not buy 
 foreign corn with our manufactures, we should then 
 have an annual present of so many quarters of wheat 
 given to us. His hypothesis was, that foreign impor- 
 tation of corn would stimulate our manufactures. The 
 more corn we purchased, the more goods we should 
 produce to pay for it. But after having got the people, 
 as he averred, ranged upon his side, what . did Cobden 
 do, when challenged by the protectionists to let the 
 problem be settled by an appeal to the country ? He 
 deplored the procedure. He charged the protection- 
 ists with preaching the democratic doctrine, that ques- 
 tions of the highest policy ought to be decided by the 
 people. 
 
 Now the fact is, that the free-trade agitation (and we 
 have it on the authority both of Cobden and of Sir 
 Eobert Peel) was supported by the gold of the manu- 
 facturers. And the fact is also, that as soon as he had 
 succeeded in effecting a split in the Ministry, Cobden 
 dispensed with the support of the " intelligent " public. 
 Not one defeat, said he, nor two, nor three, would make 
 him swerve from a belief in his principles. How can 
 the question, then, have been decided by the people ? 
 And yet it is maintained that the question was decided 
 by the people, — even more than this, that it has been 
 irrevocably settled. 
 
 But a little inquiry will lead to the conclusion that 
 
PEEFACE. XI 
 
 the manner of its decision was from above, emanating 
 from those who were most largely interested in cheap 
 bread, and not from below. It had to be made to 
 appear that this free trade was all in favour of the 
 working classes. Let us see how this was done. 
 
 " Was there ever prosperity with high price of bread ? " 
 asked Cobden, and answered, No. Whence did he draw 
 his proof? Prom the experience of thirty years, be- 
 tween 1815 and 1845, " Only make bread permanently 
 cheap, and you will raise up a permanent prosperity." 
 But he ignored the circumstance that he was arguing 
 from protective experience to free-trade results. Now 
 this statement of Cobden's may be met with its opposite 
 from Huskisson. In 1825 there existed prosperity with 
 high price of bread; in 1826, depression with a low 
 price. This is Huskisson's evidence : " A spirit of over- 
 speculation and over-trading prevailed. At that moment, 
 when the manufacturing districts were in full employ- 
 ment, when there was no complaint among the popula- 
 tion, corn was 7s. or 8s. a quarter dearer than it was at 
 present." " I know there has been a glut of our man- 
 ufactures in all the foreign markets ; and I also know 
 that if anything greatly depressed the price of corn in 
 the home-market, it would only lead to a further aggra- 
 vation of our difficulties and distresses." "Sir, I say 
 this advisedly. I say that the present average price 
 of wheat is one which could not in my opinion be 
 materially lowered, without producing more of suffer- 
 
Xll PREFACE. 
 
 ing than of relief to all classes of the community" 
 (vol. ii. pp. 549, 556). 
 
 To state that prosperity was associated only with low 
 prices of wheat was ohvionsly inaccurate. But it served 
 a purpose, as did also the assertion that in 1842 the 
 corn merchants were ruined to the extent of £2,000,000 
 by the Corn Law. And these are instances of the par- 
 tial method pursued by Cobden in order to attain the 
 desired goal. Why did he not balance all the gains of 
 the corn merchants with their losses ? Because it was 
 his object, no matter the soundness or truthfulness of 
 the means, to achieve his end. 
 
 But if the pernicious Corn Law was the direct source 
 of the loss of £2,000,000 to the corn merchant — a small 
 section of an interest — what has been the effect of the 
 want of that law upon the interest itself? Cobden 
 complained that the corn merchants lost £2,000,000. 
 But consumers gained thereby, for none of this money 
 left the country. 
 
 Now, what is the charge of the protectionist ? That 
 the want of the Corn Law caused a loss of no less a 
 sum than £425,000,000 to the agricultural interest 
 between 1846 and 1866 ; and that all this money was 
 expended abroad on the production of the first neces- 
 saries of life. 
 
 No wonder, then, that agriculture should become 
 depressed — in spite, too, of the removal of the greatest 
 burden upon the land, the destruction of the game that 
 
PREFACE. XUl 
 
 ate up its produce. Contrast this depression (predicted 
 by the protectionists) with the promises attending a 
 free intercourse in corn. "We were to grow, instead of 
 16,000,000 quarters, 20,000,000 quarters. There was 
 to ensue a demand for labour in the agricultural dis- 
 tricts. We were to be self-supporting, if we grew as 
 much as we may grow, under the gentle stimulus of 
 the imports. 
 
 Such was the line pursued to banish the fears of 
 those who, while self-interested in a universal free 
 trade, were yet averse to advance one interest at the 
 expense of another in their own country. In other 
 words, all the manufacturers indiscriminately could 
 sacrifice agriculture with very good grace. For it was 
 shown that protection was the bane of the farmers; 
 that free trade was the proper stimulus; and that if 
 agriculture did not progress under free trade, then it 
 would be the fault, not of a free competition, but of the 
 farmers' incompetency. So Cobden set up to teach the 
 farmer his trade. He must drain with tiles ; he must 
 hew down hedgerow-trees ; he must destroy the game 
 upon his land. In short, he must do everything to 
 spend capital, without looking ahead to see how it 
 shall be returned to him. This was described as the 
 essential preparation for the coming competition. If 
 he could not bear up against this, then he was told by 
 the free-trader that " he had no wish to preserve that 
 which cannot bear the healthy climate of pure com- 
 
XIV PREFACE. 
 
 petition." But how was competition to be made pure ? 
 By free trade becoming universally applied to all the 
 tariffs of the world. This was the promise held out to 
 those who trembled lest we should become isolated in 
 our arbitrary action. "What will happen, said they, if, 
 we being free-traders, other nations remain protective ? 
 One-sided, unequal, or " impure " competition. 
 
 And this is exactly what has happened. 
 
 The free -trade policy was carried by two main 
 promises : 1. That our agriculture should not suffer ; 
 2. That all other nations would become free-traders. 
 
 Neither of these promises has been fulfilled. 
 
 The introduction of free trade has been falsely 
 ascribed to the action of the masses. In reality, it 
 was effected by the Manchester (and this was the 
 manufacturing) school of economists. 
 
 But whatever part the general public took in the 
 original change, they alone will have to decide whether 
 the reform is to continue, or whether it may be reversed 
 or modified with advantage to the whole community. 
 
 E. G. 
 
 London, Novemler 1888. 
 
 PS. — The quotations from Cobden's Speeches wiU be 
 found in The Student's Edition, edited by Right Hon. 
 John Bright and Professor Thorold Eogers. 
 
CONTENTS. 
 
 CHAPTER I. 
 
 THE CAUSATION OF PBOSPERITT AND THE ANALYSIS 
 OF DISTRESS. 
 
 § PAGE 
 
 1. The causation of prosperity ..... 1 
 
 2. The analysis of distress . . .16 
 
 CHAPTER II. 
 
 FREE TRADE AND THE EQUABLE PROGRESS OP LABOUR. 
 
 3. The results of unequal competition . . . .32 
 
 4. British labour displaced by foreign produce, and not other- 
 
 wise consumed, directly prevents the labouring classes 
 from acquiring that "plenty" which it is the object of 
 free trade to afford . . . . .40 
 
 E. Cobden's errors ...... 54 
 
 CHAPTER III. 
 
 OVER-SPECULATION AND THE RAPACITY OF MANUFACTURE. 
 
 6. The sudden rises in the price of wheat due to speculation . 59 
 
 7. The "natural" protection to corn . . . .68 
 
 8. Cheap bread and the object of the Manchester school . 77 
 
XVI CONTENTS. 
 
 CHAPTER IV. 
 
 COBDEN AND BRITISH AGEICULTUEE. 
 
 9. Cobdeu as an advocate ; one-sided arguments . . 86 
 
 10. Cobden and tte future price of corn ; "protection and star- 
 
 vation'' ....... 92 
 
 CHAPTER V. 
 
 THE DIRECT EFFECT OF FREE TRADE UPON AGEICULTUEE : 
 ITS REMOTE EFFECT UPON LABOUR GENERALLY. 
 
 11. CoMen's factors for the future price of corn . . 101 
 
 12. Cobden's relation to the abundance which followed ftee 
 
 imports of corn ...... 106 
 
 13. The actual factors in the determination of the future price 
 
 of corn ....... 114 
 
 li. The free- trade idealists not in touch with what is going on 
 
 around them in the commercial world . . . 123 
 
 CHAPTER VI. 
 
 THE RELATION OF FREE TRADE TO THE HOME MARKETS. 
 
 15. The moral influence of free trade in extending our trade- 
 
 circulation with foreign markets .... 134 
 
 16. Final results of the artificial demand induced by free 
 
 trade ....... 145 
 
 CHAPTER VII. 
 
 DEMAND IS NORMAL OR ARTIFICIAL ACCORDING TO THE STATE 
 OF THE CIRCUMSTANCES SURROUNDING IT. 
 
 17. Stable force-s in operation to extend our trade other than 
 
 the insecure free-trade principle .... 152 
 
 18. What the action of free trade depends upon . .162 
 
CONTENTS. XVU 
 
 CHAPTER VIII. 
 
 FREE TRADE HAS NOT EFFECTED WHAT COBDEN PREDICTED OF 
 
 IT — (a) IT HAS NOT BECOME UNIVERSAL ; (b) IT HAS 
 
 CEASED TO BE A GOOD THING FOR US, IF EVER IT HAS 
 BEEN SO. 
 
 19. Fluctuations in price of corn not adverse to manufacture : 
 
 tendency to lower prices under protection . . 176 
 
 20. Free trade does not induce equality of surrounding con- 
 
 ditions ....... 189 
 
 CHAPTER IX. 
 
 THE NATURE OF THE CORN LAW, AND THE OPPOSITE CONDITIONS 
 AFFECTING OUR AGRICULTURE AND MANUFACTURE. 
 
 21. The Corn Law necessary to presei've a fixed portion of the 
 
 capital of the country ..... 203 
 
 22. The question of repeal not an economical, but made a social 
 
 and political question — why ? . ... 213 
 
 CHAPTER X. 
 
 BECAUSE SOME INDIRECT TAXATION IN COURSE OF TIME BECOMES 
 INJURIOUS, ALL INDIRECT TAXATION IS NOT ALWAYS IN- 
 JURIOUS. 
 
 23. Importance of the preservation of independent judgment, 
 
 and of the treatment of each problem by itself, without 
 being implicated with others with which it has no real 
 concern ....... 221 
 
 24. " Capital diverted from less to more remunerative sources," 
 
 in free-trade argument refers to commercial operations of 
 the whole world. It does not apply, except injuriously, 
 to one nation, when other nations pursue a different 
 commercial policy ..... 226 
 
XVlll CONTENTS. 
 
 CHAPTER XI. 
 
 UNIVEESAL FBEB TRADE AND BEITISH MANUFACTURING SUPRE- 
 MACY — THE IDEAL PICTURE : PARTIAL FREE TRADE AND 
 BRITISH MANUPACTDBING DISTRESS — THE ACTUAL PACT. 
 
 25. The extension of manufacture not resident in causes put 
 
 forward by free-traders — viz., foreign demand for corn. 
 Sir Robert "Peel shows that this cause is not powerful 
 enough to produce desired effect . . . 233 
 
 26. Kemote consequences of remission of duties not considered 
 
 by free-traders, who remain content with immediate 
 effects ....... 239 
 
 27. The central force controlling our trade and commerce aban- 
 
 doned by the free-traders. Cobden's so-called "natural 
 regulator " has broken down .... 246 
 
 CHAPTER XII. 
 
 THE ONE - SIDED FREE - TRADERS AND INCREASING IMPORTS : 
 "new doctrines to SUIT FRESH CONDITIONS.'' 
 
 28. Free trade does not tend to induce commercial equality 
 
 among nations whose original surroundings are unequal 251 
 
 29. Free trade does not tend to carry off supplies in the best and 
 
 cheapest fashion, as Cobden foretold. It allows whole 
 markets to become acquired by our rivals . . 260 
 
 CHAPTER XIII. 
 
 FREE TRADE AND THE PRODUCTIVE SOURCES OF THE NATION : 
 THE SUPPOSED CONFLICT BETWEEN MANUFACTURE AND 
 AGRICULTURE HAS BEEN TURNED INTO A STRUGGLE BETWEEN 
 CONSUMPTION AND PRODUCTION. 
 
 30. So far as our internal trade is concerned, free trade has only 
 
 exchanged one monopoly for another . , . 269 
 
CONTENTS. xix 
 
 31. Free trade, as practised by this country, tends to approxi- 
 
 mate the "market" to the "natural" rate of wages, 
 by increasing the competition of the labourers amongst 
 themselves ...... 277 
 
 32. The partial arguments of the free-traders . . .279 
 
 CHAPTEE XIV. 
 
 PARTIAL AND UNIVERSAL FREE TRADE. 
 
 33. Some events have fallen out according to Cobden's predic- 
 
 tion ; but not at the specified time, nor in the anticipated 
 manner ....... 285 
 
 34. Ricardo's theory of international trade criticised . . 293 
 
 35. " Free trade to remove source of wars arising from com- 
 
 mercial frictions. '' In reality, wars are due to impulse of 
 acquisition, and have reference, in the first place, to polit- 
 ical objects ...... 296 
 
 36. Comparison between reciprocity and unequal free trade 
 
 (Cobden's " ideal reciprocity ") . . . 302 
 
 CHAPTER XV. 
 
 FREE TRADE AND THE LABOURING CLASSES : THE POLITICAL 
 POSITION OF THE INCOME-TAX-PAYING CLASSES. 
 
 37. The bimetallists and the cause of depression . . 314 
 
 38. The construction of a " political power " out of monopoly . 321 
 
 39. It is more important for the labourer to regard himself as a 
 
 producer than as a consumer .... 328 
 
 Index ..... • • 334 
 
FEEE TRADE UNDER PROTECTION. 
 
 CHAPTEE I. 
 
 THE CAUSATION OF PROSPEEITY AND THE ANALYSIS 
 OF DISTRESS. 
 
 " What in me is dark 
 Illumine, what is low raise and support." — Milton. 
 
 ALL rUOSPEMTT NOT CAUSED BT FREE-TRADE PRINOirLE — THE OTHER 
 FORCES IN OPERATION, RAILWAY EXTENSION AND THE GOLD DIS- 
 COVERIES — THE INFLUENCE OF THE NEW BANK CHARTER ACT 
 (1844) UPON THE PRICE OF CORN — THE MORAL INFLUENCE OF FREE 
 TRADE IN OREATINQ AN ARTIFICIAL DEMAND — THE EXPORT TRADE 
 OF THE OOUNTBY UNDER PROTECTION INCREASED IN PROPORTION 
 TO THE INCREASE IN POPULATION — ALL COMPETITION NOT BENE- 
 FICIAL — IT WAS NOT SO IN THE INSTANCE OF THE CURRENCY — 
 COMPETITION TO BE .SUCCESSFUL MUST BE PROPERLY LIMITED — 
 COBDEN's DOCTRINE FALSE " THAT BREAD IS RAISED IN PRICE IN 
 ORDER THAT RENTS MAY BE INCREASED " — THE MEANS COBDBN 
 USED TO EFFECT A FKEE-TEADE POLICY " EVIL," BUT THE END HE 
 PROPOSED WAS "good" — OOBDEN DID NOT INCLUDE ALL FACTORS 
 IN DETERMINATION OF DISTRESS. 
 
 § 1. The causation of prosperity. — Let it be conceded, 
 then, that imder protection there was throughout an 
 equal advance in our trade, and that free trade in con- 
 
 A 
 
2 FREE TRADE UNDER PROTECTION. 
 
 junction with other forces operated to effect that sudden 
 rise which characterised the year 1850, and which was 
 maintained with but slight variation till 1866. What 
 proportion of this increase was due to the stimulating 
 influence of the free-trade principle ? For it is now 
 abundantly clear that not all this remarkable addition 
 was caused by free trade. 
 
 How did free trade effect an increased circulation in 
 the markets of this country, and those of foreign ones 
 as well ? Was this " increase " to the normal trade cir- 
 culation of the nation liable to be checked by external 
 forces, capable of being called into existence by sur- 
 rounding States ? And if so (and subsequent events 
 have proved that such an assumption, entertained by 
 the protectionists during the free-trade agitation, was no 
 trivial and unfounded one), as the principle of free trade, 
 partially carried out by this country, is thus shown to 
 be well within the sphere of other forces, over which 
 our Government cannot possibly have any control, 
 under its present commercial code, — as the principle of 
 free trade, therefore, from these circumstances tends to 
 fluctuate in its action, it becomes a very interesting 
 question from the scientific view of the problem, but a 
 very vital one from the national point, to settle what 
 determines that it shall be beneficial ; whether sur- 
 rounding conditions have so altered since the prosperous 
 period alluded to above, as to oppose a successful bar- 
 rier to its power of continuing that prosperity; and 
 whether, if this partial application of free trade to inter- 
 national commerce in the face of a commercial depres- 
 sion ^ which is assuming symptoms of an increasingly 
 
 1 "The depression in trade has ceased to be u. mere oscillation, and 
 
FREE TRADE UNDER PROTECTION. 3 
 
 chronic character, is proved to be the immediate conse- 
 quence of its adverse operation, any means to elude 
 its disastrous influence are to be discovered in the fiscal 
 system which presides over, or rather leaves uncontrolled, 
 our trade and commerce with other nations ? 
 
 But the true explanation of this rapid rise in the 
 export trade of the country, appearing so soon after the 
 introduction of free trade by the people — it was a 
 national movement, said the free-traders, and so power- 
 fully did they conceive themselves to be supported, and 
 so just and righteous was their " cause," that they arro- 
 gantly or in defiance menaced the ruling classes with 
 revolution, if they continued to oppose the measure 
 which was to bless the labouring part of the community 
 with cheapness and plenty — is not to be found in the 
 action of free trade alone. This principle, as it was 
 partially applied by us — and the free-traders did not 
 shrink from acknowledging that it was to the national 
 interest so to adapt it ^ — was the undoubted means of 
 increasing the trade activity of our markets. And it is 
 the opinion of many who have given much attention to 
 the subject, that this " additional increase " was, in the 
 very means which brought it about, beset with dangers. 
 It was an artificial increase ; it was not in the ordinary 
 or the normal ^ course of trade activity ; it did not facil- 
 
 has assumed (1886) some symptoms of a more chronic character." — Sir 
 T. H. Farrer in preface of ' Free Trade v. Fair Trade,' third edition. 
 Compare this admission with what Cobden said free trade would effect 
 for our agriculture and commerce — it was to make them permanently 
 prosperous. 
 
 1 Cobdon's Speeches — "If free trade is a good thing for us, we will 
 have it ; let others take it if it is a good thing for them. " 
 
 "^ Cf. Cobden, p. 7: "From 1831-1836, the increase of our exports 
 compared with our imports amounted to £20,000,000 official value. 
 
4 FREE TKADE UNDER PROTECTION. 
 
 itate the transit of goods from the producer to the con- 
 sumer ; it did not directly stimulate the circulation of 
 the markets. It did nothing of these things. And if 
 free trade in its unequal operation had acted alone, we 
 should have seen it limited, in the first instance, to 
 one phenomenon — that of increased production. But 
 this increased production, without the means of its 
 rapid exchange, and a stimulus to the flow of the 
 medium by which that exchange is effected, must very 
 soon have declined from the want of requisites to 
 nourish it. And those requisites are — 
 
 1. Increased facilities in carrying off goods, so that 
 they shall be within the range of the consumer in a 
 shorter time than before; and 
 
 2. Additions to the currency, so that the whole 
 amount of coin in circulation shall be largely increased.^ 
 
 But all these goods were sent to America, where they were neither sold 
 nor consumed, but despatched in exchange for hank and railway shares 
 and State bonds. This is not legitimate trade ; it is over-speculation : 
 the goods are not paid for. . . . This was a fictitious prosperity. . . . 
 Can Sir Robert Peel raise up a real prosperity, or if not, a fictitious 
 one ? In the latter case it will only lead to a recoil which wUl be in- 
 finitely more disastrous than that under which we are now suffering." 
 
 But the exports of 1860-1866 were not paid for by imports, and as 
 no money passed, according to the late Professor Bonamy Price, they 
 must have been exchanged for the stock of the indebted countries. 
 Hence, according to Cobden, this prosperity was fictitious. 
 
 It is evident that Cobden did not distinguish minutely enough be- 
 tween fictitious and real prosperity. He called that "fictitious" 
 which, in reality, was a normal prosperity. But then it was his part 
 to denounce the protective system. He never alludes to commercial 
 depression with stationary exports ; for this unfortunate association 
 never occurred during protection. He might have asked himself the 
 question, ' ' Can a nation be said to be involved in serious danger when 
 exports are not only constantly increasing, but inci-easing proportion- 
 ately to the increment of population 1 " 
 
 1 It had been held that an influx of gold would have an extravagant 
 
FEBE TRADE UNDER PROTECTION. 5 
 
 Now it so happens that just before the Corn Laws 
 were repealed, and our tariff was in process of becoming 
 a free-trade tariff, there were two factors which might 
 have been portrayed, and their consequences considered 
 by some of those who advocated free-trade doctrines, 
 and who had, as we know many of them had, the inter- 
 ests of their country solely at heart. One of these was 
 certainly within the grasp of any one who had taken 
 the trouble to look around him, and observe not merely 
 what was going on, but also to revolve what might pos- 
 sibly be the consequences of such a change in the ordi- 
 nary commercial transactions of his time. This was the 
 rapid extension of the railway system, which of itself, 
 by facilitating transit, by placing the producer and con- 
 sumer in greater propinquity, would assuredly act in 
 the direction of increasing supplies. As the demand 
 before was unsupplied, it would now tend to become 
 satisfied, so that, by thus shortening the time of transit, 
 the more durable articles of the manufacturer would 
 gain a larger market, supposing their individual con- 
 sumption to remain the same ; while the less durable 
 goods, coming under the tendency of a larger consump- 
 tion, would stiU be produced in larger proportion than 
 
 influence upon prices. But this was erroneous. Of. Newmaroh, 
 quoted from Barbour in his 'Theory of Bi-metallism,' pp. 74, 75: 
 " After a short time, the extension of commerce, the stimulus given to 
 invention and enterprise by fresh markets, and the consequent infinite 
 multiplication of transactions far exceeding any previous experience, 
 would prevent before long any undue rise of prices, by mere force of 
 increased quantity on the side of the new gold ; that most emphatically 
 the end to be feared was not that the new supplies of gold would con- 
 tinue, but that by any possibility they might fall away or cease ; and, 
 in short, that the world ought to rejoice if a new gold-field could be 
 discovered every few years." 
 
Missing Page 
 
Missing Page 
 
8 FREE TEADE UNDEE PEOTECTION. 
 
 confusing a problem, in the noble effort to establish the 
 "righteousness" of free trade. It was righteous, we 
 presume, because it was to advance the interests of all 
 classes of the community — not for a time only, but for 
 ever. In what way was this righteousness to become 
 manifested? In the destruction of foreign manu- 
 factures ! 
 
 Afterwards, free trade is found conjointly with the 
 railway system and the gold discoveries — all these 
 separate forces acting simultaneously and concurrently 
 towards the same object. But in different ways. Thus 
 the railway, by shortening the time and cost of transit; 
 and the increased amount of gold in circulation, by 
 tending to increase to the normal, a consumption which 
 had fallen below it. It will be perceived, therefore, that 
 neither of these causes of increased trade-activity tended 
 to force demand. What they both of them tended to 
 do was to satisfy a normal demand by a proper supply. 
 In the period of transition between a condition in which 
 all the demand cannot be met, by reason of collateral 
 difficulties, and that condition in which it is efficiently 
 supplied after such difficulties have been overcome, the 
 trade institutions of any nation would gradually grow ; 
 and that growth would be a normal one, in so far as it 
 is the outcome of a normal demand. The extra demand 
 being thus supplied, you would say that there is no 
 further source of its increase. But there is, or ought to 
 be one, nevertheless. And it should be provided by 
 the annual increase to our population. If we look back 
 upon the progress of our industries, with but few ex- 
 ceptions, during the protective period, we shall iind 
 that, take any year you please, and compare the exports 
 
FREE TRADE UNDER PROTECTION. 9 
 
 of that year with any one year before or after it, the 
 years before it always show smaller figures, while the 
 years following it always exhibit larger ones. And this, 
 too, in a gradual, and, as it appears, a normal ratio. In 
 other words, in proportion as our population increased, 
 so did the trade industries of the country. The demand 
 of foreign markets for our manufactures remained still, 
 on the whole, incompletely supplied, in spite of tem- 
 porary fits of over-speculation. And herein lay a 
 very potent danger. For it was to meet this demand, 
 in its entirety, that an important measure was framed. 
 If, argued Cobden, who led the manufacturers on the 
 occasion, we can supply all the demand which is thrown 
 upon us, then we shall be stimulating the manufacturing 
 industries of the country. This would be no otherwise 
 than a beneficial procedure ; because it would caU into 
 activity most of, if not all, the unoccupied labour of 
 the people. But he neglected the influence of railway 
 extension upon labour. He did not inquire how far the 
 railways would consume not only the labour then unoc- 
 cupied, but that also which would be displaced by any 
 increased production. When the problem is regarded 
 solely with reference to this point, it becomes a matter 
 of speculation how high wages would have risen — for 
 it is certain they must have risen. And this, too, under 
 protection ! 
 
 Thus the labouring part of the community would gain 
 by the result. But how was that result to be brought 
 about ? 
 
 The great drawback which prevented the master- 
 manufacturers of this country from supplying in greater 
 quantity the external markets, was the price of labour. 
 
10 FREE TRADE UNDER PROTECTION. 
 
 So they thought, and so Cobden averred.^ But the 
 reason why labour was so expensive resided, or rather 
 was supposed to reside, in the dearness of bread. It 
 was Cobden who drew attention to the phenomenon, 
 that when bread was dear wages were low; and vice 
 versd, that when bread became cheap wages rose to their 
 highest point. " Only make bread cheap," they cried, 
 and we will compete more successfully than we have 
 ever yet done with the world. Thus it appears that the 
 normal progress of our industries under protection was 
 not sufficiently intense enough for the manufacturers ; 
 and this the more especially, when they saw before 
 them fields which, under a new set of conditions, they 
 might very easily make their own. Instead, therefore, 
 of following a demand which, under the then state of 
 the manufacturing industries of the world, they mono- 
 polised, and, in all human probability, would have con- 
 tinued to do so — instead of remaining content with this 
 natural demand, they ran after an " artificial " one. 
 They commenced that pernicious system of underselling, 
 by means of an artifice, their foreign rivals. Such a 
 system may or may not be regarded as a highly moral 
 one, just according as a political or economical bias 
 may or may not procure it. 
 
 You may have before you the picture of all races on 
 this globe striving only to excel each other in the arts 
 of peace — a result which more than one enthusiast has 
 imagined (and many still imagine to this day) can only 
 be effected by the universal application of free trade to 
 
 ' " "We do not want cheap bread to compete with the foreigner. We 
 already do that. We want cheap bread in order to compete ' better ' 
 with him." 
 
FREE TRADE UNDER PROTECTION. 11 
 
 the commerce of the world. Or you may have the 
 highest belief in the universal (and purely ideal) pro- 
 position that competition drives labour and capital from 
 less to more remunerative channels.^ But neither of 
 these beliefs must blind you to the fact that there is a 
 certain period — which may be called the transition 
 period — ere these most desirable of all results can, if 
 they are ever to happen, be brought into existence. 
 You may believe that competition drives labour from 
 less to more remunerative sources, but is it not matter 
 of very serious consideration, whether you are justified 
 in enforcing this doctrine upon those who are unwilling 
 to receive it ? You may even take that doctrine to be 
 an " elementary truth," as one writer ^ in particular calls 
 it, as well as some others of a similar and ideal nature ; 
 or you may regard it as "axiomatic," as some recent 
 free-trade critics* have styled it. Such abstract rea- 
 souers would certainly be listened to, and followed, if 
 what they dealt with consisted of their own ideas 
 merely. But, unfortunately, their ideas do not conform 
 with the actual facts. And thus it is not difficult to 
 perceive that when these facts, which have undergone 
 a considerable alteration since the birth of the theory, 
 assume a fresh aspect, and sometimes a new order, it 
 is absolutely necessary to frame another theory upon 
 which to hang them together, and with which to guide 
 any subsequent policy. 
 
 ' That all competition is not beneficial was held by Lord Overstone. 
 Ho said that competition in the currency was absurd. The public did 
 not get their full share. So in the existing unequal competition, this 
 country does not get her full share. 
 
 2 John Stuart Mill. 
 
 3 Some newspaper critics on a work recently published by Blackwood 
 & Sons, entitled ' Free Trade.' 
 
12 FREE TRADE UNDER PROTECTION. 
 
 We leave this interesting point in order to inquire of 
 the free-traders upon what they founded the rectitude 
 of their doctrines. Is it the case that, in such a science 
 as that of economy, experience is needed to verify any 
 doctrine or theory which they may construct before it 
 must be put into action ? ^ Do abstract truths apply to 
 concrete sciences ? If so, are there any conditions which 
 limit their application ? 
 
 But it appears to those who have no great opinion of 
 such abstract truths, that new experiences must modify 
 old doctrines ; that what is true of a certain set of con- 
 ditions can but remain true so long as these conditions 
 continue the same ; and that anything which disturbs 
 these conditions must also disturb the doctrine which 
 they support. 
 
 Now the manufacturers in calling for the cheap loaf 
 had their own aggrandisement ^ in view, as well as the 
 material improvement of their labourers. They had 
 only to tell the working classes that the measures then 
 proposed would not only bring them a cheap loaf and 
 more employment, but also very probably higher wages, 
 and they were supported with a unanimity very rarely 
 attainable. But the reason is clear. They discovered 
 to their workmen the prospect of the promotion of their 
 self-interest. 
 
 This movement, however, of itself would scarcely 
 have been sufficient to efPect the repeal of the Corn 
 
 1 No such experience was forthcoming in the case of free trade. 
 What experience was available was only to be derived from the system 
 of making trade more free under protection. 
 
 " Cobden stated that the increased price of bread came out of the 
 manufacturer's profits. Hence, to lower the price of corn meant to 
 enlarge the manufacturers' profits ! 
 
FREE TRADE UNDER PROTECTION. 13 
 
 Laws. And it is curious to observe that no great reform 
 has ever yet been achieved without the instrument of 
 the imputations of injustice to certain interests or a cer- 
 tain party. In the instance of the Catholic emancipa- 
 tion it was the Tory party who offended. In the case 
 of the Eeform Bill it was the House of Lords which ob- 
 structed the growing liberties of the people. So on the 
 occasion of the Corn Law. repeal it was the landed in- 
 terest which was held up to the public contempt. 
 
 And it was Cobden's mission to perform this function 
 of a well-nourished and well-organised agitation. We 
 say " well nourished," because the Free Trade League 
 was handsomely supported by the manufacturers. No 
 less a sum than a quarter of a million was collected 
 during the last year of its existence. He attacked the 
 great landed proprietors of his country, not because he 
 had any personal animosities against a particular sec- 
 tion of them, but because he honestly believed that 
 they derived their high rents at the expense of the poor 
 man's table.^ He believed, and we are bound to admit 
 it in all sincerity, otherwise the extraordinary feeling 
 which he infused in his harangues, and the vain boasts 
 he uttered would count for nothing, that it was " high 
 rent " which caused the high price of corn. That any 
 man should have continued to lead so formidable an 
 
 ' The bread-tax not levied for the purposes of State, but for the 
 benefit of the richest portion of the community, p. 3. It came out of 
 the manufacturers' profits. On whom did they charge it ? 
 
 " A band of dishonest confederates leagued together for the purpose 
 of upholding the interests of one body against the general good of the 
 community. 
 
 " If this country is to be ground down by an oligarchy, it wiU be 
 mox-e honest to follow the example of the Venetian nobles." 
 
 "The landowners ground down the wages of labour." — P. 22. 
 
14 FREE TRADE UNDER PROTECTION. 
 
 agitation, under the pretext of such an egregious eco- 
 nomical fallacy, would have been astounding enough had 
 the agitator had no ulterior objects to gain. It is cer- 
 tain that Cobden was not influenced by Eicardo's theory 
 of rent, that one which is now followed by all who 
 write, and free-traders are included, on the subject of 
 economy. It is also well known to those who are con- 
 versant with his speeches, that he seems never to have 
 been more pleased and energetic than when he exposed 
 the fallacies of those who were arrayed against him. 
 But he must have caught the infection from them. 
 What would Cobden have thought of himself had he 
 been aware of the false nature of his central economical 
 doctrine — the keystone of that arch which he constructed 
 in idea to convey the people (whom he so loved) from 
 a condition of hardship to the state of plenty ? But 
 this part of the structure is undeniably unsound, and 
 wanted but the slightest pressure to give way. It falls 
 when the lesion is touched ; but the pity is that Cob- 
 den's views do not fall alone, for they implicate the 
 wellbeing of the labouring classes. He showed them 
 plenty, but there is the gulf between which he failed to 
 bridge over. And now this gulf is impassable. Is 
 there any other course open to them, but that they shall 
 regain the shelter of protection which they deserted in 
 a frenzy ? ^ 
 
 But he accused others of acting unjustly, and con- 
 
 ^ 1. "The Com taw, if it does anything, raises rents." — P. 29. 
 
 2. "If rents have increased and are increasing, then I contend that 
 this law was passed for the landlords, and that it operates for their 
 benefit and their benefit only. " 
 
 But rents rise because corn rises in price ; and corn rises in price 
 when fresh lands are brought under cultivation. 
 
FREE TKADE UNDER PKOTECTION. 15 
 
 demned them with a vigour perhaps never excelled. 
 His condemnations hecome empty — they lose that 
 righteous character which has been attributed to them 
 — when the arguments he used to silence his opponents 
 are shown to be false. Was Cobden, then, unjust to the 
 aristocracy of this country ? Did he falsely accuse them 
 of being the prime source of the degraded condition of 
 the agricultural labourer, when, in reality, these high 
 rents, which he said operated by plundering the poor, 
 were the effect and not the cause of the high price of 
 cornl^ What might be said to-day of that principle 
 which, in direct opposition to what Cobden conceived 
 would be its action, has by an adverse competition sent 
 more than half of the arable soil of England alone out 
 of cultivation, and turned out of the fields, their original 
 homesteads, those very labourers who, in Cobden's own 
 language, were degraded by the tyranny and injustice 
 of the landlords, who maintained rents at a more than 
 extravagant level, in order to be able to — pay their mort- 
 gages out of them ? 
 
 But it is of no material importance to set Cobden 
 himself in the place of the landowners, and view him 
 from the agricultural labourers' point. Under protec- 
 tion the agricultural labourers did exist in unreduced 
 numbers (though perhaps in no better condition than 
 tens of thousands of the poor at this day), let the price 
 
 1 Ricardo's doctrine, followed by J. Stuart Mill and Professor 
 Cairnos. What the Corn Law actually did, was to maintain rents at a 
 certain level. And in this process there were other results regarded 
 than the mere welfare of the landowners. There was the protection 
 of agricultural stock ; there was also the security afforded to agricul- 
 tural labour. The Corn Law had nothing to do with raising rents as 
 held by Cobden. In this Cobden is opposed by all economists. 
 
16 FREE TRADE UNDER PROTECTION. 
 
 of corn and the rent of the landlord be ever so high. 
 But nowadays many of them have been forced by 
 foreign competition to desert the soil. And why ? be- 
 cause the tenant-farmers do not find it profitable to 
 cultivate wheat at present prices. 
 
 We repeat that, at the present, it is of no use to fol- 
 low Cobden's example of arousing enthusiasm in the 
 masses, when the origin of that enthusiasm springs 
 from such impure and erroneous sources. 
 
 What Cobden effected is impossible to-day. The in- 
 telligence of the nation forbids it. Let us explain his 
 remarkable career by alluding to his short-sighted treat- 
 ment of economical problems, and to the earnestness 
 which he infused into his political aspirations. Un- 
 doubtedly he desired and strove for the greater well- 
 being of the labouring classes. And in a sense he at- 
 tained it.i But it was by means which were not only 
 unsound, but dishonest as well. 
 
 § 2. The analysis of distress. — It is common enough 
 nowadays to admit that not all the prosperity which 
 attended our commerce during the first period of the 
 operation of the free-trade principle was due to it alone. 
 But this admission, we maintain, has only been wrung 
 from the free-traders by the gradual accumulation of 
 superior proof At any rate, we have Cobden's own 
 authority for asserting that he believed, and believed 
 thoroughly, that the railway extension had but little to 
 
 ^ But it was an artificial advance. There are several ways of attain- 
 ing the same end. Some natural, others artificial ; the one set acting 
 gradually, the other suddenly and disproportionately. Cobden be- 
 lieved the true source of the regeneration of the people to be in free 
 trade. 
 
FKEE TRADE UNDER PROTECTION. 17 
 
 do with conferring prosperity upon the people. He 
 went further than this. He believed that his oppo- 
 nents, by adducing the important consequences which 
 the railway would of itself effect, — with reference to the 
 price of goods, with reference to the consumption of the 
 unemployed labour, and with reference to an increase of 
 wages brought about by an increased demand for labour, 
 — ingloriously attempted to rob his favourite principle 
 of what he considered to be its sole merit. And this 
 may further be remarked, that nowhere throughout the 
 voluminous utterances which he made upon free trade 
 or other subjects, does he ever refer to the important 
 factors of railway extension and the gold discoveries as 
 bearing upon the normal development of trade. But is 
 this surprising, when we also recall that Cobden does 
 not allude to the universal fall in prices which occurred 
 between 1828 and 1848 ? What influence would this 
 phenomenon have upon the inventions and enterprises 
 which tend to stimulate trade? Does Cobden state 
 that a contracted circulation — one in which the wear 
 and tear of the coin in use had not been sufficiently 
 met by the annual supplies of gold — might account in 
 some degree for the state of commercial affairs during 
 1837-41 ? No : and, it appears, for a very good reason ; 
 for such an explanation would not have made for his 
 purpose. It would not have strengthened his argu- 
 ments in favour of a free-trade policy. Could it be 
 possible that Cobden was uninformed of this phenom- 
 enon ? He could not then have been so extensive a 
 reader as Professor Thorold Eogers avers he was. For 
 Lord Overstone distinctly mentions the fact in a pam- 
 phlet published by him in 1841, called ' Further Keflec- 
 
 B 
 
18 FREE TRADE UNDER PROTECTION. 
 
 tions on the Currency,' and he was no mean authority 
 on financial problems. 
 
 The complex character of- the causation of prosperity 
 during the early period of free trade, we hold, Cobden 
 did not aUow. Besides the free -trade principle as 
 partially applied by us to our commerce with other 
 peoples, including our colonies, there entered into that 
 causation two very important factors. These may be 
 enumerated under the capital heads of (1) railway de- 
 velopment, and (2) the gold discoveries. And this is 
 the order in which they began to take effect. Now 
 when two or three causes are in existence at the same 
 time, it is difficult, owing to what is called by logicians 
 the intermixture of effects, to separate that portion 
 which is due to each cause out of the total effect, and 
 thereby be enabled to determine its exact value. It is 
 difficult, if not impossible, in economical phenomena so 
 to vary our results by means of experimental investi- 
 gations as to lead to accurate conclusions. Thus the 
 chances of error in ascribing any particular degree of 
 prosperity to this or that cause in combination with 
 others are manifold. Of free trade we can only say 
 this — that it caused some prosperity ; the precise amount, 
 however, is hidden in obscurity. 
 
 But the free-traders to-day are quite willing to allow 
 that free trade was not solely responsible for all the 
 prosperity which attended its early progress. "We have 
 this on the authority of Sir T. H. Farrer, and that 
 ought to suffice. On p. 8 of his ' Free Trade v. Fair 
 Trade,' he says " that the ablest free-traders — such as 
 Mr Fawcett and Mr Gladstone — are as decided as Lord 
 Penzance can be in condemning the short-sighted 
 
FBBE TRADE UNDER PROTECTION. 19 
 
 fanaticism which has too often treated our free-trade 
 policy as the sole factor of our commercial prosperity."^ 
 Then it is admitted that there was much darkness 
 hanging over the explanation "why it was our com- 
 merce so greatly prospered." Perhaps it has heen con- 
 venient to continue the error just so long as the free- 
 trade party, which became incorporated into the Eadical 
 section of the great Liberal party, thought it might be 
 prolonged without any harm accruing therefrom. We 
 suppose that even free-traders will not deny that this 
 " short-sighted fanaticism " was the principal factor in 
 maintaining the united Liberal party for so long a 
 period in power. They were upheld in the government 
 of the country on the basis of an "inappreciable" 
 error. But still, with all deference to free - trade 
 knowledge of Cobden and his speeches, included 
 amongst these short-sighted fanatics is Cobden him- 
 self. Thus it appears that the master had one expla- 
 nation of the action of free trade, and that his pupils 
 have come to possess themselves of another. Which is 
 the true one ? If the pupils are right, as they seem to 
 think, then the master was wrong. Cobden, therefore, 
 promoted the free-trade principle after the year 1850 
 under an erroneous impression. He believed that all 
 the effects he witnessed were its products, while only a 
 part of them flowed from its source. The free trade 
 which Cobden projected in idea, cannot possibly be the 
 
 1 Somo of the free-trade theorists, therefore, were wrong. There 
 seems, too, to he another modification of free-trade doctrine in process 
 of dissemination. Cohden and the late Professor Bonamy Price ruled 
 that imports are " immediately " paid for " by exports. " But since them, 
 no less an authority on economics than Mr Gladstone has ruled that " in 
 the long-run " imports and exports are equal. — 'Standard,' May 3, 1888. 
 
20 FREE TRADE UNDER PROTECTION. 
 
 free trade which his present followers are endeavouring 
 to bolster up in practice. Just in the same way as 
 Husldsson's free-trade policy was supposed to he Adam 
 Smith's free-trade policy (and as Cohden believed it to 
 be so), so now who is there but does not believe that 
 our present policy of free trade is not that which was 
 framed by Cobden ? But just in the same manner as 
 Huskisson's policy was misunderstood (and misunder- 
 stood, I believe, for the very simple reason that his 
 comprehensive commercial policy being directed to- 
 wards an imperial policy made against that cosmopoli- 
 tan tendency which is one of the ulterior objects of a 
 universal free trade), so are Cobden's arguments and 
 schemes misunderstood at the present day by those 
 who are interested in misunderstanding them. For, if 
 any one can show us where Cobden predicted that our 
 agriculture would be partially destroyed, and that our 
 one-sided free trade would remain " isolated " in the 
 international commercial policy of the world for the 
 period of nearly half a century, then it will be time to 
 step aside and to permit others to portray what Cob- 
 den's arguments were and in what his predictions con- 
 sisted. It does not take a second reading of Cobden's 
 speeches to become aware of the fact that, with regard 
 to the above-mentioned assumed predictions, Cobden's 
 own views were in direct antagonism. Does Cobden 
 anywhere assert that "free imports into this country 
 are to our interest," while surrounding nations place an 
 import on our exported goods ? ^ We know of no pas- 
 sage even where he hints at such a state of things as is 
 
 1 The reader must be careful uot to fall into error on this point. 
 Cobden said, " If free trade is a, good thing for us, we will have it." 
 
FREE TRADE UNDER PROTECTION. 21 
 
 presented in our isolated free-trade policy.^ But if this 
 policy of free trade is to effect the regeneration of the 
 world, some nation must make the start ; and Cobden 
 was instrumental in compelling the Government of his 
 country to adopt it. He saw it would be to our interest. 
 And when our free-trade success was witnessed by sur- 
 rounding nations, then he predicted that success would 
 be the harbinger for these nations to follow in our suit. 
 Such were, in truth, Cobden's anticipations ; and 
 upon them were founded his scheme of inducing all 
 nations to become free-traders, for the plain reason that 
 each would be the gainer by it. But if Cobden erred 
 in his principles, in his argument, and in his " com- 
 mercial speculations," it can scarce be wondered at that 
 the master manufacturers, who placed such implicit trust 
 in him, should have shown so great a want of foresight 
 as they have done. For the increased stimulation of 
 their trades to satisfy an artificial demand, by raising 
 railway rates, would obviously bear against them in time 
 of depression. But suppose that depression to assume 
 a serious aspect, and suppose that there are no immedi- 
 ate prospects of a remedy for that depression. Then the 
 manufacturers have to pay a far higher rate than would 
 have been extracted from them had the rate of their 
 production been regulated by " natural " demands only, 
 and not by natural and artificial demands combined. 
 
 This was in opposition to those who argued that we could not practise 
 free trade advantageously unless other nations became free-traders. He 
 referred to the transition period, in which free trade was to have a 
 stimulating influence. When other nations saw our increased pros- 
 perity, then, he said, they would become free-traders too, and within 
 a period of five years. — Cobden's Speeches, pp. 185, 201. 
 ' * On the contrary, all his arguments for free trade are based on the 
 assumption that other nations are free-traders. 
 
22 FREE TRADE UNDER PROTECTION. 
 
 This, then, is a source of loss, and it is directly traced 
 to free trade. "What would have heen the normal rate 
 had free trade been left for a subsequent and more for- 
 tunate period, when it " might " have been effected by 
 international consent ? Something below the high rate 
 which the manufacturers have been accustomed to pay 
 up to a recent period. And they have been paying this 
 high rate while their profits have been gradually re- 
 duced, by the determination of foreign nations and our 
 colonies to supply, as far as they can, their own markets.^ 
 In effect, therefore, during the latter period of our com- 
 mercial progress or retardation under free trade since 
 1873, the manufacturers have been making an annual 
 present to the railway companies. This has encroached 
 upon their profits. It was originally the tribute which 
 the stimulus of free trade contributed to the railway 
 companies. But when that stimulus disappeared — 
 when the " artificial demand," which the manufactur- 
 ers so carefully created by means of the Legislature, 
 no longer existed — then to pay for its supposed as- 
 sistance would seem a robbery. Nevertheless, and it 
 must be said to their credit, the manufacturers con- 
 tinued to pay what may be called an inconsequent 
 tax out of their own pockets. A revival of trade would 
 come about, as it came about in the former days of 
 protection, and then they would be able to reap the 
 reward of their patience. But to hope for a revival of 
 
 ' The movement against excessive railway rates forms a striking 
 commentary on Cobden's parallels. No doubt but what the manufac- 
 turers' profits under free-trade imports are considerably reduced by high 
 railway rates. Under protection, Oobden said the manufacturers' profits 
 were curtailed by the high price of bread. But they did charge them 
 then on the foreign consumer. Who bears them nowadays ? 
 
FREE TRADE UNDER PROTECTION. 23 
 
 trade under present circumstances, and to base that 
 hope upon our experience of trade depression under a 
 former and protective code, is obviously to hope with- 
 out sufficient reason of our hope ever being fulfilled. 
 There were certain causes of depression under protec- 
 tion; and as they are causes which tend to operate 
 under favourable circumstances, no matter what the 
 principle be under which our commerce is conducted, 
 they may be called " normal " causes. Such a cause is 
 speculation. While our trade flourished under pro- 
 tection, we read that its uniformly progressive course 
 was marked by periods of depression. These were in 
 nearly every instance caused by over - speculation,^ 
 which led to over-production. As a consequence, the 
 markets became overstocked; and as "demand" con- 
 tinued but slowly to advance in external markets, and 
 actually receded in the home market, owing to the en- 
 forced idleness of a larger or smaller number of labour- 
 ers, production was consequently reduced tiU an equi- 
 librium was effected between fresh supply and this new 
 state of demand. Now it was during this period of 
 diminished production that distress prevailed. But 
 who was responsible for the excessive speculation lead- 
 ing up to it ? It was not the labourers. They, indeed, 
 were content and happy so long as they were occu- 
 pied, and the recipients of fair wages; and we will 
 undertake to say that the sum of the prosperous 
 periods under protection is out of all proportion to the 
 sum of the periods of depression. But we need not 
 refer to this fact to remark that it was possible to be, 
 and to continue, prosperous under protection. Who, 
 1 The opinion of Sir Robert Peel (1839). 
 
24 FREE TKADE UNDER PROTECTION. 
 
 then, were mainly responsible for many of those inter- 
 ruptions which disfigure the upward curve of our trade 
 and commerce during protection? It was the ill-ad- 
 vised speculations of the manufacturers. It was the 
 endeavour to make fortunes out of our constant trade, 
 by giving it the character of progressing by fits and 
 starts, that all the havoc to labour directly flowed. 
 This was the fountain source of the mischief.^ The 
 markets were overstocked : production consequently re- 
 ceded. But why was the period immediately following 
 upon the distress of 1837 favourable to the deYelop- 
 ment of an agitation for reform ? There had been many 
 antecedent occasions like unto it in all respects — occa- 
 sions when the price of corn was high and the progress 
 of manufacture retarded by temporary causes. It will 
 readily be allowed that any period of distress is favour- 
 able to agitation. Then why was the question of the 
 repeal of the Corn Laws not agitated before 1837? 
 The answer is not far to seek. To conduct an agita- 
 tion with any chance of its succeeding, there must be a 
 head ; and to make it grow and develop, it must have 
 plenty of resources.^ 
 
 ' To go one step higher, these fits of speculation were more or less 
 the product of the then "improper " state of the currency. It is well 
 known that the currency was regulated according to the supposed 
 wants of commerce (Lord Overstone). When the exchanges were ad- 
 verse, the difiference was paid — not by the income of the country, but 
 out of the capital of the money merchants. Hence the various hanks 
 had to contract or exchange their issues on occasion. 
 
 2 But though the repeal of the Corn Laws had not been agitated, 
 yet it had been discussed. The London merchants in 1821 drew up a 
 petition in which the policy of free trade was advocated But the con- 
 ditions of 1821 were very widely different from those of 1837. What 
 was possible, therefore, in the former year, may not have been practi- 
 cable to many minds in the latter. 
 
FREE TRADE UNDER PROTECTION. 25 
 
 But the time at which Cohden appeared on the stage 
 of the commercial world cannot, exaggerate it as you 
 may, be called extraordinary, though the man undoubt- 
 edly was. It required to be made extraordinary by the 
 simple device of arousing enthusiasm amongst the peo- 
 ple. Nothing, we believe, can more easily persuade the 
 populace to drown all past recollections of the benefits 
 which have been conferred upon them by the combined 
 genius of their countrymen than the proclamation, 
 uttered with all the earnestness of truth, that they are 
 suffering unjustly at the hands of the ruling class. Only 
 point out to them that they are the subjects of a tyranny, 
 and they are too ready to follow you, whether you have 
 their wellbeing singly in mind, or whether you are 
 taking them by the way, in your endeavour to promote 
 ulterior and prejudiced views. But was it possible that 
 the people, lashed into a fury, should in their blindness 
 perceive the gigantic scheme which Cobden entertained, 
 and of which free trade formed but a part ? Was it 
 possible for them to detect any error lurking in the 
 reasons which ascribed their sufferings to the rapacity 
 of the landlords? Absolutely impossible. When the 
 causation of distress was so partially displayed by the 
 enlightened leader, it is not to be expected that the 
 ignorant and enthusiastic mass will be capable of im- 
 proving it. 
 
 And the causation of distress was very imperfectly 
 worked out by Cobden. Indeed, were it not for the 
 fact that the man was above suspicion in this matter, 
 and that he firmly believed he was working in the 
 right groove, any one who has read his speeches closely 
 would at first conclude that he very cleverly imposes 
 
26 FREE TRADE UNDER PROTECTION. 
 
 upon his audience. If he was convinced that high 
 rents caused a high price of corn, then he was justified 
 in following out his doctrine to its logical termination. 
 And that was, " You must reduce rents." But we may 
 here remark that the evU consequences of that econom- 
 ical fallacy have not fallen upon Cohden's own head. 
 We cannot blame Cohden for pursuing a mistake, since 
 its nature was undiscovered by his opponents. But it is a 
 very strange circumstance that the adherents of Eicardo, 
 who gave what is regarded nowadays as the true defi- 
 nition of rent, should have allowed what to them must 
 have appeared untrue to pass without a challenge.^ We 
 say that for an erroneous fact or proposition no man is 
 to be blamed if he uses it in good faith, though its con- 
 sequences may be disastrous. But where censure must 
 be bestowed is when any one, instead of taking a large 
 view of the subject under consideration, confines him- 
 self in a narrow circle. And we think it cannot be 
 questioned that Cobden did not make a comprehensive 
 study of the important subject of distress. He did not 
 even include all the facts which determined distress at 
 the time, though he might have done. His conclusion, 
 therefore, must of necessity be unsound. It might 
 refer to a part, but it could not explain the whole of 
 the distress of that period. 
 
 1 Admit that the Com Law did in the first instance increase rent, by 
 maintaining prices ahove what they would have been without protec- 
 tion. From this admission, which is true, Cobden inferred that rents 
 were afterwards raised by the landlord, in much the same way as by 
 an Act of Parliament, and that in consequence the price of corn was 
 raised. This is false. It is altogether opposed to the facts. Rents 
 did rise, as Cobden said they did ; but the average price of corn 
 during periods of ten years from 1815 to 1845 fell, as shown by the 
 gradual reduction in the amount of protection afforded to agriculture. 
 
FREE TRADE UNDER PROTECTION. 27 
 
 There happened to be in existence during the whole 
 of the time Cobden agitated, and up to 1850, aU the 
 evUs which ensue upon a contracted currency. They 
 were caused by the scarcity of gold. Too little gold 
 circulating throughout a community is followed by the 
 diminution of exchange ; it causes also the paralysis of 
 enterprise. Does Cobden ever refer to this as a special 
 cause in the production of distress ? We cannot find 
 any. Will it be doubted that this contraction of the 
 currency would increase existing distress arising from 
 another cause ? But this source of distress, originating 
 in the scarcity of gold, is beyond the power of man to 
 remedy. He may devise some scheme by which the 
 currency shall be artificially enlarged, as the bi-metal- 
 lists propose, by creating a gold and silver standard. 
 The other source of distress, however, arises from over- 
 production. And the effects of that would be removed 
 in the course of time. It appears, then, that Cobden 
 mistook the nature of the distress which accompanied 
 the early part of the free-trade agitation. He ascribed 
 a complicated result to a single cause.^ As matter of 
 fact, that complicated result was the product of two 
 causes at least. A third one — the distress induced by 
 deficient harvests — we leave aside for a time. There 
 were then in existence the evils of (1) a contracted and 
 abnormal currency ,2 (2) of over-production, and (3) high 
 rents, inducing high price of corn. But as Cobden still 
 persevered in his attempt to repeal the Corn Laws, the 
 
 1 It is important to notice Cobden's treatment of the nature of dis- 
 tress and the causation of prosperity. AU distress was due to one 
 cause. AU prosperity was the effect of free trade. 
 
 '■^ The abnormal currency acted most injuriously ou agricultural 
 prices. 
 
28 FREE TRADE UNDER PROTECTION. 
 
 only cause left to him was " high rent," as he did not 
 recognise the contraction of the currency or its improper 
 state, for the markets had once more assumed a vigor- 
 ous tone, and the export trade of the country stiU con- 
 tinued to increase. The revival of trade began in 1841, 
 and Cobden expressed a wish in 1843 that the ensuing 
 prosperity might be real, and not fictitious. He ad- 
 mitted the revival, but qualified it as being partial. 
 He wished he could say it was general. The cause, 
 however, of this partial revival resided, according to 
 him, in the low price of wheat. But how can it be pos- 
 sible that any very serious amount of distress could be 
 prevalent when the export trade of the country was in 
 the ascendant ? How, too, could high rents be respon- 
 sible for aU the distress of the nation, when by far the 
 larger part of that distress was removed without rents 
 undergoing any change ? Still there was distress. That 
 is undoubted. But it was a peculiar distress, arising 
 from the contraction of the currency. Cobden did not 
 observe this ; but attributed the hardships which the 
 poor continued to suffer, but in less degree, to a false 
 cause. He ascribed them to the grinding tyranny of 
 the rich. Under these circumstances, had Cobden been 
 aware of the paralysis of enterprise, and the diminished 
 exchange which a contracted currency inevitably 
 creates, would he have considered that small residuum 
 of distress which remained after all the rest had been 
 accounted for, a sufficient basis on which to continue 
 his agitation ? In reality, this it was which supported 
 him in his subsequent career, up to the time when he 
 succeeded at last in convincing, as it is supposed he 
 convinced. Sir Eobert Peel of the paramount necessity 
 
FEES TRADE UNDER PROTECTION. 29 
 
 of repealing the Corn Laws in order to remove distress. 
 All the other support he received was given on a false 
 hypothesis. And it was a very considerable support. 
 Would that support have been as considerable as it was, 
 had the precarious nature of the evidence upon which 
 it was given been recognised ? 
 
 Thus the situation was a profoundly intricate one ; 
 and yet Cobden treated the problem as if it were the 
 simplest in the universe. He assumed the success of 
 free trade as a foregone conclusion. It was but a part 
 of a large scheme which he contemplated, of making 
 government more simple, less expensive, and more 
 efficient. To us it seems that he completely ignored the 
 economical aspect of many problems in his endeavour 
 to attain advanced political positions. But "by his 
 fruits ye shall know him." And it is well for the secu- 
 rity and progress of all sections of English society that 
 one part of a gigantic scheme has been tried and found 
 to fail. For if part of the huge fabric which Cobden 
 ideally constructed has broken down, what may be said 
 of the probable success of the rest ? 
 
 No one, I think, would have deplored more than 
 Cobden would have done the disasters of his error. If 
 he could speak with such emotion against the evils of 
 the Corn Laws, with what vigour he would have railed 
 against a partial free trade we can easily imagine. 
 But he could not foresee all the results of his partial 
 free-trade policy ; he could only infer what some would 
 be ; and the others — well, they would be left for time 
 to unfold ! Did past experience afford him any assist- 
 ance in deducing what would assuredly be the conse- 
 quences of an uncontrolled free trade in the case of 
 
30 FREE TRADE UNDER PROTECTION. 
 
 those of our industries which were not yet mature 
 enough to withstand the onslaughts of a foreign rival ? 
 Did he recall to mind the unfortunate results of Huskis- 
 son's policy in 1824 with regard to our silk markets ? 
 Here there was a case which might have allowed him 
 some scope for contemplation, when he was considering 
 the effects of the application of free trade ^ to young and 
 growing industries, without a due and proper protection. 
 Huskisson, in reducing the silk-duties from the level 
 of prohibition to what he deemed a due and proper 
 protection, erred not in the object which he had in 
 view, which was a meritorious one, but in the means by 
 which he attempted to effect it. His policy was to 
 stimulate the silk trade by means of foreign competi- 
 tion. But instead of stimulating, he paralysed. The 
 English silk manufacture, though protected by a duty 
 of 30 per cent, could not hold the field against her 
 French rival. And the result was, practically, the de- 
 struction of the hopes of our silk market. This was 
 the experience which Cobden might have derived from 
 a past experiment in the direction of free trade. In ad- 
 vocating the principle of free trade, he was only aware 
 of ideal consequences ; all the practical results of it he 
 could not know, and did not get to know. But the 
 abstract method, by which free trade came into being, 
 has its uses, and most important ones they are, for with- 
 out it, we should scarce have any progress in the world. 
 It has its dangers as well. For when we abstract, we 
 assume a certain state of surrounding conditions. Such 
 
 ' Practically, Huskisson's measure was free trade, though nominally 
 it was an attempt to make our silk industry more free, but still sub- 
 ject to protection. 
 
FREE TRADE UNDER PROTECTION. 31 
 
 conditions may at the time be imaginary: they inay 
 come into a future existence, just as Cobden anticipated 
 that free trade would become universal ; or they may 
 already exist, and be liable to aU kinds and degrees of 
 fluctuation. The method, therefore, it will be uni- 
 versally admitted, must have limits prescribed to it. 
 And these limits in economy are what experience has 
 already brought to light. The question is, " Whether 
 Cobden stepped over these limits ? " Had he revolved in 
 his mind all the possible positions his country might 
 be placed in, owing to the varied, and perhaps varying 
 attitudes of surrounding nations ? Did he believe that 
 in all these positions the commerce of the United King- 
 dom would stand triumphant ? Or did he quickly dis- 
 pose of all doubts by vainly assuming that if free trade 
 were carried in his own country, nothing could prevent 
 it from being put into operation by every other people ? 
 Now it is our opinion that the same defect which 
 characterised Cobden's explanation of the cause of dis- 
 tress, likewise disfigures his anticipations respecting 
 the future policies of nations. He was of a confident 
 and emotional turn. He jumped to the conclusion 
 there was only a single cause of distress, and that he 
 placed in high rents. And he likewise jumped to the 
 conclusion that foreign nations would become free- 
 traders. 
 
32 
 
 CHAPTER II. 
 
 FREE TRADE AND THE EQUABLE PEOGEESS OF LABOUE. 
 
 "... Being, in fact, consistent in nothing excepting in liis otstinate 
 determination to follow the opinion he had once formed, in every situation 
 of things and through all variety of risks." — Sir Walter Soott (charac- 
 ter of Charles the Bold). 
 
 oobden's fe.ee tkade ebduced to a system of febe impoets into 
 great beitain and lebland — how unequal competition is 
 pbaotised to oue disadvantage — depkession under free 
 trade cannot be compared with depression under protec- 
 tion — the " peculiar " features of free-trade depression 
 — the chronic character of its symptoms admitted by the 
 free-traders — "free trade and plenty" — "plenty" de- 
 pends upon the ability to buy — wages-fund of united 
 kingdom impaired by british employment of foreign labour 
 — relation of excessive railway rates to depression — free 
 trade and reduction of wages — the tendency towards high 
 wages when labour is fully occupied. 
 
 § 3. The results of unequal competition. — Now it is a 
 matter of the first importance to recognise the course 
 which our whole trade has taken, and is taking, under 
 the supposed benign influence of a system of free 
 imports. For it is to this that the full operation of 
 free trade, as now practised, amounts. We are not 
 blessed with that universal free trade which Cobden 
 
FREE TRADE UNDER PROTECTION. 33 
 
 anticipated for us. Of this the abstract free-traders of 
 the present day are well aware, and therefore, with 
 some degree of propriety, they have changed their front. 
 So far as they regard the problem (in opposition, let 
 it be observed, to Eichard Cobden), it is really of no 
 moment whether we have a universal free trade or 
 not.'- They are quite convinced that free trade reduced 
 to a system of free imports is, under the present circum- 
 stances, best for their country ; and their grounds, that 
 the country is flourishing under this system of free 
 imports, and that there is every reason to be and 
 remain contented.^ The differences in the conditions 
 between what Cobden predicted and what his followers 
 are compelled to adhere to will readily appear, to any one 
 who cares to ascertain them, fairly pronounced. And 
 we leave the free-traders of to-day to reconcile them. 
 
 But this system of free imports may perhaps be best 
 illustrated by the following simple figure. Suppose 
 there are two fields, not very far apart, containing 
 merchants who are bartering their goods. If you may 
 enter either of them without payment, then, as a free- 
 trader, you would infer' a condition of equality. But it 
 so happens that in the case of one of them the advan- 
 tages have been so great that the merchants in it can 
 produce their goods at a less cost than their neighbours. 
 In the hope of crushing their rivals, these merchants 
 proposed that all previous taxes upon merchandise — 
 and food was regarded as the chief of raw productions 
 — should be abrogated, and they succeeded in abolishing 
 
 1 All Cobden's arguments for the utility of free trade are founded on 
 the assumption of its being universal. 
 
 2 Sir T. H. Farrer in ' Free Trade v. Fair Trade. ' 
 
 C 
 
34 FJREE TRADE UNDER PROTECTION. 
 
 their own. It may also be remarked that the surround- 
 ings of their various industries varied greatly, and that 
 out of the disturbance induced by a change in their 
 mutual commercial policy, the predominant manu- 
 facturers of the one nation would secure a certain 
 market in the other, while the latter would in exchange 
 supply the former with an equivalent of corn. There 
 would be a displacement of labour ; but while the 
 manufacturing country would monopolise the markets 
 of their rivals, the latter, it was intended, should only 
 be permitted to export just enough corn as would 
 ensure " cheapness and abundance " to their foreign 
 brother labourers. This was again and again main- 
 tained : that by a free importation of corn, not a single 
 acre of land would be thrown out of cultivation.^ But 
 in spite of the opinion that both parties would be 
 gainers by the change, and in spite of the apparent 
 simplicity of the new policy, the neighbours of the free- 
 traders came to the conclusion that the importance 
 of home manufactures was very great ; and therefore, 
 instead of following in the paths of their " generous " 
 rivals, who were quite willing to take in return for 
 their own goods the "natural" productions of a 
 growing community, they not only maintained the 
 existing duties, but in most instances increased them 
 
 ' " We have no reason to fear foreign competition (in corn) it restric- 
 tions are removed." — Cobden, p. 142. "1 have never been one who 
 believed that the repeal of the Corn Law would throw an acre of land 
 out of cultivation." — P. 52. Cobden's attitude towards those who con- 
 cluded differently to him : ' ' These philosophers, so profoundly ignorant 
 of what is immediately around them, but who meet us at every turn 
 with prophecies of what is going to happen in the future, will tell us, 
 forsooth, that free trade will throw their land out of cultivation, and 
 deprive their labourers of employment." — P. 63. 
 
FREE TRADE UNDER PROTECTION. 35 
 
 to such a point as to exclude all foreign wares — that is, 
 the balance, after the home markets had supplied the 
 home consumer according to their ability, was only open 
 to the competition of foreign producers. Every facil- 
 ity was thus afforded to the home producer. He has 
 a certain market for his goods, but he cannot supply 
 it completely. His supplies fall short of the home 
 demand. Is there a tendency here in existence which 
 stimulates the home manufacturer in his exertions, so 
 as to equalise the home supply and demand ? And 
 yet the economists who presided over the fortunes of 
 the merchants of their rivals, the free-traders, assert 
 that by Act of legislation you cannot create tendencies, 
 and therefore that you cannot promote trade.^ 
 
 But while the home supply is gradually approaching 
 the home demand, the foreign imports will gradually 
 decrease, and finally disappear ! Then the free-trade 
 economists come forward and say that their merchants 
 must find other markets. 
 
 If, then, the merchants in one field have to pay a tax 
 before they can enter their goods for barter in the other, 
 while their rivals are permitted a free entry, it would, we, 
 think, appear to most people who are not biassed by the 
 ideal views of free-traders that the conditions are very un- 
 equal. Now the idealists assert that " exchange implies 
 equality of value." And thus the free-trade merchants 
 receive the value of their goods, minus the tax which 
 they pay for being allowed the privilege of selling in a 
 foreign market. And thus they contribute indirectly to 
 the exchequer of other nations. 
 
 ' Cobdeii said, "You cannot by legislation add one farthing's 
 worth to the wealth of the nation." — P. 197. 
 
36 FREE TEABE UNDER PROTECTION. 
 
 But it will be offered in reply, that no matter the in- 
 equality, our free-trade merchants had the balance of ad- 
 vantages, in so far as they could produce at a cheaper rate. 
 
 But to understand the gradually changing relations 
 which take place between rival industries, you must 
 closely watch their respective developments. It will 
 then be seen that the protected industries have every- 
 thing to assist them ; their surrounding circumstances 
 are favourable ; they have a greater demand than they 
 can at present supply : while the free-trade industries 
 are in the meanwhile becoming trammelled by reason of 
 the fact that " that artificial demand " which was made 
 for them by legislation, and which was expected to 
 become a " constant " demand, is gradually being re- 
 moved from their grasp. 
 
 But this is not the only obstacle which the free-trade 
 merchant has to encounter. How far he has been re- 
 sponsible for the extensive growth of manufactures in 
 other countries in his " eager endeavour " to destroy 
 them, we need not here inquire. But there can scarce 
 be a doubt that by affording his rivals such indirect 
 assistance (and it has rapidly accumulated and assumed 
 a serious magnitude), he has eventually, within a much 
 shorter time, become the source of those trade difficulties 
 with which at present he has to deal. And one of those 
 difficulties is this : that the foreign manufacturer whose 
 goods have improved and are improving now undersells 
 him in his own market, after having in the first place 
 wrested some external markets from him.^ 
 
 ■' («) Sugar-refining industry ; (J) iron and steel industries— rails, 
 knives, razors (imported in the "rough" from the Continent and 
 finished in Sheffield) ; (c) the carrying ti-ade ; {d) the silk trade ; (e) 
 the agricultural industry — wheat, butter, eggs, cheese, hops, &o. 
 
FREE TRADE UNDER PROTECTION. 37 
 
 It seems, then, that the balance of advantages has 
 turned in favour of the foreigner. He can produce 
 goods of the same quality, and at a cheaper rate. He 
 is not burdened with taxes at our ports ; but our 
 manufacturers have still to bear the burden of foreign 
 duties. 
 
 Are the merchants in these fields under equal condi- 
 tions ? If not, in whose favour is the unequal com- 
 petition ? 
 
 With such a condition of commercial affairs as this, 
 there was only wanting one element ere a period of 
 depression would arrive — and that element, time. We 
 have been suffering from a depression of trade for 
 many years. The year 1875 may be taken as the 
 starting-point of an actual general decline ; for it is 
 from this period that imports begin to preponderate 
 over exports. But we must not be oblivious of the 
 fact that agricultural decline commenced from the 
 very day when a free intercourse in corn came into 
 operation, and has constantly and steadily been in- 
 creasing.^ In short, it is even said by the champion 
 of the free-traders,^ that " the depression has assumed 
 (since 1880) symptoms of a more chronic character." 
 If by this expression he intends to say that the means 
 of recovering are not obvious, then we agree with him. 
 
 1 With the excoption of 1854-57, in which period the national agri- 
 culture received an unexpected stimulus from the contraction of corn 
 imports. Did the country lose anything by this increased activity ? 
 It is true the price of wheat rose ; but did the manufacturing indus- 
 tries suffer in consequence ? The export trade points to the conclusion 
 that they did not. Then why cannot "corn imports" be properly 
 reduced to-day ? 
 
 2 Sir T. II. Farrer, in 1885. 
 
38 FEEE TRADE UNDER PROTECTION. 
 
 It is certain that the present depression has no proto- 
 type throughout the whole history of protection ; for 
 all paroxysms of depression during that era continued 
 for no greater length of time than from three to five 
 years. Besides, you could, in the majority of instances, 
 certainly predict its termination, as the cause ^ was 
 understood. But as to the present depression, it has 
 lasted at least twice as long, since the date at which 
 Sir T. H. Farrer first observed serious signs, as the most 
 severe trade depression under protection. And it has 
 a few features which are new to those who have taken 
 the trouble to analyse it. Thus it has struck in turn 
 at every branch of industry thi'oughout the country. 
 Its progress has been gradual, in contradistinction to 
 the sudden paroxysm under protection ; and its effects 
 have accumulated aud are still accumulating. 
 
 The abstract free-traders allow the depression ; but 
 they explain it away by stating that " it is ' in the ordi- 
 nary course of affairs,' that just as you had, and were 
 to expect, periods of depression under protection, so you 
 must not be surprised if depression overtakes you in 
 the progress of free trade." ^ 
 
 But we are not to be imposed upon by these or 
 any such statements, issuing from the mouths of 
 the staunchest free-traders. There are a good many 
 people who have already arrived at a frame of mind 
 which does not suffer them to be any longer amused or 
 astonished at the most wanton, though a few are ideal, 
 
 ^ (a) Pressures in tlie money market, leading to depression of manu- 
 facture ; {b) money at low interest, leading to over-speculation. 
 
 ^ But the reader will remember that Cobden stated free trade was 
 to raise up a permanent prosperity for us. It was to do away with all 
 that fictitious prosperity occurring under protection. 
 
FREE TRADE UNDER PROTECTION. 39 
 
 assertions of abstract free-traders. Nobody needs to be 
 informed that there are " normal " tendencies towards 
 depression, whether trade progresses under protection 
 or is retarded ^ under free trade. These are inevitably 
 bound up in the transactions of commerce ; they are 
 the outcome of these transactions, and are minor causes 
 operating under the influence of a major principle, 
 whether that principle be protection or free trade. 
 
 Now the point which the free-trader refrains from 
 discussing is the character of the depression ; and this 
 is the very point round which the whole of the dispute 
 revolves. The abstract free-trader claims that the pre- 
 sent depression is in all respects comparable to those 
 which occurred during the reign of protection. It is 
 here that the protectionist joins issue with him, and 
 asserts the very contrary, and for these reasons. The 
 conditions now which surround our trade are not the 
 same as they were when under the control of protec- 
 tion. Therefore to draw the same conclusions from the 
 present state of our trade as we were wont to do when 
 those conditions were modified by protection, is obvi- 
 ously illogical, and would not be done unless there 
 were some ulterior purpose to justify it.^ Free trade, 
 as partially practised by this country, has entirely dis- 
 arranged those surrounding conditions, from the exist- 
 
 1 Our agricultural industries were checked from the very first ; our 
 mnnufaoturos were primarily stimulated (by the moral influence of free 
 trade amongst other causes) ; they are now in a state of depression, 
 
 " Of a political nature. A party in the State has become powerful 
 by the diffusion of free-trade doctrines, and it is to their interest to 
 uphold the principle in all its integrity. It will, perhaps, appear to 
 some that " the question " of free trade "is fraught too 'deeply with 
 ruin to their cause for them to give a fair opinion on it." 
 
40 FREE TRADE UNDER PROTECTION. 
 
 ence of which we could predict a complete recovery 
 under protection. And the problem to be solved is 
 whether free trade, though it could not stamp out 
 normal causes of distress, has or has not introduced, 
 by the disorder which it has created, a new and a 
 predominant one. 
 
 § 4. British labour displaced hy foreign 'produce, and 
 not otherwise consumed, directly 'prevents the labouring 
 classes from acquiring that "plenty" which it is the 
 object of free trade to afford. — You cannot deny the 
 change in surrounding circumstances ultimately in- 
 duced by free trade. With that change there has 
 gradually appeared signs of distress, which have 
 increased, and are increasing. What is the exact 
 amount of distress prevalent is difficult to ascertain. 
 But that it is very great, and of dimensions large 
 enough to form the subject of a parliamentary inquiry, 
 there can be no doubt in the minds of those who 
 closely follow all the collateral forces which free trade 
 has brought in its train. 
 
 But there is one point bearing on the association of 
 free trade with cheapness and plenty which we cannot 
 forbear to mention. Every one who knows what 
 Cobden's opinions are, from a study of his speeches, 
 will recollect that the powerful agitator connected 
 free trade not with cheapness only but "abundance" 
 as well. He is very clear upon this.^ Free trade 
 
 ' P. 105 : " We do not seek free trade in corn * primarily ' for the 
 purpose of purchasing at a, cheaper money rate ; we req^uire it at 
 the natural-price of the world's market. Whether it becomes dearer 
 with a free trade, or whether it becomes cheaper, it matters not to us, 
 
FEEE TEADE UNDER PROTECTION. 41 
 
 tends to produce cheapness,^ he asserts, and very con- 
 fidently too ; but he does not bind himself to mean 
 that it will cheapen all articles: there may be some 
 disturbing cause which intervenes to raise prices. 
 But the chief, the sole, almost the sublime object of 
 free trade was, as he put it, to produce "abundance." 
 This is the ground which he fell back upon, when 
 charged by his opponents with attempting to effect 
 a general fall in prices.^ It would not, this free 
 trade of his, cause a reduction of price in all arti- 
 cles. Of that he was well aware. But he must 
 have some specious argument by which to prevail 
 upon the ignorant. And thus it was that Cobden 
 promised the working classes " abundance." An 
 abundance, it is to be remembered, which was not 
 to interfere in the slightest degree with home pro- 
 duction of corn ! 
 
 Now it is not our object to argue that free trade 
 does not tend to procure "abundance." For that is 
 the true way of stating Cobden's proposition. What 
 is our purpose is to show — 
 
 1. That the consequent, " abundance," is altogether 
 dependent on the favourable nature of surrounding cir- 
 cumstances for its production by free trade ; and, 2. That 
 
 provided that the people have it at its natural price, and every source 
 of supply is freely opened, as nature and nature's God intended it to 
 be." P. 62 : " What do free-traders want? Not cheap corn merely, in 
 order to have low money wages, but plenty of corn — the price of wHeh 
 must find its natural level in the markets of the world." 
 
 ' The reader will observe that "cheapness " is a political as well as 
 economical element. 
 
 2 P. 73. " For assuredly ho took the least comprehensive or statesman- 
 like view of his measures when he proposed to degrade prices, instead 
 of aiming to sustain them by enlarging the circle of exchanges." 
 
42 FREE TRADE UNDER PROTECTION. 
 
 " plenty," the great end of the free-traders, was achieved, 
 and is yet being attained, through means diametrically 
 opposed to those portrayed by Cobden. Did he not 
 honestly declare that the stimulation of a foreign com- 
 petition in corn would compel British farmers to expend 
 more capital on the soil, and employ more labour, in 
 order that they might produce at least one-fourth more 
 than they grew under the system of protection ? ^ Did 
 he not assert that, rather than fear the result of being 
 swamped with foreign corn, we should become a corn- 
 exporting country under free trade ? ^ 
 
 Free trade will undoubtedly attract an abundance of 
 food to this country, if only there is the demand for it, 
 • and such a demand continued during our manufactur- 
 ing prosperity. But it will be said there is ever a 
 demand for food. Not, however, in the economical 
 sense. The free-trade economist's notion of demand is 
 something more than a mere desire. There must be 
 existing, with this desire, the ability to pay for what 
 you want. Obviously, therefore, if the labouring classes 
 are to continue demanding food from the western 
 hemisphere, and to enjoy an abundance of it, they 
 must possess the means of acquiring it. That is, they 
 must be efficiently employed. What are the facts ? 
 Do you admit that, from a comparison of the export 
 with the import trade, the labour of this country suffers 
 a very serious loss ? and one, too, which there is pro- 
 per ground for assuming, is increasing. If that is the 
 fact, and it is not in the mere statement of the precise 
 
 ' Cotden's Speeches, p. 51. 
 
 2 Ibid., p. 115: "Wo should be a, corn-exporting country if we 
 grew as much as we may. " 
 
FEEE TRADE UNDER PROTECTION. 43 
 
 amount, however important in many respects, that you 
 will be able to adduce sufficient grounds for advocating 
 what must always be on such occasions a partial 
 policy — you must inquire into tendencies ; you must 
 ascertain whether any of these are in active operation 
 at the'present ; whether these checks which previously 
 impeded them from coming into action are in process 
 of being removed. Such being the fact, it is clear that 
 the wages-fund of the United Kingdom must be de- 
 creased. And if decreased, it is not an improbable 
 inference that the ability of the labouring community 
 to pay their way is diminished. 
 
 Is there anything to support this conclusion? Let 
 us make a reference to the imports of corn during the 
 last few years, and you will perceive that, though these 
 imports have been increasing, as our fields have been 
 turned out of cultivation by adverse competition, yet 
 that they have not been increasing sufficiently enough, 
 not even for the supposed necessaries of the existing 
 labouring class, much less, then, for that increment 
 which is constantly enlarging their numbers. Take the 
 figures of last year, and you will at once perceive that 
 there is a deficiency in the normal amount of wheat — 
 to be consumed on free-trade principles in the country 
 at the average of 5.65 bushels per head of the popula- 
 tion — of just two millions of quarters.^ 
 
 And we may here point out to the free-trader the 
 important distinction to be made between giving the 
 labouring masses facilities for procuring abundance, and 
 interfering with the very means which are to procure 
 such abundance. In other words, to indicate the erro- 
 1 Letter of Sir J. R. Lawes to ' Staiulavd,' October 1887. 
 
44 FREE TRADE UNDER PROTECTION. 
 
 neous and dangerousi. course which was pursued when 
 " cheapness and plenty " were sought without reference 
 to demand for labour. It was not the first occasion 
 when cheap provisions, the importance of which was 
 recognised by Huskisson, became the care of the legis- 
 lator. That distinguished statesman spent the whole of 
 his official life in the endeavour to secure steady prices 
 to the consumer. He set aside all schemes which, 
 however much they might cheapen food, tended to 
 encroach upon demand for labour. Cheapness, he 
 asseverated, was a very good thing when associated 
 with demand ; but " cheapness without demand was a 
 sign of distress." He foresaw the influence which cheap- 
 ness in itself, without being related to production, would 
 have upon demand. Contrary to the free-trade policy, 
 Huskisson conserved the sphere of demand. " You must 
 not," he said, "injure demand by cheapening food." 
 Cobden said, " Make bread cheap, and let demand take 
 care of itself." 
 
 But what can be more absurd than to accuse the 
 free-trader of independence? Was it not to unfetter 
 industries — to allow of labour pursuing its " natural " 
 channels — to improve to the very utmost the surround- 
 ing conditions of the labouring man, — that Eichard 
 Cobden laboured, and, so far as regards one generation, 
 with the exception of the agricultural labourer, not in 
 vain? 
 
 It was to remove abnormal interferences, as he 
 thought, and as he termed "unnatural," because (as 
 protectionists conceive, duly) restrictive, not to create 
 them afresh, that the principle of free trade was put 
 into operation. Is it just, then' to accuse the free-trade 
 
FREE TRADE UNDER PROTECTION. 45 
 
 principle of creating interferences ? Let the following 
 facts be contemplated, and then you will perceive 
 whether there is justice in the charge. When the cry 
 of distress was raised during protection — and even 
 when the markets were depressed — the export trade 
 steadily and constantly increased. But during free- 
 trade distress, our exports remain stationary. They are 
 standing still, while the population of the country is 
 constantly being increased. Was ever such a phenom- 
 enon known under the protective period? We chal- 
 lenge the free -trade theorists to adduce, out of Sir 
 Eobert Peel's experience, any single instance of it. We 
 do so fearlessly, because we know that such an occasion 
 cannot be brought forward. And we submit this rela- 
 tion of distress, with decreasing exports, to the consider- 
 ation of those who, rather than argue from mere facts 
 in the field of economy — a treacherous practice — en- 
 deavour to discover the workings of a principle of which 
 these facts or figures are but the indications of its 
 existence. 
 
 When this association of actual free -trade distress 
 (in contradistinction to so-called free-trade prosperity) 
 with decreasing exports — absolute,^ when compared 
 with the export trade under protection, which shows 
 an increase proportioned to the increasing population ; 
 
 1 Under protection exports increased steadily, and kept pace with 
 iucreasing population — vide figure in 'Free Trade,' p. 19. Imports 
 were more than balanced by exports. Under free trade : exports, 
 1850, £153,000,000; 1866, £239,000,000 ; 1872, £314,000,000; 1885, 
 £271,000,000. Since 1875 there lias been no steady increase to meet 
 requirements of additional population. Care must be taken not to 
 confound increased value under free trade with a proportionate in- 
 crease of bulk. Bulk and price both rise, but the latter in greater 
 intensity. 
 
46 FREE TRADE UlSfDER PROTECTION. 
 
 relative,^ when contrasted with a population constantly- 
 increasing — is properly understood, then we are of 
 the opinion that the charge against free trade inter- 
 fering with the normal development of the national 
 industries has been sustained, and will pass unchal- 
 lenged. But it must be remembered that the question 
 concerns free - trade distress, and free - trade distress 
 alone. There has been far too great a leaning on the 
 part of many economists ^ to deduce constant beneficial 
 results from free trade. The deduction, we assert, is 
 not founded on real tendencies. Where these econo- 
 mists have erred is, we venture to state, in not suppos- 
 ing that the surrounding conditions, at first existent, of 
 free-trade action, would be liable to fluctuation. These 
 conditions, as every one at the present day cannot but 
 acknowledge, have very materially altered. Where are 
 the " dear " markets of Cobden's days, you may ask of 
 the manufacturers of Manchester? And in what does 
 the utility of cheap markets consist, when the ability to 
 buy is being slowly but increasingly reduced ? Regard 
 the amount of unoccupied labour ! Let it be but freely 
 admitted that Cobden's times are not ours, and then you 
 
 I From Mr F. T. Haggard, in his pamphlet on 'Demand and 
 Supply ' : exports + freights + interest, on £100,000,000. 1866-7.5, 
 £3,66i,000,000 ; 1876-85, £3,764,000,000— an increase of 100 millions 
 sterling. Increase of population during 1876-85, 3,720,000. From 
 these can be deduced exports per head— 1870, £11.6 ; 1880, £10.7. 
 
 ^ The authority of writers like J. S. Mill and Professor Cairnes 
 cannot but be diminished by the circumstance that they were biassed 
 by the primary and favourable operation of free trade. They wrote in 
 the midst of the " unparalleled prosperity " immediately following, 
 but not altogether the consequent of, free trade. But neither of those 
 economists analysed in detail the causation of that prosperity. Both 
 magnified the action of the free-trade principle. 
 
FREE TRADE UNDER PROTECTION. 47 
 
 will open up the way to the inquiry, " Is our present 
 economical policy so adapted to its surroundings as to 
 be beneficial to the nation at large ? " 
 
 But free trade has not only induced a " major " in- 
 terruption in the normal course of our trade, it has 
 been the cause of minor interferences as well. Let the 
 quarrel between the master manufacturers and the rail- 
 way companies attest the accusation. The railway rates 
 are too high. They are one of the causes of the de- 
 pression of trade. In the opinion of some, they con- 
 stitute the sole cause. But how long have they been 
 too high, or relatively high ? And how is it that the 
 free-trade merchants made their large fortunes when the 
 rates were high ? "We think that we may, without 
 falling into any grievous error, divide the career of the 
 free-trade merchant into three periods. The first period 
 was the one in which he was prosperous. His foreign 
 rivals he scorned. He attempted but failed to crush 
 them.'- Free trade detests monopoly, and rejects it as 
 hindering trade. And yet, unhappily, it was the very 
 object of these merchants to obtain a monopoly of 
 foreign markets.^ How is the reconciliation between 
 sentiment and practice to be effected? 
 
 But the supremacy of British manufacture was to 
 receive a blow. This blow was struck by other nations 
 who consented to follow in the paths which made Eng- 
 land a great commercial country. They determined 
 
 ' Sir Robert Peel gloried in the paralysis experienced by some 
 German industries, as one of the immediate oiTeots of British free 
 trade. 
 
 ' Mr Gladstone in 1843 said that " the free-traders were attempting 
 to break down one monopoly in order that they might establish 
 another." Quoted from Cobden, p. 30. 
 
48 FREE TKADE UNDEK, PROTECTION. 
 
 that, in supporting themselves as far as they could, they 
 were promoting in the best manner their own interests. 
 They resolved that their progress was to reside in the 
 development of towns ; and to make these grow, it was 
 clear that they must nourish manufactures. In a word, 
 they are protective. 
 
 As foreign manufactures increased, demand for British 
 goods began to diminish. As natural growth even of 
 native industries is slow, so the influence of their de- 
 velopment upon the British merchant was gradually 
 reduced, but the effects were cumulative. He began to 
 lose control over those markets which he endeavoured 
 to swamp ; but what was this but to lose that artificial 
 demand which he was the means of creating? The 
 " artificial " demand decreasing, his small profits upon 
 greater quantities went on decreasing too. The bulk of 
 his produce, undergoing a relative reduction, as he could 
 not charge a greater price, the growth of his business was 
 inevitably checked. Here, therefore, he ought to have 
 claimed a reduction in railway rates, because that arti- 
 ficial demand which sent up the rates, was becoming 
 more and more reduced. Against such a claim, how- 
 ever, there would have been many objections. Besides, 
 the manufacturers are not unlike their feUow-creatures 
 in " hoping for better times," and in bearing a present 
 small loss in prospect of greater gains in the future. 
 But their hopes were unfulfilled. And thus it happened, 
 the loss of this artificial demand became the cause of a 
 parliamentary inquiry into the proper cost of the trans- 
 mission of goods by the railway. The railway, indeed, 
 must needs have its proper share. The share received 
 by the railway proprietors during the first period of the 
 
PEEE TRADE UNDER PROTECTION. 49 
 
 free-trade merchant's career was not a " normal " one. 
 The free-trade merchant in his second period cannot 
 pay, with a sufficient profit to himself, the cost of transit. 
 It is excessive. But why excessive ? It is excessive 
 because at its present high level he cannot compete suc- 
 cessfully with his foreign rival. The tables, then, have 
 been turned, for we know that he competed in the first 
 period very greatly to his benefit. It is frivolous, there- 
 fore, to assert that excessive railway rates are the cause 
 of the present depression. Nor is it at all likely that 
 their reduction will be followed by a permanent revival 
 of trade,^ as those maintain who argue that the excessive 
 cost of transit damps the ardour of the merchant, and 
 acts directly in causing a smaller production of goods. 
 The " production of goods " is not dependent in the first 
 instance on the cost of transit ; for the cost of transit 
 is included in the price which is paid for those goods. 
 But suppose that price to be lowered, and by these very 
 forces which free trade stimulated ; then, indeed, the 
 cost of transit, which is now become excessive by reason 
 of an alteration in one of the surrounding conditions of 
 the free-trade merchant, bears very hardly upon him. 
 But it is the result of his own short-sighted policy. 
 The alteration consists in the fluctuation of price ; and 
 price falls from a higher to a lower level. Thus the 
 
 1 The reduction in cost of transit will go into the pockets of the 
 manufacturers. They will be certain of some profit then ; and the 
 maintenance of their factories will be assured for a while, without, 
 however, any margin for extending their business. But for how long ? 
 Just as long as prices ai-e maintained. But we do not know that our 
 foreign rivals cannot produce at even a cheaper rate than they do at 
 present. Besides, they have the advantages of the " bounty " system. 
 What is to help the British manufacturer if prices are still further 
 reduced ? 
 
 D 
 
50 FKEE TRADE UNDER PROTECTION. 
 
 price of English goods becomes determiaed by the price 
 of foreign goods.^ But what was the price regulated by, 
 when our foreign rivals could not compete against us, 
 both in neutral and our home markets ? Clearly by 
 the ability of the consumers to pay. It follows, there- 
 fore, so far as our free-trade exchanges are concerned, 
 that home prices are only in process of becoming regu- 
 lated by foreign prices. In the first period of his pros- 
 perity, the free-trade merchant made his own prices. 
 He grew rich upon the produce of his monopoly. But 
 now, in the second period, he is having Ms price made 
 for him, and with the ensuing consequences, not only do 
 his profits get smaller and smaller, but the quantity of 
 his goods is reduced. The free-trade merchant, there- 
 fore, is nowadays in the unhappy position of having 
 the candle of his misfortunes burning at both ends ! The 
 second period of the free-trade merchant's career is thus 
 consumed in the process of equilibration — we mean in 
 his attempt to get on equal terms with protected rivals. 
 But foreign export prices have become so low, that he 
 can no longer stand up against them with profit to him- 
 self. We are thus arriving at the third period, in which 
 he wiU have to propose a reduction of his labourer's 
 wages ; a measure which has already been advocated by 
 
 1 1. In the home market, because of the free entry of foreign pro- 
 duce, raw and manufactured. The importation of foreign corn has sent 
 its price from 50s., which was the level Cohden anticipated (p. 73) 
 to 30s. per quarter. Is this the lowest price at which corn can be 
 grown abroad at a profit ? The same tendencies exist in every imported 
 article. 
 
 2. In neutral markets, the foreigner, if he cannot produce as cheaply 
 as his English rival, is assisted by a bounty. 
 
 3. In rival markets, the English manufacturer is excluded from free- 
 trade competition by heavy import duties. 
 
FREE TRADE UNDER PROTECTION. 51 
 
 the greatest living free-trade economist, Mr John Bright. 
 And this is progress ! We do not deny that the nation 
 advanced commercially under the primary and moral 
 influence of free trade, and the material conduct of other 
 forces. What we assert is that this advance was not an 
 equal advance, for it affected manufacture alone ; and 
 that free trade, and free trade alone, has destroyed our 
 agriculture, while it has helped to elevate our manufac- 
 turers. But even this prosperity of manufacture was 
 transitory. We have already seen its level of prosperity 
 receding. What is the causation of that catastrophe ? 
 How shall we he able to afford stability to the super- 
 structure when its foundations have been undermined ? 
 How support the labouring class, artificially enlarged 
 by a transient influence, when the means of employing 
 it are being still further reduced ? The railway rates 
 are reduced ; the labourers' wages are going to be re- 
 duced, if they are not so already; and the British 
 manufacturer has to seek markets anew, for protected 
 countries do not like his goods, and neutral markets will 
 not give the price which he demands for them. They 
 can get them cheaper from protected countries. There 
 must be a lesion lurking somewhere, it is clear. But 
 it is not discerned by aU ; it resides in the cost of free- 
 trade labour being too dear. While all else is cheap 
 (there are but few exceptions), labour remains dear^ in 
 
 1 The reader will recall the great increase in the rate of wages, ex- 
 cepting agricultural, about the year 1850. On account of the increased 
 trade of our manufacturers, demand for lahour increased and wages 
 rose. On the other hand, bread was cheapened. Now, our trade rela- 
 tively shrinking, and labour being at a discount, even with the reduction 
 of wages ensuing upon competition of the labourers themselves, yet 
 the wages of labour are very much larger than those of the foreigner. In 
 
52 FREE TRADE UNDER PROTECTION. 
 
 the free-trade country. What is the result in protec- 
 tionist States ? Labour is cheap ; prices of articles rela- 
 tively dear. Which is the more favourable set of con- 
 ditions for an export trade? It assuredly requires a 
 considerable amount of self-restraint, when contem- 
 plating the many artifices employed to cajole the igno- 
 rant during the free-trade agitation, not to express in 
 the liveliest manner the indignation which they call up. 
 It was " protection and starvation " then. Why do we 
 not cry out " free trade and scarcity " now ? 
 
 Of the grand picture which Cobden painted — what 
 remains? The supremacy of British manufacture, a 
 flourishing agriculture, no possibility of being swamped 
 with foreign corn, high wages, and food in abundance ! 
 It seems as if it had been drawn upon the sands of time, 
 and that the advancing wave of the prosperity of foreign 
 nations has removed all traces of its former existence. 
 And even when they recede, we look in vain for its re- 
 appearance amongst ourselves. But all these elements, 
 consider them as you will, are closely inter-related; 
 they are all supported upon the same basis. Destroy 
 that basis, and these elements are dispersed; they fly 
 in opposite directions. The interest of the landed pro- 
 prietors, the sons of England's former benefactors, whose 
 ancestors in the distant past built up slowly but surely 
 the foundations of the greatness of the people, was 
 severed from the rest. The selfishness of the manu- 
 facturer required it.^ And now, what community of 
 
 this way the British free-trade manufacturer is handicapped! The 
 present rate of wages of labour refer to a past period of prosperity. 
 
 1 "Our opponents have been fond of telling us that this is a middle- 
 class agitation. I do not like classes, .' . but I believe that we 
 
FREE TRADE UNDER PROTECTION. 53 
 
 interest have we as people of the same nation ? i The 
 manufacturer gets his food from abroad, because he 
 pays less for it. But, said Cobden, under free trade we 
 shall not produce one quarter less of corn than we do 
 now (1843) ! The labourers get their goods from Ger- 
 many, instead of patronising the native industries of 
 their country, because they can buy them at a cheaper 
 rate. Yet Cobden said that the best customers of the 
 manufacturer were the agricultural labourers.^ Thus 
 is there a double force acting against the true interests 
 of the nation. Instead of employing our own labour 
 in full, we employ some of that of the foreigner. But 
 not only does the nation suffer from a constant drain 
 of its wealth in this pernicious procedure, but she is 
 racked internally with opposing interests. Where be- 
 fore there was harmony, now discord prevails. The 
 master and man under protection found their interests 
 working in unison ; under free trade the labourer has 
 already begun to learn that his interest is not that of 
 his master. He has been accustomed to high wages; 
 but these wages must, under present circumstances, be 
 reduced, and therefore he opposes the action of the 
 manufacturers.^ The influence of the trades-union in- 
 
 have enongli of the middle class and the propertied portion of the 
 middle class, to teat the landlords at tlieir own game." — Cobden's 
 Speeches, p. 121. 
 
 ' " Non frater a fratre, non hospes a hospite, tutus." 
 
 ' Speeches, p. 51: "The best customers of the farmers are the 
 labouring and manufacturing classes." 
 
 P. 53 : " The farmers will make up the deficiency in the value of 
 agricultural produce by increasing the amount of production ; more 
 labour will be employed; and consequently there will be a greater 
 demand for manufactured goods." 
 
 ' There were, of course, discontents during protection, but they 
 
54 FREE TRADE UNDER PROTECTION. 
 
 creases,! ^nd capitalists turn away from labour which 
 demands a greater wage than they can afford to pay. 
 
 § 5. Golden' s errors. — We have already noticed one 
 of Cobden's errors. It might appear to some that to 
 err on the question of causation is of supreme gravity. 
 To regard the effect as cause, and base a policy upon it, 
 must in the long-run end in disaster. And we think 
 the reason why Cobden's arguments have not been so 
 narrowly examined as they deserve to be by those who 
 applaud him most is close at hand. Any policy which 
 opens with the flush of success, and which continues 
 successful for a period of time overlapping two genera- 
 tions, is apt to be popular. And thus the free-trade 
 policy became popular in England, not because it was 
 framed upon a safe and secure basis, but because it was 
 attended with a trade activity never equalled in this 
 country. Under such circumstances it is clear that the 
 ignorant crowd became prejudiced in its favour. But 
 the strangest phenomenon of all is, that the wise, and 
 those who wrote upon economy,^ should take it for 
 granted that free trade and prosperity were inseparably 
 
 never assumed a serious aspect. The Chartist agitation was hased on 
 political, not on economical grievances. At first the Chartist leaders 
 held aloof from the free-traders, as being likely to prejudice their 
 cause. They were afterwards absorbed in the agitation for free trade. 
 
 1 "The principle of protection, extended to trades-unions so justly 
 and so beneficially in England, should be extended to the Irish oc- 
 cupiers of lands, for the protection of their interests, when threatened 
 by the vast and organised power that is paraded against them." — Rt. 
 Hon. "W. E. Gladstone, reported in ' Standard ' of July 9, 1883. 
 
 If the Irish occupier is to be protected from adverse (?) influences, 
 why should not the British farmer ? 
 
 2 John Stuart Mill, Professor Cairnes, Professor Jevons, Professor 
 Fawcett. 
 
FREE TRADE UNDER PROTECTION. 55 
 
 associated. Assuredly there must be some basis for 
 that relationship. What is that basis ? 
 
 But the vulgar prejudice, you will allow, should not 
 have been permitted to obscure the discernment of the 
 public teachers. It may be all very well, as an election 
 manoeuvre, to call the people to vote for free trade and 
 prosperity. And the fact that prosperity had been pre- 
 dicted as the consequence of free trade, and did actually 
 come about, would suffice to impel the people to place 
 the prophet's mantle upon Cobden's shoulders. But 
 the calm and intelligent man, whom Cobden loved but 
 whom he seems rarely to have found, would concern 
 himself in incLuiring how it was that free trade induced 
 prosperity. He would endeavour to learn the basis 
 upon which the association of free trade with prosperity 
 rests. If he had done so, and it is the fact that Cob- 
 den's admirers have not performed this task, he would 
 have discovered that the proposition " free trade causes 
 prosperity," like all other universal and ideal proposi- 
 tions, requires to be limited by the actual facts of ex- 
 perience before you can clothe it with any practical 
 meaning. "Free trade causes (some degree of) pros- 
 perity." Yes ; but only under certain conditions. Now 
 it is the state of these conditions which determines the 
 action of the free-trade principle. 
 
 The direct effects of free trade were — 1, The tendency 
 to lower prices in the home markets ; and 2, Increased 
 circulation, mainly of the foreign markets, owing to 
 increased production of British manufactured goods.^ 
 
 ' It should be observed that there are other causes which increase 
 the circulation of the markets. Free trade is only one cause, nor is 
 its action a very constant one. 
 
56 FREE TRADE UNDER PROTECTION. 
 
 What determines that " increased circulation " shall be 
 the cause of prosperity ? — when prices in foreign markets 
 are maintained. We have just witnessed a period when 
 that increased circulation was not prosperous for the 
 manufacturer, for the simple reason that he did not 
 get the same price for his goods. Therefore this in- 
 creased circulation is not always associated with pros- 
 perity. Did free trade cause prosperity directly ? The 
 free-trader says so. How, then, does he prove it ? Is 
 it not rather the true statement of the fact to say that 
 free trade caused, under certain conditions, " increased 
 circulation," ^ and that that " increased circulation " was 
 associated with the cause of prosperity ? ^ If this is so, 
 then free trade was but the indirect cause of prosperity, 
 and how many disturbing elements there are between 
 free trade and prosperity can easily be imagined. 
 
 But the causation of error is ignored when in their 
 train come the opportunities supplied by an enormous 
 increase to our wealth, of indulging in satisfactions. But 
 these satisfactions are in large part denied to the pres- 
 ent age. And why? Because Cobden believed that 
 the home industries were depressed owing to wages 
 being high from the dearness of bread. He said, " You 
 must cheapen labour," and then you will stimulate not 
 only the manufacturers but also the farmers to produce 
 more.' But he did not detect that in the process by 
 
 1 I.e., the manufacturers foresaw that if they could get a firm foot- 
 ing in foreign markets by throwing large quantities into them, they 
 would be enabled to maintain their hold the better with the price of 
 wheat reduced in the home corn-markets. 
 
 2 Obviously, on this assumption, an artificial one. 
 
 ' The assumed beneficial effect of free trade upon agriculture was an 
 afterthought. Cobden mentions this when endeavouring to win the 
 farmers in 1843. 
 
FEEE TRADE UNDER PROTECTION. 57 
 
 which he cheapened bread there lurked the seeds of 
 those forces which would grow up and retard the progress 
 of that wages-fund of labour which he endeavoured to 
 promote. What did Cobden attempt ? Did he strive 
 after the equable progress of the working classes ? No 
 one, it is certain, wishes to detract from the magnani- 
 mous object which he had in view. For every philan- 
 thropist pursues the same object. It is in the means, 
 not in the end, where the fault rests. Now Cobden 
 used means of whose stability and constancy of action 
 he could not be assured, though he was strongly preju- 
 diced in the belief of their stability and constancy. 
 Those means have failed, and have interrupted the 
 progress of labour. Hence the present labour crisis. 
 
 But it is difficult to-day to assure the labourer that 
 with a smaller wage he will be any the better off. Will 
 the labourer be able to do more with that reduced 
 wage ? If such be possible, it can only be after a tran- 
 sitionary period between high price of corn -with high 
 wages and cheap bread with reduced wages. During 
 that period, it is open to the free-traders to claim enor- 
 mous advantages for the labouring community. But in 
 the opinion of some those advantages have been too 
 suddenly acquired. They rested upon a precarious 
 foundation. They likewise had their corresponding 
 evils. They have taught the working man how to be 
 extravagant, how to be vicious, and how to destroy 
 himself with inferior spirits. 
 
 We believe that all improvements should be induced 
 gradually; and that free trade, in consequence of its 
 suddenly conferring an abnormal prosperity upon the 
 labouring mass, has been the prime cause of a vast 
 
58 FEEE TEADE UNDER PROTECTION. 
 
 amount of moral and social evil. For we need go no 
 further back than to Aristotle to be taught that the 
 sudden acquisition of wealth tends to be followed by 
 extravagance and arrogance on the part of those who 
 become its possessors. In the case of those who were 
 so little and so badly prepared for it, was it unlikely 
 that the tendency should, in the generality of cases, 
 become a predominant force? Thus, Cobden did not 
 secure an equable progress to the national labour in- 
 terests. But whatever the moral and social evils that 
 have accrued from free trade, the question that stands 
 before the working classes is the reduction of wages. 
 And what they will have to determine is whether this 
 reduction retards their progress ; and if so, whether 
 their wages shall be rendered more secure by a due and 
 proper protection to their own labour. The issue, it 
 seems, is a simple one. It is certain that wages cannot 
 be maintained at their present rate under our free-trade 
 system. Under protection there will be the tendency, 
 with full employment of labour, towards high wages.^ 
 
 ^ There has heen of late an attempt, and in some cases a successful 
 attempt, on the part of the labourer to acquire an increased wage, 
 notably in the instances of the " puddler " and the " coal-miner." The 
 demand was based upon " the revival of trade " (1888). 
 
 It is impossible not to observe the influence of force, used in a 
 threatening fashion by labour organisations. But because a small 
 section of labourers have had their wages increased, it is not to be 
 inferred that the great bulk of labourers have become proportionately 
 enriched. It is the fact that wages have generally become reduced, 
 either through "short time" or else from working "by the piece." 
 The question also remains, " How long will the revival continue ? " 
 
59 
 
 CHAPTER III. 
 
 OVER-SPECULATION AND THE EAPACITY OF MANUFACTURE. 
 
 "Welcome, Herr Philipson— welcome, you of a nation whose traders 
 are princes and their merchants the mighty ones of the earth. What new 
 commodity have you brought to gull us with? You merchants, by St 
 George ! are a wily generation. " — Sir Walter Scott. 
 
 THE INFLUENCE OF THE CORN MERCHANTS UPON PRICES COMMENTED 
 UPON BY HUSKISSON AND SIR ROBERT PEEL — THE PREVALENT 
 TREATMENT OF THE AVERAGES — HIGH RENT NOT RESPONSIBLE 
 FOR THE SUDDEN VARIATIONS IN THE PRICE OF CORN— THOSE 
 SUDDEN VARIATIONS THE SOURCE OF THAT DISTRESS FOR WHICH 
 HIGH RENT WAS BLAMED — UNDER THE CORN LAW PRICE OF 
 WHEAT SLOWLY RECEDED, WHILE RENTS INCREASED — COBDEN 
 GAVE THE BRITISH FARMER A " NATURAL " PROTECTION — THE 
 DESTRUCTIVE TENDENCIES OF EXCESSIVE CORN IMPORTS — DEPRES- 
 SION UNDER PROTECTION AND FREE TRADE NOT COMPARABLE — 
 UNDER PROTECTION DISTRESS WITH INCREASING EXPORTS — UNDER 
 FREE TRADE EXPORTS DECREASE WHILE DISTRESS CONTINUES. 
 
 § 6. The sudden rises in the price of vSheat due to spec- 
 eolation. — But there are many other causes besides the 
 ones already adduced, why the soundness of that legis- 
 lative policy affecting our commerce with other nations 
 — and in its accomplishment Kichard Cobden took the 
 chief part — should be reviewed. And amongst these 
 there appears this one — the influence of the corn mer- 
 chant in raising the price of wheat. 
 
60 PEEE TRADE UNDER PROTECTION. 
 
 Now this was no trivial influence. It is specially 
 mentioned by Huskisson, with other factors, as tending 
 to cause that excessive fluctuation in the price of wheat 
 which he so much deplored. It was this which acted, 
 together with other forces, to prevent a fairly remuner- 
 ative price to the grower, and a steady one to the con- 
 sumer. All who have pursued with attention Huskis- 
 son's policy, will remember that the attainment of this 
 steady price was his chief object ; that in this consisted 
 " his " settlement of the corn question. To seize upon 
 a single unqualified assertion, with no reference to the 
 peculiarity of the circumstances under which it was 
 uttered, and to call it " the last codicil of Huskisson's 
 wiU," 1 this, we are inclined to think, would in the in- 
 stance of any other individual but Cobden, be regarded 
 as a questionable means of arriving at a safe conclusion.^ 
 It is all the more wonderful in Cobden's case, for he 
 had already drawn the attention of the multitude to 
 exactly the same procedure on the part of his opponents. 
 He had, antecedent to this example of it in himself, 
 exposed the invidious practice of snipping with a pair of 
 scissors certain sentences of an opponent's argument, 
 till what is left makes directly against what that op- 
 ponent intended to advocate ; and we can imagine the 
 horror of the ignorant crowd when such an unjust prac- 
 tice was discovered to them by the enthusiastic and 
 persuasive Cobden. But we do not impute impure 
 motives to Cobden on this account. In such a busy 
 
 ' CoMen's Speeches, p. 1. 
 
 ^ Sir Robert Peel also remarked upon the influence of the corn mer- 
 chants in causing great variations in the price of wheat. — Vide his 
 Memoirs, vol. ii. part 3, " The Repeal of the Corn Laws." 
 
FREE TRADE UNDER PROTECTION. 61 
 
 mind, where there was not the most desirable arrange- 
 ment of ideas, it is impossible but that he should fall 
 into unguarded inconsistencies. Taken in conjunction 
 with the shallow treatment of those problems to which 
 we have alluded, we regard this as a sign of Cobden's 
 superficiality.^ We think there can be no doubt that 
 he was too fascinated with the apparent grandeur of 
 his ends ; and that in his endeavour to reach them, he 
 lost sight of the best practicable method, and plunged 
 into the darkness of a hypothetical region, in which 
 he was unable to guide the nation's progress with cer- 
 tainty. It must be allowed that to judge from a part 
 when you have the opportunity of examining the whole 
 of a statesman's policy, and to adduce that tainted 
 judgment as proof of the soundness of the views you 
 are advancing, is a treacherous method, and must event- 
 ually end in disgrace. But Cobden had the power of 
 impressing his audience, and his system of dwindling 
 proof down to the lowest possible limit, is, or may be 
 taken as, evidence that his mind, comprehensive as it 
 was in a very large degree, was not sufficiently trained 
 in that profoundly intensive treatment of economical 
 questions which their very nature requires. He was 
 comprehensive and superficial ; but he did not discern 
 with clearness many of the points which were present, 
 and more might have been presented to his view. He 
 was not, certainly, comprehensive and profound. Had 
 he been less comprehensive and more profound ; had he 
 
 1 But it must not be supposed from this that Cobden was not com- 
 prehensive. Ho tolls us himself that he took a comprehensive view of 
 the question. But a view may be comprehensive, so far as breadth is 
 concerned, without being deep enough. 
 
62 FREE TRADE UNDER PROTECTION. 
 
 studied all the peculiar circumstances whicli extracted 
 from Huskisson an unfortunate statement ^ — unfortu- 
 nate, because liable to be exaggerated and likely to be 
 misinterpreted by shallow or cunning men ; had he more 
 closely examined the nature of rent, instead of losing 
 the control of his reason in an outburst of passion against 
 the wicked landowners ; and had he portrayed all those 
 possible surrounding conditions which were likely to 
 appear in the course of free trade, — then he might have 
 attained to a firmer and still more comprehensive grasp 
 of his subject — such an one whose handling could not 
 by any means have led himself into error, and his 
 country to the verge of ruin. 
 
 It may seem to some a strong, but it is not a novel 
 view, to look upon Cobden's emotional susceptibilities 
 as being somewhat akin to fanaticism. His attitude 
 towards the proprietors of the land, founded as it was 
 on very imperfect evidence, almost suffices to sub- 
 stantiate this charge.^ How, then, do you explain the 
 phenomenon, that Cobden managed to keep the field so 
 
 ' Huskisson stated that the Corn Law of 1815 might be repealed. 
 But this did not exclude the imposition of another Corn Law. We 
 have Cobden's authority for this. On p. 162, we read: "It is ad- 
 mitted that the present Com Law cannot stand. It seems to be doubt- 
 ful what we shall get instead of it. Are we to have another Com 
 Law ? " Yet Cobden believed that Huskisson was a free-trader in 
 corn . 
 
 ^ Cobden's relation to the landowners was peculiar. It appears he 
 entertained at one time a deadly hatred towards the Whig aristocracy. 
 But afterwards, we find him acting in conjunction with them. On 
 the whole, we conclude that he was not averse to the ai'istocracy, as a 
 class, provided only that they did not oppose what he regarded as the 
 ' ' progressive " spii'it of the age. Indeed he recognised their import- 
 ance in the British constitution, if they performed their functions 
 honestly and efficiently. 
 
FEEE TRADE UNDER PROTECTION. 63 
 
 long, alone protected by an artillery of errors ? One 
 reason is at once forthcoming, in the moral force of the 
 man; the power which he possessed, in such brilliant 
 degree, of making those with whom he came into con- 
 tact believe in the rectitude of his ends, by a powerful 
 description of the results of those ends (if they hap- 
 pened !), drawn at the expense of the elucidation of the 
 means by which they were to be effected. Another 
 reason is found in the following fact. It was unlikely 
 that the poorer classes, being opposed to the richer, 
 would believe in the protestations of the latter ; these 
 protestations were, however, put forward by a small 
 and determined section, which announced that the wel- 
 fare of agriculture was inseparably associated with the 
 welfare of the country. Thus, a strong prejudice being 
 aroused against the landlords, they endeavoured to re- 
 but, so far as in them lay, the cruel and unjust calumny 
 flung at them. And they did this in very different 
 ways. Some of them, indeed, even went the length of 
 actually believing the charges which were openly made 
 against them — which were to this purport, that their 
 excessive rents went to pay either mortgages or else the 
 dowries of their eldest daughters. Their excessive 
 rents being purely arbitrary, and gradually increased 
 for definite objects, they were ultimately borne by the 
 consumer of corn ; ^ and as the labouring classes formed 
 by far the larger part of the community, nearly the 
 whole of the burden weighed upon them. Hence the 
 
 1 On some occasions, Cobden said the landlords throve on the in- 
 creased price of bread at the laboiirer's expense ; on others, he stated 
 the " increased " price came out of the manufacturer's profits. But he 
 never tells us on whom thoy finally fell — the foreign consumers of 
 English manufactures. 
 
64 FKEE TRADE UNDER PROTECTION. 
 
 picture drawn by Cobden, of the working man feeding 
 his hungry children upon half a loaf, the other half 
 being removed by a spectre, and conveyed, in the shape 
 of money, into the coffers of the landlord. It was easy, 
 then, for Cobden to infuse some angry enthusiasm in 
 the breasts of those who heard him, by thus "proving" 
 to them that they, the larger part of the community, 
 had been constantly subscribing, and were doing so 
 still, to the excesses and extravagances of the upper 
 classes. 'No matter whether the cause was true or 
 false, Cobden was dexterous in putting his audience 
 in touch with it. But before attacking an influ- 
 ential and respectable class, before accusing the 
 landlords of acts of tyranny and rapacity, it seems 
 but reasonable, at this distance of time — but again, 
 Cobden only regarded that side of the argument 
 which made in his favour — that he should have in- 
 quired into the antecedents of the body of men whom 
 he succeeded in dragging into the public odium. He 
 would then have discovered that, under the system of 
 things which appeared to him disgraceful, the nation 
 had flourished, and that fhis flourishing condition was 
 expressed in a slow and equable progress.^ Besides, he 
 would have perceived that the very factor which he 
 desired to abolish — the high and fluctuating price of 
 
 ' As matter of fact, the manufacturers and merchants made far 
 higher profits than the farmer and landlord. Besides, they acquired a 
 much larger revenue, as attested by David Hume in a letter to Tur- 
 got: " Je suis persuade qu'en France et en Angleterre les revenues de 
 cette nature sont beaucoup plus grands que ceux qu'on tire de la ten-e." 
 — Les Grands Ecrivains Franjais : Turgot, par M. Leon Say, Paris, 
 1887 (p. 51). On what proper grounds, then, could the merchants de- 
 sire to make higher profits ? 
 
FREE TRADE UNDER PROTECTION. 65 
 
 corn — was undergoing a natural cure, as shown by the 
 fact that the price of wheat was gradually receding from 
 its former high level; he would have observed those 
 tendencies gradually increasing which would have 
 effected what it was Huskisson's ambition to bring 
 about — a steady price of wheat. But Cobden's treat- 
 ment of the problem, though comprehensive, was not 
 accurately comprehensive. Those points which were of 
 minor importance he dignified into major significance. 
 The difficult paths which required some finding he left 
 untrodden. But after he had got the landlords in their 
 own trap, as he thought, we think it will appeal to the 
 minds of all those who take a calm and sober view of 
 things that he ought to have left nothing unattempted 
 which would secure the justice of his accusations. Por 
 when a charge is made and found not to be substantiated, 
 Cobden must have known that all the epithets which he 
 hurled at the heads of the landlords would certainly re- 
 coil upon himself. Against such a disastrous conse- 
 quence every honourable man strives with all his might 
 to protect himself. But what do we find Cobden doing ? 
 Nothing of the kind. On all succeeding occasions, when 
 he addressed his free-trade audiences, he had nothing 
 new to say; what he did was merely to increase his 
 threats, and the baseness of his charges. He continued 
 his vituperations of a class which, on more than one 
 occasion, he admitted formed an important part in the 
 constitution of the country. But instead of abusing, he 
 might have directed his energies towards acquiring fresh 
 information, making new analyses, and discovering other 
 modes of reasoning which, in consequence, he left 
 unused. He might, without any fear of arriving at a 
 
 E 
 
66 FREE TRADE UNDER PROTECTION. 
 
 false conclusion, have put himself in the place of the 
 landlords. And here the fact must be recalled, that 
 Cobden first became a landlord after the repeal of the 
 Corn Laws. If, then, he had taken the comprehensive 
 view, of which he was so proud, it must have occurred 
 to him that it was just possible that part of the increased 
 price of wheat went into the pockets of the corn mer- 
 chants, if, in fact, all of it did not do so. Such a 
 possibility would suggest the reason of its coming into 
 being. This would have brought him to the speculation 
 of the corn markets, and the conditions and their vari- 
 ations which led to that speculation. But any normal 
 function — and speculation is a normal function — may 
 be exaggerated or abused. Over-speculation, therefore, 
 tended, when circumstances were favourable, to become 
 active in the corn markets, as well as in the markets of 
 the manufacturers. But nowhere does Cobden mention 
 this over-speculation in the corn markets, and he winked 
 at the true causes which produced distension of the 
 trade markets. There was evidence enough, then, to 
 show that Cobden's facts and figures were insufBicient 
 to justify the weighty conclusions he based upon them. 
 Had Cobden been a master of reasoning, and had he 
 used that system which had often been used before him, 
 and eventually styled the " double method " by John 
 Stuart Mill, he would have extended his inquiry con- 
 cerning the influence of rent upon the price of corn, by 
 adducing the progress in the variation in the price of 
 corn in other countries. Nor need his labours have been 
 very extensive in this direction. One contrary instance 
 would have sufficed to prove the false nature of his 
 general conclusion. There was a tract published in 
 
FREE TRADE UNDER PROTECTION. 67 
 
 1841, which contains an account, by Dr Calvert Hol- 
 land of ShefiBeld,^ of the fluctuations in the price of 
 wheat in Danzig, Eotterdam, Lisbon, the United States, 
 and other countries during a series of years. Such a 
 statement had then, and has now, very obvious bearings. 
 It demonstrates the fact unknown to Cobden — it could 
 not have been ignored by him — that the fluctuation in 
 the price of corn was just as great in those countries 
 where rents were very low, and the corn markets not 
 disturbed by an export trade, as it was in England, 
 where the rents were very high, comparatively. Now 
 this instance is quite sufficient, according to one of the 
 canons of Mill, to prove that rent cannot be the sole 
 cause of the high price of corn. And therefore Cob- 
 den's assumed proposition is proved to be untrue. In- 
 deed, the circumstance that, in the one case where rent 
 was low and in the other where it was high, fluctuation 
 happened in both, goes to prove that some other cause 
 or causes " must " have been present to effect this result. 
 Now this fluctuation in price was dependent, as we 
 know to-day, on the variation ^ of those factors which 
 influence the price of corn. Huskisson affords cases in 
 which the price of corn was 20s. higher a fortnight be- 
 fore, than it was immediately after, the harvest. Such 
 an alteration could not be in any way charged to high 
 rent, as a consequence. But we need go no further to 
 
 ' Tract by Dr C. Holland, published by Ollivier, Pall Mall, in 
 answer to M'CuUoch, who argued that a fixed duty would do away 
 with the assumed evils of the Corn Law of 1828. The Doctor proves 
 that the fixed duty would introduce evils of greater magnitude than 
 those which he thinks are falsely ascribed to the action of the Com Law. 
 
 " Sometimes induced fraudulently, as Sir Robert Peel mentions in 
 his Memoirs, vol. ii. p. 346. 
 
68 FE,EE TKADE UNDER PROTECTION. 
 
 show that, though Cobden's purview was fairly com- 
 prehensive, yet it was neither sufficiently nor accurately 
 comprehensive enough to enable him to arrive at the 
 true conclusions. But he reached, by its means, a 
 working conclusion, which made for his purpose. 
 
 § 7. The " natural " proiection to corn. — Cobden, then, 
 raised a fury against the landlords, because he was 
 ignorant of the true facts of the case. We cannot be- 
 lieve that Cobden, knowing his charge against the land- 
 lords to be groundless, but difficult for them to refute, 
 made use of so base a method to effect their overthrow, 
 in order to promote ulterior objects. But it is upon 
 these ulterior schemes that those who have written 
 upon Cobden appear to lay far too great stress. Per- 
 haps they have reason : at any rate they fail to remark 
 upon the extraordinary means which Cobden used to 
 bring about the regeneration of society. If any one 
 can show that these means are moral ones, based as 
 they are upon a succession of errors,^ he must have a 
 perception of morality differing very widely from that 
 which many, and it is to be hoped most, possess to-day. 
 Cobden, however, did not know the false natiire of the 
 prime arguments; and we do not convict Cobden of 
 intentional political immorality. But they are known 
 to-day ; and therefore, to persist in their recognition as 
 true and moral means of effecting sound reform, is to 
 be taken in the belief that a gigantic system, such as 
 
 ^ I.e., statements wMcli you are conscious are false, but use as 
 "truths" to gain the end-object. The manufacturers, on the author- 
 ity of Cobden, believed that free trade would destroy agriculture. Yet 
 they persisted in their free-trade policy. 
 
FREE TRADE UNDER PROTECTION. 69 
 
 Cobden dreamt of, can rest upon an insecure and false 
 basis. One of the pillars of that system, the only one 
 which has reached completion, has already given way 
 from the strain that has been put upon it. But did 
 Cobden do well in attempting to destroy the powerful 
 position of the landowners ? Were they not as justly 
 entitled to their rent as is the capitalist who lets out 
 his mill or money for others to use ? They both require 
 the wages of their capital. And when it comes to be 
 known that the capital of the present day has been 
 acquired by the means of free trade at the subsequent 
 expense of the labouring classes ; that Cobden saw the 
 field open out to his gaze where plenty and occupa- 
 tion reigned predominant, but that he did not see far 
 enough beyond : he did not see the contracted field 
 where food was scarce, and that abundance which he 
 said he had effected begin to fail, and that labour 
 which was always to be occupied unemployed. When 
 it comes to be known that the analysis of the free- 
 trade movement shows indisputably that the profit of 
 the manufacturer was the sole motive which impelled 
 him to sacrifice for a time the interest of the landowner, 
 and with the landowner that of the tenant-farmers, 
 and with the tenant-farmers that of the agricultural 
 labourers, — then calm and dispassionate people will 
 begin to look into the nature of those other measures 
 which are associated with free trade and Eadical views. 
 Thus shall we find that the free-traders in anticipation 
 wooed the working classes of the following generation, 
 lest the people might presumably be plundered by the 
 landlords of the antecedent one. And further, that 
 there are other sorts of property which can be acquired 
 
70 FREE TRADE TJNDER PROTECTION, 
 
 by as questionable means as those whicb have been 
 imputed by some who are their enemies to the pro- 
 prietors of the soil. The Eadical asserts that the land 
 has been acquired by plundering those who had a nat- 
 ural right to it. But how will the free-trader and 
 Eadical account (on their hypothesis, that free trade is 
 a good thing) for the capital acquired during the primary 
 and prosperous period of free trade ? ^ It is not our pres- 
 ent object, however, to extend the nature of this inter- 
 esting inquiry any further at this juncture. 
 
 "What we propose to show is, that by effecting a free 
 intercourse in corn, Cobden concluded that he had de- 
 stroyed the source of the fluctuation in the price of 
 corn. In that process the average price of corn would, 
 as he acknowledged, be lowered. This would be to 
 the farmer's disadvantage, and, by implication,^ to the 
 disadvantage also of the landlord. But against this 
 disadvantage he set (1) the paramount benefit the la- 
 bourer would derive from a steady and cheap price of 
 bread, which had for consequence that labour would 
 
 1 Free trade was only partly the cause of the so-called free-trade 
 prosperity. Free trade induced some prosperity in one generation, 
 and depression in the following. But the free-traders ascribe great 
 powers to the free-trade principle. How did it act ? By increasing 
 the manufacturers' profits, and by cheapening the labourers' loaf. 
 This was clearly the intention of Cobden and the manufacturers. 
 What was the fact ? Wages rose, bread remained nearly at the same 
 average price till 1860, and profits were greatly enhanced. But the 
 discovery of gold acted with increased demand to raise wages. Did 
 labour get its due share ? 
 
 2 On this point Cobden was in error. A reduction in price of com 
 did not necessarily lead to a lower rent. Provided the same amount 
 of wheat was grown, then with a low price of corn there would be a 
 tendency to increase the prices of other agricultural products. 
 
FEEE TRADE TJNDEE PROTECTION. 71 
 
 be by so much the cheaper as bread fell in value ;^ and 
 (2) the stimulus which the foreign competition thus set 
 up would supply to the farmer, by improving the amount 
 of produce of the land, by compelling him to expend 
 more capital upon its better cultivation.^ The honest 
 agitator thought that he was in reality acting in the 
 interests of the tenant-farmers by abolishing the Corn 
 Laws. He set himself up as the farmer's friend, and 
 wished him God-speed in the ideal prosperous course 
 which he had marked out for him. 
 
 It is impossible to suppose that Cobden ever intended 
 to destroy in the slightest degree the agricultural pros- 
 pects of his country. All his assertions go to prove 
 that he was the more sincere and wiser advocate of 
 the farmer's cause than were the landlords who made 
 political capital out of him. Did he expect that one 
 acre of land would go out of cultivation by the en- 
 croachments of the foreign corn-grower upon the home 
 markets ?^ Eather did he believe that the home-grown 
 corn would be increased by the benign application of a 
 mild but invigorating stimulus.* We have consequently 
 to compare the present circumstances of the home corn 
 markets with those conditions which affected them in 
 Cobden's times, and to inquire how the adverse state 
 
 ' The labourers would have more money to expend upon manufac- 
 tured produce. 
 
 2 ' ' There is no Interest in this country which would receive so much 
 benefit from the repeal of the Corn Laws as the farmer-tenant interest 
 in this country." — P. 114, Cobden's Speeches. 
 
 3 P. 140: "I believe that the upholders of protection are pur- 
 suing the very course to throw land out of cultivation, and to make 
 poor land unproductive." 
 
 ■• P. 52 : " All;,that is required to produce one-fourth more than 
 they (the farmers) do now, is freo trade in corn." 
 
72 FEEE TRADE UNDER PROTECTION. 
 
 of our agriculture to-day has been brought about by 
 Cobden's mistakes, and his want of foresight. Did he 
 succeed in doing away with the fluctuation in the price 
 of corn ? Can any one consent to such a proposition 
 when the price of corn in the home markets has gradu- 
 ally but surely been descending since the repeal of the 
 Corn Laws?^ He found a state of things which he 
 thought to be injurious to the best interests of the 
 nation, — to the manufacturing interests, in so far as 
 they made labour dear by making bread dear ; and to 
 the agricultural interests, by hindering further improve- 
 ments. To advance those interests, he succeeded in 
 removing, it is true, those temporary fluctuations, the 
 causes of which he misunderstood; but did he gain 
 thereby a steady price to the consumer, and a re- 
 munerative one to the grower of corn ? For that was 
 his object,^ as it was the object of Huskisson before 
 him. Can this be affirmed of his policy ? On the 
 contrary, in the removal of one evil he sowed the seed 
 of another. In the place of a minor evil we have 
 another of far greater magnitude than the one de- 
 stroyed, and one which we shall show was so from 
 the evidence not only of Cobden, but also of those 
 who advocate free trade, and yet are not blind to the 
 
 ' During the first ten years the fall was only to the extent of 2s. the 
 quarter. This is to be accounted for by the unexpected stimulation 
 afforded our agriculture by the war in the Crimea. Afterwards, with 
 no counteracting transient influence at work, the decline in price went 
 down from 64s. to 28s. lOd. 
 
 ^ It was Cobden's intention that free trade in corn would effect a 
 descent of price from 56s. to 50s., and would render the latter price 
 permanent. Page 70 : "Is this difference in price to throw land out 
 of cultivation, annihilate rent, ruin the farmer, |p,nd pauperise the 
 labourer ? " 
 
FREE TRADE UNDER PROTECTION. 73 
 
 enormous importance of the agricultural industries of 
 their country. Instead, then, of a constant price, we 
 have a descending price. And what is the lowest 
 limit of this, compatible with the maintenance of the 
 national agriculture ? It is said that wheat cannot be 
 grown at a remunerative price to the farmer at a price 
 less than 40s. a quarter or thereabouts. The contention 
 of Cobden, who most probably derived his information 
 from M'CuUoch, was that the " natural " protection of 
 transit to this country would raise the price of the 
 wheat in the home markets from 36s., which was the 
 average of a series of years, not very well chosen, at 
 foreign ports, to 40s. Under such circumstances, and 
 if the price was maintained at 40s. in the home markets, 
 then, in very truth, the farmers would have nothing to 
 fear from Oobden's proposal. Did Cobden, then, take 
 away all protection from the farmer? By no means. 
 Such a course would have been the very opposite of 
 his intended policy. That policy consisted in changing 
 what he took to be an artificial protection for a natural 
 protection — the former was unnatural, the other be- 
 stowed by nature. His intention was clearly not to 
 leave the home farmer completely at the mercy of his 
 foreign competitor.^ Something intervened to favour 
 the home producer. The free-traders of to-day may not 
 like this species of protection — their notions of what 
 
 ' Besides this natural protection, another element prevailed with 
 Cohden to effect a free trade in corn. It consisted in the circum- 
 stance that the whole amount of wheat capable of heing exported 
 from corn-growing States could not reach beyond two and a half 
 million quarters at the utmost. It is obvious, however, that this is 
 drawn from his experience of our occasional demands for corn. The 
 reader will perceive that both those data have considerably varied. 
 
74 FEEE TRADE UNDER PROTECTION. 
 
 free trade does and was intended to do may be different 
 from Cobden's notions — but they are compelled to ac- 
 knowledge that this natural protection was upheld by 
 Cobden, their master. 
 
 We shall not here pursue the investigation of Cob- 
 den's relation to the Corn Laws. But it will at once 
 seem to the reader that the original framers of that law 
 proceeded exactly upon the same lines that Cobden 
 did, and that the difference of effect consists merely in 
 the different circumstances with which they had each 
 of them respectively to deal. 
 
 Cobden, when he agitated the repeal of the Corn 
 Law, proceeded upon the assumption, unfounded, that 
 this law was the instrument by which the landlords 
 were enabled to get high rents. But we can perceive 
 now more clearly, since many conditions obscuring 
 their true explanation have passed away, that the Corn 
 Law was originally intended to act just like Cobden's 
 "natural" protection. We make no reference to the 
 statement that the Corn Laws were abused. We simply 
 mention the principle upon which they were framed, 
 and which referred to a state of things in which the 
 farmers would not, under certain conditions, be able to 
 supply all the wants of the country.^ And it is strange 
 that the more exact working of this principle was just 
 beginning to be felt when Cobden introduced his system 
 of free intercourse in corn. He was not averse to pro- 
 tection, as we have seen, when it was natural. He 
 desired to see the agriculture of the country in a more 
 flourishing condition. If the Corn Laws were — and it 
 
 1 E.g., where the harvests were either deficient in quality or reduced 
 in quantity. 
 
FREE TRADE UNDER PROTECTION. 75 
 
 is only premised — unjustly used to further the exactions 
 of the landlords, then what becomes of Cobden's law, 
 which has been so altered from its original bearings 
 that it now destroys the farming interest? This, no 
 doubt, is the grand difficulty — to get a principle to 
 work out the end which you design for it, and it is 
 evident such an end cannot be attained aU at once. 
 This difficulty it was which prompted Sir Eobert Peel's 
 sliding-scale. 
 
 We may allude here to the remarks made by Mr 
 Gladstone at the time, and adduced by Cobden to show 
 some discrepancy between him and Sir Eobert Peel on 
 the effect of the sliding-scale in maintaining price. Mr 
 Gladstone said (1844), " that the last Corn Law [of 1842] 
 had been most successful in its operation, and he took 
 great credit to the Government for the steadiness of 
 price obtained under it." ^ Sir Eobert asserted that you 
 could not maintain prices by legislation. Where, then, 
 was the error ? In confusing the fundamental support 
 which the Corn Law gave with those sudden variations 
 caused by minor influences. But now the course of 
 time, and changes in those conditions which Cobden 
 regarded as permanent, have minimised the protection 
 which he styled a natural protection ; and why natural 
 protection? That natural protection has come to be, 
 from many circumstances, no protection at all. As you 
 approximate the supply to the demand, as the foreign 
 
 1 Quoted by Cobden in House of Commons, in speecb of 13th March 
 1845. "We draw the attention of the reader to the fact that the price 
 of wheat, wliioh had been greatly disturbed by the war with France, 
 had been slowly but steadily declining since 1815, the year of the first 
 Corn Law ; and this took place in spite of the speculations of the corn 
 merchants. 
 
76 FREE TRADE UNDER PROTECTION. 
 
 corn-growers extended and improved the cultivation 
 of the soil, price was lowered, when they were sure of 
 a market for their produce. Then, again, competition 
 amongst the foreign exporters entered as another factor 
 to reduce price. But finally, the cost of transit, by the 
 increase of advantages which were gained from the pos- 
 session of a constant market, became lower, and is now 
 not a twentieth part of what Cobden expected it would 
 always remain. Thus have the home farmers been 
 robbed of the effect of that natural protection which 
 Cobden left to them. Now, if Cobden had been aware 
 of any such adverse working of his principle, would he 
 have taken steps to counteract it ? In our opinion the 
 question is beyond doubt. And for this reason — that 
 it was not Cobden's intention that his measure should 
 throw land out of cultivation. If, then, as the case 
 stands, Cobden allowed the efficacy of a natural pro- 
 tection, and if, as his sentiments upon the corn prob- 
 lem fully corroborate, he would have granted the corn- 
 growers of the United Kingdom that just protection to 
 which they are entitled, supposing they are to continue 
 the agricultural industries of the country, then what 
 objection can his successors bring forward against a 
 due and proper protection to the home markets — a 
 duty upon foreign corn, to indemnify them for that 
 natural protection of which they have been robbed? 
 Upon what ground do the free-traders of to-day oppose 
 a duty upon corn in the face of such evidence, drawn 
 entirely from Cobden's treatment of the question ? Is 
 it because this step would defer, perhaps throw aside, 
 that free trade in land which still forms a part of the 
 free - trade programme ? Or is it because the free- 
 
FREE TRADE UNDER PROTECTION. 77 
 
 traders would become insignificant with the downfall of 
 their policy ? 
 
 But prove as we may that the action of free trade 
 has become quite contrary to what its original pro- 
 moters intended it to be, it is only to be expected, and 
 it follows from the frailty of our constitution, that free- 
 traders will oppose such a duty upon corn to the very 
 last. Introduce it, and their existence is rendered im- 
 possible. It must be left, therefore, to the collective 
 judgment of the nation to determine whether free trade 
 in corn is to continue, and the land to go completely 
 out of cultivation, and the manufacturing labour market 
 to be still further embarrassed than it at present is, by 
 reason of the additional competition in it ; or whether 
 the land is to be cultivated under a due and proper 
 protection, the manufacturing labour to be relieved of 
 its unnatural distension, and manufacture herself to be 
 stimulated by the demands of the agricultural labourer.^ 
 The nation must decide whether a small section of the 
 community is to continue obtruding its views, to the 
 detriment of society at large, just because their ideal 
 views have not been accomplished, or because they 
 have some more ideal views with which to experiment 
 upon the progress of the people. 
 
 § 8. Cheap bread and the object of the Manchester 
 school. — To assist those who are capable of giving an 
 impartial judgment on this vital question, we have 
 
 1 This demand for manufactured goods on the part of the agricul- 
 tural labourer was considered by Cobden to be a most important one. 
 Improve his wages, and he will become a better customei'. But free 
 trade has destroyed what little-custom he gave. 
 
78 FREE TRADE UNDER PROTECTION. 
 
 been impelled, from the certainty of the destructive 
 character of our present system of free imports, carried 
 on under the all-imposing name of free trade, to offer 
 such evidence as we could derive from Cobden's own 
 words. This evidence, though it may be startling to 
 those who read it for the first time, is quite correct, 
 and can be verified by reference to his many harangues 
 upon free trade. It is the business of those who doubt 
 it to detect the flaw. The question, as we understand 
 it, is not whether a section of a party shall continue 
 to exist, or whether a principle shall still reign; it 
 is whether the nation shall recover from a decline in 
 which, by a series of unfortunate phenomena,^ none of 
 which were apparently foreseen by the free-traders 
 themselves, it has already entered. 
 
 If Cobden permitted a " natural " protection, what 
 harm can there possibly be done to his practical system 
 by yielding its equivalent now ? To the unprejudiced, 
 obviously there can be none, for there is nothing 
 effected contrary to his intention. But the free-traders 
 have their fascinating principle to defend. Admit the 
 justice of the above inference, and they are bound to 
 retreat from the field of discussion, if they cannot 
 advance something other than a due and proper pro- 
 tection, in the place of a natural protection. Are they 
 agreed that agriculture is to be maintained? Then 
 what proposal do they make in order to accomplish 
 their purpose? 
 
 ' 1. The disappearance of Cobden's natural protection. 
 
 2. The capabilities of corn-growing States not only to meet our 
 demands, but to depreciate the value of home-grown wheat. 
 
 3. Foreign competition in home manufacturing markets, which 
 Cobden said he did not fear. 
 
FREE TRADE UNDER PROTECTION. 79 
 
 We have seen that Cobden destroyed the sources of 
 that over-speculation which made so great havoc in 
 the corn markets. But he never blames the corn 
 merchants ; nor does he take into consideration the 
 influence of the season in bringing that excessive specu- 
 lation about. The high price of corn he laid at the door 
 of the landlords, because high rents cause the price of 
 corn to be high. Do the free-traders of to-day subscribe 
 to this doctrine ? Will they continue to do so in the 
 teeth of evidence, supplied by John Stuart Mill, the 
 late Professor Jevons, and the late Professor Cairnes,^ all 
 of them ardent free-traders, but not one of whom, unfor- 
 tunately for theii' cause, defined what was the action 
 of their favourite principle? 
 
 But if Cobden did not refer to the speculation of the 
 corn merchants, neither did he refer to the speculative 
 tendencies of the manufacturers. We mean in the sense 
 of censuring them for being the direct cause of the 
 periodic distresses of the country. Everybody knows 
 how Cobden explained the over-production of the manu- 
 facturers and the consequent distension of the markets. 
 It was because the seasons were unfavourable ; because 
 bread was high, and therefore ability on the part of 
 the labourers to purchase manufactured goods was di- 
 minished. With distended markets, too, labour being 
 dear, there was no inducement on the part of the 
 manufacturer to go on with production. Such is 
 clearly to place manufacturing distress after agricul- 
 
 ' The doctrine these distinguished economists advanced is that in- 
 crease in rent follows increase in price. It is necessary to warn the 
 readers of Cobden of the fundamental error he committed in ascribing 
 high price to high rent. 
 
80 FEEE TRADE UNDER PROTECTION. 
 
 tural distress in order of time, and associate them 
 together as being cause and effect. Agricultural distress, 
 it is true, may have had some influence in accounting 
 for the depression of the home markets ; hut the fact 
 that it was not the sole cause ^ of that depression is 
 shown in the circumstance that manufacture was de- 
 pressed while agriculture was in a flourishing state. 
 These coexistences were also observed by Cobden. 
 And he pictured the progress of our chief industries as 
 being in perpetual antagonism, so that when the one 
 prospered, the other was depressed. But he never 
 mentioned the state of the money market as tending to 
 induce those excessive speculations, which Sir Eobert 
 Peel adduced as the principal factor in the causation of 
 the manufacturers' distress. So far as he was con- 
 cerned, the latter had no faults ; it is certain that he 
 never alluded to them. 
 
 But if Cobden unwittingly destroyed the influence of 
 speculation in the corn markets, without any doubt he 
 increased it in the markets of the manufacturers. He 
 might succeed in destroying the place in which self- 
 interest was exerted, and sometimes- exerted wildly and 
 disastrously. But he could not destroy the motive. The 
 motive of self-interest was diverted into the manufac- 
 turing markets, and exercised there a predominant sway. 
 Capital, which would have been directed towards culti- 
 vating the soil, was gradually diverted to the promotion 
 of manufacture. Hence arose that gigantic consumption 
 
 1 Besides, its magnitude must be taken into consideration as well. 
 Cobden tells us that the agricultural labourers expended on home 
 manufactures but a million and a half. The reader is to suppose that 
 cheap bread was demanded only to convert this into two millions. 
 
TKEE TRADE UNDER PROTECTION. 81 
 
 of labour which characterised the manufacturing pur- 
 suits of the country between 1850 and 1866. Was 
 speculation destroyed in the markets of the merchant ? 
 There is no need to fear speculation which concerns the 
 actual existence of goods. But was over-speculation 
 prohibited ? ^ We call the evidence recently delivered 
 before the Eoyal Commission to inquire into the Depres- 
 sion of Trade. The present depression is due to an 
 overstocking of the markets, caused by over-produc- 
 tion. There has been, therefore, some error in adjust- 
 ing the amount of supply to demand. How was this 
 overstocking brought about ? In this way. The artifi- 
 cial demand created by free trade has gradually disap- 
 peared. That demand now is, in greater part, supplied 
 by the foreigner himself. He has been stimulated to 
 do so by the rapacity of the British manufacturer. But 
 this artificial demand was the outcome of free trade. 
 It certainly does not exist now, else there would be no 
 depression of trade. Depression has been caused by 
 the gradual disappearance of an artificial foreign de- 
 mand.^ But for the distress which existed during pro- 
 tection, — and let the reader remember how much and 
 how severe any depression of our markets could be so 
 long as our exports went on advancing — let him com- 
 pare it with the present depression, in which our exports 
 
 ^ Protection, Cobden averred, if it caused prosperity, caused a ficti- 
 tious prosperity. We exported goods ; but these goods were not im- 
 mediately paid for. Now free trade was to create a real prosperity. 
 We were to buy our corn and other imports with the produce of our 
 manufacture. Do we, as matter of fact ? 
 
 2 And also by the former home demand for manufactured goods on 
 the part of the agricultural labourers, now very considerably reduced 
 in numbers. 
 
 F 
 
82 FREE TRADE UNDBK PROTECTION. 
 
 have been stationary practically for the last ten years, 
 — Cobden blamed not only the landlords, who kept up 
 a high price of bread, but also the farmers, who did not 
 spend enough capital upon their farms, and therefore 
 did not produce enough to satisfy the wants of the 
 country. Is it difficult -to be convinced, from what has 
 been adduced, that he blamed entirely the wrong cause, 
 and to perceive that the corn merchants were alone to 
 blame, if blame was to be bestowed upon the authors 
 of excessive prices ? What would Cobden blame to- 
 day as the cause of the present decline ? What do the 
 free-traders bring forward as a cause ? It is over-pro- 
 duction, they say. Then whose fault is it that such a 
 phenomenon should appear 1 It must be the merchant's 
 fault. For it is evident that agriculture cannot be 
 blamed ; nor yet the money market, since the circula- 
 tion has been reduced to a metallic one. But why did 
 he over-produce ? Because his expectation led him to 
 believe that he would still be able to find a market for 
 his goods. Upon what was that expectation based? 
 Upon the evidence which the assumed prosperous period 
 of free trade in this country afforded him. Now, what 
 is to blame for such a disappointment of expectation ? 
 Is there any other cause than an unequal free trade ? 
 But the free-traders retort, " Our trade under pro- 
 tection had the faculty of recovering from these par- 
 oxysmal depressions from which it suffered periodically. 
 Now, when we introduced free trade, what we reaUy 
 did was to unfetter the industries of the country. Our 
 legislation was framed to advance, not to retard. If, 
 therefore, our industries recovered from depression 
 under protection, what is there to prevent them from 
 
FREE TRADE UNDER PROTECTION. 83 
 
 recovering equally under free trade ? " The answer, we 
 think, is simple. We could predict, during the period 
 of protection, because we had certain experience to go 
 upon. But in the case of free trade we had yet to learn 
 from experience. Besides, there are very many different 
 circumstances existing now to what obtained then. Is 
 it logical to infer that because depression was remedi- 
 able under protection, that it is also remediable under 
 free trade ? Does not such a conclusion assume the 
 very point which is under discussion — the nature of the 
 present depression ? But there is no difference, it ap- 
 pears, between the method employed by Cobden and 
 that held by his successors ; a method which consists 
 in the practice of analogous reasoning, when thfere is 
 not the least foundation for the assumed analogy. If 
 the free-trader asserts that the present depression is 
 like those which happened under free trade, he is bound 
 to show it. We assert that the various surrounding 
 conditions in the two instances of depression compared 
 are entirely different. How, then, can you infer from 
 one to the other ? But if the free-trader desires to be 
 reminded of some of those differences to which we have 
 alluded in surrounding conditions, then we will refer 
 him to the continuous investments of capital in this 
 country under protection. Capital was then applied 
 for the purpose of the advancement of the labour in- 
 terests of the people, because it was sure of reaping 
 an adequate reward. But nowadays capital is driven 
 away from the country, because there is less security 
 for its occupation than abroad. In other words, the 
 outlook of the progress of all our industries, without 
 exception, is dark under free trade; there is no bright star 
 
84 FEEE TRADE UNDER PROTECTION. 
 
 shining ahead, whose appearance Sir Eobert Peel so often 
 predicted; while under protection past experience showed 
 there was no cause for alarm, and, in spite of the depres- 
 sion, capitalists only awaited a favourable opportunity to 
 embark again in their trades. What does our experi- 
 ence under free trade teach us ? That our export trade 
 has become stationary. Did it ever become stationary 
 under protection, no matter how long and severe were 
 the periods of depression ? But no comparison can be 
 drawn between the period of depression under free 
 trade and any one occurring during the course of pro- 
 tection. Protective distress may have been sharp, but 
 it was never as prolonged as the period of free-trade 
 depression. Besides, the revival of trade under protec- 
 tion was associated with its general advancement. Take 
 the revival of trade in 1881 ; compare it with the great- 
 est prosperity we experienced under free trade while it 
 continued prosperous. And what will you discover as 
 the result of that comparison ? That, although our ex- 
 port trade, and our trade as a whole, was greater than 
 in the few previous years, yet it did not reach the re- 
 markable level of 1873. Now, what is there to be 
 learnt from this? That even when we experience a 
 revival, yet that the whole bulk of our trade is on the 
 wane. It is pursuing that downward path which we 
 have pictured in another place ^ with fluctuations of 
 minor degrees of prosperity, but the last of which, we 
 make bold to predict, will never reach the level of the 
 one that preceded it. 
 
 It is this anticipation, founded upon what we have 
 
 1 Free Trade : An Inquiry into the Nature of its Operation, p. 225. 
 Published by Messrs Blackwood & Sons. Edinburgh : 1887. 
 
FREE TRADE UNDER PROTECTION. 85 
 
 shown to be the direct and unopposed action of an 
 unequal free trade, as contrasted with its evanescent 
 and indirect ^ action, which leads those who allow the 
 accuracy of our facts, and acquiesce in their arrange- 
 ment, to oppose the continuation of a system of free 
 imports, as destructive to the best interests of the 
 nation. 
 
 1 "With the introduction of free trade, and cheap bread looming in 
 the future, the manufacturers increased their produce, in order to 
 swamp foreign markets. Was this " increased production" founded on 
 an economical basis ? No. This " increased production " we therefore 
 ascribe to the moral influence of the principle of free trade. 
 
 There can scarce be a doubt, we think, that the single object of the 
 Manchester school was to make British manufacture supreme. It has 
 failed to do this; and, in the attempt, has succeeded in destroying 
 agriculture. 
 
86 
 
 CHAPTEK IV. 
 
 COBDEN AND BRITISH AGEICULTDEE. 
 
 " There never can be prosperity in any country while all the numerous 
 cultivators of the soil are permanently depressed and injured." i 
 
 " When once there comes that spirit over the minds of men, — a spirit 
 which repudiates party, which seeks not to gain advantage here by the 
 spoliation of somebody there, but a spirit which wishes the truth to be fully 
 discovered and recognised, — ^the time will be at hand when the cultivators 
 of the soil shall no longer be made the shuttle-oock of political parties." 2 
 
 " I am deeply interested in the prosperity of agriculture." 
 
 — John Bbiqht. 
 
 COEDEN's one-sided AEODMBNTS — HIS OPINION OF THE PEOGKBSS OF 
 AOEIOULTCRE, BASED UPON WHAT HE BELIEVED WOULD HAPPEN, 
 BUT HIS PEEDICTIONS NOT BOENE OUT BY EXPEEIENOE — ATTITUDE 
 TO LANDED PEOPEIETOES WHO STOOD IN HIS WAT — HIS DATA FOE 
 DETEEMINING FUTUEE PRICES UNSOUND AND INSUFFICIENT. 
 
 § 9. Cobden as an advocate ; one-sided arguments. — 
 Free trade was openly promulgated by Cobden and his 
 associates to remove the distress arising from a scarcity 
 of corn. Such distress resulted from the insufficiency 
 of the home crops ensuing upon bad seasons. But this 
 free trade in corn was not in the slightest degree to 
 
 ' Speech delivered in House of Commons, April 11, 1851. 
 
 ^ P. 444 of Professor Thorold Rogers's edition of Right Hon. Jolm 
 Blight's Speeches. (This sentiment bears strongly upon the position 
 of our Army and Navy at the present day. ) 
 
FKEE TRADE UNDER PROTECTION. 87 
 
 exert any prejudicial influence upon the national agri- 
 culture. And it is certain that, towards the end of the 
 free-trade agitation, Cobden, in his usual incomplete 
 fashion, proved — he asserted the proof was conclusive 
 — that instead of being depressed by free trade, the 
 farming prospects of the country would be raised to 
 a height never known before.^ It was to place the 
 people outside the influence of a " natural " cause over 
 which there was no hiiman control. 
 
 At first the new policy created considerable alarm. 
 And such was the confusion of opinions, that the 
 majority of the original promoters of free trade be- 
 lieved that it would destroy agriculture. It was not 
 until Cobden — the farmer's friend ^ — showed how 
 competition would stimulate the production of wheat, 
 that some of the farmers began to be converted, and 
 the manufacturers to be satisfied. This assumed fact, 
 that our agriculture was not to suffer, proved one of 
 the essential props of his complicated policy — com- 
 plicated in the inevitable alterations which it induced 
 in every branch of internal and external trade. And 
 it was a prop which admitted of fascinating illustra- 
 tions. To appeal to the eye by telling the labouring 
 multitude that it was in their power to buy a larger 
 loaf for a less price than that which they were in 
 the habit of giving for a small one, may be looked 
 upon as a rhetorical success. But in order to give 
 the illustration stability and effect, it was his duty to 
 
 ' P. 114 : " We should be an exporting country, if we only grew as 
 much as wo may grow. " 
 
 => P. 93 : " If there has been one individual who has more consistently 
 stood up for farmers' interests and rights than another, I am the man," 
 
88 FREE TKADE UNDER PROTECTION. 
 
 tell his audience that the present he was making 
 them would be a solid and permanent one. And 
 further, as he always addressed himself to an intelli- 
 gent audience, it seems to us that it was almost re- 
 quisite for him to have detailed the nature of the 
 process which enabled him to confer so lasting a 
 benefit upon the labouring classes. Let us always 
 bear in mind that Cobden's free trade was to re- 
 move the source of distress which was caused by 
 occasional scarcity of corn. 
 
 But it did not suffice to dilate upon the happy 
 results accruing from a free intercourse in corn. He 
 might have been content with a mere reference to the 
 distressed state of the nation under protection, and 
 have referred to the circumstance that, in spite of 
 periodic attacks of commercial depression, the rate of 
 profits still continued to be high. He might simply 
 have proved to the nation that the state of affairs 
 which he contemplated would be far better than the 
 actual state in which he was then living. In short, 
 that protection might be good, but that free trade was 
 better. But his combative disposition precluded this 
 more sober course. Protection was a bad thing for 
 the country : it was the sole cause of all the evils 
 of the nation. Free trade was the regenerator. And 
 thus, denouncing the system of protection as having 
 no good effects (he said '' all protection was bad " ^ 
 — of course, he did not include " natural " protection) 
 
 1 "All protection was bad "; "protection is destmctive to agricul- 
 ture."— Pp. 61 and 87. 
 
 P. 27: "I do not ask for a law to enhance the profits of my busi- 
 ness ; " yet he says that the profits of manufacture will be enlarged 
 by repeal. 
 
FREE TRADE UNDER PROTECTION. 89 
 
 — as, in fact, working positive harm to the country ; 
 as, further, the protective system was associated in 
 his scheme with the tyranny of the landlords, — we need 
 not be surprised to hear that the association of pro- 
 tection and starvation became a very early means of 
 touching the susceptibilities of what Cobden was fond 
 of calling an intelligent assembly. But Cobden gained 
 his point by the power of persuasion. And it seems 
 the intellect of his followers could not have been 
 greatly exercised. We suppose that Cobden assimi- 
 lated a new meaning to the term which is capable of 
 so much abuse, — the intelligence of the country,^ — 
 and that he strictly applied to all those who were 
 disposed to agree with MnL For if you read of Cob- 
 den's treatment of his opponents, you will find that 
 he offered them little courtesy, and no respect. He 
 " candidly confessed he felt the most supreme con- 
 tempt for all they said." What especial reasons 
 there may have been for such conduct, which cer- 
 tainly does not reflect highly upon the beauty of his 
 character, we care not to inquire. We are disposed to 
 infer from these extremes of conduct, the disposition 
 of a passionate, and therefore dangerous, man. The 
 present age will not believe, though Cobden tells us 
 so, that all his followers were intelligent. But we 
 would have believed him had he told us that a par- 
 ticular section of them, and that section which gave 
 him pecuniary support in his political campaign, were 
 pursuing, under the cloak of Cobden's patriotism, a 
 
 ' But the "intelligence of the country " is veiy liable to fluctuate. 
 We have lately had an instance of it in the development of Home Rule 
 by Mr Gladstone. 
 
90 FREE TRADE UNDER PROTECTION. 
 
 very .selfish policy.^ Nor do we believe, though Cob- 
 den rated them as such, that all his opponents were 
 the ignorant and selfish creatures he misrepresented 
 them to be.^ 
 
 In thus evincing a partiality which all wlU agree is 
 unphilosophical, and many regard as unjust, he ren- 
 dered himself prone, as all prejudiced men do, to 
 serious error. It would be of small moment did the 
 errors of such men end with their own discomfort ; but 
 they become serious indeed when their consequences 
 reach the comforts of those for whose wellbeing reform 
 was originally effected. We do not think that Cobden 
 was calm enough or sober enough in his view of men 
 and things. He was too attached to his own ulterior 
 projects. He called them dreams.^ But the objects 
 which were present to his imagination matter little to 
 this or any succeeding age. What we are concerned 
 
 '■ Of., "We do not wisli to sacrifice any right of the richest or most 
 powerful class, but we are resolved that that class shall not sacrifice 
 the rights of a whole people." — John Bright. 
 
 On what grounds, we ask, did the Manchester school sacrifice agi-i- 
 eulture ? Compare the precept with the example. 
 
 2 " I will teach them the A B G of this protection. It is of no use 
 trying to teach children words of five syllables when they have not got 
 out of the alphabet." — P. 183. 
 
 ^ P. 187 : "But I have been accused of looking too much to mate- 
 rial interests. Nevertheless, I can say that I have taken as large and 
 great a view of the eflFects of this mighty principle as ever did any 
 man who dreamt over it in his own study. I see in the free-trade 
 principle that which shall act on the moral world as the principle of 
 gravitation in the universe, drawing men together, thrusting aside the 
 antagonism of race, creed, and language, and uniting us in the bonds 
 of eternal peace. I have looked even farther. I have speculated and 
 probably dreamt in the ' dim ' future on what the effect of the triumph 
 of this principle was, say a thousand years hence." Perhaps so. But 
 will it actually occur within this moderate interval of time ? 
 
FEEE TRADE UNDER PROTECTION. 91 
 
 with is the certainty and security of the means he 
 adopted to effect his ends. If these fail, it is clear the 
 ends become of small importance. We think many 
 will be inclined to blame, not the sincerity of the 
 man, but his unhappy temperament, which urged him 
 headlong in a wild commercial career. We think, 
 too, that most people judge those to be best qualified 
 for the art of governing the various disorders which 
 occur in the progress of our commerce and society, 
 who are gifted with a disposition enabling them to 
 take just, because rational, views.^ In order to this, it 
 is necessary to regard each difficulty from the two 
 sides of those who have a grievance and those from 
 whom the grievance is supposed to flow, and every 
 opinion concerning its removal in the same way ; or, if 
 you like it better, to take the egoistic and altruistic 
 views of principles advanced to adjust commercial and 
 social wrongs. 
 
 Now the altruistic views of his reforms Cobden did 
 not efficiently regard. He glanced at them merely. 
 He was, on this account, most unfitted to undertake 
 the conduct of great affairs.^ But he succeeded ! There 
 are many elements needed to become successful. Cob- 
 den was earnest and enthusiastic ; he could generate 
 
 ^ The evidence, to be derived from a study of Cobden's speeches, that 
 he pleaded the cause of free trade, and that he did not sit in judgment 
 on it, is overwhelming. 
 
 - And yet there are still some who tliink that the treaty with France 
 ■(I860) was a great masterpiece. See Professor Thorold Rogers in 
 ' Cobden and Political Opinion, ' chap. ix. The existence of a treaty 
 precludes the existence of free trade. Therefore, one or the other, or 
 both parties to it, must be more or less protected. It seems the eye 
 of the free-trader is not large enough to see that all the protection is 
 on the side of the Fi-ench people. 
 
92 FREE TRADE UNDER PROTECTION. 
 
 that enthusiasm in the breasts of others which he felt 
 in his own. Nor did he hesitate to abuse ; and thus he 
 used the lowest means to succeed. But, besides all 
 these, he could persuade. We think that it cannot 
 but be seen now that the intelligence of the main body 
 of his followers was deceived. Cobden first deceived 
 himself ; his dangerous faculty rendered it an easy task 
 for him to involve and continue others in error. 
 
 § 10. Cohden and the future price of corn: "protection 
 and starvation." — This was his appeal to the mob. It 
 was by this means that he raised up passion in the 
 multitude, and then directed their angry eyes, when 
 judgment was obscured, to look upon protection as the 
 cause of their distress. It was a loathsome thing, this 
 protection ; and it must be trampled under foot. But 
 the great landed proprietors stood in the way. They 
 must be sacrificed ; the Napoleon of commerce decreed 
 it. And so we read of his insults to the aristocracy, 
 whose only object, he declared, was to grind down the 
 people's wages to the lowest limits of subsistence. It 
 was the landlords who hindered the agricultural labourer 
 from advancing in the scale of civilisation. 
 
 Such reasoning was, of course, the intellectual produce 
 of a hot-headed partisan. We presume, if we may venture 
 to do so, seeing that he has been described as a weU-read 
 man,^ that Cobden was aware, from its description in 
 the ' History of Prices ' by Tooke, of the extreme distress 
 
 1 Professor Thorold Rogers. Cobden knew very well how to select 
 his arguments. Instead of giving all the evidence necessary to lead 
 to a sound conclusion, he gives just enough to establish his biassed 
 view. 
 
FREE TRADE UNDER PROTECTION. 93 
 
 which prevailed throughout France in the year 1839. 
 This was due to the scarcity of corn from unfavourable 
 harvests. Unfortunately, too, this country was at that 
 time suffering from distress. We had a Corn Law ; the 
 Frenchman had not. And yet Cobden thought himself 
 justified in attributing all our distress to the Corn Law. 
 Was this logical ? Can you with propriety infer, when 
 there are many causes of distress in existence, that only 
 one prevails, unless you adduce special grounds^ for 
 the exceptional case? But the protectionist might 
 argue from the fact that distress prevailed in France, 
 without any Corn Law, that the Corn Law was not the 
 cause of distress in England. He might adduce the 
 opinion that the Corn Law was required to prevent the 
 country from being swamped with foreign corn. And 
 he might, too, bring the weighty authority of Huskis- 
 son to his support. The protectionist states that you 
 may have distress from scarcity without a Corn Law. 
 If, therefore, protection be a cause of scarcity, how does 
 it act ? ^ Obviously, the Corn Law only obtruded itself 
 upon the notice of the agitator during bad seasons. 
 During these bad seasons, the supply of corn from 
 
 1 It was Cobden's contention, that by reducing the price of corn, 
 the prosperity of manufacture would be assured. But had not manu- 
 facture prospered under the Corn Law. Add the years of prosperity, 
 and compare them with the years of distress ; the prosperous years 
 will be found to be far more numerous than adverse ones. A point to 
 remember also, is, that during protective distress, the rate of profit 
 did not decline. 
 
 " The free-trader replies, protection fetters trade. But does not also 
 free trade put fetters on our industries? Take agriculture. Thus 
 you will perceive that the so-called fetters have not in reality been 
 destroyed by free trade ; and that they have only had their position 
 altered by it. 
 
94 PEEE TKADE UNDER PROTECTION. 
 
 foreign parts might be inadequate to meet the demands 
 of the country. Can you prove that they were then 
 inadequate to the assumed requisite demands ? There 
 is only Cobden's statement of the impossibility of ade- 
 quate supplies, and many of his statements affecting 
 the corn question were certainly not the most reliable. 
 But it was only at certain times that this possibility of 
 an alarming scarcity was likely to become an actual 
 fact. Here, however, we may remind the reader that 
 Cobden, who, we have already mentioned, most prob- 
 ably derived his information from M'Culloch, failed to 
 hit upon the exact state of the corn-growing countries of 
 the Continent from a perusal of the ' Commercial Dic- 
 tionary.' It is possible he may have overlooked the 
 passage ; but Professor Rogers asserts that his experi- 
 ence was " world-wide," and his memory very retentive. 
 But here it is, nevertheless. And you will see that 
 attention to these passages, which we are about to 
 quote, would have rendered unnecessary that vicious 
 tampering with the progress of our agriculture which 
 subsequently was effected. It is a direct denial, and 
 out of his own mouth, to what M'Culloch says on 
 another occasion, when he is treating the corn question 
 from the free import point of view.^ He proved con- 
 clusively in one place that any large quantity of wheat 
 could not be brought into this country under 50s. a quar- 
 ter ; and he states the circumstances which intervened 
 to prevent an excessive supply. Thus, from Odessa, it 
 was the dif&culty of conveying corn from the interior ; 
 for as this was done by means of cattle, the quantity 
 was limited by the number of cattle. From Danzig 
 ^ See his pamphlet on the Corn Laws. 
 
FREE TRADE UNDER PROTECTION. 95 
 
 he relied upon past experience to conclude that the 
 largest quantity imported in the near future would not 
 exceed 200,000 quarters.^ And he limits the total 
 possible supply of grain to this country from all sources 
 at ahout one million and a half quarters. But before 
 we quote the passage which gives a direct denial to 
 what had first been written, let us invite attention to 
 the amount of wheat imported into this country during 
 certain years. 
 
 In 1830 there 
 
 were 
 
 imported ' . 
 
 1,494,898 quarters. 
 
 1, 1833 
 
 ir 
 
 
 1,144 „ 
 
 rr 1835 
 
 tl 
 
 
 48 If 
 
 n 1837 
 
 11 
 
 
 232,620 
 
 M 1839 
 
 ir 
 
 
 2,500,045 
 
 Here there is evidence enough that foreign countries 
 could supply aU those demands ^ of wheat which this 
 country made upon them. It is true they were fitful 
 demands, and oftentimes sudden demands. But never, 
 so far as we have read, has there been an actual scarcity, 
 for any serious length of time, in England.^ What this 
 country required it could always obtain ; and if the 
 demand were sudden, then there was sufficient wheat 
 hoarded in the granaries of corn-growing countries, ready 
 
 '■ No mention is made of tlie development of additional capabilities, 
 wilder new conditions. 
 
 ^ But to get out of this difficulty Cobden asserted the people were 
 not properly fed. 
 
 ' Opponents may draw attention to the Bread riots. It is difficult 
 for us to decide as to the exact value of those riots as signs of real 
 distress. There are always some disaffected persons ready to take ad- 
 vantage of temporary distress to promote their own ends. They are to 
 be found among the idle portion of the community. The curious point 
 however, is, that the Chartists did not want any alteration of the Com 
 Law. 
 
96 PKEE TRADE UNDEE PROTECTION. 
 
 at any time to be thrown into our markets. Now it was 
 this factor which tended to prevent a dearth. But what 
 does Cobden say of the capacity of foreign corn countries 
 to supply our markets 1 We give his own words, pp. 152, 
 153: "Now there is the profoundest philosophy pre- 
 sented in aU the charms of poetic language.^ But I like 
 to go to experience ; I never like to deal in the future, 
 or to argue on what will happen ; but let us take the 
 lights of experience to guide us in our paths for the 
 future. We have had occasions in this country, when 
 we have had as sudden a demand for corn aU over 
 the world for this country, as though we had a total 
 and immediate repeal of the Corn Laws. In 1839, 
 1840, and 1841, during all these three years, the aver- 
 age price of corn in this country was 67s. We ran- 
 sacked the world for com during these three years ; 
 our merchants sent everywhere for it ; we swept over 
 the face of the earth, bribing every nation to send their 
 corn to this rich market, and gain this high price for 
 their produce. I will give you a list of places from 
 which we received corn in one year during that period : 
 from Eussia, Sweden, Norway, Denmark, Prussia, Ger- 
 many, Holland, Belgium, France, Portugal, Spain, 
 Gibraltar, Italy, Malta, Ionian Islands, Turkey, Egypt, 
 Tripoli, Tunis, Algiers, Morocco, Cape of Good Hope, 
 Mauritius, East India Company's territory, Australia, 
 Canada, United States, Chili, and Peru. Every region 
 on the face of the globe — Europe, Asia, Africa, 
 America, and even Australia — was ransacked for 
 
 ' Refemng to a passage whicli he had just quoted from the ' Times,' 
 containing, "But rivers of corn are as pure and impossible a fiction 
 as rivers of gold ! " 
 
FREE TRADE UNDER PROTECTION. 97 
 
 corn. How much do you think we got in the course 
 of that year, — ^bribing the nations of the earth with the 
 high price of 67s. a quarter ? In 1839, we received in 
 wheat and flour together, equivalent to 2,875,605 
 quarters — about one-eighth of the annual consumption 
 of the wheat of this country. In 1840, when we had 
 given them a year's stimulus, the imports were 2,432,769 
 quarters of corn. In 1841, 2,783,602 quarters. During 
 those three years we imported 8,091,972 quarters, being 
 an average each year of 2,700,000 quarters. Now, 
 mark me, that corn was sent out for by our merchants 
 with a knowledge that the price in this country for 
 eorn was nearly 70s. a quarter, and was brought here 
 with the belief and under the conviction that every 
 quarter of it would be admitted into this country under 
 a Is. duty. There was, therefore, during these three 
 years virtually a total and immediate repeal of the 
 Corn Laws ; and you see the result in the supply for 
 this market." 
 
 And now, in reply, to enlighten those who perhaps 
 may think that all the various facts relating to the com 
 problem were properly set forth by the repealers during 
 the free-trade agitation, we quote the passage to which 
 we alluded above. It is on page 432 of M'Culloch's 
 ' Dictionary of Commerce and Commercial Navigation.' 
 " The wheat shipped at Odessa is principally brought 
 from Volhynia and the Polish provinces to the south of 
 Cracow, the supplies from which are susceptible of an 
 indefinite increase." ^ Was there sufficient ground, 
 
 1 The inconsistency alluded to was pointed out by an author who 
 signed himself F. C, and who criticised M'CuUocli's pamphlet on the 
 Corn Laws in an able Irochure, published by W. E. Painter, Strand, 
 
 G 
 
98 FREE TRADE UNDER PROTECTION. 
 
 then, for those who argued that an alteration in the cir- 
 cumstances relating to the importation of corn would 
 be associated with injury to the home producers ? Was 
 Huskisson's scare needed to prevent the country from 
 being swamped with foreign corn ? But all the possi- 
 bilities hanging upon this view of the question were 
 utterly neglected. It was futile — so the free-traders said, 
 and it was by so false an argument that they persuaded 
 many of the tenant-farmers of the kingdom — to suppose 
 that any serious amount of wheat could be imported 
 into the country. Why ? Because the annual average 
 of past experience, extending over a period of three 
 years, was a little more than two and a half million 
 quarters.^ It has been truly remarked of the repealers, 
 " that they thought the rest of the world, including the 
 corn-growing States, would stand still, while they alone 
 progressed." ^ If such were the real dangers to be appre- 
 hended, and they were not nugatory ones, it is clear 
 that, if the repealers were alive to them, then they must 
 
 in 1841. The confusion of the times is here strikingly illustrated in 
 M'Culloch's forced change of front. He was first an able supporter of 
 the Corn Law, but in face of the formidable free-trade agitation he 
 judged it " expedient " to arrive at a compromise. 
 
 ^ But if Cobden had taken an experience extending over a wider 
 range, between 1828 and 1840, he would have found that the average 
 imports were but a little more than one million quarters. Cobden 
 said he liked to go to experience. But what experience had he had of 
 free trade ? Absolutely none. It suited, however, his purpose to 
 inform the nation that with a " virtual " repeal so harmless — an exag- 
 gerated description of a free trade under Jprotection — they need not be 
 alarmed at a real repeal, and that, too, a sudden and total one. ' ' I 
 never like to deal in the future," &c., said Cobden. Yet he " dreamt " 
 of the benefits to accrue from free trade, p. 187. 
 
 2 Essay on Free Trade, published by Ridgway, Piccadilly, 1841, 
 and signed F. 0. 
 
FREE TRADE UNDER PROTECTION. 99 
 
 have been certain of a mucli larger gain to meet this 
 possible loss. For the risk would not have been under- 
 taken unless there were the corresponding rewards. 
 But, as we have already stated, our belief is that Cobden 
 erred in not grasping the whole of the subject ; in not 
 attending to each factor in all its existing and possible 
 bearings; in not regarding sufficiently the remote as 
 well as the immediate consequences of a free trade 
 in corn. We believe that Cobden, when he pleaded 
 for the interests of manufacturers, was under a profound 
 impression of advancing the true interests of the nation. 
 It was impossible, on his own authority, that he should 
 legislate for a class. " We will have no war of classes 
 in this country," said he ; and when voting for the re- 
 peal of the malt-tax, he added that he did not take that 
 position out of any affection for the farmers.^ And in 
 the increased activity which the English people would 
 experience from a policy of free trade, he believed that 
 all other nations would be roused into the same activity 
 by the same means ; and that the more intimate com- 
 munion between nations thus effected would redound 
 to the benefit of the world. For he predicted^ that 
 
 '■ P. 204: " If he did, lie would follow the error of the protectionists 
 hy attempting to legislate for a particular class." 
 
 ^ P. 85 : "I believe that if you abolish the Corn Laws honestly, 
 there will not be a tariff in Europe that will not be changed in less 
 than five years to follow your example." 
 
 P. 201 : " I believe there is no event that has ever happened in 
 the world's history, that in a moral and social point of view there is 
 no human event that has happened in the world, more calculated to 
 promote the enduring interests of humanity than the establishment of 
 the principle of free trade, — I don't mean in a pecuniary point of view, 
 or as a principle applied to England ; but we have a principle estab- 
 lished now which is eternal in its truth and universal in its applica- 
 tion, and must be applied in all nations and throughout all times, and 
 
100 FEEE TRADE UNDER PEOTECTION. 
 
 not five years would elapse, after the repeal of the Corn 
 Laws, before other nations would follow in our suit. 
 How far Cobden's anticipations have been realised, has 
 been left for the present generation to determine. And 
 it is possible, nowadays, seeing that free-trade enthu- 
 siasm is already on the wane, to analyse, without fear 
 of being thought insane, the extraordinary errors of a 
 great man, and to learn how they led him insidiously 
 into a trade policy which was assumed (and in some 
 way was) successful at first, but which was sure to be 
 destructive after the beneficial stimulation of other 
 forces had disappeared. 
 
 applied not simply to commerce, but to every item of the tariffs of the 
 world ; and if we are not mistaken in thinking that our principles are 
 true, be assured that those results will follow, and at no very distant 
 period. 
 
101 
 
 CHAPTER V. 
 
 THE DIRECT EFFECTS OF PEEE TRADE ON AGEICULTUEE, 
 REMOTE EFFECTS UPON LABOUR GENERALLY. 
 
 " Was there ever successful impostor who did not commence by a fraud 
 on his own understanding ? " — Lord Lytton. 
 
 THE FKBB-TBADE ELEMENTS TO DETERMINE A "STEADY AND FIXED " 
 PMCE OP COKN HAVE VEEY CONSIDERABLY VARIED — " FREE TRADE 
 AND ABUNDANOB," SO LONG AS WE ARE ABLE TO PURCHASE SUP- 
 PLIES FROM ABROAD — HUSKISSON AND THE CORN LAW: "l AM 
 NOT ONE OF THOSE WHO WISH TO LESSEN THE BANK WHICH THE 
 AGRICULTURISTS HOLD IN THIS COUNTRY" — RISE IN PRICES DUE TO 
 CORN SPECULATION — COBDEN ASSERTED FARMERS SOLD THEIR CORN 
 AT THE LOWEST, THAT THE CORN SPECULATOR SOLD AT THE HIGH- 
 EST PRICES — COBDEN ALSO STATED THAT CORN LAW RUINED THE 
 CORN SPECULATORS ! — THE MACHINERY BY WHICH PRICE OF CORN 
 WAS REGULATED HAD ITS DEFECTS — THE BEST PART OF THE LAW 
 WAS BLAMED FOR THE DEFICIENCIES OF THE WORST— FREE TRADE 
 AND STARVATION — THE DISPLACEMENT OF LABOUR — THE LOGICAL 
 CONCLUSION OF FREE TRADE DRIVING CAPITAL FROM LESS TO MORE 
 REMUNERATIVE CHANNELS — THE FREE-TRADERS STAND UPON 
 HYPOTHETICAL POSITIONS OF THEIR OWN CONSTRUCTION — THEIR 
 AIM WAS TO FORCE THE WORLD'S COMMERCE TO ASSUME THOSE 
 POSITIONS — ALL OTHER NATIONS NOT FREE-TRADERS ! 
 
 § 11. Cohden's factors for the future ]^rice of corn. — To 
 remove the especial cause of scarcity — a hypothetical 
 scarcity — and to ensure an abundance of cheap food, 
 were the objects of a free intercourse in corn. Thus 
 
102 FREE TRADE UNDER PROTECTION. 
 
 the fitful character of the country's demand for a supply 
 of the chief necessary of life was destroyed. Occasional 
 demands became permanent ones, and with the per- 
 manency in the demand for corn by a free-trade nation, 
 a new field was opened up to foreign corn-growing 
 States. 
 
 Nobody wiU dispute the tendency of the foreigner to 
 increase his productions when he has a market which 
 will freely admit them. But this tendency of course 
 has its limits, and those limits are — (1) the lowest price 
 at which corn can be grown at a profit in corn-growing 
 countries ; and (2), increase of corn-land under cultiva- 
 tion from accession of capital to foreign agriculture. 
 Now it seems the Corn-Law repealers deduced the single 
 limit, which they applied to this tendency, from past 
 experience of the quantity of imported corn. Does it 
 occur to the reader that such was a safe treatment of 
 the issue in point ? If there be any doubt, it will at 
 once be dissipated when this factor is brought out clearly 
 into the foreground — the circumstance that the con- 
 ditions affecting the foreign supply were not the same 
 after as they were lefore the abolition of the Corn Laws.^ 
 If the conditions were to remain the same, then the free- 
 traders would have been justified in drawing those in- 
 ferences and that conclusion which they drew before 
 1845. But though the form of their argument is cor- 
 rect, its substance is unsound in so far as the major 
 premiss is concerned. They assumed that a free trade 
 in corn would make up the deficiency arising from bad 
 
 ' CoMen argued as if they would continue the same. To strengthen 
 his conclusion, he states there was a, virtual repeal during 1839-41. 
 There was, however, no ground for such a procedure. 
 
FREE TEADE UNDER PROTECTION. 103 
 
 seasons. Only " let the foreigner see what the English 
 market is in its natural state, and then they will be 
 able to judge from year to year and from season to 
 season what will be the future demand of this country 
 for foreign corn." ^ Thus they argued that it was the 
 reverse of likely to expect the country being swamped 
 with foreign corn. "Point out the places where the 
 corn is to grow," they exclaimed; and then consider 
 the expense of conveying it to our ports. It was on 
 this ground — viz., that the home corn market would 
 not be depressed by competition ^ — that they gained an 
 easy victory over their opponents. But in all questions 
 affecting mutable factors, to take a " present " view 
 does not suffice. It is requisite, if you do not wish to 
 court disaster, to contemplate what will happen as the 
 future consequences of alterations. We instance the 
 very extensive changes that have taken place, nor have 
 they ceased to take place, in the conditions affecting 
 the home corn markets. " Valleys of corn " have sprung 
 up, and that, too, in spite of the ridicule which Cobden 
 threw upon the suggestion. The price of corn abroad 
 has constantly descended, though Cobden promised the 
 tenant-farmers that it would not fluctuate to their dis- 
 advantage.^ And the explanation is very simple. The 
 
 ^ P. 185. Suoli could only occur if prices were regulated by the 
 home market. 
 
 2 The reader will remember that competition was to stimulate the 
 home corn markets, and enable the British farmer to grow one-fourth 
 more. It was also to make England a corn-exporting country. He 
 will also remember that Cobden denounced protection as being the 
 cause of agricultural depression. 
 
 * Cobden anticipated a descent of price to the extent of 6s. — from 
 56s. to 50s. This conclusion he drew from considering England and 
 Jersey as parallel cases — vide p. 72. But the prospect of feeding a 
 
104 FEEE TRADE UNDER PROTECTION. 
 
 fertility of foreign soils was quite ignored, and the ex- 
 ■ tent of their cultivation was left out of the account — 
 in short, we assert that Cobden only looked to Europe 
 for our supply of corn.^ Now, as the facilities for the 
 production of foreign wheat were increased — as, in the 
 words of the free-traders, restrictions were removed — 
 what was bound to happen? Increased production. 
 Do the free-traders deny this ? But increased produc- 
 tion was associated, in the case of the foreign corn- 
 grower, with profit. This, too, will not be denied. And 
 the accumulation of profits means capital. The capital 
 of the foreign corn-growers thus increased, and was em- 
 ployed in the extension of the cultivation of the soil. 
 The amount of wheat, therefore, produced by foreign 
 countries gradually increased. It depended upon the 
 lowest cost of foreign production whether or not the 
 foreign grower would be able to displace the home pro- 
 ducer out of his own market. Even supposing the cost 
 of transit to remain the same, if, by expending more 
 capital upon his farms, the foreign grower could thereby 
 improve the quantity of produce at the same time that 
 he reduced the amount of labour bestowed upon it — 
 just those very consequences of which Cobden intended 
 the British farmer should reap the benefit ^ — then the 
 
 richer State affords a greater intensity of impulse on the part of the 
 foreigner for the desire of profit, and leads him to greater exertions. 
 
 ' Compare Speeches, p. 21, where the Auti-Corn-Law League had 
 been presented with a quantity of wheat ; but, said Cobden, after all 
 expenses had been paid, the cost of conveyance being so great, no 
 profit was left. It was, therefore, an uuremunerative gift. 
 
 2 Cobden laid down the principle that what the British farmers 
 wanted was more capital. Free trade was to compel more capital and 
 more labour to the cultivation of the soil. But though a small amount 
 of capital may be wasted in an assumed improvement, yet it is an 
 
FREE TRADE UNDEK PKOTECTION. 105 
 
 foreign grower would possess at least one, and a very- 
 important, means of lowering prices. Let us compare 
 the advantages which Cobden's policy had respectively 
 upon the home and foreign grower. He was imbued 
 with the idea that the British farmer did not produce 
 enough ; that he did not spend sufficient capital upon 
 his farm, nor employ enough labour. He must be 
 stimulated to better things. What was to be the stim- 
 ulus ? Foreign competition. Now it was being under 
 the impression that this stimulus supplied by foreign 
 competition would always remain about the same in 
 intensity, and that very moderate, which impelled 
 Cobden to advocate a free intercourse in corn. But by 
 what authority, upon what grounds, did he make so 
 perilous a conclusion ? Simply upon past experience, 
 without any particular reference to what would happen 
 in the future, if adverse changes took place. 
 
 But this was not the only factor which, it was pre- 
 dicted by the protectionists, would undergo that change 
 which is part now of our present experience. Upon 
 what grounds was the cost of transit placed at 10s. 
 a quarter from Danzig, the port whence the free- 
 traders anticipated would be obtained the greater part 
 of our supply 1 1 Did they consider that improvements 
 
 economic fact that capital in large quantity will not be applied unless 
 profits are remunerative. The political economists assert, in opposition 
 to Cobden, that you can only increase the extent of corn-land hy first 
 of aU raising the price of corn, and so directing "capital " into the far- 
 mer's hands. Of. Cobden, p. 135. 
 
 ^ P. 72 of Cobden's Speeches. This question is asked, because there 
 appears to be evidence pointing to the conclusion that wheat could be 
 imported from Danzig with profit, at the low cost of 3s. 6d. per quar- 
 ter. — See Calvert Holland's answer to M'CuUoch, in a pamphlet 
 published by OUivier, Pall Mall, in 1841. 
 
106 FREE TRADE UNDER PROTECTION. 
 
 in the means of transit would be effected — improve- 
 ments leading to a reduction of the cost ? If we were 
 to have abundance, that assuredly implies larger im- 
 ports. There would, consequently, be an increased 
 stimulus to shipping activity; with that increased 
 activity, the competition of the carriers would tend to 
 lower the cost of conveyance. And thus another factor 
 appeared (which was but a tendency in Cobden's days ; 
 but it seems tendencies were utterly ignored) to render 
 the "just" stimulation of the British farmer from the 
 reformer's point of view, an " unjust " stimulation from 
 the point of view of agricultural prosperity. We put it 
 to the reader whether or not either of these factors 
 would not be sufficient to paralyse the efforts of the 
 home producer. Can he produce at a profit to himself, 
 when the difference between the price of wheat at 
 Chicago and London does not admit of a profit being 
 made ? If, then, either of these forces produce a 
 paralysis, their combined influence must certainly effect 
 his destruction. 
 
 § 12. Cobden's relation to the abundance which followed 
 free imports of corn. — Cobden promised his countrymen 
 abundance ; at the same time he asserted that we could 
 not possibly derive from a free intercourse more than 
 two million and a half quarters during the year.^ Such 
 a quantity would not have supported the population at 
 the time he spoke for forty days ! It is not desirable 
 in so grave a subject to appear to be captious ; but it 
 
 1 P. 152. " We swept over the face of the earth, bribing every nation 
 to send their corn to this rich market, and gain this high price — 67s. 
 the quarter — for their produce." In 1840 the result was 2,700,000 qrs. 
 
FREE TRADE UNDER PROTECTION. 107 
 
 certainly seems as if Cobden's idea of abundance is 
 different from the ordinary acceptation of the term. 
 Does it refer to ought else than quantity ? Then a free 
 trade in com could not give us abundance, because 
 Cobden tells us most emphatically that the world could 
 not supply us with it.^ Did Cobden, by a process 
 peculiar to himself, include the element of price in his 
 idea of the word " abundance " ? So that it may be 
 said when an article is cheaper, you can buy more of it 
 for the same price.^ Now where, on Cobden's own 
 showing, is the additional quantity to come from ? 
 From our farmers' increased exertions ! But Cobden 
 more than once stated that his prime object was not to 
 cause a mere cheapness, rather was it to afford abun- 
 dance of the necessaries of life to the toiling multitude. 
 Thus does it appear that Cobden adapted his arguments 
 to the especial occasion for which they were severally 
 designed. He believed in the soundness of free trade ; 
 he predicted other nations would become free-traders 
 within five years, if we originated the policy. And 
 
 ' We refer to the passage in whicli Cobden ransacked the world for 
 corn. 
 
 2 There is some inconsistency regarding this point in Cobden's 
 speeches. Advocating the manufacturing labourers' distress, he states 
 that they will, by a free trade in corn, be enabled to spend less upon 
 bread and more upon manufactured goods. Instead of spending 23. 6d. 
 a-week upon bread, the labourer will spend but Is. Cobden does 
 not say the labourer was to have more bread, but only that its price 
 was to be reduced. On this occasion he was arguing out the causes of 
 high prices, and showing how they depressed manufacture. But when, 
 in 1844, he was pleading for agricultural distress, observe the change 
 of front. It was not cheapness merely, but plenty ; nay, he did not 
 desire to depress prices. And as the immediate result of a free trade 
 in corn, he stated that it was his belief that the price of corn would 
 have a tendency to rise instead of falling, p. 184. 
 
108 FREE TRADE UNDER PROTECTION. 
 
 thus do we discover how Cobden varied the " means " 
 to attain his " end." 
 
 This we are constrained to mention, in order to show 
 that just as Cobden was not comprehensive enough in 
 the management of his arguments (he was comprehen- 
 sive enough for the object which he had in view), so was 
 he not nice enough in the definition of his terms. It may 
 also be pointed out, that in his abnormal treatment of 
 words arose much obscurity. For it is evident that 
 when he tells you that you are to have abundance, and 
 in the same breath that that abundance does not exist, 
 there must be some ulterior motive urging him to im- 
 press his " ideal " views upon his intelligent audience. 
 Very probably to-day, as the result of the labours of the 
 school board, the idea of abundance in the popular 
 mind is reduced to its proper sphere. It is nearly cer- 
 tain that the unemployed — that portion of the honoured 
 working classes whom Cobden so tenderly fostered, 
 but the cause of whose disaster resides in the very 
 principle he advocated as being sure to effect their 
 elevation — have by a negative process a distinct idea of 
 what abundance is not. But Cobden told the labour- 
 ing crowd a generation ago they were always to have 
 abundance. Does the present one believe that this is 
 the fact? Have we reached a time when Cobden's 
 boast that free trade would always bring abundance of 
 the necessaries of life to this country, fails from being 
 contrary to the fact ? And what is the fact ? That 
 last year (1887) there was a deficiency of 2 millions 
 of quarters. The country requires 26 millions,^ it got 
 
 1 On the calculation that each individual requires 5.65 bushels 
 a-year. 
 
FEEE TRADE UNDER PROTECTION. 109 
 
 only 24. Do the traders look upon this result as sub- 
 stantiating Cobden's prediction, that we were always to 
 have abundance? 
 
 But we suppose that the association of starvation 
 with free trade will be regarded with the extreme of 
 indignation by the abstract free-traders of the present 
 day. We suppose they will receive this description of 
 the actual state of the nation much in the same way as 
 their predecessors received the warnings of the protec- 
 tionists — by arrogantly ignoring them. But we beg 
 leave to recall this difference between the attitude of 
 the protectionists and free - traders within a compar- 
 atively short period of time. The free-traders, with 
 Cobden at their head, proclaimed that the normal dis- 
 tress was due to protection. Let it be well considered 
 that the distress consisted in bread being at a high 
 price. There was no actual scarcity, but from the 
 deficiency of the harvests there portended one. And 
 how was this met ? In Huskisson's time, far from 
 there being anything like an insufiBciency, there was a 
 surplus. The warehouses were filled with corn, which 
 was taken out of bond and the duty paid upon it, when 
 there was a demand for it. Nay, so much of this corn 
 was imported, owing to the speculation of the corn 
 merchants, that its mere quantity became a nuisance. 
 At one time it was rotting in the warehouses ; ^ and to 
 satisfy the importunities of the corn merchants — and 
 they were entitled to just consideration when their 
 judgment did not overreach them in their patriotic 
 undertakings — Huskisson was obliged to pass a measure 
 
 I Huskisson's Speeches, vol. ii., pp. 555 and 568. Published by 
 Murray, Albemarle Street, 1831. 
 
110 FREE TEADE UNDER PROTECTION. 
 
 which permitted of this excess supply being thrown 
 into the markets during the three months which pre- 
 ceded the harvest.^ He was bound on the one side to 
 protect the interests of the home growers.^ This was 
 paramount. On the other, it was but fair that the 
 services of the corn importers should be properly- 
 recognised, and in this manner he attempted to remove 
 the evil consequences of their errors of judgment, at 
 the same time that he blamed them for exceeding so 
 far the demands of the country.^ This was the state of 
 the corn supply in Huskisson's time : instead of there 
 ever being a deficiency, there was always an actual or 
 potential surplus. "Where was the potential surplus ? 
 In foreign ports,* waiting shipment to this country 
 when the contracted state of the home markets was 
 favourable for its importation. Was there cause to 
 fear an immediate scarcity? Surely not. The de- 
 ficient harvests at home had first to be disposed of, 
 but the produce would not last throughout the year. 
 And Cobden has told us that even in 1839, when there 
 was a failure of the harvests in this country and 
 
 'Huskisson's Speeches, vol. ii., p. 402. " Warehoused Com Bill." 
 
 ^ What Huskisson desired was to make the trade in corn as free as 
 possible under a due and proper protection to the British farmer. 
 
 3 " He was sure that if any honourable gentleman objected to the ad- 
 mission of this corn " (in bond, and kept there because not in demand), 
 " which was calculated to release a capital that had been so long locked 
 up, he must take a very different view of this question from that which 
 presented itself to his mind. It was not from any feeling of regard 
 to the owners of the corn that he made this statement. They had 
 speculated in the article, and must stand by the consequences of .their 
 speculation. They might have made a vast profit out of it ; as things 
 had turned out they had sustained a loss." — Huskisson's Speeches, 
 vol. ii., p. 393. 
 
 ^ Huskisson's Speeches, vol. ii., p. 397. 
 
FREE TRADE UNDER PROTECTION. Ill 
 
 France, but were severe in the latter, the amount that 
 we required was less than two million quarters. 
 
 But farmers had to be paid : they had to make all 
 their income out of a smaller supply. To get the same 
 value for a smaller quantity, you must raise the price. 
 And consequently the price of corn rose, and con- 
 tinued to rise, until it reached the lowest figure at 
 which foreign importation was permitted. Where, 
 then, was the injustice ? Was it unjust that the 
 farmer should be fairly remunerated for his self- 
 interested patriotism in cultivating the soil ? If not, 
 then it is very evident that the effects of adverse 
 seasons should be prevented from bearing too hardly 
 upon him. The cause of the high price of bread was 
 due to the singular influence of the seasons and to 
 speculation in corn. When the seasons were favour- 
 able, the price of bread was low ; it was made so by the 
 competition of the farmers. Por in those days the 
 farmers did not know how to combine and form a ring. 
 Had such been the case, then the free-traders might 
 have cast their aspersions upon landlords and farmers, 
 alike with credit to themselves and advantage to the 
 community. But the " so-called " ring has arisen in 
 the progress of free trade ; and how far it is due to free 
 . trade, as we carry it on, is a subject large enough to be 
 analysed in a separate essay. 
 
 You cannot, therefore, charge the landlords with 
 snatching half the loaf of the poor labourer ia pay- 
 ment of the farmer's rent. Nor can you accuse the 
 farmers of using unfair means to get a better price than 
 what they were justly entitled to.^ But Cobden com- 
 
 ^ We give a quotation from Cobden in order to show that the 
 
112 
 
 FREE TRADE UNDER PROTECTION. 
 
 plained of injustice, and where is it ? We will not 
 further allude to the disposition and the influence of 
 the corn merchants to keep the price of corn as high as 
 possible. But they form a very important link in the 
 chain of communication which connected the home 
 producer with the home consumer, and you cannot 
 ignore their influence as Cobden did. Had he referred 
 to them impartially, he would have reflected upon the 
 common practice of those merchants in making their 
 profits as high as ever they could make them.^ 
 
 "enhanced" prices did not go into the farmers' pockets: "A short 
 time ago I met a miller near Winchester, who told me the prices 
 which he paid every year for the corn which he purchased before the 
 harvest and after the harvest during five years. This statement I beg 
 to read to the House. 
 
 1839. August 
 November 
 
 1840. August 
 October 
 
 1841. August 
 October 
 
 1842.' August 
 
 September 
 1843. July 
 
 September 
 
 Now, where did the difference go to ? Most farmers not being able to 
 hold out for the highest prices, it went into the pockets of the specu- 
 lators." Cobden does not tell us who was responsible for this difference 
 in prices ! Cf. p. 21 : "It has ruined the corn speculators." 
 
 1 At the expense of the consumer, and therefore, in the instance of 
 bread, of the whole of the community. We quote a passage (p. 135) 
 from an article published in 1841 by Ridgway, of Piccadilly, and 
 signed F. 0. "The scale of 1828 is eminently adapted to breed 
 sudden and great fluctuations." (Huskisson's scale of 1827 was re- 
 jected.) " A careful inquiry into its merits, if undertaken by any one 
 who has a previous knowledge of the tricks and manceuvres of markets, 
 will easily lead to the detection of the temptations which it holds out 
 
 
 Load of 6 qrs 
 
 Wheat. 
 
 . £19 10 
 
 
 16 
 
 
 18 
 
 
 14 5 
 
 
 19 
 
 
 15 
 
 
 17 
 
 
 12 
 
 
 15 15 
 
 
 12 10 
 
FREE TRADE UNDER PROTECTION. 113 
 
 We cannot close our eyes to the fact that Cobden 
 was supported by the manufacturers, for without their 
 influence and pecuniary assistance he must have re- 
 mained in that condition of insignificance in which he 
 was horn. Nor is the practice of the merchants blame- 
 worthy, so long as it is not carried on at the expense 
 of any one, or perhaps all the interests of the nation. 
 It is not self-interest that is to be condemned, but self- 
 ishness. "We ask again. Where resided the injustice ? 
 Cobden declined to argue the question within the sacred 
 precincts of the corn merchant's of&ce. The cause of 
 the injustice, therefore, resided in the variation of the 
 seasons. If this was the true cause of the injustice to 
 the consumer — and it has been well summed up in one 
 of those pithy sayings for which the late Lord Beacons- 
 field is famous, that the history of agricultural dis- 
 tress in this country is the history of agricultural 
 abundance — why was it not exposed in all its naked- 
 ness to the people of Great Britain and Ireland? 
 Because Cobden was prejudiced, and, so far as he was 
 concerned, honestly prejudiced, in ascribing the evil to 
 another and false source; and we think he was sup- 
 ported in this error by attending too much to the 
 ultimate social and political consequences of the prin- 
 
 to gamWing speculations, and large and rapid fluctuations of price." 
 "They " (the corn merchants) "buy nothing but the primest samples 
 when they want to lower the duty, and sell only the worst description 
 of wheat when they intend virtually to close the ports, which manoeuvre 
 enables them to buy cheaper abroad, and ultimately to sell dearer at 
 home. It is thus that, by trick and artifice, returns, which are not in 
 themselves fictitious, are nevertheless fictitiously affected. " The author 
 of this tract blames the scale for the development of these lower pro- 
 pensities of man. The evil might be overcome by modifying the mode 
 of progression in the scale of duties on imported corn. 
 
 H 
 
114 FREE TEADE UNDER PROTECTION. 
 
 ciple of free trade. He was thus impelled, by keeping 
 the end-object only in view, to believe that the real cause 
 lay elsewhere. As he was the leader of the manufac- 
 turers, we may perhaps in this fact discover the cause 
 of his reticence regarding speculation, and prices 
 higher than they should have been naturally, and an 
 explanation of the partial view which he took of the 
 high price of bread. But can the belief entertained by 
 Cobden be continued by the present generation ? Ex- 
 amine all the facts, place them in their proper sequence ; 
 analyse all the. doctrines which prevailed throughout 
 the free-trade agitation, and then estimate the cause 
 of the high price of bread, — will you place it in the 
 tyranny and rapacity of the landlord? But the sup- 
 position is absurd. 
 
 § 13. The actual factors in the determination of the 
 future -price of corn. — What is the correct statement of 
 the question ? The law of the land required that the 
 farmer be protected. It gave the preference to his pro- 
 duce before that of foreign growers; If his produce 
 fell short of the demand of his countrymen, seeing that 
 under the then conditions he bought from them, it was 
 but fair to him that they should buy as much corn as 
 he could supply them with. Now such a result could 
 only be effected through the instrumentality of a corn 
 law.'^ The working of the Corn Law is, indeed, worthy 
 of a separate description; but this was its single de- 
 sign. Like all other laws, it had its defects ; and it 
 
 ^ Cobden himself subscribed to this proposition. His words are : 
 " We must, at all events, keep the labourer a corn customer of the 
 country." — Page 53. 
 
FEEB TRADE UNDER PEOTECXION. 115 
 
 is certain that its simplicity was perverted for ulterior 
 and selfislL ends. We make no comparison of the results 
 of the action of those who effected its repeal, and who 
 denounced the utterly selfish ^ working of the law in 
 no measured language. We cannot stay to inquire 
 what sum it was that went into the pockets of the 
 manufacturers between the years 1850 and 1873, nor 
 what proportion of that gigantic sum was diverted into 
 the labour market, — suffice it to say, that in the event 
 it seems that the tables have become turned against the 
 promoters of the repeal of the Corn Law. For there is 
 no doubt that they attributed not the motive of self- 
 interest, but the motive of selfishness, which is a very 
 different motive, to the landlords of their day. They 
 charged them with being unduly and unjustly rich at 
 the expense of all the wheat-consumers of the nation ; 
 and as the labourers formed by far the larger part, the 
 labourers mostly suffered. Perhaps we may illustrate 
 this idea of Cobden and the free-traders, of the land- 
 lords growing fat upon the blood of the nation. (For- 
 tunate, indeed, for the nation that it contained so many 
 fields of labour !) First of all, we know that this de- 
 scription of the state of affairs is altogether wrong. 
 But Cobden did not believe it was wrong, nor did his 
 intelligent followers detect where the error lay. We also 
 know not only of the false charges — charges which had 
 not the shadow of a foundation to rest upon — against 
 
 ' It seems the law was made selfish from the effect of speculation, 
 carried to abuse by the corn merchants. The present paralysis of 
 agriculture shows that the Corn Law was not enacted in the selfish 
 interests of the landed proprietors. The law really protected the 
 self-interest of an important part of the community, whereas Cob- 
 den asserted it only favoured the aristocracy. 
 
116 FREE TRADE UNDER PROTECTION. 
 
 the landlords, but of the true motives of the manufac- 
 turers as weU.^ In denouncing the selfishness of the 
 landlords, they successfully for a time concealed their 
 own selfish policy. They succeeded in gaining the sup- 
 port of the people by contrasting their own fascinating 
 policy of national self-interest with the selfish, degrad- 
 ing, and tyrannical policy of the landlords. They had 
 the impertinence to believe the landlords to be what 
 their distorted imaginations, induced by erroneous eco- 
 nomical doctrines, depicted, Eeason slumbered, while 
 their fancy led them into every kind of absurdity. 
 Their recklessness demanded that they should lose con- 
 trol over themselves before they lost control of the 
 national trade. But perhaps the worst feature in their 
 conduct is their arrogance in claiming a national char- 
 acter for what was a mere prejudiced, and, as it has 
 turned out, a very clumsy, piece of legislation. It may 
 be said we have grown rich by free trade; but the 
 answer is, that we have not grown equally rich. We 
 have progressed, but not as a body. That is not pro- 
 gress which determines superabundant wealth into the 
 hands of the capitalists, while it increases the pressure 
 of obtaining a subsistence by the sweat of their brow 
 of the lowest of the poor class to the point of starva- 
 tion. Cobden, however, though his restless energy led 
 him into all kinds of quarrels, could not battle with 
 the seasons. But the means which he advocated would, 
 he said, remove these prejudicial effects. He allowed 
 
 ^ To support this, allusion may be made to Cobden's change of tac- 
 tics when advocating the manufacturing and agricultural labourers' 
 distress in 1839 and 1844 respectively, and to the large sums sub- 
 scribed by the manufacturers to repeal the Corn Laws. In 1845, no 
 less a sum than ^£250, 000 was collected for this purpose. 
 
FEEE TEABE UNDER PROTECTION. 117 
 
 them some influence, but did not ascribe to them the 
 first place in the causation of agricultural distress, which, 
 it must always be remembered, means high price of 
 bread. In fact, enough has been said to convince the 
 candid reader that, in the pursuit of his ends, he was not 
 particular enough in the management of his means, and 
 that his treatment of the question of free trade was a 
 peculiarly partial one ; and how the treatment of the 
 question, partial from the very first, has been continued 
 in the same groove of partiality, may be learnt from a 
 perusal of some recent free-trade literature, and amongst 
 others a work on ' Free Trade v. Fair Trade,' by Sir T. H. 
 Farrer, who complacently shows that while the export 
 trade of every protective nation in the world is extend- 
 ing, that of England alone is shrinking. But at present 
 we must ask the reader to follow us in the elucidation 
 of some of the moral developments which Cobden's 
 honestly intended but arbitrary assertions may create. 
 
 It will occur to every one that to raise the cry of 
 protection and starvation, demands the existence of 
 starvation. Now there was no starvation under protec- 
 tion.^ If Cobden meant that there would be starvation 
 in the future under protection, then precision requires 
 that he should have said so. On the other hand, he 
 stated there would always be abundance with a free- 
 trade system. And when we come to analyse what 
 
 ^ Many different inferences are derived from the occurrence of 
 the so-called Bread riots. But the influence of Chartism in their 
 causation cannot be ignored. It is very probable that the merely 
 temporary high price of bread offered the most favourable occasion for 
 revolutionary leaders to stii- up the poorest of the poor, by appealing 
 to their hard lot. Thus Chartist principles would be diffused by turn- 
 ing an economical grievance to attain political ends. 
 
118 FREE TRADE UNDER PROTECTION. 
 
 abundance means in his terminology, we discover that 
 it is made to represent a relatively low price of bread. 
 There could not possibly be, according to his own ac- 
 count, a greater abundance than what existed in his 
 day.i if only there was the money to buy dear bread 
 with. Did he refer to the abundance of the future ? 
 Then it is evident that he went against his limited 
 knowledge of the subject of the capacity of corn-grow- 
 ing States. For he assured the farmers that they had 
 nothing to fear from the foreigner. The stimulus he 
 applied to them was for their own benefit.^ Nay, he 
 went farther. He predicted that the produce of the 
 British farmers would be increased.^ 
 
 By abundance, therefore, he meant low price of bread, 
 and more than that, a uniformly low price of bread. 
 But we are well aware that "abundance" did follow 
 the free intercourse of this country with corn-growing 
 States ; and that the fact that it did so has prejudiced 
 many people (and some free-traders who argue from the 
 book of Cobden by taking two passages, and arbitrarily 
 connecting them) into the belief that Cobden was a pro- 
 phet. Now nothing can be more certain than that the 
 
 1 In 1839 the importation of wheat amounted to 2,500,000 quarters. 
 On what ground did Cobden assert that we should never he able to 
 import more than this ? On the ground that more was not then grown 
 in corn-growing States. It is certain that one of the reasons which 
 Cobden offered the farmers in order that they might not be frightened 
 by competition was the fact, based upon past experience, that a mod- 
 erate importation of wheat — say 300,000 quarters — always sent up the 
 price to 40s. and upwards. The reader will understand that such 
 experience would not be adapted to new conditions. 
 
 ^ P. 71. 1. The farmers had only to fear a competition of two and a 
 half million quarters. 2. Prices rose with increased importation. 
 
 * To the extent of one-fourth of the whole produce ! — P. 52. 
 
FREE TRADE UNDER PROTECTION. 119 
 
 sort of abundance, in the sense with which we have ex- 
 perienced it, was far from the mind of Cobden. He did 
 not predict that our markets would, in process of time, 
 be swamped with foreign corn. It remains for us to-day 
 to be aware of the fact. But that abundance which the 
 farmers of Cobden's times and the protectionists feared, 
 but which Cobden himself relegated to the limbo of ex- 
 ploded ideas, has come to pass, in spite of what Cobden 
 intended should happen. He declared that he so legis- 
 lated as to acquire a comparatively low but uniform 
 and steady price of bread.^ Did he intend that the 
 price of corn should be gradually displaced to a lower 
 and yet lower level ? On the contrary, the " impos- 
 sible" abundance prevented such a phenomenon. But 
 what is the fact? Instead of corn fluctuating between 
 high and low prices, but on a level which remunerated 
 the farmer, and was gradually receding, as it did under 
 protection, the price of corn has, under free trade, en- 
 tered upon one vast fluctuation, in which there is but 
 one tendency, and that of decline. The highest point 
 we have passed long ago ; the lowest, it is the belief of 
 many, we have yet to reach, supposing that it is the 
 desire of the nation to persevere any further in what 
 Lord Melbourne described as " the maddest of all mad 
 courses." 
 
 1 Huskisson endeavoured to effect this by allowing as free an inter- 
 course as possible under a policy of protection. He devised a sliding 
 scale with this object in view — Revision of the Corn Laws, p. 386, 
 vol. ii. Cobden attempted to reach a steady price by an absolute free 
 trade. Both Huskisson and Cobden had the welfare of British agri- 
 culture at heart. But while Huskisson treated the com problem 
 separately, Cobden mixed it up with the prosperity of manufacture and 
 political and social advancement. 
 
120 FREE TRADE UNDER PROTECTION. 
 
 It is impossible but that the conduct which the free- 
 traders thought it wise to follow, must be associated 
 with a dangerous distrust of leaders by the people on 
 future and similar occasions. It may be a fine art to 
 arouse enthusiasm on a false basis, or any basis. But 
 if the people of this country have learnt, by the unhappy 
 consequences which have overtaken them in their blind 
 attachment to a disastrous policy, to regard with greater 
 care all the possible future developments of this or 
 that legislation, perhaps the lesson will be worth the 
 burden which these consequences have already entailed 
 and yet entail upon them. The free-traders raised the 
 cry of " protection and starvation." And what was the 
 foundation of it ? They created a fierce enthusiasm, 
 and an intelligent multitude was betrayed into sowing 
 the seed of its own ruin. Thus there is reason for 
 distrust, and much distrust. The people were told — 
 though falsely — that the landlords were their despotic 
 rulers.^ They will learn soon, if they do not already 
 know it, that it was speculation carried to excess which 
 formed the prime source of that temporary distress 
 from which they were suffering in 1837. How long 
 will it take to destroy the influence of that false and 
 misguided association of protection and starvation ? 
 
 1 The efficient representation of the towns had commenced in 
 Huskisson's time ; for advancing their claims he lost his seat in the 
 Ministry of 1828. The Reform Bill of 1832 extended the electorate. 
 Thus progress was gradually being effected in the distribution of power. 
 It was Cobden's intention that this progress should be hastened by free 
 trade. Since Cobden's days the power of the people has greatly in- 
 creased ; instead of pursuing a uniformly steady course, it has advanced 
 by a leap. Free trade is responsible for this. Admit that it has 
 induced some of those political consequences Cobden anticipated, it 
 has ultimately been at the expense of the material prosperity of labour. 
 
FREE TRADE UNDER PROTECTION. 121 
 
 Certainly the appearance of a deficiency of two millions 
 in the quantity of com needed to feed the nation at 5.65 
 bushels per head, which occurred in 1887, is likely to 
 go some way towards rending it asunder. Would it be 
 a wise thing to preach from the text of free trade and 
 starvation? It would not. What change is to take 
 place must be effected, not by the enthusiasm of a 
 crowd, however intelligent it may be, nor by the pol- 
 icy of a single individual or of a faction, but by the 
 collective wisdom of the nation. The present trade 
 difficulties of the nation require not enthusiasm to 
 solve, but reason to unravel and judgment to decide, 
 what is the best course out of them.^ 
 
 And thus the argument leads us to a more elaborate 
 analysis of the contents of the question than the free- 
 traders have yet offered. They give " signs " ; but what 
 do they say about tendencies ? They have placed us in 
 the best of positions to acquire cheap food. We have 
 had, we still may have abundance. Yes ; but the ten- 
 dency to abundance has already received a severe shock. 
 Abundance is beginning to decline. How do the free- 
 traders explain the phenomenon ? There must be a 
 
 1 "With regard to the objects to be attained, we adduce two state- 
 ments of Huskisson : 1. " But it was said that to withdraw our pro- 
 tection from the manufactures of the country and to continue it to the 
 growers of corn, was acting upon an erroneous system. I deny this 
 position entirely, and contend that reasoning from analogy, in a case 
 like the present, must necessarily lead to an erroneous conclusion. . . . 
 When there was an accumulation of cotton the manufacturer could 
 contract his supply ; but could a similar measure be adopted by the 
 agriculturist when there was an accumulation of corn?" — Vol. iL 
 p. 347. 2. "Cheapness is a good thing — but cheapness without de- 
 mand is a sign of distress." It is necessary to consider these two 
 points in reference to the claims of producers. 
 
122 FREE TRADE UNDER PROTECTION. 
 
 cause or causes in the background to account for the 
 change. The free-traders tell the labouring masses, 
 " We have given you cheap bread ; " but they forget to 
 say that they have taken away from part of them the 
 capabilities of acquiring it. When foreign labour dis- 
 places our own, for us to maintain the balance, we must 
 displace the foreigners. Are we doing that ? Let the 
 free-traders examine these questions a little more care- 
 fully, not from a mass of figures, which are only apt to 
 confuse, but from a consideration of tendencies ; let 
 them picture to themselves not only what forces are 
 in operation, but also what determines the intensity of 
 those forces. Let them bring forward a comprehensive 
 statement of cause and effect, in order that their oppo- 
 nents may examine it, and trace their errors, if there be 
 any (and there are many in Cobden), to their hidden 
 sources. 
 
 " Give us the means," reply the labourers, " of obtain- 
 ing that bread which you have made so cheap for us." 
 And have they not the undoubted right of inquiring 
 whether it was originally intended that their labour 
 should be displaced by that of the foreigner ? Let us 
 take it for granted, and Cobden would not have object- 
 ed to its occurrence, that some labour was displaced.^ 
 Then the older free-traders rejoiced over the additional 
 resources thus accruing to the natural industries of the 
 country.^ The weak markets, those which had to be 
 
 ' And, we may add, continues to be displaced. 
 
 ^ What is a natural industry ! Cobden talks of our cottons and 
 woollens being natural industries, because well established and cheaply 
 produced. Compare such industries with the cultivation of tobacco and 
 the growth of the vine. In the one case, the skill of the workman, in 
 
PHEE TRADE UNDER PROTECTIOX. 123 
 
 strengthened by the imposition of duties, were swept 
 away. Only the strong ones remained behind. It is 
 thus that labour and capital, under the system of 
 free trade, flows from less to more productive sources. 
 But when the staple manufactures of the country 
 are checked ; when the quantity of exported produce 
 remains stationary, and its value undergoes a marked 
 decline, the degree being such as only to permit the 
 manufacturer to produce at ordinary profits ; when 
 the prospect of recovery is remote, if it is at all percep- 
 tible, — then we think that the time has come to recog- 
 nise the present dangerous conditions surrounding the 
 existence of our trade : the existence of our trade be 
 it observed, for its progress has ceased. 
 
 § 14. The free-trade idealists not in touch tvith what 
 is going on around them in the commercial world. — It 
 becomes essential — since we have come to learn that 
 the free trade of Cobden ^ does not remove that partic- 
 ular cause of distress predicted of it — to analyse the 
 action of the free -trade principle; how it brought 
 about prosperity, with other factors, during the primary 
 period of its operation ; to determine the state of transi- 
 tion in which a temporary equilibrium was being in- 
 duced ; and then to mark out, after the influence of 
 
 the other, the accident of climate, forms the distinguishing feature. 
 Now we cannot change our climate, but other people can be trained 
 to become industrious and skilful. 
 
 1 I.e., a system of free imports. But Cobden's arguments refer to 
 that condition of international trade in which exchange is free. He 
 advocated universal free trade — why was he content with partial free 
 trade ? Was it certain other nations would become free-tradei-s ? No. 
 Then why did he run the risk of being isolated in a hypothetical policy ? 
 
124 FEEE TRADE UNDER PROTECTION. 
 
 former effects had ceased to exist, the direct action of 
 the principle. It can be of no use to shut our eyes to 
 the possibility that free trade is the cause of manu- 
 facturing depression and the labourers' distress. It is 
 illogical to argue that because free trade produced pros- 
 perity at first, that it must therefore continue to do so. 
 We must treat the problem in a comprehensive fashion, 
 and leave its partial treatment to be undertaken by the 
 abstract free-traders, who are prejudiced in the belief 
 that the free-trade principle, on account of its sacred 
 character,! is omnipotent. We must cast aside the spirit 
 of partisanship. The free-traders, there is no doubt of 
 it, for it formed a part of Cobden's ill-assorted design, 
 and he acknowledged it, have ulterior ends.^ What 
 these ends are, matters little to a distrustful, unem- 
 ployed, and ill-fed people. Ask the free-traders why the 
 people are distrustful, why they are not employed, 
 why, too, they are ill - fed ? They afford specious 
 answers. They appeal to some distant period when 
 the lot of the labouring man is to reach the " ideal " 
 they have depicted to him. Thus may it be asserted 
 that they refuse to enter into the rational treatment of 
 the question. They rest contented, after they have 
 raised the free-trade principle to that nothingness " an 
 axiom." And what information they can derive from 
 
 1 Cotden, p. 187. How any one principle in economy can be more 
 sacred than another, or he " sacred " at all, is beyond our comprehen- 
 sion ! But compare John Bright on this point, at p. 456 of his 
 Speeches : " Free trade, though not given amid the thunders of Sinai, 
 is not less the commandment of God, and not less intended to promote 
 and secure the happiness of men." 
 
 2 Cobden stated that many supported free trade simply on account 
 of its "moral" and "social" bearings. 
 
FREE TRADE UNDER PROTECTION. 125 
 
 such a procedure they may he pleased to retain. But 
 there are slight differences, perhaps practical ones, 
 between an axiom of mathematics, which is an abstract 
 science, and the assumed axiom of free trade, which 
 refers to a concrete one. Is it their aim to discuss the 
 problems of economy from the abstract point of view 1 
 Then they may be assured that they are never, at any 
 particular time, dealing with what is going on about 
 them; and that, first of all, they assume that affairs 
 will take a particular course, and argue from those 
 positions which they have taken up, and which they 
 are foolish enough to suppose will remain as eternally 
 fixed in nature as they are in their own imaginations.^ 
 But those very positions, which once upon a time may 
 have been sound ones, have in course of time become 
 very materially altered. The ideal economists believe 
 that they are still the centres round which the prin- 
 ciples guiding our trade revolve. It is true the prin- 
 ciples are still revolving round that centre; but the 
 positions have long since been abandoned by those who 
 take a practical part in the conduct of our trade. The 
 manufacturers will find that the eternal principle is 
 working their ruin. Let us point out to the reader the 
 tendency at the present day in this country to invest 
 capital abroad. The ideal economists will discover — 
 but too late, perhaps, as all those must do who suppose 
 that affairs are to be governed by abstract ideas, instead 
 of dealing with their actual state as in practical legis- 
 lation — that their principles still operate, but that, so 
 
 ' We inquire, where are those ' ' dear " markets in which our 
 merchants are always to sell ? We were told we should buy in a cheap 
 market. Are all our markets now as cheap as they were in 1846 ? 
 
126 FREE TRADE UKDER PROTECTION. 
 
 far as the country for whose benefit they were framed 
 is concerned, they are affecting passive ^ and not active 
 surroundings. But we go further, and tell the ideal 
 political economists that their boasted axioms are noth- 
 ing but their own pretentious assumptions, the crea- 
 tures of a frame of mind evolved out of a network of 
 hypotheses to which the then condition of our manu- 
 factures afforded its countenance, but which by no pos- 
 sibility of means could remain true for all time, unless 
 " surrounding conditions " continued the same. 
 
 It is a concession, however, on the part of free-traders 
 to allow their protectionist opponents the merit of hav- 
 ing, in the course of a rigid analysis, summoned out of 
 obscurity the various influences which created their 
 unparalleled prosperity. But the proper influence of 
 free trade must be estimated. The attempt must be made 
 to portray what would have been the combined results 
 of a normal currency, the railway system, and the gold 
 discoveries, on the progress of our commerce. We have 
 already called attention to one element in the composition 
 of that unparalleled prosperity — an artificial demand. 
 We have already explained how it interfered with the 
 existence of a normal railway rate. And the reasons are 
 gradually accumulating to prove the justice of restating 
 the case of the old protectionists. To begin with, there 
 is Cobden's false theory as to the origin of rent.^ To 
 proceed, there are all those predictions of the free- 
 traders which, alas ! remain unfulfilled. But, as if free 
 trade could not exist without the maximum of error, 
 
 ' As regards agriculture and the other industries which have been 
 depressed by free trade. 
 
 ^ On this he founded his unjust charges against the landlords. 
 
FREE TRADE UNDER PROTECTION. 127 
 
 there is the twofold error into which the original sup- 
 porters of the system fell ; an error which was enter- 
 tained by their successors, who succeeded in incorpo- 
 rating the principle among the tenets of a party. Else, 
 why was free - trade prosperity unparalleled ? Why 
 were the people cajoled into supporting the Eadicals 
 because of free-trade prosperity, if the Eadical leaders 
 knew in their hearts that all that prosperity was not 
 due to the principle of free trade ? Are we to suppose 
 that those leaders were base enough to hoodwink the 
 electorate into the belief that free trade was the sole 
 cause of prosperity, knowing all the time that such was a 
 false statement, in order that they might promote those 
 other reforms which, if accomplished and successful, 
 would change a false for a sound basis of popular support? 
 But the error is admitted — to the extent that all 
 prosperity was erroneously ascribed to free trade. The 
 other part of the twofold error, the ascription of direct 
 action to free trade in the causation of prosperity, we 
 have never seen disputed. Consequently, what the 
 abstract free-traders have to show — and perhaps all the ' 
 more difficulty will be experienced by them when they 
 are made to descend from their lofty generalities, their 
 universal propositions, and certain collateral issues — 
 what they have to show is, " How did the principle of 
 free trade effect that proportion of the unparalleled 
 prosperity which every one, free-trader and protectionist 
 alike, agree to accredit it with ? " The problem now is 
 limited to the answering of a very simple question. 
 But this " particular " feature of the argument we make 
 no doubt will be avoided by free-trade theorists. It 
 iutrenches upon the character of their discussions. So 
 
128 FREE TRADE UNDER PROTECTIOK. 
 
 long as they arrange words and propositions, the pro- 
 duce of their imagination, but capable of leading them 
 into mischievous conclusions, by reason of the fact that 
 they do not apply to present experience, they succeed 
 in holding their own. But the positions which they 
 now hold belong to a bygone age ; the conditions which 
 supported the proposition that you may destroy one in- 
 dustry in order that another may benefit, no longer ob- 
 tain. It is idle to assert that when the English manu- 
 facturer has been turned out of one market, he must 
 employ his labour and capital in more productive indus- 
 tries. It is ridiculous to inquire of the free-traders 
 where those more productive industries are placed. We 
 have elsewhere ^ displayed the working of the free-trade 
 principle by the means of considering what tendencies 
 are in operation to counteract its influence, and by the 
 facts or signs which justify the existence of those 
 tendencies. But in aU large and complicated opera- 
 tions, such as are those of free trade, you cannot expect 
 to find regularity and uniformity in all directions in 
 which it works, nor even in one direction during a given 
 period of time. All those effects, therefore, which are 
 " exceptional," the free-traders will magnify into the 
 rank of being first-rate consequences ; when, if the ques- 
 tion were properly and rationally treated, they would 
 not be rated at all. But against these exceptional re- 
 sults it is our duty to warn the reader, lest he be snared 
 into the belief that one consequence of our partial free 
 trade — and that a minor one,^ and purposely exaggerated 
 
 1 Free Trade : An Inquiry into the Nature of its Operation. Black- 
 wood & Sons. Edinburgh : 1887. 
 
 " To give an instance : excessive railway rates — but they were not 
 
TREE TEADE UNDER PROTECTION. 129 
 
 — represents, and is the mirror of all the consequences 
 of the principle. To arrive at a true conclusion, it is 
 essential that we consider all the consequences, in the 
 order of their importance, and not to cut one out be- 
 cause it is apparently fascinating. It is then we shall 
 reach, and only then, the main action of the principle 
 of free trade. 
 
 Now, as the theoretical action of the principle of free 
 trade has not been discussed, but assumed, by the free- 
 traders, — who are so much attracted by theoretical or 
 hypothetical pursuits, and who, curiously enough, de- 
 rived all the groundwork of their " ideal " doctrines 
 from an examination of the course of our trade under 
 protection, — it becomes necessary to put forward an ex- 
 planation of it. It is upon this explanation, we are 
 convinced, that the case against the free-trade system 
 will be decided. The free-traders unanimously ascribe 
 a direct action to the principle. Sir T. H. Farrer, it is 
 true, has written in the interest of free trade.^ He 
 seems to have been unfortunate in hitting upon all its 
 exceptionally favourable results and putting them pro- 
 minently before the public. He should have been 
 warned by their exceptional nature. But he does not 
 balance these exceptionally favourable and small results 
 with the normally unfavourable and larger results of 
 his principle. And as he nowhere refers either to the 
 direct or indirect operation of free trade, we infer, 
 perhaps wrongly, that he subscribes to the unanimous 
 conclusion concerning its operation. 
 
 excessive in 1860, when the manufacturers, out of their enormous 
 profits, could afford to pay them — are charged with being the cause 
 of depression. 
 ' Free Trade v. Fair Trade. Cassell & Co. Chaps, i. and iii, 
 
 1 
 
130 FREE TRADE UNDER PROTECTION. 
 
 It is to this effect : that free trade caused its proper 
 proportion of prosperity directly. And it is this ex- 
 planation that we unreservedly impugn. We meet this 
 with its opposite. We assert that free trade induced 
 what little prosperity it did induce ^ indirectly. That 
 while it acted indirectly, we enjoyed an addition to the 
 prosperity we should certainly have enjoyed without it. 
 And that we are now, and have been for some time, 
 suffering from its direct consequences.^ 
 
 Let us consider this matter rationally and as compre- 
 hensively as we can. 
 
 The free-traders will not deny that all prtuciples 
 must act through the effects which they bring about. 
 Take a grievance. Many men, and some sections of 
 the community, suppose they have grievances. The 
 labouring men out of employment at the present day 
 suppose they have a grievance. The grievance may or 
 may not be based upon a just and right foundation. 
 But so long as the grievance remains pent up, so long 
 will it remain inactive. But if founded on a just basis, 
 it will sooner or later become a principle in action. It 
 will become related to all the other sections of the 
 community ; and all kinds and degrees of effects will 
 be induced thereby. Some of the consequences thus 
 brought about are oftentimes fraught with danger to 
 the whole community. And thus it becomes essen- 
 tial, and is the effect of far-seeing statesmanship, to 
 
 ^ The moral influence of free trade led to increased circulation. It 
 was the aim of the British manufacturers to become supreme. But 
 this increased circulation was aiTested by foreign duties. 
 
 2 The indirect consequences were favourable, the direct conse- 
 quences are disastrous ; the indirect were temporary, the direct are 
 permanent. 
 
FBEE TRADE UNDER PROTECTION. 131 
 
 arrest the growth of a morbid enthusiasm, lest it 
 assume too formidable dimensions.^ But such a happy 
 consummation is only possible when the true sequence 
 of phenomena ending in the popular expression of a 
 grievance is well understood by those whose business it 
 is to inquire into them. There are many influences 
 which oppose the redressing of such grievances. Some- 
 times such an influence resides in the interests of a 
 party. We doubt not but what the proposed reversal of 
 our partial free-trade system will be bitterly opposed 
 by the national Liberal party. But it will be for the 
 electorate to decide what course of trade will best pro- 
 mote the interests of the country. Again, take any 
 medicinal drug or poison. So long as it remains upon 
 the shelf of the druggist, it produces no effects. But 
 bring it into relation with the various tissues of the 
 body organism, and what results ? All kinds of local 
 and other effects. All the efi'ects, then, that we can 
 think of, are brought about by certain principles acting 
 upon those surrounding conditions which are favourable 
 to the development of their beneficial or evil conse- 
 quences. Free trade is no exception to this general 
 rule of principles. But where the great difficulty pre- 
 sents in the elucidation of economic phenomena is in 
 the multiple effects which a single principle induces. 
 This is because the surrounding conditions of the 
 operating principle vary in this branch of industry, as 
 
 ' It might be adduced that free trade was promulgated to counteract 
 Chartism. Cohden's dictum that "free trade was to save us from 
 tyranny at one end and anarchy at the other," may he brought forward 
 as a support to this view. Still, this view does not preclude another 
 one — viz. , that out of the disaster of the times a section of the com- 
 munity grasped the opportunity to promote a selfish end. 
 
132 FEEE TRADE UNDER PROTECTICCR. 
 
 compared with those of that other one ; in our deaUngs 
 with one nation as contrasted with our dealings with 
 another. Thus innumerable minor influences spring 
 up to modify its action. But not only do these sur- 
 rounding conditions vary, at any particular period, in 
 all places, and in all industries, they also vary from 
 time to time in each industry, and in our trade rela- 
 tions with all the nations of the world. 
 
 Thus do we meet face to face with the difficulties of un- 
 ravelling the definite results of a complicated principle, 
 on each occasion when we desire to estimate its especial 
 influence. It is impossible in many instances to obtain 
 such definite results, because some of the effects inter- 
 act, and it is beyond our means to calculate the influ- 
 ence of such interaction. Hence the perils of trusting 
 to mere figures ; hence the dangers of founding reli- 
 able conclusions upon trade statistics. What we can 
 only hope to achieve is to ascertain the main operation 
 of the principle, without being able to precisely deter- 
 mine its intensity. And for this reason it has appeared 
 to US' the better course to foUow the late Professor 
 Gairnes's advice,^ and deduce tendencies first, and after- 
 wards observe by signs and figures the influence of 
 their operation. ' This is a course diametrically opposed 
 to ' that pursued by the free-traders. They take their 
 figures and facts and argue from them. On the other 
 hand, it is the usual procedure to place such facts and 
 figures in a subordinate position, and make them ex- 
 press the influences of tendencies which are originally 
 assumed to be in existence. It seems to us that the 
 
 ^ In the ' Logical Method of Political Economy.' Macmillan & Co. 
 P. 105, Lect. III., "Economic problems not susceptible of exactness. " 
 
TEEE TRADE UNDER PROTECTION. 133 
 
 free-traders themselves do not care to inquire into the 
 nature of these tendencies. 
 
 Such, then, is the hopeless nature of the task of 
 estimating the exact result of each definite action of free 
 trade. Perhaps it is by this circumstance that the free- 
 traders have been enabled so long to satisfy their follow- 
 ers with a list of those general assertions, which appeal to 
 an ideal state,^ but are very far from being compatible 
 with the practical experience of those data, whose exist- 
 ence they ignore. If economical problems are solved as 
 purely " ideal " problems ; if the data involved are not 
 then in existence, but only supposed to be so, or ought 
 to be so, from the ideal economist's point of view, then 
 it is quite certain there must be confusion between the 
 theory of political economists on the one side, and its 
 practice on the other. Such confusion cannot be pres- 
 ent without disaster ; and it must inevitably terminate 
 in a war of opinions, where the public will learn that the 
 abstract conclusions to which the "ideal" economists 
 have ascended, are based upon no supports which 
 present experience can afford them. In short, that the 
 free-trade school of economists are no longer in touch 
 with what is going on in the commercial world ; that 
 they have left it in disgust at the wickedness of man ; 
 and that they argue in an abstract economic sphere of 
 their own fanciful construction. 
 
 1 Cf. what Sir Robert Peel stated with reference to the adaptability 
 of free trade to old and established interests on the one hand, and to 
 young and growing states on the other. "If we had to deal with a 
 new society, in which . . . complicated interests . . . had found no 
 existence, the true abstract principle would be, ' to buy in the cheapest 
 market and to sell in the dearest. And yet it is quite clear that it 
 would be utterly impossible to apply that principle in a state of society 
 such as that in which we live. . . .'" 
 
134 
 
 CHAPTER VI. 
 
 THE EELA.TION OF FREE IMPOETS TO THE HOME MAEKETS. 
 
 " For himself, he had no hesitation in denying that the Com Laws had 
 anything to do with the existing distress in some of the mannfaotnriug dis- 
 tricts, or that they even contributed to produce it. It was not logical, or 
 a legitimate mode of reasoning, to say that because Government came for- 
 ward with a measure which, in their opinion, had a tendency to alleviate 
 the present distress, to soothe the feelings of the sufferers, and to show a 
 sympathy with their sufferings, that therefore they looked upon the Com 
 Laws as the cause of the distress. His opinion might perhaps he worth 
 little upon this subject, but he must frankly and openly say that he did 
 not look upon the Com Laws as the cause of the present distress. " i — (May 
 2, 1826.) 
 
 "The evil under which the country now (1826) laboured arose from 
 over-trading and a want of credit." ^ 
 
 IMPORTANCE OF DISTINGUISHING BETWEEN " APPAKENT " AND "EEAL" 
 OVEE-PEODUCTION — THE FALLACY OF " KEDUCING PRICE OF BREAD 
 TO EXTEND LABOUR " EXPOSED — THE COMPLAINT OF THE MANUFAC- 
 TURERS — TO BE ON EQUAL TERMS WITH THE FOREIGNER COBDEN 
 SAID THEY MUST HAVE " BIIEAD " AS CHEAP AS THEIR RIVALS HAVE 
 IT — DID SUCH A PROCEDURE BRING ABOUT EQUALITY ? — THE 
 FOREIGNER STILL RETAINED THE MEANS OF INDUCING INEQUALITY 
 — OUR PRESENT COMMERCIAL SURROUNDINGS NOT IN ACCORDANCE 
 WITH COBDBN's anticipations— free trade WAS TO IMPROVE 
 AGRICULTURE : IT HAS DESTROYED IT — FREE TRADE WAS TO SWAMP 
 FOREIGN MARKETS WITH BRITISH GOODS — ITS REACTION HAS STIM- 
 ULATED FOREIGN PRODUCTIONS. 
 
 § 15. Tlie moral influence of free trade in extendiTig 
 our trade-circulation with foreign markets. — Free trade 
 ^ Huskisson's Speeches, vol. ii. pp. 556, 557. ^ Idem, ii. 567. 
 
FREE TRADE DNBER PROTECTION. 135 
 
 induced its due proportion of prosperity indirectly. 
 Let us see the nature of the process by which that con- 
 clusion is reached. 
 
 Before free trade was ever introduced, our markets 
 were from time to time overstocked ; demand was over- 
 estimated ; 1 there was an excess of supply resulting 
 from over-production. Now the sorts of this over-pro- 
 duction are two, — 1, A real over-production, ensuing 
 upon the manufacturer's anticipation of larger markets ; 
 and 2, An apparent over-production, consequent upon 
 the demand failing to consume that supply which past 
 experience justified the manufacturer in producing. 
 Unless the causation of over-production is strictly con- 
 sidered, the reader is apt to give his adhesion too hastUy 
 to certain views. It is in the nature of prejudice to 
 snap at support. Oftentimes one single argument is 
 sufficient to convince the unwary and those who have 
 not given time and thought to the subject. But in 
 economy it is a good rule to follow — " Be not fascinated 
 by appearances. The argument is, on the surface, a 
 taking one. Be on your guard lest you be deceived by 
 those appearances." Let us give an instance of this. 
 Suppose (and this actually occurred during the free-trade 
 agitation) that, in the treatment of the causation of over- 
 production, an advocate states the case as follows: — 
 " You are convinced of the presence of a larger supply 
 than there is demand to consume it. How comes about 
 
 1 Or, as M'Culloohput it, the cause of the glutted state of the mar- 
 kets resided in the miscalculation of the manufacturers — Political 
 Economy, p. 202 ; where he also states " that those who investigate 
 the history of industry, in this or any other country, will find that a 
 period of peculiar prosperity in any one branch is the almost uniform 
 harbinger of mischief." 
 
136 FEEE TEADE UNDER PROTECTION. 
 
 that difference between the supply and demand ? Ob- 
 viously the blame is to be laid upon demand being 
 smaller than it ought to be. The manufacturer, there- 
 fore, is put out in his calculations. But why is demand 
 smaller than it ought to be? Obviously enough, be- 
 cause the price of bread consumes the major part of the 
 labourer's wages. He spends more on his bread, and 
 therefore less upon the produce of manufacture. See, 
 then, how the poor manufacturer is to be pitied." ^ 
 
 And if this had been (in the days of protection) the 
 only cause of over-production, which we must point out 
 is only an apparent one, the solution of this fascinating 
 statement was very easy. You have only to reduce the 
 price of bread, and the labourer buys more of the mer- 
 chant's produce. Thus a channel is opened up for the 
 outlet of this supposed excess of supply. 
 
 "Whether or not we have gone beyond the limits of 
 actual fact in thus presenting the reader with the free- 
 trader's exposition of the cause of the manufacturers' 
 distress, we leave the admirers of Cobden to determine, 
 while at the same time we ofiFer to them the perusal of 
 certain passages in his work.^ If it be, as we believe it 
 is, on the authority of those passages (appended in the 
 footnote), the true statement of the great free-trader, 
 
 1 This was actually put by Cotden. The home market, he said, 
 was the mainstay of the manufacturer. And he adduces the evidence 
 of an " intelligent " labourer in Stockport to support this view, p. 129. 
 Against one authority, we advance another. Huskisson stated that 
 ' ' two-thirds of our cotton manufactured goods were not made to meet 
 the home consumption, but the foreign demand " — ii. 566. 
 
 2 P. 25]: ' ' Let the farmer perfectly understand that his prosperity 
 depends upon that of his customers." P. 131: "We of the middle 
 classes will continue to be his customers." 
 
FREE TRADE UNDER PROTECTION. 137 
 
 we submit to the reader, Is it a partial statement? 
 Does it or does it not include all the causes of over- 
 production? Does it specify the nature of the par- 
 ticular over-production under consideration? 
 
 We are not going to deny the fact that both causes 
 of over-production were in operation at the same time. 
 But what we are going to deny is Cobden's accuracy in 
 attributing to the labourer's deficient means the major 
 cause of the manufacturer's distress.^ We are going to 
 assert that Cobden left out of the account altogether 
 the probability that the manufacturer's depression 
 might be due to his own endeavours in supplanting his 
 neighbours. We proceed to give two reasons why it is 
 our belief that an actual over-production was the major 
 element in the causation of distress ; and that the in- 
 ability of the labourer to pay for the manufacturer's 
 goods, from the dearness of bread, was but a minor 
 cause ; and a cause, too, which did not act directly, but 
 indirectly, as the effect of a much larger cause, brought 
 into operation by a state of the markets leading to 
 over-speculation. 
 
 The first reason is in the tendency of the manufac- 
 turer to produce a larger supply than he can dispose of. 
 The excesses of supply gradually accumulate. We 
 think it is evident that the manufacturer would be 
 
 • The difference between 2s. 6d. and Is., Cobden asserts, would be 
 spent upon fustian jackets. Calculate the amount which the agricul- 
 tural labourers would have to spend upon manufactured produce. 
 Say each would expend £2 a-year more upon goods, and place their 
 numbers at 2,000,000. The sum of £4,000,000 would then flow into 
 the pockets of the merchants and the manufacturers ! But where is 
 the source nowadays from which this is to proceed ? Where are the 
 agi'icultural labourers ? Experience has proved that the interest of 
 the home market was not efficiently preserved by the free-traders. 
 
138 FREE TRADE UNDER PROTECTION. 
 
 impelled to produce more, owing to the favourable 
 nature of his surrounding circumstances. Thus cheap- 
 ness of bread and a distended labour market would 
 enable him to buy labour cheap ; and hence, it would 
 be to his interest to produce as much as ever he pos- 
 sibly could while those circumstances lasted. He 
 would thus produce at the smallest cost, and obtain 
 thereby larger profits. But he could not expect, to sell 
 all his goods, unless he determined to lower the price 
 of his articles. With a stock thus on hand, unless 
 demand went on increasing at a rapid rate, he must 
 soon contract his powers of production. Labour would 
 be thrown out of employment, and hence distress arise ; ^ 
 and, we presume, the labourers, thus unoccupied, would 
 have less means of purchasing their former masters' 
 goods. 
 
 Now the question arises, Did the manufacturers de- 
 pend more upon the home than the foreign market for 
 the demand of their goods? It is easy to perceive 
 that, when the foreign market was against them, they 
 might call attention to the disturbed state of home 
 consumption, owing to the inability (in particular as 
 Cobden mentions) of the agricultural labourer to con- 
 sume part of the supplies. But what proportion did 
 that small figure have to the total demand? Could 
 the comparatively small demands of the agricultural 
 labourers be properly considered alongside of the great 
 and increasing demand of the foreigner ? ^ The greed 
 of the manufacturers forbade it. 
 
 ' On some of these occasions the prices of bread ruled high. It was 
 thus a coincidence if distress existed with high price of provisions. 
 
 ^ Of. the £4,000,000 before mentioned with our export trade of 
 £150,000 000 and upwards. Of course the manufacturers regarded the 
 
■FREE TRADE UNDER PROTECTION. 139 
 
 But the increasing state of our export trade under 
 protection shows that the demand of foreign countries 
 was slowly and surely extending. "What reason, 
 therefore, was there to blame the home consumers for 
 contracting their demand ? If we examine the nature of 
 that demand, one year with another, over a period of 
 time extending from 1815, is it surprising to discover 
 that it was fitful, just like the demand for labour, and 
 that it was characterised by rises and falls 1 And yet, 
 in spite of these rises and falls, the nation had gone 
 ahead ; for, if there was no other sign of prosperity, we 
 had a flourishing export trade. Why, then, did the 
 free-traders hit upon a time when the home demand for 
 manufacturing produce was deficient ? Had it not 
 already been so on many previous occasions, without 
 harm accruing to the manufacturers ? Had it any 
 appreciable influence upon the state of the export 
 trade ? That, we know, constantly increased. There 
 must have been some ulterior motive which impelled 
 the manufacturer to blame the deficiency in the demand 
 of home supplies. What was that motive ? The motive 
 of being able to enlarge his field of production, if he 
 could only get favourable conditions. He saw possible 
 opportunities, which he desired to realise. With cheap 
 bread at home ^ he could undersell his foreign rivals. 
 
 larger sum witli greater leniency. If the latter remained permanently 
 high — and this was the stake for which they played — it mattered little 
 what became of the former. 
 
 1 It must be understood that the effect of cheap bread upon our 
 agriculture was to improve it, according to the opinion of the free- 
 trader. But events have not fallen out as the free-trader anticipated. 
 There was to have iecn an increasing demand on the part of agricul- 
 tural labourers for manufactured articles. The external demand was 
 also to continue a constantly increasing one. 
 
140 FREE TEADE UNDER PROTECTIOK. 
 
 By that means foreign demand would be artifically in- 
 creased, and the increment would lead to a more exten- 
 sive production of the " natural " produce of the country. 
 To meet this increased production, aU unemployed 
 labour would be called into activity. And as, too, 
 more capital and labour were to be compelled to the im- 
 provement of the soil, the wages of agricultural labour 
 thereby increasing, the picture of the labourers' future 
 prosperity was thus done in the brightest of colours. 
 
 The second reason is to be found in the growing state 
 of our export trade. So long as that constantly in- 
 creased, what complaint could the manufacturers justly 
 bring forward? But complain the manufacturers did, 
 whether they had just foundations or not. Now, what 
 was the nature of that complaint ? It consisted simply 
 in this, that, instead of being content with a certain and 
 secure ^ foreign market, they were ambitious of gaining 
 a complete monopoly of it. They saw the possibility 
 of acquiring an ascendancy, and they looked about for 
 the means to obtain their end. It was fortunate for 
 them that they had the services of a man who, what- 
 ever errors he may have perpetrated (nor are they few 
 and unimportant), was, nevertheless, honest in his be- 
 lief in the justice of the end to be obtained, and who 
 argued his case from a sincerity in the national ^ bene- 
 fits to be derived from the new policy. Cobden saw 
 that free trade would not only help the manufacturers 
 in the furtherance of their object, but also that, by the 
 
 ^ I.e., relatively to the ability of the foreigners to compete with 
 them. 
 
 2 "Our object is what I have always declared it — the benefit of the 
 whole community." — P. 48. 
 
FREE TRADE UNDER PROTECTION. 141 
 
 reaction of their support, it would enable him to put 
 into operation, at the same time, the first instalment of 
 a vast scheme which he had devised for the more in- 
 timate commercial union of different peoples. They 
 would be so busy in the pursuit of their " natural " in- 
 dustries that a chief cause would be removed of that 
 race-hatred, so apt to be inflamed by the lower designs 
 of diplomacy. "War would therefore cease and deter- 
 mine. Henceforward, if Cobden's scheme were followed, 
 the only rivalry existing between nations would be 
 commercial rivalry.' But the most striking part of 
 Cobden's visionary scheme consists in the statement 
 that all nations would be gainers by the adoption of 
 a universal free trade. It will occur to a few, on the 
 first consideration of this assertion, that a weak country 
 would have a very poor chance against the rich and 
 powerful one, and one, too, in which trade industries 
 had reached a high degree of development. But in 
 spite of that impossibility in the quality of surrounding 
 conditions of nations, we venture to suggest that there 
 must have been, in the minds of those who advocated 
 the doctrine that all nations would be gainers by free 
 trade, this very important qualification. All nations 
 might, indeed, gain by a universal free trade. But 
 there are degrees of gain. Some might gain more than 
 others. And we have a suspicion that the manufacturers 
 thought that by a universal free trade they would gain 
 more than their neighbours. This suspicion is justified 
 by the occurrence of that period of prosperity during 
 the unencumbered operation of our one-sided free-trade 
 system. It is possible that, had free trade become uni- 
 versal, as Cobden predicted, we should have continued 
 
142 FEEE TRADE UNDER PEOTECTIOJST. 
 
 that prosperity. But it must assuredly have been at 
 the expense of the growth of manufactures in other 
 countries. But if other peoples lost in one direction 
 they would have gained in another, says the specious 
 free-trade doctrine. They could not compete with our 
 manufacturers under the free-trade system, but then, 
 neither could we compete with them in the manufac- 
 ture of their natural productions. This follows, quite 
 obviously, from the free-trade doctrines, that " the price 
 of the foreign market controls the price in the home 
 market,"^ and that "labour and capital are diverted 
 from less into more remunerative channBls." But al- 
 though the gain on the part of some other nations may 
 have been undoubted, it is clear that the nature of that 
 gain was not accurately described by Cobden. We know 
 he does not refer to this " aspect " of the gain problem. 
 He merely asserts that nations would gain. From Cob- 
 den's point of view, then, the future growth and develop- 
 ment of towns in his own country would become un- 
 paralleled.^ But the soil was not to be deserted ! ^ How 
 could he hope, therefore, to supply the world's markets 
 with English manufactured goods ? Surely its demand 
 would be more than our greatest supply ; and we have had 
 some experience what was the magnitude of that supply. 
 
 ■■ "Were free trade universal, these doctrines would stand. But as 
 free trade is carried on nowadays, the prices in our markets are in- 
 fluenced by foreign prices, while we have no equivalent influence over 
 foreign markets. 
 
 2 It was said at the time (1841) that Cohden's aim was to make 
 Great Britain one large town. Sir Robert Peel also alludes to the 
 probability of free trade converting our island into one vast workshop. 
 
 ' P. 62. On the contrary, " free trade was to clear the streets of 
 those spectres which are now haunting your thoroughfares beggin" 
 their daily bread, and to depopulate your workhouses." 
 
FREE TRADE UNDER PROTECTION. 143 
 
 Other countries, then, must still manufacture ; but 
 they could never hope to rival the British manufacturer. 
 Because the price of their goods would be determined 
 by the price of our goods ; and because, as our manu- 
 factures extended, the cost of prodirction diminished. 
 In young communities, such a price, we need hardly 
 remark, would be unprofitable. For in young countries 
 the wages of labour are relatively higher than in older 
 ones. This factor of itself would have suf&ced, had no 
 others been present, to ruin the foreign manufacturer. 
 Thus their manufactures would have been dwarfed; 
 and, as a matter of fact, many of them were paralysed 
 during the first period of free-trade action. 
 
 But what remained to develop towns, to improve 
 their civilisation, to promote the mental and moral 
 qualities of the foreigner, if manufacture was denied 
 him ? Nothing. But the foreigner would gain by the 
 English demand for corn. How much corn did Cobden 
 anticipate would be imported into this country ? Two 
 millions of quarters was the utmost to which he could 
 look forward. Our demand for foreign corn before 
 free trade was thus, as compared with our present one, 
 inconsiderable.^ But what were we to gain by the 
 increased export of our manufactures ? 
 
 Now, he said both peoples would gain; but we 
 
 ' But Cobden stated such a demand would stimulate our manufac- 
 tures ; for if we import a oomplemental supply, we must pay for it in 
 manufactured goods. As matter of experience, such demand does not 
 under all conditions [e.g., of an unequal free trade) produce stimula- 
 tion. Tlie facts are these : The importation of corn has increased to 
 16 millions, but its price has decreased. Our exports continued to 
 rise when imports were moderate. They have become stationary 
 when these imports are excessive. 
 
144 FEEE TRADE UNDEE PROTECTION. 
 
 think it has been proved that the naaniifacturers of this 
 country gained much more than the foreigner during 
 the early period of free-trade action. The respective 
 gains were therefore very unequal. But had our 
 manufacturers by a universal free trade been enabled 
 to maintain their supremacy, then the manufacturers 
 of foreign countries would have been confined within 
 a very small circle. And what would be the conse- 
 quence ? Their towns would not grow at a natural 
 rate, if they grew at all; their civilisation would be 
 impeded ; their chances of affording each individual 
 of the community that " natural " opportunity of direct- 
 ing his talents into their natural channel would be re- 
 stricted. He may have an original genius for facilitating 
 the production of a certain trade, but he cannot apply 
 his talents to the benefit of his own country, because 
 that trade has no existence there.^ But it is clear that 
 the range not only of the satisfaction of disposition, but 
 also of the practice of ingenuity, is contracted when 
 certain industries are denied a nation. Is this a true 
 gain, then ? To have burdens placed in the way of 
 their efforts to work out their civilisation; to have 
 limits applied to the dispositions which men evince for 
 this or that particular kind of employment ; to restrict 
 the number of industries, and therefore the amount of 
 ingenuity of a nation, — How is this gain ? we ask once 
 more. 
 
 Other nations have not thought it to be so ; and they 
 have, naturally enough, afforded each member the 
 fullest scope in the satisfaction of his disposition, and 
 
 1 He must migrate to some other country, and thus to obstacles 
 already existing there will be added a new set. 
 
FREE TRADE UNDER PROTECTION. 145 
 
 the ingenuity of the nation the largest possible field for 
 its application. It is thus that protective nations con- 
 serve all the interests of their people. Suppose, if a 
 future Arkwright makes some great discovery in the 
 development of the silk trade, is this nation to make a 
 present of it, on free-trade principles, to the Prench- 
 man, because he can utilise it to greater advantage than 
 the Englishman ; but, worst of all, because, in the end, 
 we can have our silks at a cheaper rate ? How was 
 this country developed, unless it has been by the 
 ingenuity of some few of its members, and by the 
 useful discoveries they have made? Can we hope to 
 progress as rapidly when we have contracted the field 
 for the display of that ingenuity ? When one industry 
 has reached its acme of development, we might have 
 been so circumstanced that a second, younger, and less 
 stable industry might, through a similar impulse afforded 
 to it, as ingenuity succeeded in advancing the growth 
 of the former, have rapidly assumed its active character 
 and growing tendency. Thus might there have been a 
 transfer of activity; but the opportunities for such a 
 transference free trade has practically destroyed.^ 
 
 § 16. Final results of the artificial demand induced by 
 free trade. — To return to the indirect action of free trade. 
 What was it that the manufacturers created when they 
 succeeded in abolishing the Corn Laws ? An artificial 
 demand. Why was this demand an artificial one ? Be- 
 
 ^ I.e., free trade working unequally. With universal free trade we 
 should derive advantages as well as the foreigner. Under a system of 
 free imports the advantages are all on his side. He protects "young 
 and growing " industries. We have lost ours. 
 
 K 
 
146 FREE TRADE UNDER PROTECTION. 
 
 cause it was over and beyond what the foreign markets 
 required of the English manufacturers. How was it 
 induced ? By underselling the foreign manufacturers. 
 Thus the manufacturers desired to increase their sup- 
 plies. But if they undersell, they must produce at a 
 cheaper cost than before,^ and so the Corn Laws were 
 abolished. They gained the day, and the demand 
 from foreign markets at once became surrounded with 
 dangers. The Englishman had robbed the foreigner of 
 his share of the market ; but that share the foreigner 
 could very easily gain back. And it was just the tem- 
 porary character of this part of foreign demand that 
 gave it its artificiality. It was not a permanent one. 
 But the other constant demand was permanent ; it had 
 been permanent up to the very day when the repeal 
 of the Corn Laws was effected. The English manufac- 
 turer, not content with this constant demand, required 
 an increased one. He exchanged a secure market 
 for an uncertain one. Now, observe what happened. 
 The foreigner put into operation forces to resuscitate 
 his paralysed industries. But the very means which 
 enabled him to gain back what had formerly been 
 plundered from him, invested him with the power of 
 rapidly reducing what, up to that time, had been a 
 constant demand. Now it was in this that the danger 
 resided. 
 
 1 The price might also have been reduced by a diminution in the 
 cost of transit. Had free trade not been introduced the price of manu- 
 factured goods would have fallen, owing to the action of this force 
 alone. As it turned out, two forces determined that prices should 
 fall — cheap bread and cheaper conveyance. But the money value of 
 commodities underwent, at the same time, an increase, owing to a 
 greater quantity of gold being in circulation in 1850 and after. 
 
FREE TRADE UNDER PROTECTION. 147 
 
 But the manufacturers of this country complained of 
 the rivalry they were experiencing on the part of the 
 foreigner. And this was the friendly way which Cob- 
 den advised should be taken to put an end to that 
 rivalry. The complaints of the manufacturers, it is 
 certain, were unfounded at that time. The state of the 
 export trade proves that they were so. But they might 
 have had some future misgiving with reference to the 
 security of their foreign markets. Perhaps they were 
 anticipating dangers, and preparing to counteract their 
 influence. But whatever they feared or strove to win, 
 they made conditions favourable for the increased activ- 
 ity of the foreigner's trade.'^ And who is to blame if 
 the constant demand, under protection, for their man- 
 ufactures has become so seriousli/ reduced under free 
 trade ? 
 
 The reason is plain, therefore, why we call the de- 
 mand induced by free trade an artificial demand. It 
 was probable from the very first that it would vary. 
 The event shows that it has done so ; and by this time 
 it has nearly disappeared in some countries. 
 
 But this artificial demand caused an increased market 
 for our goods abroad, which led to an increased produc- 
 tion at home. The consequent increased circulation of 
 the trade markets was associated with increased profits 
 to the British manufacturer, and increased employment 
 and better wages to the British labourer. (We must re- 
 mark here, regarding the rise in the wages of labour, 
 that more influences than one existed to raise them : 
 
 ' They supplied other nations with the stimulus of more fully pro- 
 viding for themselves, in order that they should not be supplanted by 
 British manufactured goods. 
 
148 FEEE TKADE UKDEE. PEOTECTION. 
 
 there was, 1, the alteration in the currency, already 
 noticed — and 2, the gold discoveries ; both these acted 
 in conjunction with increased demand for labour.) 
 
 There was, therefore, between free trade and pros- 
 perity, the intermediate state of increased circulation. 
 That such is the fact, and we think there can scarce be 
 a doubt of it, is proved by the following circumstance : 
 when the trade markets of this country began to get 
 less active, then prosperity became diminished. We 
 produce, it is said, exactly the same amount to-day that 
 we did five years ago. There ought to have been an 
 increase, if we are to provide for an increasing popula- 
 tion ; but this increase may, for present purposes, be 
 left out of consideration. The markets are stagnant. 
 Why? Because profits are low. The British manu- 
 facturer can no longer grow rich upon monopoly prices, 
 for his monopoly has been taken away from him. Why 
 are his profits low? Because he is undersold by his 
 foreign rivals.^ There is no increased circulation — the 
 rather is trade circulation depressed. There is no pros- 
 perity. For there is no constant demand for our manu- 
 factures, as there was in the days of protection ; nor fit- 
 ful demand, as during the first twenty years of free-trade 
 operation. But the free-trade principle is still acting. 
 If prosperity be a direct result of it, why are we not 
 prosperous ? Let us see, then, what are the direct 
 effects of free trade. The chief one exists in the 
 tendency to lower prices.^ The price of corn tends to 
 
 ^ Yet free trade was to make him compete better with his rivals — 
 p. 130. 
 
 ' In direct opposition to what Cobden stated, p. 73, free trade was 
 to enlarge the circle of exchanges, by which means prices were to be 
 sustained. He accused Sir Robert Peel of being unstatesmanlike in 
 
FREE TRADE UNDER PROTECTION. 149 
 
 fall, because a superior amount imported from abroad 
 determines that it shall fall. And with a fall in the 
 price of corn, the corn land goes out of cultivation. But 
 why does not the price of butchers'-meat undergo a 
 similar fall ? The reason is, because the English master- 
 butchers have a monopoly of the market, and by 
 common consent they determine that prices shall be as 
 high as the people will bear them. But this is unjust ; 
 this was never the intention of Cobden, you will say. 
 But then Cobden did not foresee " all " the events of 
 his complicated policy. Could he have unravelled them 
 all, we think he would never have considered it in the 
 light of a boon to the working classes to have, by the 
 same process which makes their bread cheaper, their 
 butchers'-meat made dearer, and other agricultural pro- 
 duce in proportion. The gain to be derived from such 
 a change is hypothetical. But with this displacement 
 of the scales, let us consider the number of workmen 
 which free trade has sent out of employment. It is a 
 lamentable fact that the agricultural labourer has been 
 divorced from the soil. Then in what does he gain? 
 You will reply, if a free-trader. Oh ! his labour will be 
 diverted from less to more remunerative sources. Then, 
 as protectionists, we ask you, Where is this more re- 
 munerative employment of which you speak ? How do 
 you explain the circumstance that there are so many 
 unemployed labourers at the present day, if these re- 
 munerative occupations exist ? 
 
 Thus, from the lowering of the price of wheat, we see, 
 
 attempting to degrade prices by the tariff of 1842. But Cobden " did 
 not think his tariff caused the reduction of one farthing in the price of 
 articles of consumption." 
 
150 FREE TRADE UNDER PROTECTION. 
 
 as a direct result, the land going out of cultivation and 
 the accumulation of unemployed labour. And, in 
 addition, there exists another phenomenon which can 
 be directly traced to free-trade action. Competition, so 
 much feared by the manufacturers of 1840, induced by 
 our partial free-trade system, has at last become un- 
 equal. The manufacturers have already felt that it is 
 so. They are beginning to acknowledge it. They can- 
 not produce nowadays as cheaply as the foreigner;^ 
 and, besides, the latter has the advantage of a duty on 
 his rival's produce, and a bounty, when requisite, upon 
 his exports. The disadvantages of our manufacturer 
 are accumulating; but the surroundings in which he 
 finds himself are of his own making. Is it the fact that, 
 at the present day, the foreigner undersells the English 
 merchants in their own market? How is it to be 
 harmonised with Cobden's prediction ?2 
 
 The influence of over-speculation was, in Sir Eobert 
 Peel's time, paramount in the causation of distress. 
 But with a change in surrounding circumstances, new 
 causes of distress appear. We would, then, invite our 
 free-trade opponents to inquire into — 
 
 1. The cause which sends land out of cultivation, 
 and whether this effect was " predicted " by Cobden, 
 or desired by him ; and, 
 
 ' In spite of bread being cheaper than even Cobden anticipated it 
 would be. This is marvellous. " Whenever, " Cobden said, " you find 
 bread cheap, you will always find labour prosperous," p. 129. But he 
 argued from protective experience. He is in error, however. Occasion- 
 ally depression existed along with cheap bread. 
 
 2 He stated that the manufacturers did not seek a law to enhance 
 the profits of their business, and that they did not fear foreign com- 
 petition. 
 
FEEE TEADE UNDER PROTECTION. 151 
 
 2. The cause whicli checks the growth of our manu- 
 factures by making competition unequal. 
 
 And lest they should be still zealous of meeting some 
 of the difficulties whicb remain with protectionists, 
 we would ask them, what the cause was which interfered 
 with the assumed stimulating influence of free trade be- 
 tween 1845 and 1850 ? Do they think that it was 
 fettered in its action by the fixed duty for three years 
 (1846-49) ? Or was it because there was not gold 
 enough in the world to raise prices and stimulate 
 industry ? With reference to this inquiry we would 
 particularly call their attention to the state of the ex- 
 port trade in 1849-50, when the duty on corn for all 
 practical purposes no longer existed,^ with its state in 
 1850-51. The difference is considerable. How do they 
 explain it ? ^ 
 
 ^ It was reduced to a nominal duty of a sHUing a quarter. 
 
 2 The increase in the amount of gold in circulation was associated 
 with a rise in the money value of commodities. It is easy to perceive 
 that when the circulation of money is largely increased, its distribution, 
 provided it can be employed with profit, reaches all the various labour 
 markets. It creates a demand, which reacts upon the employment of 
 capital. 
 
152 
 
 CHAPTER VII. 
 
 DEMAND IS "NORMAL" OK "ARTIFICIAL" ACCORDING TO 
 THE NATURE OF THE CIRCUMSTANCES INFLUENCING IT. 
 
 " In such a year, tliere was a stringent Corn Law passed for the protection 
 of agriculture. From that time, agriculture slumbered in England ; and 
 It was not until, by the aid of the Anti-Corn-Law League, the Corn Law 
 was utterly abolished, that agriculture sprang up to the full vigour of ex- 
 istence in England, to become what it now is, like her manufactures, un- 
 rivalled in the world." — Richard Cobden (p. 115). 
 
 OOMPAEISON OF KESULTS OF SHTJTTLB-DISOOVBET WITH THOSE OF 
 RAILWAY DEVELOPMENT — INTERACTION OF CAUSE AND EFFECT IN 
 ECONOMICAL PHENOMENA — THE PUBLIC DID NOT GET ITS DUE 
 SHARE IN THE ISSUE OF THE IMPROPER CURRENCY (BEFORE 1846) 
 — DID LABOUR DERIVE ITS PROPER SHARE FROM THE COMBINED 
 OPERATION OF THE RAILWAY, THE GOLD DISCOVERIES, AND FREE 
 TRADE ? — SURROUNDING CONDITIONS OP OUR ISOLATED FREE- 
 TRADE POLICY MODIFIED BY OTHER NATIONS — PROOF THAT FREE- 
 TRADE DEMAND WAS "ARTIFICIAL" — DIFFERENT VIEWS RESPECT- 
 ING THE FRENCH TREATY — COBDEN APPEALS FROM THE PEOPLES 
 OF THE WORLD TO THEIR RULERS. 
 
 § 17. Stable forces in operation to extend our trade 
 other than the insecure free-trade principle. — Had the 
 influence of the railway system operated alone, as one 
 of the means of increasing the circulatory activity of 
 the trade markets, and therefore tending to raise the 
 produce of these markets, some such a state of things 
 
PEEE TRADE UNDER PROTECTION. 153 
 
 would have ensued as ifoUows, according to the ideal 
 free-trade interpretation of economical phenomena. 
 
 You suppose that all demand is not sufficiently satis- 
 fied when the cost of transit materially influenced the 
 price of commodities. It is easy to perceive that when 
 the conveyance of goods is carried on with difBciilty, 
 a force is in action, (1) to restrain the production of 
 goods, and (2) to raise their price. For the purchase 
 of goods is thus limited to a small section of the com- 
 munity, able to afford the price of a contracted market. 
 But expand that market, and what happens ? The 
 presumption is that the supplies are now greater than 
 the former demand. A consequence which leads to a 
 reduction in price. Thus, for the same amount, the 
 original purchasers can get more of the goods they 
 want : and obviously the reduction in price brings the 
 articles within the sphere of all those whose infe- 
 rior means permit of their buying at a lower rate. 
 The reaction of the lower price, originally induced by 
 facilitating transit, is seen in the increased demand for 
 goods. And supplies continue, till they become more 
 or less equal to the demand.^ 
 
 Now this increased production is carried on at the 
 expense of the labour interests concerned in it. When 
 steam was introduced, the amount of labour displaced 
 was very considerable. The profits thus accruing to 
 
 ' The free-trade doctrine is that supply is equal to demand. This 
 is obviously an ideal assertion. In practice, at no time is supply equal 
 to demand or demand equal to supply. The proof of this is shown in 
 the fact that when but a limited amount of any commodity is pro- 
 duced, the price of it tends continually to increase, from competition 
 amongst buyers. The glutting of the markets also proves its falsity in 
 practice. 
 
154 FEEE TRADE UNDER PROTECTION. 
 
 the manufacturer became greater. For although he sold 
 at a smaller price, it must be remembered that he pro- 
 duced, under the new conditions, ever so much more 
 than at iirst, and that the cost of production diminished.'- 
 
 But the railway is the means whereby the manufac- 
 turer is enabled to increase the production of his goods, 
 by bringing the consumer into a nearer relation with 
 him. It is a fact in economics that exchanges tend to 
 increase, the nearer you are brought into communication 
 with the source of production. The railway, therefore, 
 absorbs a certain proportion of the price of the commo- 
 dities. It is smaller than the original cost of transit, 
 but it becomes of greater amount as the volume of 
 goods conveyed increases. By the introduction of the 
 railway system, labour was thrown out of employment. 
 That labour, however, was absorbed in the promotion 
 of the very instrument which sent it into disuse. 
 
 But in the increased production which befalls the 
 manufacturer, whence is he to derive the increment of 
 labour necessary to that end? From all the unoc- 
 cupied labour of the land. According as that is small 
 or great in amount will be its influence on the advance- 
 ment of wages. So long as there is a demand for 
 labour, wages must tend to rise. They will rise when 
 its supply falls short of the demand for it. There was 
 thus in operation a force which tended (1) to increase 
 the productive powers of the country, and (2) to raise 
 
 1 Regarding the rapacity of manufacture, it cannot be denied that 
 cheapening bread tended to reduce wages. This reduction was coun- 
 teracted by a demand for labour, induced by steam. But this coun- 
 teracting influence was withdrawn when the agricultural labourers 
 thrown out of employment increased the supply above the demand for 
 labour. 
 
FREE TRADE UNDER PROTECTION. 155 
 
 the wages of labour. Such a force enabled the manu- 
 facturer not only to sell more of his goods at home at 
 a smaller price, and with greater profit to himself, but 
 it also assisted him in his endeavour to maintain a 
 sound supremacy over foreign and neutral markets. 
 Just as he could afford to sell at a lower price in the 
 home markets, so could he reduce prices in external 
 markets, and thereby compete more favourably with 
 his foreign rivals. 
 
 What more, then, we are tempted to consider, could 
 the manufacturer desire 1 He had an enlarged sphere 
 of operation, and he possessed a certain means of main- 
 taining his hold upon that sphere.^ That is to say, 
 " certain " in so far as the nature of his surrounding 
 conditions warrants the use of this attribute. 
 
 Was it possible, under the new condition of facilitat- 
 ing transit, for him to sell his goods cheaper at home, 
 and to acquire a larger market abroad? Could both 
 these desirable consummations have been effected 
 under the influence of protection ? We have but to go 
 back to the introduction of the shuttle and the new 
 methods of cotton-printing, to observe the effect of an 
 increased, production on the prosperity of the community 
 at large. The beneficial results of these discoveries 
 
 1 It was said, we think by Lord Melbourne, that the Government 
 had nothing more to give after the repeal of the Com Laws. It seems 
 a pity that the agitation for free trade should have preceded the de- 
 velopment of the railway system. But, the agitation once begun, for 
 the leaders to preserve their dignity they had to go on with it. The 
 question arises whether the influence of the railway upon the develop- 
 ment of trade was properly considered by the free-traders. If so, then 
 it is very clear that the manufacturers were cognisant of the fact that 
 they had a double force working for them — one immediate, the other 
 remote. 
 
156 FREE TRADE UNDER PROTECTION. 
 
 were developed under a protective code, and while 
 the one set of improvements increased trade circulation 
 by making its channels broader, the railways acted by 
 making those channels longer. The action of the 
 "shuttle" was upon the seat of production itself; it 
 directly effected an increased production. But such an 
 increase, though it extended the channels of circulation, 
 did not suffice to satisfy the wants of an increasing 
 population, and of an increasing external demand. 
 While the railway, by promoting circulation, not only 
 accomplished this end, but likewise reacted indirectly 
 upon the sources of production.^ 
 
 By the comparison of these two phenomena, one of 
 which happened during the reign of protection, and 
 the other acted in conjunction with other forces during 
 free trade, the reader can very readily ascertain what 
 would have been the single effect of the railway under 
 a protective system. It will be observed that the dis- 
 covery of the shuttle, as also the invention of the rail- 
 way, was followed by two consequences, which inter- 
 acted each upon the other. Both caused increased 
 production and increased circulation ; but each operated 
 in a different fashion. The introduction of the shuttle 
 caused a direct increase of production, and an indirect 
 increase of circulation ; whUe the invention of the 
 railway caused a direct increase of circulation, and an 
 indirect increase of production. And both of them 
 tended to satisfy a normal demand ; for by a " normal " 
 
 ' It is important to notice in economical phenomena the interaction 
 of cause and effect. An article is cheapened because more of it is pro- 
 duced. Demand for it at once increases, and this increased demand 
 leads to a further increased production. 
 
FEEE TRADE UNDER PROTECTION. 157 
 
 demand, we mean that sort of demand which was 
 fairly open to the energies of our manufacturers to 
 supply, and to supply by reason of the favourable char- 
 acter of their surroundings, for an indefinite length 
 of time.^ 
 
 But it appears that the British manufacturer during 
 the free-trade agitation was under the influence of a 
 demoralising power. Now, whether his demoralisation 
 was founded on a just view of what was going to be the 
 course of events in the future, or whether his affected 
 danger was magnified to further his own aggrandise- 
 ment, is a problem which must be left to each individual 
 to determine.^ But it is impossible, in analysing all 
 the various motives which converged towards free trade, 
 not to take into consideration, even for the moment, 
 the selfishness of the manufacturers. The selfishness 
 of the manufacturer may or may not be exaggerated ; 
 but the manufacturing interests of this coimtry, like 
 all the other interests — or, we should be more correct in 
 saying, what remains of many of those interests — is a 
 self-interested one. This self-interest was advanced by 
 
 1 This " normal " demand under protection (as the main principle of 
 conducting our commerce, the minor forces working under it being 
 the various means of making trade more free) is to be contrasted with 
 the "artificial " demand induced by our partial free-trade system for a 
 time. Regard this demand comprehensively — i.e., over a lengthened 
 period of time — and its tendency was to increase ' ' under protection. " 
 It has been checked by free trade. 
 
 ' For the evidence is conflicting. Cobden averred over and over 
 again that it was not the intention of a free trade in corn to lower 
 wages, in opposition to Lord Stanley. The manufacturers, he asserted, 
 must be a most besotted class (p. 103), did they mean to do such a, 
 thing. In addition, the great agitator said that it was not his object 
 to lower prices, but to maintain them and keep them steady (p. 73). 
 We know he anticipated the price of wheat would remain at 50s. (p. 71). 
 
158 PEEE TRADE UNDER PROTECTION. 
 
 the development of the railway system. Nobody could 
 with honest intentions convict the manufacturers of 
 obtaining an undue proiit from the facilities thus 
 afforded to the transit of their goods. Nobody, we 
 assert, could honestly convict them of using any unfair 
 contrivance in acquiring more than their proper share 
 of the prosperity which railways induced, because all 
 the community gained in the process. But self-interest 
 abuts on selfishness ; and if in the pursuit of purely 
 selfish views the manufacturers forced an artificial 
 development of their own industries, so as to create 
 a purely artificial demand abroad for their increased 
 produce, while they left the subsequent progress of 
 those industries to the caprice of fortune (whose smile 
 sometimes betrays), then we think that the charge of 
 their being impelled by a selfish motive is substanti- 
 ated.^ It rests upon three considerations : — 
 
 1. The progress of our trade had been uninterrupted, 
 and from the beneficial action of the railway, was 
 certain to be improved ; but it must be remembered, 
 the rates of profit under the system of protection would 
 have continued normal. 
 
 2. The British manufacturers entertained the notion 
 that their foreign rivals were becoming more dangerous. 
 
 ' The influence of the following two motives must be carefully separ- 
 ated. "Self-interest" was advanced by the railways. The selfish 
 ends of the manufacturers, promoted by a free trade in corn. Now it 
 is possible that, in the final object to be attained, both these motives 
 were put into action ; but that, in the explanation of the means to 
 bring about prosperity, one force was suppressed, and the material 
 wellbeing of the community ascribed to the influence which pandered 
 to the aggrandisement of manufacture. (The discovery of gold had 
 not yet intervened to complicate the result. ) 
 
FEEE TRADE UNDER PROTECTION. 159 
 
 Was this based upon fact ? Was an imaginary economi- 
 cal danger converted into a political lever wherewith to 
 raise the platform of their own prosperity ? 
 
 3. There appeared the opportunity for the British 
 manufacturers to swamp foreign and neutral markets 
 with their goods. In this process the vision of bound- 
 less profit arose. To realise it, sacrifices were necessary. 
 Did the manufacturers in their analysis of contingent 
 events weigh the inevitable results of such sacrifices 
 with reference to the patriotic conclusion of what was 
 best for the nation as a whole ? Or did they leave the 
 rest of the community to take care of themselves, and, 
 regarding their own interests only, decide upon a selfish 
 course ? 
 
 Cobden himself believed that the interests of manu- 
 facture and agriculture were opposed under the pro- 
 tective system. Can we say now that the principle 
 of free trade has enabled them to work harmoniously 
 together ? 
 
 Such would have been the influence of the railway 
 had it acted alone. And the effect of the gold dis- 
 coveries, in increasing the circulating medium, was to 
 create a more robust state of the money market. More 
 money being in circulation, it would naturally tend to 
 open up the remotest channels. As consequences of 
 this increased tension, prices rose, and enterprise was 
 stimulated. 
 
 But nobody, however, could have predicted the gold 
 discoveries of 1850. But the consequences of the rail- 
 way system could very well have been anticipated,^ 
 
 1 When free trade began to be advocated, the development of rail- 
 ways had not reached any considerable extent. 
 
160 FEEE TRADE UNDER PROTECTION. 
 
 and it seems strange that Cobden should have entirely- 
 ignored the immense benefits certain to accrue from it. 
 As he set himself to teach the House of Commons the 
 elements of political economy, such ignorance appears 
 marvellous. And, of course, it is open to any one to 
 charge him with an affected ignorance while he was 
 pursuing those tactics, which not only embraced eco- 
 nomical, but political and social phenomena as well. 
 We have his own evidence for the fears he entertained 
 during the revival of trade in 1842. And he expressed 
 his gratification that the return of prosperity had not 
 influenced one jot the faith which the labouring classes 
 had in the correctness of his economical doctrines.^ 
 In spite of returning prosperity, the people (as he 
 averred) kept on his side, while it also had the im- 
 portant effect of recruiting the funds of the Anti-Corn- 
 Law League.^ 
 
 We adduce some of the means he employed to 
 strengthen their faith. The prosperity which has just 
 come round, he said, was a fictitious prosperity. It 
 was not a lasting prosperity. The prosperity under a 
 free trade, he promised them, should be permanent. 
 Can there be any doubt that he was driven to so false 
 a contrast of these respective prosperities by his all- 
 absorbing passion for the virtues of free trade ? or that 
 he continued to use such extraordinary means to main- 
 tain the people in the faith because he was fascinated 
 by the vision which appeared to him of the regenerating 
 
 ^ On this occasion he offered tlie opinion that the prosperity which 
 the nation enjoyed was not a real, but an artificial prosperity. — Cf. pp. 
 7 and 19. 
 
 ^ P. 128. This was limited, however, by Cobden to the north of 
 England. 
 
FREE TRABE UNDER PROTECTION. 161 
 
 influence of a universal free trade ?^ The manufac- 
 turers were haunted by the vision of wealth ; Cobden 
 was spurred on by the dream of a better state of the 
 affairs of the world, to be induced primarily by free 
 trade. And it is curious, that neither of them had the 
 interests of their country singly at heart. For we 
 have it, on Cobden's own authority, that there was not 
 one of the manufacturers, in 1837, but thought that 
 free trade would destroy agriculture.^ 
 
 But, in spite of their original opinion, the manu- 
 facturers pursued their own ends without regard to the 
 adverse influence of their policy upon agriculture ; 
 while Cobden, in his endeavour to fraternise nations 
 (which, as it seems, have not been attracted by the 
 gentle insinuations of the free-trader), left his country's 
 trade upon a dangerous, because insecure, basis. 
 
 His final object, however, was a meritorious one. It 
 was nothing short of destroying the springs of war. 
 Meanwhile, in the first step which is being taken to- 
 wards this goal, the free-trade nation is nearing the 
 brink of ruin. But perhaps the free-traders, who are 
 also cosmopolitans, look upon this disaster with equa- 
 nimity, and as if it were in the ordinary course of 
 events, because it is an effect of free trade. And the 
 free-trade principle, in their hands, is sacred.^ " It 
 
 ' In this connection, let us remember the influence which the people 
 of all countries were, in Cobden's opinion, to possess upon the powers 
 which ruled them. It is well known that Cobden visited the United 
 States and France. What was the effect of those visits ? Did the 
 cause of universal free trade gain by them ? 
 
 " P. 49. 
 
 '" Cf. Cobden, pp. 187 and 188, where "free trade is something 
 more than a I'emedy for present evils." 
 
 L 
 
162 FREE TRADE UNDER PROTECTION. 
 
 cannot do any harm to the nation, because it was in- 
 tended to do good to it." 
 
 § 18. WTiat the action of free trade depends tcpon. — 
 Now the free-traders may be reminded of a very simple 
 fact known to science, that the principle of free trade 
 in itself is just as harmless, contains as many virtues, 
 can create as much good or evil, as any other principle, 
 when not in action. Only do we become aware of its 
 virtues and vices when it is brought into relation with 
 surrounding conditions. As it is in their nature to 
 vary, and not in that of the principle, and as they 
 determine its action, it follows that the operation of 
 the principle tends to fliictuate. Now all are ready to 
 admit that the surrounding conditions of our trade 
 markets to-day are not what they were in 1850 down- 
 wards to 1866 ; and hence, that the effects of the prin- 
 ciple of free trade have changed. But if they have 
 changed, the change must either be to our benefit or 
 the reverse. The free-trader argues that it still acts 
 (but with less force) for our good.^ The protectionists, 
 on the other hand, assert that all those phenomena pre- 
 dicted of old by the Tory party have come to pass; 
 that the turning-point of an artificial prosperity has 
 been passed ; and that free trade, which is nothing 
 more than a system of free imports, is the source of the 
 depression of our agriculture and manufactures.^ But 
 
 1 Sir T. H. Farrer in 'Free Trade v. Fair Trade,' chap. xi. 
 
 2 Lord Penzance (various articles in the monthly journals); Mr 
 Howorth ('Times,' Jan. 7, 1886); Mr Sampson Lloyd (letters pnh- 
 lished in 1882) ; Mr F. T. Haggard (three letters to Professor Bonamy 
 Price, 1887); Mr Howard Vincent»(on the public platform, and in 
 Parliament). 
 
FREE TRADE UNDER PROTECTION. 163 
 
 there is no doubt that free trade is now acting with 
 less intensity (assuming, for the moment, the free- 
 traders' conclusion to be coiTect) than formerly. Then 
 what is the cause of that less intensity of action? 
 Clearly, it is in the nature of a counteracting cause. 
 What the free-traders have to consider, even on their 
 own supposition, is not merely whether the action of 
 free trade is prosperous, however small the degree of 
 prosperity may be. It is not sufficient to say that free 
 trade is not so prosperous now, for in this way you con- 
 ceal the real issue of the problem from view. The real 
 issue depends upon the relation of a less degree of pros- 
 perity now with a greater degree of prosperity formerly. 
 This is the plain statement of the case. And the ques- 
 tion to be considered is, obviously, whether the coun- 
 teracting force, which has already caused a diminution 
 of an unparalleled prosperity, will be able in future 
 to destroy that remnant of prosperity which the free- 
 traders imagine (we think vainly ^) still remains. This 
 is the anticipation ; it is upon this that you must 
 build up a more secure policy. For the longer that 
 counteracting force acts, and the more intense it be- 
 comes — no one can possibly deny it — the more we are 
 losing, and will continue to lose, ground. But does the 
 free-trader fondly hope that the intensity of this coun- 
 teracting force will be arrested ? Does the reader sup- 
 pose that the surrounding conditions of foreign markets, 
 and of our own even, will stand still to enable the free- 
 
 ' The free-traders admit the existence of depression ; they admit 
 also that it is increasing. Still, even with these admissions, they assert 
 that free trade yet benefits the nation ! How do such harmonise 
 their opinions with Cobden's "free trade to raise up a real and per- 
 manent prosperity"? 
 
164 FEEE TRADE UNDER PROTECTION. 
 
 trader to trade prosperously at the expense of protective 
 nations ? ^ 
 
 It is an unfortunate thing for the science of political 
 economy that three forces, all tending more or less to 
 increase production, promote circulation, and stimulate 
 enterprise, should have come into operation almost 
 simultaneously. It is unfortunate, because it is well- 
 nigh impossible to award each force its proper share in 
 the causation of the prosperity which ensued upon their 
 combined operation. But if it is difficult to calculate 
 the exact effect of each cause, it is easy enough to define 
 generally the manner in which they operated. Every- 
 body will agree as to the way in which the increase to 
 the currency acted. But perhaps there will be some 
 demur to the distinction, which we take to be a capital 
 one, now going to be made between the operation of the 
 railway system and the action of free trade. Both of 
 them increased demand. But the distinction which we 
 make between these increments to the original demand 
 is this. The increased demand brought about by the 
 railway we call a "normal" increase, because it was 
 effected in a proper and legitimate way. In this it is 
 comparable with all those discoveries which tend to 
 increase production while they lessen the amount of 
 labour spent upon it. But the " increase " which free 
 trade accomplished we call an " artificial " increase. A 
 
 ^ Some countenance may be given to this hope from a recent utter- 
 ance of the President of the United States. An opinion is entertained 
 in this country that Mr Cleveland is a free-trader. The policy he 
 enunciates is just the policy of our own Huskisson, and nothing more. 
 It amounts to "making trade more free under protection." Were 
 he styled a limited free-trader, much misunderstanding would be 
 removed. 
 
FREE TEADE UNDER PROTECTION. 165 
 
 demand, not in the ordinary course, was created for 
 British goods in foreign markets by overstocking them 
 with cheaper articles than the foreigner was able to 
 produce. Such a demand was not a stable demand. 
 And to have legislated upon the anticipation that it 
 would be for ever a constant and a stable demand was 
 to legislate upon what had no foundation in any except 
 a prejudiced fancy. The British manufacturer saw the 
 opportunity presented to him of being able to under- 
 sell his rivals on the Continent. It turns upon the 
 nature of this " underselling" as to whether the demand 
 would or would not be a stable one. It was brought 
 about, on the solicitation of the manufacturers, by an 
 Act of Parliament which repealed the Corn Laws. By 
 this Act the State assisted ^ the manufacturer to pro- 
 duce his commodities at less cost. He was therefore 
 enabled to sell his goods at a cheaper rate abroad. 
 
 It was in this way that Cobden and the manufac- 
 turers met the real or assumed encroachments of their 
 foreign rivals. If real, it is quite obvious that Cobden, 
 in his endeavour to further the fraternisation of peoples, 
 forgot, in his frenzy to reach his goal, the obligations 
 which international morality (had he considered this 
 branch of international science) would have imposed 
 upon him. But the lesson which Cobden desired to 
 
 ' To meet this true statement of the nature of the change, the free- 
 trader asserts that prices before 1846 were "artificial" ; they became 
 " natural " — i.e., reduced to the level of external markets — by free trade. 
 But against this may be said : 1. The improper currency, before 1846, 
 made prices unnatural. 2. On the supposition that the protective 
 system tended to keep prices higher than they would be under free 
 trade, how can prices now be called natural when checks are still in 
 existence, and used by other nations, to prevent prices from reaching 
 the level of a universal free trade ? 
 
166 FREE TRADE UNDER PROTECTION. 
 
 teach, the foreigner has learnt in another way. He 
 uses State influence ; so did we. But he uses it for the 
 purposes of retaliation. Who commenced the illegiti- 
 mate procedure of underselling, with State assistance, 
 the foreigner in his own market ? It is to little pur- 
 pose to say that England acted as she did to make trade 
 free.i The world is not so shallow-brained as not to 
 perceive that what England did made her manufacturers 
 rich. And thus the lesson the foreigner has learnt from 
 England is to make his goods cheap, not by reducing 
 the cost of production, for that is a process which would 
 interfere with the equable progress of his country's in- 
 ternal trade, but by granting a bounty. The manufac- 
 turers of England have been foiled by the duties im- 
 posed upon their goods in the markets of the foreigner ; 
 they are undersold in neutral markets by means of the 
 bounty system. Thus have they been cheeked. Under 
 present conditions they cannot advance on the commer- 
 cial chess-board. Unless they recede, what will prevent 
 them from being irretrievably ruined ? ^ 
 
 When, then, a new element is introduced in the con- 
 duct of our trade and commerce, unless it is a legitimate 
 one, such as the discovery of the shuttle or the appli- 
 cation of steam, it becomes a serious question from the 
 very first, whether or not it may be the starting-point 
 of a series of foreign retaliations? The merchant of 
 
 ^ The reader must calculate the different results of universal free 
 trade upon rich and poor countries respectively. 
 
 ^ But recently an agreement has been entered into on the question 
 of the sugar bounties. By means of the foreign sugar bounties, the 
 British consumer acquired his sugar cheap. But this "cheap" sugar 
 threw our labour out of employment. If the agreement is ratified, the 
 price of sugar will be raised to the British public. 
 
FEEE TRADE UNDER PROTECTION. 167 
 
 England asked for assistance in order that he might 
 ruin, perhaps, the foreign manufacturer. That was in 
 1846. But now foreign manufacturers apply to their 
 respective States for precisely that same assistance 
 which the Englishman succeeded in obtaining when 
 the Corn Law was abolished, but in a different form. 
 They have their internal markets protected by ef&cient ^ 
 duties ; they are also assisted in neutral markets by 
 means of a bounty. 
 
 "What real difference exists between these two forms 
 of State assistance ? Both of them had the same objects 
 in view. But while one succeeded for a time only, the 
 other bids fair to maintain its efficiency so long as its 
 principle endures. Free trade created for the English 
 merchants an artificial demand in foreign markets ; but 
 after that demand was brought into existence, it could 
 exercise no control over it. Foreign countries might 
 or might not protect their manufacturing industries. 
 Cobden thought they would not be able to develop 
 them under the new system. It has happened that 
 all nations (with one or two exceptions) have become 
 strictly protective. The consequence is, that foreign 
 demand for British manufactured goods is continually 
 decreasing, as well absolutely as relatively. 
 
 It is upon this ground, therefore, that we base the 
 distinction between a "normal" and an "artificial" 
 demand.^ The railways operated in a legitimate fashion 
 
 1 From the fact that such duties hare been raised during recent 
 years, it appears that foreign statesmen lay more stress upon the 
 employment of labour than upon cheapness of price. 
 
 2 As matter of pure theory, the free-trade demand is merely an 
 " increased " demand. Experience determines whether it shall be an 
 artificial or a normal one. If universal free trade existed, it would be a 
 
168 FREE TRADE UNDER PROTECTION. 
 
 by facilitating transit. Free trade, on the contrary, 
 acted by altering the principle on which our trade with 
 foreign nations was conducted. Nothing could inter- 
 fere with the improvement in our internal trade by 
 the railway system ; and the manufacturers possessed 
 through it, had they been content with an equable 
 progress of their trade, a legitimate means of lowering 
 prices and of their competing more advantageously in 
 foreign and neutral markets. But free trade lost us 
 all control over our industries. Thus it happens that 
 the course which those industries shall take is dictated 
 by the foreigner. Even under this dangerous condition 
 the free-traders comfort themselves with the maxim 
 that, if the foreigner can produce more cheaply than 
 we can, we must divert our labour and capital from less 
 to more remunerative sources. When we reach the 
 last of that imaginary series of remunerative trades in 
 this country, it will be time, we think, even for the 
 free-trader to pause and consider where, after the next 
 commercial disaster, our labour and capital are to be 
 applied. 
 
 There is another point in connection with this dis- 
 tinction between a "normal" and an "artificial" de- 
 mand which will attract the reader's attention. It 
 refers to the influence of these respective sorts of 
 demand upon the growth of our trade and commerce. 
 There is nothing to interfere with the progress of our 
 trade when demand is increased in a normal fashion. 
 If we look back upon the effect of the discovery of the 
 shuttle, we find that the whole of our manufacture was 
 
 " uormal" demand; but other nations being protective, it becomes 
 "artificial." 
 
FREE TRADE UNDER PROTECTION. 169 
 
 raised thereby to a larger volume. But though it 
 experienced this accession in size in a shorter time 
 than a consideration of its past advance warrants/ 
 the additional increment was maintained, while the 
 subsequent course of our trade in manufacture suf- 
 fered from just the very same rises and falls which 
 previously had characterised it. This continued till 
 Huskisson's improvements in our intercourse with for- 
 eign nations ; and all these were based upon the sys- 
 tem of reciprocity. 
 
 But compare the sudden increase in the growth of 
 our trade when the three factors leading to prosperity 
 all began to operate, with (1) the moderate increase 
 consequent upon the introduction of the shuttle ; and 
 (2) the alterations which Huskisson effected in our com- 
 mercial code. You will observe a vast difference. 
 This, however, is in some degree reduced when you take 
 away the shares of the railway and increased currency. 
 What remains properly belongs to free trade. And 
 what the original intensity of this force was may be 
 roughly derived from an examination of the exports 
 between the years 1850 and 1875.^ 
 
 This fitful increase induced by free trade, like all 
 other sudden operations in nature, could not be a per- 
 
 1 "We regard this result of the shuttle discovery as a transformation. 
 The seeds of improvement were inherent in manufacture. The bud 
 had only to open and display the leaf. 
 
 - Allowing free trade a third part, for the purpose of illustration, of 
 the increased exports, there is due to it £51,000,000 per annum up to 
 1873. In 1864 our whole trade, under protection, would have been 
 something more than £73,000,000, and in 1869 something more than 
 £78, 000, 000. This is calculated from the rate of increase of our ex- 
 port trade up to 1842, and does not include the advance which the 
 gold discovery and railway extension brought about. 
 
170 FEEE TRADE UNDER PROTECTION. 
 
 manent increase. You canaot expect an export trade 
 all at once to more than double itself, and very soon to 
 become more than quintupled, and to retain for any 
 length of time the higher level to which it was forced 
 from above, not gradually elevated from below. Sud- 
 den changes are foreign to the normal and stable growth 
 of trade, just as those changes are indicative of danger 
 in other spheres of natural operations. To ensure 
 stability, you must progress slowly and steadily.^ No 
 better illustration of this principle can be afforded than 
 that derived from the acquisition of knowledge. But 
 the contrast of this " fitful " increase, sure to occur under 
 free trade, with the " steady " increase under protection, 
 was hot undertaken by Cobden and the free-trade 
 manufacturers. There was no room for contemplation 
 of this sort in Cobden's busy brain. For his imagina- 
 tion led him into far different regions of thought than 
 those immediately concerned with the safety and secur- 
 ity of trade progress. He contemplated the supremacy 
 of British manufactures. He believed that the world 
 of commerce would fall prostrate before the idol of free 
 trade which he had unveiled. He dreamt dreams of a 
 higher and better state of things. But all his schemes 
 were shadows ; they were void of substance.^ There 
 must be always a period of transition between the origi- 
 
 ^ The sudden growtli induced by free trade I compare -witli the 
 growth of a mushroom. It assumed large dimensions in a short time. 
 But the springs of its nourishment being attracted by other organisms, 
 it decays as rapidly as it developed. 
 
 ' Instead of attending to the scarcity of the sources which fed our 
 manufactures, he merely contemplated a sudden growth. He pandered 
 to a temporary demand, without regard to any future influence of his 
 measure upon labour. Huskisson, on the contrary, protected the 
 springs of labour. 
 
FREE TEADE UNDER PROTECTION. 171 
 
 nal idea or design and the object to be gained or the 
 goal to be reached. In this period Cobden acted as if 
 events were going to fall out as he predetermined they 
 should fall out. He aimed at giving effect to his sha- 
 dowy schemes through the instrument of international 
 enthusiasm. He succeeded — we know well how he 
 succeeded — in convincing part of his own countrymen, 
 certainly not the most unprejudiced part, of the reality, 
 and not only the reality but the absolute necessity, of 
 those schemes. But the cloak which was held before 
 the eyes of a large part of his countrymen was torn 
 through by the statesmen on the Continent and in 
 America. We now know that Cobden reckoned solely 
 upon imaginary conditions. But it reflects upon the 
 marvellous enthusiasm of the man himself, when he 
 tried to show other nations what they would gain by a 
 universal free trade, in opposition to the judgment of 
 their leaders, which was to continue in the old groove.^ 
 
 ^ The system of reciprocity. International bargains ought to he 
 (and they are in most instances) founded on a basis of equality. You 
 can obtain a greater or less degree of equality under protection. 
 Universal free trade is certain to favour the richer and older communi- 
 ties. Respecting the French treaty, we lay before the reader a passage 
 from Professor Thorold Rogers's ' Cobden and Political Opinion, ' p. 339. 
 ' ' He neither understood the bearing, nor saw the importance, of Cob- 
 den's treaty. Mr Lowe imagined that the essence of Cobden's treaty 
 was reciprocity, and he explained reciprocity as the antithesis to free 
 trade. Now the treaty of 1860 was not a reciprocity treaty, for 
 France did not accept free trade in the same measure as England had 
 accepted it. But, if it had been a reciprocity treaty, it need not have 
 been hostile to free trade, for it is quite possible for two nations to 
 enter into such a reciprocal obligation as involves the mutual accept- 
 ance of free-trade doctrines. Cobden's treaty was an arrangement by 
 which a true reciprocity of free trade was made a question of time." 
 In the meanwhile, which nation suffers the most from unequal condi- 
 tions ? we inquire. 
 
172 PKEE TRADE UNDER PROTECTION. 
 
 They were safe in that. "Where they would get, did 
 they step out of it, they could not tell. 
 
 But if Cobden was but slightly acquainted with the 
 science of which he was the chief expounder in his day, 
 and which he defined more by the force of his character 
 than by the rectitude of his arguments, he was still 
 less acquainted with the elements of a far higher 
 science than the science of political economy, — the 
 knowledge of his fellow-creatures. He endeavoured 
 to create a distrust between peoples and their rulers. 
 He ought to have been assured that those peoples, or 
 the bulk of them, would naturally be more influenced 
 by the judgment of their own rulers than by the opin- 
 ions of a man, however meritorious his views, however 
 noble his sacrifice, who was nothing more or less than 
 the self-constituted guide of the destiny of nations. 
 
 He ought to have known, at the very outset of his 
 mission, that he could never hope to break the faith of 
 other peoples in their governors, even if he succeeded 
 in shaking that faith at home. What he ought to have 
 done at first, he performed at last. He secured a treaty 
 with France, after he had failed in persuading the 
 United States of the inestimable value of free trade. 
 But upon what basis? The basis of reciprocity. It 
 was the exact framework upon which the second Pitt 
 constructed his commercial treaty with France in 1785. 
 It was the reflection of William Huskisson's conduct 
 towards foreign nations. But it is magnified by the 
 free-traders into one of the natural developments of 
 free trade, when, in its simplest dress, it is but the 
 development of free trade under the principle of pro- 
 tection. 
 
FEEE TRADE UNDER PROTECTION. 173 
 
 We think that one important conclusion may be 
 drawn from a general study of Cobden's work as bear- 
 ing upon the progress of his intellect, and the altera- 
 tions that intellect underwent with reference to his 
 views of the world's affairs. That conclusion is, that 
 Cobden's sense of the utility of enthusiasm became 
 materially impaired. He went to work in a different 
 fashion.^ His primary method had borne no good 
 fruit. Instead, now, of appealing to the people, he 
 strove to influence their rulers in a system which should 
 be of advantage to them. But those rulers are in the 
 most favourable position to know what is best for the 
 welfare of the nation whose care is committed to their 
 charge. And it was difficult for Cobden to identify 
 himself with that position. As matter of fact, he never 
 really succeeded in doing so. But there can scarce be 
 _a doubt that that is the first step in conferring pros- 
 perity upon a nation. International arrangements 
 must be mutual in the first instance, like the French 
 treaty of 1860. 
 
 To act arbitrarily, as we did in 1846, is, then, to 
 
 ^ At first Cobden, supported by the gold of the manufacturers, ob- 
 tained the adhesion of the labouring classes of Lancashire and York- 
 shire. These were his strongholds. Then he appealed to the rest of 
 the labouring community, and dangled the cheap loaf before them. 
 But not making rapid progress, he began to use threats. The forty- 
 shilling franchise was the lever with which he menaced the landlords. 
 After the Chai-tists were gained, and the agricultural labourers de- 
 luded, Cobden was ready for a dissolution. He trusted the "intelli- 
 gence " of the country. He stated the question could only be decided 
 by a new Parliament. But the Conservative phalanx offered a very 
 resolute resistance. It was then Cobden told Sir Robert Peel that 
 even a dissolution, if adverse, would not influence his views upon the 
 rectitude of his principles. What becomes of the national intelligence ? 
 
174 FREE TRADE UNDER PROTECTION. 
 
 make nations more inimical than they were before.^ 
 Before we took that course, it was incumbent on our 
 rulers and demagogues to ascertain the disposition of 
 those nations which our arbitrary act would injure. 
 But you will reply, there were pressing needs at home 
 for the repeal of the Corn Laws. There was even 
 danger of revolution.^ But whence sprang the danger ? 
 Was it from our rulers — or demagogues, our would-be 
 rulers ? The danger was clearly made by the leaders 
 of a deluded people. They had but to acknowledge 
 they were pursuing either a selfish or a cosmopolitan 
 course of policy. At any rate, the public ought to have 
 known all the possible results of a twofold tendency. 
 What happened ? These leaders saw, as they thought, 
 far; but they did not foresee. They abandoned the 
 control of their country's trade. They exposed weak 
 points. They left them unguarded, a prey to the vio- 
 lence of their neighbours' attacks. 
 
 ^ Our free- trade policy raised considerable alarm in France. 
 
 2 From the quarter of Chartism. It is probable that the leaders of 
 the Chartist movement were satisfied with the promises of the free- 
 traders. Commercial innovation first; build up a free-trade party 
 and with it carry political reforms. 
 
175 
 
 CHAPTEE VIII. 
 
 FREE TEADE HAS NOT EFFECTED WHAT COBDEN PREDICTED 
 OF IT — (a) IT HAS NOT BECOME UNIVERSAL; (6) IT 
 HAS CEASED TO BE A "GOOD THING" FOR US, IF EVER 
 IT HAS BEEN OF ANY REAL BENEFIT. 
 
 "Capital and skill could not lie compelled to remain in this country. 
 They were certain to emigrate if impeded by hurdens which they were 
 unable to bear." 
 
 " America, which produced the raw material more easily than we did, 
 was manufacturing cotton so cheaply as to be driving ours out of the 
 market." 
 
 "If capital had not a fair remuneration here, it would seek for it in 
 America. To give it a fair remuneration the price of labour must be kept 
 down."— William Huskisson.i 
 
 COBDEN HAD TO EBLY UPON HYPOTHESIS, AND NOT UPON EXPERIENCE 
 — ILLOGICAL TO ARGUE FROM EXPERIENCE OF A LIMITED FREE 
 TRADE ACTING UNDER PBOTEOTION TO UNLIMITED FREE TRADE 
 RESULTS — FLUCTUATIONS IN PRICE OF CORN AS GREAT IN UNITED 
 STATES AND OTHER COUNTRIES WITHOUT A CORN LAW AS IN ENG- 
 LAND WITH HER CORN LAW — FLUCTUATIONS IN PRICE EXISTED IN 
 EARLY PERIOD OF FllEE-TRADE OPERATIONS (1850-1860) — COBDBN'S 
 INNOVATIONS IN THE CONDUCT OP OUR COMMERCE CONTRASTED 
 WITH THOSE OF HUSKISSON AND OF PITT— COBDEN'S RELATION TO 
 
 ^ Speeches, vol. ii. pp. 398, 399. Here Huskisson infers that the 
 wages of labour ought not to undergo sudden fluctuations. For if 
 wages experience a sharp rise, there is the reaction to be feared. 
 When it is said free trade has been of no real benefit, reference is made 
 to "labour" and not to "capital." 
 
176 PEEE TEADE UNDER PROTECTION. 
 
 PEOGEESS OF TEADE INVOLVED IN POLITICAL AND SOCIAL EEFOEMS 
 — THOKOLD EOGEKS SATS, " PRINCIPLES OP COMPETITION AEE 
 BBTTBE, KNOWN IN OUE TIME : " YES ; BY OTHEP. NATIONS — THE 
 POSITION OF CHEAP BP.EAD WITH EEFEEENOE TO THE COtTKSE OF 
 MANUFAOTUP.E. 
 
 § 19. Fluctuations in price of corn not adverse to manu- 
 facture : tendency to lower prices under protection. — Un- 
 der protection, therefore, tliere were ample means, with- 
 out a free intercourse in corn, in the manufacturer's power, 
 capable of advancing more successfully the national 
 industries. These means, too, in no way interfered 
 with the principle which regulated our commerce, and 
 they admitted of the same conclusions being drawn 
 after as before their introduction. Very different was 
 the case when free trade was developed. You could 
 not base upon experience, for there was none. Hypo- 
 thesis alone was the mainstay of free-traders. And it 
 is a little remarkable to find that the free-trade leaders 
 drew their conclusions as to what free trade would 
 effect from the experience which had been acquired 
 under a protective code. 
 
 But it may be as well, perhaps, at this juncture to- 
 remind all those who endeavour to take an impartial 
 view of this intricate question of the following fact. 
 The price of corn, which had previously been subject 
 to very extensive fluctuations,^ was tending to become 
 steady, under the operation of Sir Eobert Peel's sliding- 
 scale. Certainly the variations of the twelve years 
 antecedent to 1846 were not greater than those which 
 
 1 Owing to the extensive alteration in our agriculture, consequent 
 on the great war. Associated with these changes were many gambling 
 transactions, noticed by HusMsson. 
 
FEEE TRADE UNDER PROTECTION. 177 
 
 characterised the twelve years subsequent to 1849. Our 
 trade was prosperous with these variations, both under 
 protection and free trade. Thus the mere fact of a 
 variation in the price of corn is not incompatible with 
 trade progress. 
 
 But the manufacturers thought, or said it was, 
 opposed to the best interests of the country. And for 
 this end, Cobden aimed at getting a reduced but fixed 
 price of corn. During the first part of the enormous 
 trade which our manufacturers conducted, subsequent 
 to the introduction of free trade, the price of corn 
 fluctuated^ just as extensively as under the sliding- 
 scale. But there were disturbing causes to account for 
 this fluctuation, exclaim the free-traders. Were there 
 not also the same disturbing causes in operation under 
 protection ? The free-trader cannot blink the matter. 
 Where is the difference, then ? If this fluctuation in 
 the price of corn assisted in preventing the manu- 
 facturers from extending their powers of production 
 under protection, how could it possibly aid them when 
 our commerce was carried on under the principle of 
 free trade ? ^ And yet they extended their markets 
 enormously, and increased their profits at an unparalleled 
 rate ! It is certain, therefore, from the above con- 
 sideration, that the repeal of the Corn Laws had not 
 that omnipotent influence which has been ascribed to 
 
 1 It is quite clear that a variation in the price of corn, within certain 
 limits, is not injurious to trade operations. 
 
 2 Theaveragepriceof corn during ten years, 1830-1840, was56s. The 
 average price, 1850-1860, was 54s. That is to say, so far as the low price 
 of bread was concerned, the labourer gained something less than 2s. 
 during the year. And yet Cobden asserted that the high price of bread 
 prevented labour from being occupied. 
 
 M 
 
178 FfiEE TRADE UNDER PROTECTION. 
 
 it in the induction of prosperity. What was the 
 amount of influence which it had, in effecting the in- 
 crease of trade prosperity, is a problem which must he 
 left to the free-trader to solve.^ It is quite clear to 
 those who advocate protectionist views, that its influ- 
 ence could only become apparent when the price of 
 corn actually became reduced, and continued to be re- 
 duced ; but the attentive reader will observe that, when 
 the price of bread in this country began to decline, our 
 whole trade tended to become stationary. Under the 
 circumstances, undoubtedly the reduction in the price 
 of bread was a boon to the manufacturer who found his 
 hold upon the foreign markets becoming less firm. If, 
 however, the careful observer proceeds further, he will 
 find that, with the continued decline in the price of 
 corn, the trade of the country has already become, and 
 is stDI becoming, less and less remunerative. 
 
 The abnormal state of commercial aff'airs referred to 
 by the Eoyal Commission appointed to inquire into 
 the present depressed state of trade is this — while the 
 volume of our trade has remained stationary (there is 
 no reference to the increment in it corresponding to the 
 annual increase in population), its value has progres- 
 sively diminished. But what is this sign but the prel- 
 ude to the reduction of the bulk of our industries? 
 Prices fall : there is less incentive for the enterprising 
 manufacturer to increase his productions ; and if he 
 cannot find a remunerative market, he diverts, accord- 
 ing to the free-trade doctrine, his capital from less to 
 
 1 It is important to observe as well, that (luring the Crimean war, 
 when the price of corn was considerably raised, the increase had no de- 
 pressing influence upon our export trade. 
 
FREE TRADE TUSTDEE, PROTECTION. 179 
 
 more remunerative channels. Is it the fact that these 
 channels are to be found in a free-trade country ? How 
 do the free-traders explain the increasing circulation of 
 British capital in foreign countries and the colonies ? 
 But this fall in prices, exaggerated, certainly, by other 
 influences which spring primarily from the original 
 cause producing the fall, is to be regarded, not absolute- 
 ly, but relatively, with reference to the sequence of 
 events in which it forms at present the final link. 
 
 Take this fall in prices absolutely, and explain it as 
 being caused by one of those minor influences which 
 only tends to exaggerate it, and you arrive apparently 
 at a true solution of cause and effect. But in this pro- 
 cess a very common error is committed. There is an 
 extensive effect. There is but a small cause adduced 
 to account for it. It is impossible, therefore, not to run 
 into serious misapprehension, when you do not make 
 accurate and careful observations. Much the same sort 
 of mistake is committed by those who account for the 
 depression in our trade by means of the " excessive " 
 railway rates .^ 
 
 But it will be admitted that such is not a scientific 
 procedure, however much it may be prompted by party 
 and prejudiced views. When the free-traders avoid the 
 comprehensive study of the subject of the present de- 
 pression ; when they grasp at false explanations, which 
 
 ' The manufacturers made great profits when these rates stood high, 
 because demand for their goods was brisk. But Sir T. H. Farrer says 
 that simultaneously with the growth of manufacture in other countries, 
 there is a corresponding decline in our own. Demand has been re- 
 duced. And it seems that the rates are to be reduced to permit the 
 free-trader to compete with protectionist manufacturers in neutral and 
 home markets. 
 
180 FREE TKADE UNDER PROTECTION. 
 
 suffice only to convince those who are free-traders by 
 tradition ; when they distort facts, and adduce partial 
 and minor causes ; when they shun the consideration 
 of principles of action or forces created by free trade, 
 and rely upon a series of statistics, which are dexter- 
 ously managed so as to mislead, — then the impartial 
 observer discovers the weakness of a position which 
 they strive to conceal from the public view. 
 
 But you cannot take this " fall in prices " absolutely, 
 and reach the true cause of depression. The rational 
 treatment of the argument is paramount even to free- 
 trade sophistry. Thus it becomes essential that you 
 take this phenomenon of the fall of prices relatively. 
 You must consider the sequence of phenomena in 
 which this fall in prices holds a place. And not only 
 is it necessary to comprehend this sequence, but you 
 have as well to reflect upon all those causes which deter- 
 mined the various phenomena in it. You will then be 
 in a position to ascertain the true cause of the last 
 link in that chain of commercial events which ends in 
 a " fall of prices." Nor will this be the termination of 
 your labours. You have discovered causes in opera- 
 tion which have produced a fall in prices. And that 
 fall has been progressive. But those great causes are 
 still acting. And if they continue to operate — as it is 
 certain they will — what will be the final result ? It is 
 thus that you can predict the appearance of the next 
 succeeding phenomenon. After the fall in prices, there 
 will appear a diminution in the bulk of our trade. It 
 is a question whether or not that diminution has not 
 already appeared. But for the purposes of this argu- 
 ment, which relates to the discovery of the true cause or 
 
FREE TRADE UNDER PROTECTION. 181 
 
 causes of the fall in prices,^ the appearance of this 
 phenomenon is of no moment. If it exists, it merely 
 points to the fact that the cause of the distress is 
 increasing in intensity. But from another point — the 
 welfare of the country — it is all-important. 
 
 Now it becomes matter of controversy to ascribe any 
 and what influence to a free intercourse in corn as the 
 cause of the prosperity of the manufacturers. We are 
 inclined to the opinion that the causes leading to that 
 prosperity were already in operation before the Corn 
 Laws were repealed; and the effect of an increased 
 and normal currency, in raising prices and stimu- 
 lating enterprise, still further tended to magnify the 
 effects of those causes, and to increase the profits of 
 our merchants. Were the beneficial effects of the 
 development of the railway portended ? We adduce 
 a passage from Cobden, in which he ignored, or affected 
 to disregard, the enormous benefits to be derived from 
 facilitating the transit of our goods.^ There can be no 
 doubt of the troubled state of the times, which, in the 
 judgment of many, and M'CuUoch inclined to this 
 view, arose more from political than economical dis- 
 abilities. It was that economist's opinion that it was 
 more prudent, under the then existing circumstances, 
 
 ' Of course, all prices which are more or less under the influence of 
 monopoly are excluded. 
 
 ^ P. 72, where he states that 10s. 6d. a quarter is the average cost 
 of conveying corn from Danzig to London. This, said he, would be 
 permanent, and act as a sort of natural protection to the British farmer. 
 Also, p. 104, where he asserts that the only obstacle in the way of 
 manufacturing prosperity was "dear bread." He does not refer to 
 cheaper transit. Now bread did not become appreciably cheaper till 
 after 1860. Cobden's factor, therefore, was not in operation during 
 1850-1860. And still the nation enjoyed prosperity. 
 
182 FREE TRADE UNDER PROTECTION. 
 
 to allow the economical change to be effected, than 
 subject the framework of our constitution to the severe 
 strain which was imminent. But the absorption of 
 the Chartist element into free-trade agitation was the 
 turning-point. Two separate agitations — one purely 
 political, the other free trade — were welded together. 
 But how? By the persuasive eloquence of Cobden. 
 It was he who pointed out to the Chartists the 
 necessity of attending to their material welfare in the 
 first instance. First let them acquire material pros- 
 perity, and their political wants would be satisfied 
 in course of time, and by the same instrument, too, 
 which, he said, would ensure their prosperity. But 
 the whole of Cobden's political economy is wrong.^ 
 He started upon a false assumption, and raised a 
 superstructure thereon, well pleasing to the intel- 
 lectual eye of the people. The more fascinating his 
 invidious illustrations, the more popular he became. 
 And it was essential he should maintain his place in 
 popular favour. That he thoroughly believed in the 
 efficacy of free trade to consummate an everlasting 
 prosperity, and to effect that communion of cosmo- 
 politan interests which was to destroy for ever war- 
 like tendencies, there cannot, we again repeat, be 
 the slightest doubt. A man who occupied so high 
 a position as he did in the estimation of the public — 
 
 ' It is false to assert that high rents are the cause of high prices. It 
 • is false to assert that the Corn Law was a purely selfish law, in favour 
 .of the landowners. We are in a false position now. For other nations, 
 according to Cobden, were to become free-traders within five years. 
 But his calculations referred to what would happen "if his assumed 
 events fell out." They have not fallen out. Our present experience 
 of free trade is absolutely opposed to what Cobden anticipated of it. 
 
FREE TRADE UNDER PROTECTION. 183 
 
 though popular favour is capricious: he was turned 
 out of the representation of Stockport at the general 
 election of 1857^ — must needs cast about for all possible 
 evidence to warrant the trust thus shown in him. And 
 in the extraordinary delusions which were entertained 
 as to what was cause and what effect, and how pros- 
 perity was brought about, he had ample scope to give 
 his favourite principle a prominent place. The very 
 passion of the man overbore the quiet arguments of 
 those who attempted to take an opposite course. He 
 denounced them as enemies of the people. As for 
 themselves, they were sowing the seeds of their own 
 destruction ; and the people would remember their 
 tyranny, and take vengeance on the day of reckoning. 
 And when prosperity happened, as Cobden had pre- 
 dicted — when men were more concerned in the accom- 
 plishment of their material wellbeing than in the 
 method by which it was induced — they became deaf to 
 all other but Cobden's voice. He had been first in the 
 field; he had gained the popular ear, and it seemed 
 useless to try to dispossess him of it. But the attempt 
 was made. With what effect is well known. 
 
 And thus it came about, from the intermixture of the 
 effects of different causes, that Cobden was enabled to 
 point to free trade as the sole cause of prosperity. 
 Wages rose, just as Cobden had predicted. Our foreign 
 trade extended in a degree beyond what Cobden had 
 anticipated. The Manchester school was for the time 
 
 1 Professor Thorold Rogers, 'Cobden and Modern Political Opinion, ' 
 p. 112. "It was infinitely more creditable to C.obden," says this 
 writer, "that he lost his seat at the general election in 1857, than 
 to Lord Palmerston that he was able to secure public support for the 
 affair of the Lorcha. " 
 
184 FREE TRADE UNDER PROTECTION. 
 
 triumphant. But the price of bread did not suffer any- 
 serious fall, though the effect of competition was at 
 once to send poor land out of cultivation. And rather 
 than a drain of gold occurring, the Bank (1850) held 
 more bullion than during the palmiest days of protec- 
 tion. Why ? Because capital was withdrawn from agri- 
 culture. The circumstances, indeed, were fortuitous. 
 It remains for a subsequent generation to recognise the 
 fact whether Cobden was or was not self-deceived. 
 
 If, as we believe, a free intercourse in corn did not at 
 once assist the British manufacturer in extending his 
 markets, then in that period during which the price of 
 corn fluctuated as it did under the sliding - scale, its 
 action must have been superfluous. 
 
 If the repeal of the Corn Laws did not at first really ^ 
 benefit the manufacturer, if it came to his assistance 
 afterwards, it is requisite to inquire under what condi- 
 tions. Now it seems to be the case that it could bene- 
 fit him only when his profits began to diminish, and 
 when he was therefore compelled to reduce the wages 
 of his labourers. If, then, this was the only assistance 
 it could afford him, and it cannot be regarded as a very 
 substantial assistance, let us see what were the disad- 
 vantages ensuing upon the abolition of the Corn Law. 
 It permitted the entry of as much foreign corn as could 
 be sent into our markets. It introduced a dangerous 
 tendency, for the welfare of agriculture was threatened. 
 Now it was impossible so large a quantity of corn 
 
 ^ There can be no doubt tliat the repeal of the Corn Laws benefited 
 the manufacturers from the very first. But this benefit was purely a 
 selfish one. The Corn Laws were ostensibly abolished to enable the 
 manufacturers to compete more successfully with their rivals. This 
 the repeal did not eifect till profits began to decline. 
 
FREE TRADE UNDER PROTECTION. 185 
 
 could be grown abroad as to disturb the prices of the 
 home markets immediately, though there was a sha- 
 dowing forth of future events in the excessive importa- 
 tion of corn in 1847 and 1849. The efPect of a free 
 trade in corn upon our markets would be gradual. It 
 could not be otherwise. For there were many difficul- 
 ties to be overcome before any very large quantity 
 could be annually poured into the country. There 
 were the difficulties of the cultivation of new soils; but 
 they were moderate. There were also difficulties im- 
 posed by the cost of transit, not only from the interior 
 of corn-growing counties to the seaport towns, but also 
 from these towns to free markets. These were more 
 serious, but they could not be considered as constant : 
 though Cobden argued from a belief in their constancy, 
 and thus arrived at the conclusion that foreign imports 
 of corn would not prevent home-grown corn from being 
 sold. For such was not the object of a free trade in 
 corn (p. 53). But they have become reduced, as im- 
 provements have increased. We have M'Culloch's 
 evidence that there was no limit to the production of 
 corn in corn-growing States. There is evidence on re- 
 cord to show that the cost of transit varied indirectly 
 with the demand. Cobden, following M'Culloch, put 
 the cost at 10s. 6d. a quarter. Opposed to this we ad- 
 duce an authority which states that, if the demand be- 
 came constant, 4s., or even 3s. 6d., would be a remuner- 
 ative price.^ But the alarm having been raised that 
 our agriculture would be at once destroyed,^ the fact 
 
 ' Calvert Holland, M.D. Analysis of Mr Fawke's Address to Land- 
 owners of England. OUivler, Pall Mall, 1841. 
 
 2 This, of course, was an exaggeration. But it shows clearly the 
 fears entertained at the time by the protectionists. 
 
186 FEEE TRADE UNDER PROTECTION. 
 
 that our oldest industry was enabled to continue in a 
 fairly prosperous state (though, as a comparison of sta- 
 tistics shows, a certain amount of inferior land went 
 out of cultivation), went against the protectionists and 
 strengthened the views which were held by Cobden, 
 and still entertained by his successors.'- 
 
 But the fact is equally patent that both sides took 
 an erroneous course. The free-traders, on the one side, 
 argued from the data that were before them, that no 
 adverse force was then in operation. But they did 
 not consider that the amount of competition which 
 they put into operation might become so powerful as 
 to exercise an adverse effect. The protectionists, on 
 the other side, took an alarmist view, and predicted the 
 certain ruin of our agriculture. Both the free-traders 
 and protectionists were partly right and partly wrong. 
 The free-traders were right when they asserted that 
 there was no immediate cause for dismay ; but they 
 were wrong when they neglected to take into consid- 
 eration the growth of tendencies which the repeal of 
 the Corn Laws directly created. While the protection- 
 ists cut a sorry figure before the public by crying out, 
 " Euin, ruin ! " when there was no ruin, nor any imme- 
 diate prospect of it. In the midst of such conflicting 
 opinions, what was the proper method to pursue ? It 
 was to determine all the several tendencies which the 
 abolition of the Corn Laws was prone to bring into 
 action ; to estimate in what likely way these tenden- 
 cies might increase in intensity ; and to calculate their 
 
 ^ Even in 1850 capital was diverted from less (agricultural) to more 
 remunerative (manufacturing) pursuits. In the process the money- 
 market became distended. 
 
FEEE TRADE UNDER PROTECTION. 187 
 
 influence, at each state of their growth, upon our own 
 agriculture. 
 
 But Cobden at least never expected that such ten- 
 dencies would become ad verse. ^ On the contrary, the 
 competition which a free intercourse in corn set up, 
 would increase, in his opinion, the amount of home 
 produce. We must state, in his justification, the na- 
 ture of the change which he succeeded in effecting, — 
 uselessly, if the argument we have already adduced be 
 allowed to stand. It was the " surplus " of wheat the 
 foreigner was to supply ; not the main bulk of the 
 food of the people. In exchange for this supply we 
 were to give the excess of our manufactured goods. As 
 we had more to give them than they had to give us, 
 on this supposition we may congratulate Cobden on 
 the dexterity which he used, and the persistence which 
 he showed, in making his protectionist opponents un- 
 derstand the real character of his commercial reform. 
 If they would only see the matter in Cobden's bear- 
 ing, they would very soon be convinced that they had 
 everything to gain and nothing to lose. For the bal- 
 ance of trade would be on our side. We should be, on 
 the whole, the gainers by the transaction, and this, in 
 spite of the free-trade doctrine that " exchanges are of 
 equal value." ^ 
 
 If we compare Cobden's conduct on this occasion 
 with that of William Pitt respecting the treaty with 
 
 1 We haYe already adverted to the places where Cobden states that 
 competition was to (1) increase our corn produce by one-fourth, and (2) 
 make England a corn-exporting country. 
 
 2 If exchanges are of equal value, how is it possible that we have 
 been able to invest the purchase-money of our exported goods in 
 foreign investments? 
 
188 FREE TRADE UNDER PROTECTION. 
 
 France in 1785, the result is the same in both instances. 
 Both sides were to gain. But England was, in each 
 case, to be the greater gainer. This Pitt acknowledged; 
 but Cobden, so far as we can learn, left the problem in 
 the fascinating position that both parties were to gain. 
 • Had he developed that position a little further, he 
 would have perceived that when one party gains more 
 than the other, the increment of gain to the first is the 
 representative of a loss to the second. But the " rela- 
 tive " aspect of the question was carefully avoided by 
 Cobden. Pitt and Cobden worked towards the same 
 end, but by different means. Pitt extended the free- 
 dom of trade, under the system of protection. If, con- 
 trary to expectation, the balance of exchange came to 
 be against him, it was within his power to regulate the 
 balance at the expiration of the treaty. He did not 
 permanently lose control over the conduct of our trade. 
 But Cobden, under the impulse of ulterior views, at- 
 tained the same end as Pitt had done by another means. 
 He abandoned the scientific procedure of making trade 
 more free under protection, so ably expounded and put 
 into practice by Huskisson. He ridiculed the very 
 idea of protection.^ He called into operation the prin- 
 ciple of free trade ; and he thereby abandoned for ever 
 afterwards all control over the course of our trade. 
 How could Cobden divine that the subsequent course 
 
 1 And he also compared monopoly with protection, and laid the 
 faults of monopoly at the door of the protective system. All protec- 
 tion, however, in his opinion, was had. Cf. Huskisson, ii. 649. The 
 changes which "have established the principles of free trade, with 
 moderate duties, for that system of prohibition which formerly pre- 
 vailed. It is for the interest of all classes that we should substitute a 
 system of protection for one of prohibition." 
 
FKEE TRADE UNDER PROTECTION. 189 
 
 of our trade would continue favourable to us ? Had 
 he better means of peering into the future than "William 
 Pitt or William Huskisson ? Was he singly interested 
 in the progress of our trade, as they were ? It appears 
 not to be the case. By making trade more free under 
 protection, both Pitt and Huskisson contemplated com- 
 mercial advantages alone. But Cobden, by introducing 
 the principle of free trade, had not only commercial, 
 but political and social benefits to attain. Herein lies 
 the difference. It explains Cobden's motive for a uni- 
 versal free trade. His reform affected not commerce 
 alone, and therefore, from the very first, the commercial 
 part of it was surrounded with dangers. For suppose 
 these political and social alterations not to take place, 
 as his scheme implied. Suppose other nations not to 
 become infatuated with free trade. Then the higher 
 and better state of things as worked out by Cobden is 
 removed from an uncertain probability to the region of 
 impossibility. 
 
 § 20. Free trade does not induce equality of surround- 
 ing conditions. — It becomes incumbent, therefore, to 
 consider what is the total effect of an isolated part of 
 Cobden's policy. 
 
 During the first period of free-trade action a free 
 intercourse in corn neither assisted ^ the manufacturers 
 nor benefited the labourer. Eather, from the circum- 
 stance that the wages of labour were increased, does 
 it appear to us that the labouring classes would have 
 
 1 What really did assist the manufacturers and enable them to in- 
 crease the wages of labour, was the railway system, coupled with an 
 enlarged currency. 
 
190 FREE TKADE UNDER PROTECTION. 
 
 been better enabled to meet all the disadvantages 
 whicb a fluctuation in the price of bread entails.^ 
 
 During the second period, when a sort of equilibriuni 
 was being effected between British and foreign manu- 
 facturers, and the former was compelled to sell his 
 goods at a reduced rate, owing to the introduction of 
 the protective system in some countries and an increase 
 of protective duties in others, a fall in the price of 
 bread was of actual service both to the manufacturer 
 and labourer. 
 
 But observe the condition of commercial affairs which 
 made such a fall advantageous. Was it to meet a 
 decline in our manufacture that the alteration in our 
 Corn Law was framed? Not according to Cobden. 
 The repeal of the Corn Law was to assist the manufac- 
 turer from the very first. That was the intention of 
 the repealers; and they admitted it when they were 
 compelled to acknowledge that the consequent reduc- 
 tion in the price of bread (which was expected to take 
 place immediately by both parties^) would be asso- 
 ciated with a fall in wages. But what is the fact? 
 The fact is, that this freedom of intercourse in corn did 
 not come to the assistance of the manufacturer tUl he 
 was in difficulties. Those difficulties were not of his own 
 making ; but they became exaggerated by the influence 
 
 ^ On this supposition, that wages in 1850 would have undergone the 
 same increase under protection as they did under free trade, there 
 were the means to counteract the disadvantages of dear bread. 
 
 ^ And the free-traders further assumed that the reduced price would 
 remain a "steady" one. The sequence of events as portrayed by 
 Cobden is as follows : We should get more corn from the foreigner. 
 We thus should obtain an abundance, and we should pay for it by our 
 manufactures. Our manufactures would thus be stimulated, while 
 our agricultm-e was to improve. 
 
FEEE TEADE UNDER PROTECTION. 191 
 
 of the change in our commercial policy which Cobden 
 carried, in order to benefit the poorer classes of the 
 country. When that change aided the manufacturer, 
 and under what circumstances, we can now easily per- 
 ceive. And the question arises. Were these adverse cir- 
 cumstances sufficiently foreseen ? Did Cobden expect 
 (if he contemplated the arrest in growth of our manu- 
 facturing industries) that this assistance, coming at a 
 time when foreign nations were still protectionists, 
 would turn the scale against them and compel them to 
 become free-traders ? 
 
 But such a supposition is without foundation; for 
 we have Cobden's word that he believed all nations 
 would become free-traders within a comparatively short 
 period after the introduction of free trade into the com- 
 mercial code of his country. 
 
 It appears, then, that Cobden did not contemplate 
 any kind of difficulty in the way of the British manu- 
 facturer. Even supposing him to have pursued a tor- 
 tuous course, he could not have framed a measure to 
 counteract the evil effects of a future danger, the pos- 
 sibility of which he never entertained. But so far as 
 we have been able to learn, Cobden did not examine 
 the possible future effects of his policy, in aU those 
 varied conditions by which it might be surrounded. 
 We know his enthusiasm in the cause of free trade 
 was unbounded. We know, too, that he erroneously 
 ascribed to free trade all the prosperity which ensued 
 upon the development of the railway and the discovery 
 of the gold-mines (p. 279). And his influence in di- 
 recting popular attention into false views of cause 
 and effect was overwhelming. In this respect he was 
 
192 PEEE TRADE UNDER PROTECTION. 
 
 veritably " the man in possession." But the excite- 
 ment of the times, and his prejudiced opinions (and 
 no man can deny that Cobden was prejudiced), led him 
 into taking an over-confident course, which a profound 
 analysis of all the contingent phenomena with which 
 he ought to have dealt, and a more comprehensive 
 survey of the forces which determine the progress of 
 nations, would have forbidden. It is true of Cobden 
 that had he reasoned more he would have felt less of 
 the virtue of free trade. "We cannot but marvel at the 
 audacity of the man who asserted that " England had 
 but to commence the glorious career of free trade; 
 when all nations, observing the extent of her pros- 
 perity, and envious of it, would straightway follow her 
 lead." But when the same man effects a policy, on the 
 fragile grounds that other nations are certain to pursue 
 the same, though we marvelled at his over-confidence 
 in the first instance, it is impossible not to censure his 
 temerity in the next. For upon what was this cer- 
 tainty founded ? ^ Cobden could not believe that the 
 internal and external conditions of any other nation in 
 the world were in all respects similar to those of his 
 own country. But free trade, he declared, was best for 
 his country. Because, we presume, we wanted but 
 little corn then (1845), and we had a large surplus of 
 manufactured goods to exchange. A system of free 
 markets, therefore, would redound to our benefit. 
 
 1 Other nations had but to see the prosperity conferred on us by 
 free trade, and they would straightway become free-traders. But 
 against this it might be argued that free trade did not cause all the 
 prosperity we enjoyed. And further, that though our conditions were 
 favourable to free trade, the conditions of other nations were not 
 adapted for its equally successful operation. 
 
FREE TRADE UNDER PROTECTION. 193 
 
 Now Cobdeu believed that other nations, whose sur- 
 roundings were dissimilar to our own, would become 
 free-traders, when they saw the prosperity which the 
 new principle conferred upon us. It is requisite to 
 pause awhile and ascertain whether Cobden's conclu- 
 sion was a strictly logical one. 
 
 We do not desire to detract from Cobden's honesty 
 and sincerity. A man may be ever so prejudiced,^ nor 
 may he be on that account any the less honest and 
 sincere ; though, if he is called upon to guide, this pre- 
 judice will cause ruin to the nation. Now Cobden's 
 idea of a universal free trade was this, — that the 
 natural productions of a given country would thereby 
 be stimulated into greater activity. But some natural 
 productions of some countries are inconsiderable. How 
 are these going to stand against the invasions of their 
 stronger and more wealthy neighbours ? They must 
 till the soil, the British free-trader will say. How, then, 
 are they going to progress ? 
 
 At the first step Cobden did not perceive the exces- 
 sive inequalities which a universal free trade would 
 effect in the condition of nations. But you only re- 
 quire a certain degree of inequality in order to pro- 
 gress. Increase that degree and what happens ? In- 
 stead of furthering the aspirations of a people, you 
 crush them. 
 
 ^ How Cobden's prejudice against the landed proprietors arose is 
 matter of obscurity ; but we know that some attempts were made in 
 Parliament to reflect upon the honesty of his proceeding, in the early 
 part of his career. In connection with the conservation of weak 
 and growing industries, though natural ones, this is what Professor 
 Thorold Rogers says, loco eit., p. 308 : "We have no wish to preserve 
 that which cannot bear the healthy climate of pure competition." 
 
 N 
 
194 FREE TRADE UNDER PROTECTION. 
 
 In such an altered state, and having so great advan- 
 tages, England would reap the larger part of the reward 
 of free trade. And this, without a doubt, was foreseen 
 by foreign statesmen. 
 
 These statesmen were in the best position to judge 
 of what was most favourable to the advancement of the 
 people committed to their charge. They saw that the 
 internal and external conditions of their countries were 
 in nearly all respects dissimilar to those of England, the 
 pioneer of manufacture. To argue from the basis that 
 each had natural productions, and these productions 
 would be stimulated by free trade, appeared to them 
 inappropriate to the exact state of their circumstances. 
 The equality into which they were brought by the usage 
 of the phrase " natural productions," was only an ap- 
 parent one. It was based upon a verbal description, 
 and not upon the facts in existence. These facts had 
 reference to the magnitude of, and moral influence ex- 
 erted by, some natural productions. For not only would 
 they be absolute losers by a universal free trade, but 
 they would also be put back in the race of civilisation. 
 They concluded that the conditions with which they 
 had to deal were anything but favourable to the prac- 
 tice of free trade.^ 
 
 The difference, therefore, between Cobden and the 
 foreign statesmen's view as to what was best for the 
 
 ' The mtroduction of "natural productions" is clearly for the pur- 
 pose of winning. In 1750, agriculture in England was a flourishing 
 industry ; in 1873 it became disabled. Since 1750, our manufactures 
 have increased steadily to 1849, and rapidly to 1873. Why should 
 manufacture be considered more of a natural production than agri- 
 culture ? Because the opportunity presented of raising a brood of 
 capitalists. 
 
FREE TRADE UNDER PROTECTION. 195 
 
 progress of nations, is exposed. By the mere use of 
 words, and resting solely upon a verbal description of 
 the state of the case, Cobden thought he could lay the 
 commercial world prostrate at his feet. But the for- 
 eigner discovered that England would acquire a per- 
 manent supremacy, were a universal free trade adopted. 
 He could point out England's greed in this matter. 
 He could refer to "Albion's perfidy." On the con- 
 trary, it was easy enough for him to assure his country- 
 men that, in course of time, they would reap the benefit 
 of England's arbitrary action. (We must here inter- 
 polate our opinion, that this arbitrary action has had 
 no influence except such as has been injurious to our- 
 selves.) They could afford to wait. Was it possible 
 for Cobden to cause a distrust among foreign nations ? 
 It was his ambition, at first, to do so. He scorned the 
 rulers of the people. He desired to take that by force 
 which he could not achieve by argument. 
 
 But all was of no avaU. Other nations came to the 
 conclusion that their surrounding circumstances were 
 not similar to those of England ; and that, therefore, if 
 the latter found free trade to work beneficially for her, 
 it was not logical to infer that the same cause would 
 have similar favourable results when acting under dif- 
 ferent conditions. 
 
 But the course of events has proved Cobden's en- 
 deavour to have been a useless one. International 
 enthusiasm broke down. It is just a possible means of 
 effecting those results Cobden so much desired. But it 
 is extremely improbable that it ever will be brought 
 into action, on this account — the difficulty of believing 
 that a mutual policy wUl always react with the same 
 
196 FREE TRADE UNDER PROTECTION. 
 
 degree of gain and the same degree of loss to the nations 
 engaged in it. Hence the practical reason that com- 
 mercial treaties are allowed to run for a certain number 
 of years. On paper, it is not an arduous task to show 
 that the policy, if once successful, must always be 
 successful. But the paper argument of ideal economists 
 is torn asunder by the experience of the practical man. 
 He is conscious of the fact that the original conditions 
 which determined any particular policy are liable to 
 fluctuation. It is to the self-interest of each of the 
 contracting parties to gain as much as they possibly 
 can by always adhering to the letter and spirit of the 
 treaty. How some of these original elements assume 
 such gigantic proportions as scarcely to have even been 
 dreamt of by the framers of the policy, is known to all 
 whose business is related to fluctuating phenomena. 
 Cobden never for a moment supposed that within 
 the small space of forty years his own countrymen 
 would be fed, to the extent of two-thirds of their corn 
 supplies, by the foreigner. And yet this effect, so 
 contrary to his expectations, is the present consequence 
 of a free trade in corn. What the final consequence 
 of that free trade will be simply depends upon the 
 possibility of the further reduction of one factor ; and 
 that factor is, the cost of cultivating foreign soil. The 
 tendency for this to decrease has been in operation for 
 some time ; and the question to decide is, " Have foreign 
 cultivators reached the lowest cost ? " ^ 
 
 1 We assume, of course, that we shall continue to be able to pay 
 for all the imported corn we require. With reference to the uncer- 
 tainty of action of principles, this is what Huskisson Said (ii. 328) : 
 "It was impossible for me not to feel that, in the application of 
 
FREE TRADE UNDER PROTECTION. 197 
 
 It can be safely asserted that Cobden did not expect 
 that the fall in the price of bread would assist the 
 British manufacturer in the way it has done. You are 
 agreed that this fall in the price of corn could not by 
 any means aid the manufacturer in the primary period 
 of free-trade action, for the reason that it did not take 
 place. But it was of some real benefit to the British 
 manufacturer and labourer when the career of the 
 former in foreign markets began to be checked. We 
 have to consider at what expense this real benefit was 
 achieved. 
 
 While a free trade in corn, which was subsequently, 
 by the extension of a free-trade policy effected by Mr 
 Gladstone, followed by free trade in all other articles, 
 except those few the duties on which are collected to 
 assist the revenue, did not immediately benefit the 
 manufacturer, it opened up to the whole world the corn 
 markets of our country. On the supposition that this 
 free intercourse in corn had been the sole and direct 
 means of conferring an unparalleled prosperity on the 
 nation, a free intercourse in other commodities was 
 carried out. Thus all our markets became open to the 
 attacks of the foreigner. But why was such a course 
 of action pursued ? Because there was no fear of our 
 being undersold at home. That was the very essence 
 of the motive which urged a free-trade policy. Cobden 
 tells us so. But the reason why the manufacturers 
 were formerly afraid of the competition of their foreign 
 rivals in foreign and neutral markets, now becomes 
 a little clearer. It was " immediate " danger they 
 
 principles, the result, from unforeseen causes, may sometimes disappoint 
 our expectations. " 
 
198 FREE TRADE TJNDER PROTECTION. 
 
 anticipated (in 1845) from the increasing growtla of 
 Continental manufacture. 
 
 But the old free-traders laughed at the idea of our 
 being undersold in our own markets, even when the 
 conditions leading to such a catastrophe were made as 
 favourable as possible. It is evident they did not 
 imagiae a state of affairs, in which, while every foreign 
 market was protected against the rivalry of the British 
 manufacturer, our own markets would be free to the re- 
 ception of all goods that could be poured into them.^ 
 
 It would take time for the manufacturing industries 
 of the Continent and America to assume considerable 
 dimensions. But they would have their stimulus of 
 development ; they would have a constant demand for 
 all their produce. They would increase constantly, but 
 slowly, and then an epoch must arrive when not only 
 would they be able to supply all the demands of their 
 own markets, but would be able to divert their surplus 
 produce into surrounding ones. The most favourable 
 would obviously be free markets. Towards these the 
 foreign manufacturer would divert his energies, because 
 there the least resistance is opposed to him. 
 
 And now the young free-traders may look in dismay 
 on the impossible phenomena of their predecessors. 
 
 In the second stage, when the British supplies were 
 being cut short, because foreign ones were increasing, 
 the hope of our manufacturers lay in the cheapness of 
 bread. 
 
 While they were calculating the results of vain ex- 
 pectations, the agricultural industry was beginning to 
 
 1 For the plain reason that they thought no Continental manufacture 
 would ever become so powerful as to do them an injury. 
 
FEEE TRADE UNDER PROTECTION. 199 
 
 wane.^ But this was taken to be favourable to the 
 interest of the manufacturers, because their labourers 
 got their bread cheap. The tendency, then, to a dis- 
 placement of labour in agriculture was beginning to be 
 felt. There was nothing to hinder that tendency from 
 gaining strength. It did gain strength, while British 
 manufacturers experienced a loss in their profits. But 
 this was not the only tendency in operation, though it 
 was the only one which gave signs in demonstration of 
 its existence. Another tendency was rapidly increasing 
 in strength ; a tendency which directly counteracted, 
 not the growth, but the very maiutenance of British 
 manufacturing activity. When foreign markets were 
 self-supplied, and there was no check to their growth, 
 their surplus would be diverted into other markets. 
 Now it is this tendency, created by the old free-traders, 
 stimulated by the extraordinary productions of Eng- 
 land's manufacturers between 1850-1866, that has at 
 last become characterised by actual sigas. 
 
 The third stage of that series of changes inaugurated 
 by a free-trade policy has been reached. In that stage 
 we are supplied, to the extent of two-thirds, by foreign 
 corn. During the transitionary period ending in this 
 ratio, if it does end here, more than two and a half 
 millions of acres of corn land have been sent out of 
 cultivation ; and, of course, a corresponding number 
 of agricultural labourers sent out of employment. In 
 
 1 At first the manufacturers themselves would not be seriously in- 
 oonvenienoed by an arrest in the growth of their industries. But the 
 labour interest was bound to be so ; not only because the same extent 
 of industry was open to an increasing labouring population, but also 
 because the agricultural labourers thrown out of employment competed 
 with the town labourers, the result being " a reduction of wages." 
 
200 FREE TRADE UNDER PROTECTION. 
 
 1885, the number that were divorced from the soil is 
 computed at 200,000. But the consequences of this 
 alteration are not summed up in a mere displacement 
 of labour. Por that displacement of labour has its 
 effects. And these are — (1) an increased supply of 
 labour, thus tending to reduce wages ; and (2) an in- 
 crease in the number of the poor in large towns, result- 
 ing in an increase in the number of unemployed. 
 
 But in this stage of decline we have the produce of 
 our manufactures limited, and in a twofold manner. 
 For not only is there less external demand for our 
 goods, but a certain amount of manufacturing labour is 
 displaced by the circulation of foreign articles of manu- 
 facture. Why i Because these goods can be produced 
 at a cheaper rate abroad. But these nations are pro- 
 tectionists, and they can produce at a cheaper rate 
 than the free-trade nation ! 
 
 It was the intention of the free-traders, by reducing 
 the price of food, to make free -trade goods cheaper 
 than the goods of protective nations. This was the 
 pressure Cobden and the English manufacturers im- 
 posed upon the already existing burdens of protection. 
 We now perceive how that pressure — not a real one — 
 has been overcome. We learn from that circumstance 
 that Cobden, and those who worked with him, did not 
 interpret the causation of events aright. If Cobden 
 had only for a moment entertained the opinion that 
 foreign nations would remain protective, it is im- 
 possible that he should have left the trade and com- 
 merce of his country in so ill -regulated, disordered, 
 and weakened a state. 
 
 Now it is in this stage of decline that the free- 
 
FEEE TEADE UNDER PROTECTION. 201 
 
 trader points to the blessings of cheap bread. But 
 they ignore, and from political reasons entirely, the 
 collateral consequences of a general free trade in corn 
 and commodities. We have just become acquainted 
 with those consequences. They are an over-distension 
 of the labour-market, on account of (1) the displace- 
 ment of agricultural labour, (2) the displacement of 
 manufacturing labour — both which lead to reduction of 
 wages. In addition to both these adverse results, directly 
 occasioned by our partial system of free trade, there is 
 another cause in operation producing a depression of 
 our markets. That cause is in the attitude of foreign 
 nations. They have elected to manufacture their own 
 goods ; consequently the demand for British commo- 
 dities has decreased and is decreasing, and hence the 
 contraction of our markets. But this adverse result 
 has nothing to do with our free-trade system directly, 
 though the protectionist sympathies of other nations 
 may have been indirectly strengthened by the endeavour 
 of the British manufacturer to acquire a supreme as- 
 cendancy over foreign markets. We should have ex- 
 perienced, at some distant date, this check to the growth 
 of our manufactures, even if we had still remained a 
 protectionist nation. But then we should not have had 
 other causes of depression to magnify the one they 
 induced.^ 
 
 Thus you cannot but acknowledge that our free 
 trade, or rather our system of free imports, has been, 
 and still continues, the direct cause of depression. 
 This is the evil which it has done and is doing. What 
 
 ' And in the meantime more opportunities would have been forth- 
 coming to diminish the consequences of this arrest. 
 
202 FEEE TEADE UNDEE, PEOTECTION. 
 
 is the good? Cheap bread. But you can now per- 
 ceive that the good and evil of free trade in this coun- 
 try have appeared almost simultaneously. Is the good 
 which we enjoy by having cheap bread more than 
 counteracted by the evil which the nation suffers from 
 an unecjual competition ? It does not appear so. It is of 
 little use to appeal to the sympathies of the labouring 
 classes on the subject of cheap bread. They have 
 already learnt that they have obtained cheap bread too 
 late. For their bread has become cheap, while their 
 employment is being taken away from them. 
 
 The free-trader may exclaim upon the benefit of 
 cheap bread, but the labourer will reply that his em- 
 ployment is of more consequence than mere cheapness. 
 He will plead that it is to his interest to earn his living 
 first, and to pay the proportionate prices of his food- 
 stuffs afterwards. 
 
 We conclude, then, (1) that our system of free trade 
 has directly contributed to increase a depression which 
 was unavoidable ; and (2) that this increment of de- 
 pression is increasing. 
 
 "We ask the reader, Was this the best means of pro- 
 viding for our future depression at all, and especially 
 that depression of our manufacturers, which was bound 
 to ensue if other nations continued their protective 
 tariffs? 
 
203 
 
 CHAPTER IX. 
 
 THE NATUEE OF THE CORN LAW, AND THE OPPOSITE CONDI- 
 TIONS AFFECTING OUR AGRICULTURE AND MANUFACTURE. 
 
 " Let me but have a claim upon Provence, though thin as a single 
 thread of thy Queen Margaret's hair, and let me alone for twisting it into 
 the tough texture of a quadruple cable." — Sir Walter Scott.i 
 
 THE COEN LAVtf NOT A SELFISH LAW AS DENOUNCED BY COBDEN — SOME 
 EESTRIOTIONS WERE REMOVED FROM MANUFACTURE WITH ADVAN- 
 TAGE — BUT TO ASSERT THAT SAME PROCEDURE APPLIED TO AGRI- 
 CULTURE WOULD LIKEWISE BE ADVANTAGEOUS IS ILLOGICAL, BE- 
 CAUSE THEIR SUKEOUNDINOS ARE DISSIMILAR — THE CORN LAW ONE 
 OF THE FINAL RESULTS OF THE REVOLUTION IN FRANCE — IMPORTANT 
 TO NOTICE THE CHARGE BROUGHT BY COBDEN THAT THE CORN LAW 
 ENHANCED THE VALUE OF LAND — IT DID SO ORIGINALLY, BUT THIS 
 NECESSARILY, BECAUSE IT WAS TO THE INTEREST OF THE PARMER, 
 WHICH COBDEN SAID WAS THAT OP THE WHOLE COMMUNITY — THE 
 SUBSEQUENT RISE IN RENTS NOT DUE TO COEN LAW, WHICH MAIN- 
 TAINED THEM AT A GIVEN LEVEL, BUT TO EXTENSION OF CULTIVA- 
 TION — THE MORAL INFLUENCE OF FREE TEADE — BUT THE ENEEGIES 
 OF THE MANUFACTURER CONSUMED BY OTHER FORCES. 
 
 § 21. The Corn Law necessary to ^preserve a portion of 
 the fixed capital of the country. — The same effect may 
 
 ^ This was said, in the novel, by Duke Charles of Burgundy to the 
 Earl of Oxford, who was pleading the cause of his exiled queen. So, 
 it appears, Cobden proposed to himself the political ruin of the aristoc- 
 racy on the strength of a single argument, and that an "unsound " one. 
 
204 FEEE TRADE UNDER PROTECTION. 
 
 be brought about by very different causes. Thus it 
 happened that in order to advance the true interests of 
 agriculture a Corn Law became necessary .^ Will any- 
 body affirm that without this Corn Law the English 
 farmers would have been enabled to supply the whole 
 of the population in the year 1835 ? WiU any abstract 
 free-trader assert that the extension of our wheat culti- 
 vation would have been possible without this law ? 
 It was by this law, then, that the resources of the soil 
 were developed, and a positive addition made to the 
 wealth of the nation. In the year 1840 we produced 
 close upon 16 million quarters of wheat; in the year 
 1886 we grew 7 millions only. Take the number of 
 quarters yielded in 1815 and compare with the quan- 
 tity produced in 1840. Contrast this latter amount 
 with the diminishing produce ever since the Corn 
 Laws were abolished, and you perceive the influence 
 of those laws. They were framed, though it is said 
 that the Houses of Parliament were in danger of being 
 stormed by an irate populace at the time, with this 
 single object in view : to develop the resources of agri- 
 culture. In that development the labourer, the farmer, 
 and the landlord each took their proper share, and no 
 more than their proper share. 
 
 Now it is quite possible that one element more than 
 any other conspired to create the Corn Law of 1815. It 
 was the energy of the agricultural interest, strengthened 
 
 ' During tlie great war a vast amount of capital had been applied to 
 the soil. It was essential this should be protected. From the fact 
 that there was an excess of capital introduced and inferior soils tilled 
 which did not afford remuneration, a good deal of gambling resulted. 
 This formed the chief dificulty with which Huskisson had to cope. 
 
FREE TRADE UNDER PROTECTION. 205 
 
 by the introduction of capital from external sources ^ — 
 and what could prevent this extension from assuming 
 a gambling appearance, when the opportunity for specu- 
 lating was so favourable ? — which supplied the people 
 with corn during the long Continental struggle ending in 
 Napoleon's defeat. The sentiments of that illustrious 
 general towards England were easily deducible, even 
 had he kept them secret. He endeavoured to isolate 
 the English people ; to prevent all communication with 
 the Continent, whence the construction of a French fleet 
 adequate to the purpose ; to destroy the progress of 
 our manufacture, and to cripple the resources of our 
 food-supply, if such became, from the state of the 
 seasons, unequal to the demands of the English people. 
 Hence you will discern the sagacity of our Ministers 
 in furthering the cultivation of the soil. All the 
 national attention became concentrated on the ad- 
 vancement of the farming interest. And much of the 
 capital which would, had there been no fear of any in- 
 terruption of communication with the Continent, have 
 been expended upon the progress of manufacture, was 
 consequently diverted into that channel which at the 
 time presented the greatest prospects of remunerating 
 the speculator. Inferior soil came to be cultivated 
 again, and the price of wheat consequently rose.^ 
 
 ' It was Napoleon's object to isolate Great Britain from her relations 
 with surrounding nations. This contingency caused a good deal of 
 disturbance in the state of our trade markets. In such an event, manu- 
 factures would decline. The consequence was, that agriculture received 
 an abnormal stimulus. But with regard to the Corn Law and the price 
 of bread, it is essential to observe that between 1801 and 1815, the 
 prices of corn ranged very high. After the Corn Law, prices began to 
 fall. 
 
 2 Whence came the additional capital needed to extend the tillage 
 
206 FEBE TRADE UNDER PROTECTION. 
 
 According to the maxims of free-trade and ideal 
 economists, under the then circumstances of the case, 
 this rise in price was inevitable, and its rise was 
 greater than was required by the addition of the 
 necessary amount of arable soil. But when specula- 
 tors begin to act, it is difficult to 'prescribe limits. 
 All will agree, however, even at this distance of time, 
 as to the paramount importance of agricultural exten- 
 sion. As to the manner and intensity with which this 
 was carried out, any differences which may be enter- 
 tained ought certainly to be adjusted by those most 
 competent to the task — business men. Their interests 
 were bound up with this increased agricultural activity. 
 Till the element of speculation was introduced by these 
 business men, the British farmers knew not what it was 
 to speculate. The uniformly steady rate of prices up to 
 1795 is the proof of this. But their enlarged interests, 
 the ultimate product of a cause over which the nation 
 had for many years no control, solicited a due and 
 proper maintenance, and obtained it. And thus the 
 Corn Law, which was one of the final consequences, 
 in this country, of the French Eevolution, was estab- 
 lished as much to protect the capital of these manu- 
 facturers, now become farmers, as to enhance the value 
 of land. Thus the manufacturers who had become 
 farmers in 1815 perceived the necessity of a Corn Law. 
 Their self-interest dictated it. For without such a 
 
 of the soil? Not from the pockets of the landlords, but from the 
 capitalists and the public. If, then, after so much capital had been 
 expended upon the soil, a free intercourse without protection had been 
 permitted, it is clear there would have been a serious fall in the value 
 of agricultural stock. The capitalists, corn merchants, and farmers 
 would have been the losers. 
 
FREE TRADE UNDER PROTECTION. 207 
 
 means of protection, a great deal of their capital, which 
 had become fixed, would have been lost, and this loss 
 would have been disastrous to the labour interests of 
 the country. But the manufacturers ^ in 1845 did not 
 become farmers, nor did they identify themselves (as 
 they ought justly to have done) with the prosperity of 
 the agricultural industry. Let them have but changed 
 places with their discredited brothers, and what would 
 have been the result 1 They would have felt their self- 
 interest then to have been attacked without any just 
 reason. The manufacturers could not, except by con- 
 tradicting the statements of Sir Eobert Peel, assert that 
 their progress was on the whole (1845) retarded, or 
 was likely to be retarded. But they could express an 
 opinion that they were suffering a virtual retardation, 
 and that the cause of their virtual grievance resided 
 in the high price of bread. But it was equally their 
 duty to the nation to calculate the immediate conse- 
 quences and remote results of any reform bearing upon 
 the price of bread. Was the repeal of the Corn Law, 
 tending as it did to reduce the price of corn — but even 
 here they could not predict when the tendency would 
 be sufficiently powerful to have an adverse result upon 
 prices — likely to be associated at any future time with 
 danger to the agricultural interest ? If it came about, 
 then the sum of the prosperities of our manufacturing 
 and agricultural industries would be diminished. But 
 the sum of the welfare of all the industries of the 
 country expresses what is called "the national weU- 
 
 ' Cobden tells us that, at the commencement of the agitation, it was 
 the common belief among the manufacturers that free trade would be 
 adverse to British agriculture. Vide p. 49. 
 
208 FREE TRADE UNDER PROTECTION. 
 
 being." Did the manufacturers in their eager anxiety 
 to repeal the Corn Laws intrench upon this wellbeing 
 — not perhaps as far as they could see, or as long as 
 they should live — but at some remote time ? 
 
 We fancy the response to such a question would 
 have been as follows : " Even supposing the national 
 agriculture to suffer, and the supposition is one that 
 we do not for a moment entertain,^ the rise in manu- 
 facturing activity will more than balance the decKne 
 in agricultural pursuits. We shall become one large 
 workshop. Our people will make a great stride in 
 improvement. They wiU become morally better, social- 
 ly better, and politically better adapted to take their 
 undoubted position in the government of the country. 
 We mean to force our labourers to reach that higher 
 and nobler state of society which is now denied 
 them.'' 
 
 Thus it was that the manufacturers, with one eye 
 closed, by their influence, but more by their wealth, 
 attacked the Corn Laws; and Eichard Cobden was 
 their spokesman. His noble enthusiasm rose to a high 
 tension when he displayed the causes of the degrada- 
 tion of the people. And it was worthy of a far more 
 noble object than the mere enrichment of a particular 
 class. When we perceive this, it is curious to collate 
 it with this effort to destroy the influence and wealth 
 of the aristocracy, by sapping the sources whence their 
 unjust rents sprang. But he failed to recognise how 
 that influence and that wealth rightly came into exist- 
 
 ^ Observe, in 1837 the agricultural interest was to be injured by 
 the Corn Law repeal. In 1846, instead of being injured, it was to be 
 stimulated. Cf. Cobden's Speeches, pp. 49 and 63. 
 
FKEE TRADE UNDER PROTECTION. 209 
 
 ence ; as also their national importance. He did not 
 see that, had there been no manufacturers' capital 
 diverted into agriculture in the long war, there would 
 have been no restrictions on the importation of wheat 
 other than those which precedent justified. And there- 
 fore he did not see why it was that a Corn Law was 
 framed at all. He made a telling allusion to the violent 
 factions of those days, which culminated in the House 
 of Commons being surrounded with soldiers to keep, 
 as he said, an angry and starving populace at bay. 
 But we can now measure the importance of such dem- 
 onstrations. The rational treatment of some compli- 
 cated questions has so far developed since Cobden's days 
 as to prevent most men deriving several and sweeping 
 conclusions — except in those few instances where polit- 
 ical expediency seems to demand it — from particular 
 cases. No matter how beneficial a measure, there 
 always will be a varying degree of animosity evinced 
 against it by those who are, or who think they will be, 
 its victims. The study of human nature would have 
 informed Cobden of the truth of this had he not had 
 the actual fact before him. But he protested against 
 the opposition to the Corn Law repeal. Why? Be- 
 cause he first of all believed that a universal free 
 trade was best for the interests of the world at large : 
 this was his ulterior motive. But his present motive 
 was the conviction that the aristocracy grew rich at the 
 expense of the national labour.^ This belief was based 
 upon two grounds. The ground that the Corn Law of 
 1815 enhanced the value of land, and this none can 
 deny ; but it is cruelly unjust to assert that the aristoc- 
 ' Cobden's Speeches, p. 27. 
 
 
210 FKEE TEADE UNDER PROTECTION. 
 
 racy drew all the benefits from such increased value/ — 
 for if the laws of economy have any weight, and the 
 ideal political economists propound these laws, the 
 landlords could only take their due share of the profits 
 arising from an increased value in land. And as capital 
 — so the same economists declare — is always employed, 
 if the aristocracy had not found in this enhanced value 
 the means of materially improving their fortunes, they 
 must, according to "ideal" doctrines, have discovered 
 some other means of adding to their wealth. The other 
 ground of Cobden's enthusiastic belief was that rents 
 were raised in order to enhance the value of corn. Thus 
 he denounced the aristocracy for directly encroaching 
 upon the rights of labour. But, as matter of fact, the 
 aristocracy increased in wealth by those opportuni- 
 ties which legislation and the laws of economy created. 
 High rents do not cause high price of corn. It is the 
 increasing price of corn which results, from competition, 
 in an increase in rent. 
 
 The question, then, turns upon the legislation of 
 1815. And in the treatment of this, if you argue the 
 matter according to the sequence of phenomena as they 
 occurred, and not according to an imaginary descrip- 
 tion, designed to forward this or that particular view,^ 
 you have to inquire — (1) why such legislation was 
 judged to be needed ? and (2) what was the determining 
 element in that legislation ? In the first inquiry, we 
 
 ' The value of agricultural stock was also maintained. 
 
 '^ Some might censure Cobden for displaying real ignorance concern- 
 ing this part of the question. But it is the writer's opinion that 
 Cobden's views of things were marred by a prejudice, which turned all 
 his energy towards the objects themselves, and not to the means by 
 which they were to be attained. 
 
FREE TRADE UNDER PROTECTION. 211 
 
 would remind the reader of the importance of a suffi- 
 cient supply of wheat, in the event of any such danger 
 appearing as the country had already experienced in 
 the long war. For it was this contingency which 
 formed part of Sir Eobert Peel's apology for the main- 
 tenance of the Corn Laws in 1839. Suppose our corn 
 supplies (if we depended in any large degree upon 
 external sources) suddenly cut off ; what was to prevent 
 our surplus supplies from being cut off under protec- 
 tion? A large war might easily deprive us of this 
 increment. But wars, say the free-traders, are destroyed 
 or diminished by free trade. We may, with as much 
 facility as Sir Eobert Peel, nowadays inquire. What is 
 there to prevent two-thirds of our corn supply, or part 
 of it, from being cut off under a free-trade system ? ^ 
 The remote possibility of a general war, answer the 
 free-traders. But this is assumption. Nobody, we 
 presume, or we are told to presume, desires war for its 
 own sake alone. But the question does not depend 
 upon this mere want of desire ; what is of importance 
 to us is this, whether our present system of free imports 
 diminishes in any degree, and in what degree, if any, 
 the chances of war with our neighbours. 
 
 To advance the cause of agriculture, a Corn Law be- 
 came necessary in 1815. Such a law implied a certain 
 amount of restriction. But such restriction ^ was not 
 considered to be antagonistic to the weUbeing of the 
 nation. It came, in the opinion of some, to be so 
 afterwards, when, during the free-trade agitation, argu- 
 
 ^ I.e. , a system of free imports. 
 
 2 Practised within proper limits. It is important to notice this 
 q^ualification. 
 
212 TEEE TEADE UNDER PROTECTION. 
 
 ments were manufactured to support the policy of the 
 free-traders. To advance the cause of manufacture, 
 the duties on raw material were removed. By such 
 means the cost of production was decreased, and hence 
 the position of the manufacturers improved. But such 
 improvement was at the cost of no other interest. The 
 revenue alone suffered; but its loss was more than 
 counterbalanced by the advantages of a cheaper article 
 to the home consumer, and the superior means obtained 
 by the manufacturer of maintaining his hold upon 
 foreign markets. 
 
 By the remission of these indirect taxes, the manu- 
 facturers gained, and with them the whole community 
 shared in the gain. So, by the imposition of the Corn 
 Law, agriculture gained, and so did the country, for 
 fixed capital was still kept in use, and a large quan- 
 tity of labour thereby kept in employment. If there 
 can be any doubt that a low price of bread would have 
 certainly produced a low rate of wages, you need but 
 to think of what would have happened had there been 
 no Corn Law. Bread would have been cheaper. But, 
 as the effect of this cheapness, many of the agricultural 
 labourers would have been thrown out of employment, 
 just as they have been under similar circumstances, but 
 gradually, during the last forty years, and there being 
 a greater supply than demand ^ for manufacturing 
 labour, wages must have been reduced. It was essen- 
 tial then, as it is essential now, to improve this demand 
 for labour as much as possible. It is the only factor 
 which directly increases the wages of the ordinary 
 
 ^ Unless it is assumed that manufacture would have consumed the 
 labour thus thrown out of employment. 
 
FREE TRADE UNDER PROTECTION. 213 
 
 labourer. And you can easily perceive the disturbances 
 which those discoveries have upon the equable progress 
 of wages, which fitfully stimulate the demand for 
 labour. But of such discoveries, which tend to minim- 
 ise labour and increase production, we do not think it 
 too hard a thing to say that they are " a good " to one 
 generation, but an evil to the next. 
 
 § 22. The question of repeal not an economical, hut 
 made a social and political question — Why ? — Thus simi- 
 lar effects, the welfare of agriculture and the welfare of 
 manufacture, were brought about by exactly opposite 
 causes. We see the imposition of restrictions in the 
 one industry; their removal, when it was shown they 
 could be removed without damage, in the other. 
 
 And in justice to both sorts of policies, it must be ac- 
 knowledged that the then conditions of the industries 
 demanded them. 
 
 But the question might subsequently arise, and very 
 reasonably too. Would these conditions always retain the 
 same favourable aspect? And you cannot deny that the 
 nation as a whole prospered under them. 
 
 Now it is evident that the manufacturers in 1845 
 thought they might be changed with benefit to themselves 
 and (we must suppose) advantage to the country. But 
 the burden lay upon their shoulders of proving that (1) 
 a change in the surrounding circumstances of agri- 
 culture and manufacture had taken place ; and (2) the 
 efficacy of a new measure to meet the requirements of 
 that change. 
 
 This, it appears, would have been the manly way. 
 But, in its stead, the Corn Laws were abused, the 
 
214 FREE TEADE UNDER PROTECTION. 
 
 aristocracy slandered, and — new political opinions ad- 
 vanced. 
 
 The manufacturers could not say they had not re- 
 ceived considerable benefits from the State. Then why 
 should they deny similar benefits to the farming interest? 
 Consider their attitude in Huskisson's time with re- 
 gard to the duties on wool. They desired that foreign 
 wool should come in free of duty. But they op- 
 posed the course which Huskisson judged ought rightly 
 to be pursued. They were against the exportation of 
 British wool without a duty. But Huskisson argued ^ 
 that if we permit foreign wool to enter without being 
 taxed, then in all justice we must allow the free expor- 
 tation of home-grown wool, which policy was, after 
 some opposition, put into practice. Thus he opposed 
 the selfish measure of the manufacturers and prevailed. 
 He was desirous of affording the manufacturing interest 
 due and proper advantages ; but " undue " advantage he 
 resolutely set his face against. 
 
 The cost of production had been materially influenced 
 and profits increased by the remission of taxes on the raw 
 material of manufacture. Where was the manufacturer 
 to look for a still further reduction in price and increase 
 of profits ? He need not have searched far ; for the 
 means of cheapening the cost of transit were in existence 
 and were rapidly being developed. But instead of look- 
 ing straight before him, he glanced aside at the price of 
 bread. " If this could only be reduced, then I could sell 
 cheaper, produce more, and increase my profits." Did 
 he rightly estimate the influence of the railway upon the 
 development of his trade ? If he did, then he knew 
 1 Speech of May 28, 1827 (vol. iii. p. 148). 
 
FREE TRADE UNDER PROTECTION. 215 
 
 that he had a double force working in his favour ; for not 
 only would there be a fresh stimulus created by diminish- 
 ing the distance between consumer and producer, but 
 wages would be less, because bread was cheaper. But 
 it was into the scale of cheap bread that the manufac- 
 turer threw his lot. He was pursuing his own self- 
 interest ; but his action became a selfish one when the 
 results of it, immediate or remote, it matters not which, 
 were likely to be fraught with injury to another interest. 
 Now it is against such selfish action that the State, in 
 theory, opposes an impassable barrier. Why was not 
 the influence of Parliament properly brought to bear 
 in the settlement of the spurious dispute between the 
 manufacturers on the one hand, and farmers and the 
 landed interest on the other ? Because the dispute had 
 not a single object in view. It was doubled-faced. It 
 was not an economical so much as a social and political 
 dispute. Had it been a purely economical problem to 
 solve, there was no need to arouse the enthusiasm of the 
 populace, whose intelligence cannot be suflBciently ad- 
 vanced to arbitrate on the complicated data of what 
 Cobden dignified into the highest of all sciences, the 
 science of economy. Such an enthusiasm would have 
 been worthless. But it was made a double-faced dis- 
 pute ; because the circumstances of the times were 
 favourable. There was considerable popular discontent. 
 There was depression. The manufacturers were strug- 
 gling to increase their profits. And one man, Kichard 
 Cobden, strove, in the midst, and by the help of these 
 discordant elements, to put into action a series of meas- 
 ures framed with the object of elevating the labour 
 interests of his country. The first of this series was a 
 
216 FEEB TRADE UNDER PROTECTION. 
 
 free trade in corn, and after that had been achieved, free 
 trade in all other commodities would follow as matter of 
 course. But Cobden did not live to witness the dream 
 that he had dreamt realised. He did not live to see the 
 agricultural interest, which he made so great pretension 
 to advance, in great part ruined ; and the tenant-farmers, 
 though some of them were deceived in 1846, know now 
 who was their true friend.^ He did not live to see 
 foreign commodities taking the place of British ones in 
 British markets. These disastrous events, indeed, had no 
 place in his vision. For he dreamt of only what he 
 thought would be ; not of what might possibly happen. 
 He left, it is true, his country, with her trade in the 
 fairest prospect of reaping present advantages, but in 
 the worst possible position for maintaining those ad- 
 vantages in the future. The error, from which he 
 started, pursues him throughout all his subsequent 
 undertakings. Free trade in Cobden's time was only a 
 name. For the tendencies which it created had not 
 as yet grown up so as to be within the range of ordi- 
 nary observation, so careful ought we to be in the detec- 
 tion of early signs. He thought free trade caused 
 the national prosperity following 1850, eloquently de- 
 scribed as "unparalleled and without example." To 
 have induced anything like a manufacturing prosper- 
 ity, free trade must have reduced bread to so low a price 
 that the manufacturers could reduce wages on the 
 strength of it ; or it must have opened up the mar- 
 
 1 Cotden's statement was : ' ' Whenever the time comes when the far- 
 mers understand who it is that has been telling them the truth — the 
 farmers to cast off relations with landlords, and to co-operate with 
 those who have proved themselves to have some sense and foresight in 
 the matter."—?. 212. 
 
FREE TRADE UNDER PROTECTION. 217 
 
 kets on the Continent and America ; or have done both 
 these things. The latter it has certainly not done ; 
 and our free intercourse in corn commenced to cheapen 
 bread — compared with its price during the last years 
 of protection, when the blush of prosperity was be- 
 ginning to fade. In what way, then, did free trade 
 assist this country in being prosperous ? If free trade 
 was a cause, it must have had some mode of action. 
 What that mode was, the protectionist demands of the 
 free-trader? We can only think of one mode, and 
 that is as follows. Free trade had been announced as 
 the sure precursor of prosperity. The notion stim- 
 ulated the manufacturers, reflexly, to supply that 
 demand for their produce which prosperity entails. 
 But their increased efforts were consumed by another 
 cause, which lay in the background. Nevertheless, 
 the intelligent people were led to believe that because 
 prosperity came after the introduction of free trade 
 into our commercial system, it was caused by it; a 
 conclusion which by no means follows. But it was 
 firmly fixed in the belief of the people, because it 
 had been predicted ; and it is clear that it would 
 have taken something more than the average intellect 
 to arrive at anything like a valid conclusion, when it 
 was perplexed by such doctrines as "the price" in 
 the foreign market regulates the "price in the home 
 market," "you must buy in the cheapest market and 
 sell in the dearest," and " exchanges are of equal 
 value." For it was by doctrines such as these that 
 free trade was proved to be of inestimable advantage. 
 But does it occur to the free-trader of the present day 
 that those dear markets are no longer ours ; and that 
 
218 FEEE TRADE UNDER PROTECTION. 
 
 the price of British goods in British markets has no 
 influence whatever, in the great majority of cases, upon 
 prices in American and German markets ? And will 
 they answer the question on which side the balance 
 inclines when the foreigner can, by that very policy 
 which was intended to ruin him, influence prices in our 
 markets, whUe we have no such advantage in his mar- 
 kets 1 It is this influence which renders competition, 
 as the manufacturers have learnt, so unequal ; and it is 
 this influence which is brought about by our partial 
 free-trade policy. 
 
 It was when British manufacturing interest predom- 
 inated in foreign markets that those markets were 
 gradually closed against our goods. Some of those 
 duties are no longer merely protective — they have 
 been made prohibitive. They stand at a higher rate 
 than did our silk duties in 1824 ! Those duties were 
 lowered from 70 to 30 per cent. Such surely was an 
 encouragement to foreign producers. It is certain the 
 alteration arrested the progress of our sUk industry. 
 But it is to be observed that our silk market was 
 comparatively a small one. And we should have 
 considered this fact to have been sufficient to afford 
 a due and proper protection to it from the attacks 
 of its more powerful neighbour. 
 
 "We adduce this measure, to illustrate the tendency to 
 reduce protection to its lowest limits on the part of all 
 those who conducted our commerce on protective prin- 
 ciples. And it is this tendency to make trade more 
 free under protection that is so characteristic of the 
 greatest of all our commercial reformers, William Hus- 
 kisson. But his successors appear to have acted upon 
 
FREE TRADE UNDER PROTECTION. 219 
 
 new grounds entirely, and to have argued that if any 
 degree of diminution of protection will render trade 
 more active, you have only, in order to acquire the 
 greatest activity, to do away with protection altogether. 
 For such a conclusion there was no experience. That 
 experience, available to all, referred to a diminishing 
 protection, not to its destruction. All arguments, 
 therefore, concerning free trade were hypothetical 
 arguments ; and free trade had yet to be tested by 
 experience, after it had passed through the hands of 
 the theorists. 
 
 Now it is useless to argue from general principles 
 when the sequence of phenomena is within our grasp. 
 And in that sequence we would venture to suggest 
 to the reader three points of departure : (1) The in- 
 justice of our free-trade system during its early oper- 
 ation upon those foreign markets yet open to us ; (2) 
 the influence upon them when they were closed by 
 extravagantly high protective duties ; (3) the reaction of 
 free trade upon this country, all, or nearly, surrounding 
 nations remaining protective, and evincing tendencies 
 to increase " protection." ^ 
 
 ^ It appears, from the rapid conclusions of the free-traders, that 
 the commercial policy of the United States is going to be an exception 
 to what must be regarded as the general rule. The policy of President 
 Cleveland has been announced as a free-trade policy. In the sense of 
 making trade more free, it is a free-trade policy. But this system of 
 opening up trade, while its general conduct is still under protection, 
 must he carefully separated from an absolute free-trade policy. 
 
220 
 
 CHAPTER X. 
 
 BECAUSE SOME INDIRECT TAXATION IN COURSE OF TIME BE- 
 COMES INJURIOUS, ALL INDIRECT TAXATION IS NOT SO. 
 
 " Could you prove to us that the true principles of mercantile dealing 
 required us to purchase com in the cheapest market, and to -withdraw the 
 capital which has fertilised the inferior soils of this country for the pur- 
 pose of applying it to the rich hut unprofitable wastes of Poland, still 
 we should hesitate, we should rememher with pain the cheerful smUing 
 prospects which were thus to be obscured. We should view vrith regret 
 cultivation receding from the hill-top which it has climbed under the in- 
 fluence of protection, and from which it surveys with joy the progress of 
 successful toil. If you convinced us that your most sanguine hopes would 
 be realised — that this country would become the great workshop of the 
 world — would blight, through the cheapness of food and the demand for 
 foreign com, the manufacturing industry of every other country — would 
 present the duU succession of manufacturing towns connected by railways, 
 intersecting the abandoned tracts which it was no longer profitable to 
 cultivate, — we should not forget, among all these presages of complete 
 happiness, that it has been under the influence of protection to agriculture, 
 continued for two hundred years, that the fen has been drained, the wild 
 heath reclaimed, the health of a whole people improved, their life prolonged, 
 and all this not at the expense of manufacturing prosperity, but concur- 
 rently with its wonderful advancement." — Sir Robert Peel (March 15, 
 1839). 
 
 COBDEN AND PUBLIC ENTHtrSLASM — DANOEES INHERENT IN THE 
 EXAMPLE WHICH HE GAVE — COMPAMSON BETWEEN " MANUFAC- 
 TUKINC ACTIVITY AND HIGH PKICE OP WHEAT," AND " MANUFAC- 
 TURING DEPRESSION AND LOW PRICE OF BREAD" — THE PRESENT 
 TENDENCY TO REDUCE WAGES A PROOF THAT WAGES ARE GOV- 
 ERNED BY PRICE OF CORN, AS THE OLDER PROTECTIONISTS MAIN- 
 
FREE TRADE UNDER PROTECTION. 221 
 
 TAINBD — LABOUK INTERESTS OF THIS .COUNTRY INJURED BY 
 THROWING LAND OUT OF CULTIVATION, BECAUSE (1) MANUFACTUR- 
 ING LABOUR MARKET BECOMES DISTENDED WITH UNEMPLOYED 
 AGRICULTURAL LABOUR ; AND (2) WAGES DECLINE AS THE PRICE 
 OF WHEAT DECLINES — THE WANT OF INDIRECT TAXATION, FROM 
 YIELDING CAPITAL NO SUPPORT, DRIVES IT OUT OF THE COUNTRY. 
 
 § 23. Importance of the preservation of independent 
 judgment, and of the treatment of each problem hy itself, 
 without being implicated in others with which it has no 
 real concern. — The following comparison is worthy, we 
 think, of the reader's close attention. The taxes on 
 the raw materials of manufacture were remitted, and 
 the manufacturers gained thereby, inasmuch as cost of 
 production was decreased. The consumers of their 
 goods had the benefit of cheaper prices, and not a 
 single productive source of the country was injured. 
 What suffered was the revenue ; but as the country 
 gained more than the revenue lost, the self-interest of 
 the nation as a whole was advanced by the removal of 
 these fetters on the trade of the country, as indirect 
 taxes are indignantly called by the free-traders. But 
 it is always a good point to inquire into the history of 
 those taxes which are denounced as burdens upon 
 trade, and obstacles in the way of the productive 
 powers of the country. You will in most instances 
 find three stages in the progress of these taxes. The 
 first stage is that in which they exercised a beneficial 
 influence ; the second is a transitionary period ; and the 
 third is that in which they are capable of being proved 
 to work virtual harm.^ Now the reason why a tax 
 
 ^ In other words, according as the conditions surrounding certain 
 industries varied with their growth, so was the regulating principle 
 made to vary. 
 
222 FEEB TEADE UNDER PEOTECTION. 
 
 should at one time be useful, and at a subsequent 
 period become virtually disadvantageous, is found in 
 the change which gradually takes place in those sur- 
 rounding conditions which influence its action. If all 
 such changes could be predicted so easily as the partial 
 free-traders evidently believed, there would be an end 
 to all commercial legislation. But whatever mere 
 hypothesis may inculcate, experience demonstrates 
 that such is by no means the case. It may broadly be 
 stated that no change in the condition of mutable 
 factors, induced by any cause, will remain in that 
 original state in which its authors left it; and the 
 explanation of this in economy lies in the play of 
 human desires. No constructor of any policy can 
 determine with certainty the direction which such 
 desires may take ; neither can he estimate their inten- 
 sity, nor can he foresee the means to be developed in 
 the future of giving them effect. It is from this un- 
 certainty, therefore, that our wisest legislators have 
 trodden in beaten tracks, and have opened them by 
 degrees when they could do so with the highest prob- 
 ability of good accruing from the change. And it is 
 the natural consequence of such uncertainty that no 
 alteration or reform should be projected in haste or 
 with enthusiasm, lest but an incomplete survey of all 
 the future possible developments of that alteration be 
 grasped, and just those few possible occurrences left 
 out of consideration which eventually take place. 
 Enthusiasm in any form — and popular enthusiasm is 
 the worst form, and the consequences of it are on the 
 heads of those who create it — is antagonistic to clear 
 and impartial judgment. It is upon the accuracy of 
 
FREE TRADE UNDER PROTECTION. 223 
 
 that judgment that a nation depends for its future 
 safety after the reforming measures of its leaders have 
 come into operation. 
 
 The enthusiastic man is thus surrounded by the 
 greatest dangers, for his judgment is contracted into a 
 single groove. He can see only in one line. If the 
 welfare of a people hangs upon such a precarious judg- 
 ment, it is woe to them if that groove and that line 
 lead from prosperity to adversity. In the affairs of 
 human nature, as in other things, it is matter of prob- 
 ability as to whether the judgment of this man is best 
 to be pursued. How necessary, then, is it to discern 
 that that judgment is free both from personal prejudices 
 and factious animosities. Given any man who is enthu- 
 siastic and a confident believer in the virtue of this or 
 that principle to effect good,' and for those very reasons 
 he is to be feared ; for his principle has no more virtue 
 than another, and he cannot arrest the progress and the 
 many changes which are sure to occur in those condi- 
 tions which determine the direction which the action 
 of his principle shall take. He cannot control the dis- 
 position of his fellow-creatures neither at home nor 
 abroad. He may endeavour to do so, but the attempt 
 will surely be involved in danger. 
 
 There is one feature which in particular characterised 
 the free-trade agitation. It is shown in the develop- 
 
 ' Before free trade the gradual progress of the people was in process 
 of operation. But this was not rapid enough for the purposes of 
 agitation. After free trade and the rise of wages, the progressive 
 movement was ascribed to free trade, and former principles of progress 
 were ignored. Thus it came to be asserted that without free trade 
 there would have been no material progress. But with what regard to 
 the true facts of the case ? 
 
224 FREE TRADE UNDER PROTECTION. 
 
 ment of the public enthusiasm to an extent never 
 known before in the history of this country. How 
 ably it was supported from above, and how powerful 
 it became in the hands of an enthusiast like Cobden, 
 was recognised by the political leaders of the time. 
 Well might Sir Eobert Peel wince at the menaces which 
 John Bright and Eichard Cobden felt they were justi- 
 fied in using. Por they were acting, according to their 
 opinion, in the interests of the majority of the nation, 
 against what was held up to opprobrium as the interests 
 of a monopoly. Undoubted was the great pressure put 
 upon both the parties in the State. Instead of the 
 question being discussed from a purely economical 
 point, it at once descended to the grounds of expedi- 
 ency. And thus, in order to save the State from other 
 and worse, because immediate, consequences,^ conces- 
 sion was granted; and thus the growing democracy 
 learnt that any concession might be obtained by a well- 
 organised agitation, led by wealthy and determined 
 men. 
 
 But the value of such an example is questionable, 
 as far as concerns the normal progress of society. You 
 must not forget that the issue to be decided was not 
 a simple one. There were not economical tendencies 
 only in view, but political ones as well. And so it 
 came about that many men, and amongst them Sir 
 Eobert Peel and M'Culloch, while they entertained 
 particular ideas on each part of the complex problem 
 as it was developed by Cobden, were yet compelled to 
 weigh it as a whole, and act accordingly. And we 
 
 1 Cobdeu's words will be remembered: "You will concede us free 
 trade, or you wiU concede us a good deal more." — P. 172. 
 
FREE TRADE UNDER PROTECTION. 225 
 
 have Sir Robert Peel's testimony that it was this con- 
 duct which, according to his conviction, rescued the 
 country from the horrors of civil war.^ 
 
 Against the treatment, as a whole, of such compli- 
 cated problems, too much cannot be said. It is open 
 to all species of revolting traffic in interests. A politi- 
 cal leader may thus declare that he cannot effect the 
 reform you desire unless you give him your support 
 on another question. But upon that question your 
 opinion may be opposed to his. Nevertheless you are 
 tempted with the bait, and may subordinate your judg- 
 ment to profit. 
 
 Whether or not this is a wholesome feature in the 
 " progress " of our politics, each must decide for him- 
 self. But the innovation was made by Cobden, and 
 has been practised at times by his successors.^ 
 
 It is easy to see that this innovation reigns supreme 
 during a crisis, and that it is the desire, because it is to 
 the interest, of some political leaders — those who lead 
 
 ' Vide Professor Thorold Rogers, in ' Cobden and Political Opinion, ' 
 p. 118. " The outbreak of 1848 was a unique phenomenon in politics. " 
 " The English people felt only the quivering of the earthquake, though 
 the Government was excessively alarmed at the Chartist demonstra- 
 tion of April 10. It is not a little remarkable — I have the story on 
 Cobden's authority (see Cobden's Speeches, p. 581) — that when the 
 news reached London ,of the downfall of Louis Philippe, and was 
 brought to the House of Commons, Sir Robert Peel crossed over the 
 floor of the House to the late Mr Joseph Hume and said, ' This is what 
 would have happened in England if I had not repealed the Corn Laws, 
 but had followed the advice of those people,' pointing with his hand 
 to the back benches of the Conservative party." England was there- 
 fore saved from "political" disturbance by an "economical" reform, 
 according to Sir Robert Peel. 
 
 ^ E.g., the Welsh may have Disestablishment if they will support a 
 Home Rule policy for Ireland. 
 
 P 
 
226 FREE TEADE UNDER PROTECTION. 
 
 in this double and blindfolded fashion — to create a 
 crisis, in order that justice may be unequallj'. dealt out, 
 and that their popularity may be maintained. But in 
 such an instance it is appalling to discern the heavy 
 sacrifices that are made. And finally these sacrifices 
 are felt by the general public. Of two interests, both 
 lose something when they succeed in carrying a scheme 
 which affects them but only partially. The loss may 
 be slight ; it may be nothing more than the abrogation 
 of self-respect. But it does not end there ; it has its 
 consequences upon subsequent occasions and after-ages. 
 Thus is the political factor driven to consider large 
 questions not from a comprehensive view, nor in them- 
 selves, but as questions from which is to be derived 
 some addition to his selfishness. For this self-interest 
 becomes mere selfish action when what he gains is at 
 the cost of the general welfare of the State. 
 
 To prevent such repugnant trafficking in interests, 
 and to destroy those springs which taint our self- 
 respect, will be the object of every one who believes 
 that our real progress depends not upon the surrender 
 of our judgment, but upon the maintenance of our indi- 
 vidual independence. 
 
 Now the repeal of the Corn Laws was carried in the 
 former way; it was effected by a surrender of judgment. 
 
 I 24. " Capital diverted from less to more remunerative 
 sources," in, free-trade argument, refers to commercial 
 operations of the whole world. It does not apply, except 
 injuriously, to one nation, when other nations pursue a 
 di^erent commercial policy. — "What did the repeal of the 
 Corn Laws do at once, and what did it tend to do here- 
 
FREE TRADE UNDER PROTECTION. 227 
 
 after ? It did not have any greater influence on the 
 price of bread than would have happened under protec- 
 tion till 1866. But when the imports began to assume 
 formidable dimensions, then the price of wheat began 
 to go down. There was a tendency put into being by 
 the repeal of the Corn Laws to destroy the welfare of 
 our agriculture. Cobden never thought this tendency 
 could become so powerful as it has done.^ He intended 
 foreign competition to increase the annual produce of 
 the soil. Now let us observe the two periods, in the 
 former of which a free intercourse in corn did not 
 cheapen bread, and in the latter of which it has exer- 
 cised a constant influence in lowering its price. 
 
 1. There was an excessive activity in our manufac- 
 turing industries. Our agriculture was not, on the 
 whole, at first severely depressed, though some in- 
 ferior and unremunerative soils (rendered so by the 
 new conditions) went out of cultivation, and its 
 means of advance were removed. There was a 
 change in the incidence of taxation. The manu- 
 facturing classes had to bear the burden of an in- 
 come-tax. The landlord class did not suffer from 
 the abolition of the Corn Laws ; on the contrary, 
 their rents rose. The only classes which suffered 
 from the alteration of taxation were the profes- 
 sional classes, and the owners of fixed incomes. 
 
 '■ This was the capital error into which he was led by taking a fixed 
 view of the operation of this tendency. Because, in 1845, there was 
 but a surplus of one million and a half quarters of wheat in the grana- 
 ries of the world available for our deficiency, so twenty years hence, or 
 forty years hence, this proportion was to remain the same, for Cobden 
 inquii'ed, "Where was the corn to come from ? From the Mississippi. 
 Then Cobden replied, the cost of transit would not remunerate the 
 buyer (p. 152). 
 
228 FREE TRADE UNDER PROTECTION. 
 
 Thus, while agriculture nearly maintained her level, 
 and, though the opportunity existed, the chances of 
 seeing foreign goods in our markets were considered 
 to be very remote, we could not be said to suffer any 
 actual loss through the free-trade measure. For what 
 little we lost in agriculture we more than compensated 
 by the moral influence of free trade upon manufacture. 
 But the tendency to throw corn-land out of cultivation 
 was growing apace, though in the excitement of our 
 manufacturing prosperity it was ignored. But when 
 we reach the next period we see a different state of 
 things. 
 
 2. Manufactures still flourishing, though their ad- 
 vance is becoming checked. Agriculture depressed; 
 the price of corn constantly receding ; only the very 
 best soils yield a profitable return. The amount of 
 income-tax increases for a while, but afterwards 
 becomes stationary. 
 Here we reach the stage when agriculture becomes 
 depressed.! Bread has become cheaper. This is what 
 the manufacturers wanted long before. But observe, 
 when this desired result appeared, it was at the time 
 when their progress was in the course of being retarded. 
 It was a good thing then for the labouring classes to 
 have cheap bread wheii the manufacturers would, per- 
 force, reduce wages. But at what expense was this gain 
 
 1 The depression of agriculture began to be felt in Ireland and Scot- 
 land. In Ireland, in 1853, no less than 250,000 small farmers were 
 forced to quit the soil. The consequence of this upon the material 
 prosperity of Ireland is easily recognised, and Mr Isaac Butt (quoted 
 from the ' Fair Trade Journal ' of May 20, 1887) further declared that 
 " what had then occurred in Ireland was but the prelude to what 
 would occur in England." 
 
FREE TRADE UNDER PROTECTION. 229 
 
 to the manufacturing interest obtained ? It was brought 
 about by the commencing destruction of our agriculture. 
 
 We cannot say now that this repeal of the Corn Laws 
 has acted in the self-interest of the nation. The duties 
 on corn were remitted ; consumers eventually gained 
 thereby, but " producers " have lost. When the duties 
 on the raw materials of manufacture were abolished, we 
 saw that the balance was on the side of gain to both 
 consumers and producers. But now we see that, by the 
 repeal of the Corn Laws, consumers have benefited at 
 the expense of the producers. 
 
 This is the contrast which, we think, is worthy the 
 attention of the reader. Seeing that the self-interest of 
 the nation is the sum of the self-interests of all its 
 industries, we can now discern how the remission of one 
 species of tax may improve the national interests, while 
 the repeal of another may injure them. It does not 
 follow (though the practice of the free-traders tells us 
 that they somewhat arbitrarily, we do not say ignorant- 
 ly, assume the truth of the universal conclusion), that 
 because you can show that some taxes upon our trade 
 and commerce at some time work positively to our harm, 
 all those taxes must necessarily bring about the same 
 injurious consequences.^ Nor is it the fact that because 
 some taxes on trade have been pompously described as 
 fetters, that all taxes are fetters on trade. But it con- 
 forms with the arrogance of the free-trader, who is 
 aware nowadays that free trade is not solely responsible 
 
 ' This is to argue from a part to the whole. But such is only valid 
 when all the other parts are similarly conditioned. Nobody can assert 
 that our agi'ioulture and manufacture are now, and were then, sur- 
 rounded by similar conditions. It is not even true of the several 
 branches of our manufactures. 
 
230 FREE TRADE UNDER PROTECTION. 
 
 for our former prosperity, to condemn every kind of 
 policy which is not a free-trade policy. And it is 
 certain that he will state that neither the consumers 
 nor the producers " are " hurt by our present free inter- 
 course in corn. We are not injured, says he, for it is 
 much better to have bread cheap than dear. But what 
 does he say to the question, " Have the agricultural 
 producers been injured by this free trade in corn?" 
 They cannot but af&rm the injury. But how do they 
 balance it ? They adduce a greater gain. They point 
 to manufacturing prosperity. Our manufactures are 
 increasing, and consuming the labour displaced in agri- 
 cultural districts.^ And they end a mere verbal de- 
 scription of what no doubt was originally intended to 
 be, with the portentous proposition : " Capital and 
 labour are diverted from less to more remunerative 
 sources." 
 
 Now such a proposition may be true enough when 
 there is abundance of resources. But when these re- 
 sources are limited, such a circumstance will, in the 
 opinion of most people who are not free-traders, limit 
 the value of that otherwise excellent doctrine. For, 
 let us suppose that agricultural labour has been con- 
 sumed in manufacture; when depression comes upon 
 that manufacture, there will be a tendency for much of 
 her labour to be displaced to more productive sources. 
 But our manufactures are the " natural " industries of 
 
 ' The reader will observe a certain amount of assumption in this 
 statement of the free-trader, when he reflects — (1) that emigration 
 rapidly increased during the early part of our free-trade policy ; and 
 (2) that the relative degree of the national pauperism has not undergone 
 any sensible diminution. On the contrary, during the last few years, 
 the tendency has been for pauperism to increase in the metropolis, 
 
FREE TRADE UNDER PROTECTION. 231 
 
 the country. It was Cobden's aim to make them pre- 
 dominant in the markets of the world. When, there- 
 fore, they are depressed from various causes, or abso- 
 lutely checked by the protective tariffs of other coun- 
 tries, how are you going to consume the labour dis- 
 placed by those adverse forces? One thing is clear, 
 that British capital unproductive at home will seek 
 employment abroad. It will be diverted " from less to 
 more remunerative sources ; " but you must mark the 
 application of the doctrine. It no longer refers to a 
 single community, but embraces the world. And as 
 other nations do not return those advantages which we 
 give them, this doctrine, like all the other free-trade 
 doctrines, when they are applied to a set of circum- 
 stances in which mutual free trade does not exist, can- 
 not but injure the free-trade nation. They obtain, by 
 the assistance of the ardent British free-trader, our 
 capital. What ought to have employed British labour, 
 employs foreign labour. And the same free-trader 
 draws the conclusion that we are the gainers by such 
 unpatriotic conduct ! For he says that the interest of 
 that capital comes back to England in the shape of 
 goods. We are all the richer, therefore. But he seems 
 to struggle very hard to obtain this moderate benefit 
 from his free-trade doctrine. He appears as if he were 
 striving to avoid colliding with certain facts,^ which 
 
 ' Under protection it was a good thing for this interest to be con- 
 sumed in onr country, all its resources being engaged in the production 
 of wealth. But under free trade, when all our resources are not so en- 
 gaged, to divert capital which might be employed at home, and to reap 
 the benefit of interest when we ought to enjoy the circulation of the 
 capital wliioh gives rise to it, is certainly, in the labour interest, not 
 a good thing. Thus, a million is diverted to the United States, The 
 
232 FREE TRADE UNDER PROTECTION. 
 
 would stun him. He does not care to tell you that the 
 capital formerly employing labour in this country must 
 leave behind it labour unemployed. Nor does he seem 
 to be conscious of the circumstance that to employ 
 interest, when we might be using the capital which 
 supplies that interest,, is not the best possible manner 
 of conducting the business of the nation. We gain the 
 interest only : the foreigner has his labour employed by 
 our capital. It is difficult for the free-trader to con- 
 ceive that, under another state of things, we might not 
 only acquire the interest, but likewise derive the 
 national advantage of the additional employment of 
 labour, by means of the capital which is now diverted 
 from less remunerative channels in this country to 
 more remunerative ones in foreign countries, — ^in other 
 words, to lighten the burdens which weigh so heavily 
 upon the occupation of capital, by affording our in- 
 dustries, according to Huskisson, " due and proper " 
 protection. 
 
 interest is £50,000, and employs, say, 760 labourers. But the capital, 
 if employed at home, and it would be employed were our industries 
 protected, would employ 15,200 labourers. 
 
233 
 
 CHAPTER XL 
 
 UNIVERSAL FREE TRADE AND MANUFACTURING SUPREMACY: 
 
 THE IDEAL PICTURE PARTIAL FREE TRADE AND BRITISH 
 
 MANUFACTURING DISTRESS : THE ACTUAL FACT. 
 
 " The prosjierity of Manchester is another expression for the well- 
 being of England. When that great town and the immense population 
 dependent upon it cease to advance in prosperity and in wealth, the star 
 of England has culminated. Failing trade will soon undermine the founda- 
 tion on which every other interest rests. Our teeming population, deprived 
 of employment, will soon convert this happy land into a warren of paupers. 
 Nor can the retrograde movement stop even at this stage. A dense popu- 
 lation, maddened by disappointment and;rend6red desperate by irremediable 
 want, will soon fall into a state, from the contemplation of which one may 
 well turn away." >— Samuel Jones Loyd. 
 
 THE "real" and "ostensible" OBJECTS OP THE MANCHESTER 
 SCHOOL — THE WEAK POINT OF THE MANUFACTURERS' ARGUMENT 
 DISCOVERED BY SIR ROBERT PEEL — THE EFFECT OP UNIVERSAL 
 FREE TRADE ON OTHER NATIONS NOT VSTELL CONSIDERED — IMME- 
 DIATE SECURITY FOR US, UNCERTAINTY FOR THEM IN FUTURE — THE 
 STIMULATING INFLUENCE OP CORN IMPORTS INTO THIS COUNTRY 
 NEUTRALISED BY POLICY OP FOREIGNER— THE IMPORTANCE OF 
 HAVING AN ACTUAL GUIDE, IN PLACE OP A PRINCIPLE, TO CONTROL 
 OUR COMMERCE. 
 
 § 25. The extension of manufacture not resident in 
 cause put forward hy free-traders — viz., foreign demand 
 
 1 Quoted from Cobdon, pp. 44, 45. Mr Loyd was created Baron 
 Overstone. 
 
234 FEEE TRADE UNDER PROTECTION. 
 
 for corn. Sir Robert Peel shows that this cause is not 
 powerful enough to produce desired effect. — Let us en- 
 deavour to lay bare the motive whicli the free-traders 
 had in disturbing the protectionist doctrine that the 
 welfare of the nation means the welfare of each class 
 and interest composing it. There was some strong 
 influence at work urging them to destroy that relation- 
 ship which had always existed between the agricultural 
 labourer and his master, who was condemned because, 
 his self-interest concurring with that of his landlord, he 
 added to the political influence of the latter. There 
 was a dominant power in existence which likewise 
 created a tendency towards the disruption of those 
 intimate relations which had grown up between the 
 manufacturer and his labourers. Under protection the 
 interests of the master and the man were identical. 
 But free trade disordered the direction of these inter- 
 ests : they have become divergent. What was the object, 
 then, of the free-traders 1 
 
 It is found in the scheme which they devised for 
 converting all the interests of the nation into one vast 
 manufacturing interest. This is no exaggeration; at 
 least, if it be so, the exaggeration was entertained by 
 Sir Eobert Peel, before he was forced to alter, not his 
 opinions, but his policy. All who are conversant with 
 that statesman's speeches will remember the occasion 
 when, speakiag against some of the future results of a 
 free trade in corn, he ascended a hill, a lofty position, 
 and worthy his intellectual eminence, and surveyed 
 therefrom the fields of England waving with corn, the 
 surest sign of her greatness and prosperity.^ He be- 
 1 Sir Robert Peel's Speeches, vol. vi. p. 94, edited by Dr Cook Taylor. 
 
FREE TRADE UNDER PROTECTION. 235 
 
 lieved then in the doctrine that the nation, over which 
 he exercised so peculiar a destiny, ought to he self- 
 supporting ; that all its interests ought to be conserved, 
 and external attacks upon them counteracted. In 
 short, he was the exponent of the policy of protection, 
 under which he asserted — and the assertion is of value 
 as coming from such an authority — that the country 
 had prospered, and prospered in no ordinary degree. 
 
 Now the following was the underlying motive of all 
 the free-traders' design, both economical and political. 
 They intended that England should be nothing less than 
 one gigantic workshop. They saw the means, as they 
 lightly thought, of the consummation of their idea, but 
 in the process of giving them effect, they were involved 
 in all kinds of difiBculties. Those difficulties arose 
 mostly from a determined opposition on the part of the 
 agricultural interest. As Cobden accurately observed, 
 the repeal of the Corn Laws was the key-stone of the 
 arch of free trade.^ After their repeal, the rest of the 
 national trade becomes free, as matter of course. 
 
 Contemplate for a while the effects of so vast a pro- 
 ject upon the social and political wellbeing of the com- 
 munity, both which were, in the opinion of the free- 
 trader, to ensue upon an increase of material prosperity. 
 The agricultural labourer (and in his class the free- 
 
 Ho had been arguing that the Corn Law was a provident insurance 
 against the dangers of famine (and he might have added, of war too) : 
 ' ' How perfectly baseless must be the anticipation that there will be a 
 boundless demand for our manufactures in exchange for foreign corn, 
 if the Corn Laws were repealed ! Is it credible that a regular future 
 demand of 1,000,000 quarters — that is, 250,000 quarters in addition to 
 the past supply — will produce these enormous benefits ? " 
 ' Cobden's Speeches, pp. 39 and 177. 
 
236 FREE TRADE UNDER PROTECTION. 
 
 trader included all those who preyed upon the agricul- 
 tural interest ^) would he elevated. There would follow 
 a greater demand for his labour. His wages would be 
 increased.^ It was a proud thing to make a boast of, 
 that the sources of his degradation would be destroyed 
 at a single stroke. There would be a greater demand 
 for labour in the manufacturing towns. And the wages 
 of the operatives would rise. Their surroundings would 
 be placed within range of being made more comfortable. 
 They would have more to spend upon their own com- 
 forts and the educational advancement of their chil- 
 dren. As they became more educated, their moral tone 
 would rise ; they would be in a position, from a sense 
 of responsibility acquired by the virtue of free trade, to 
 take their proper place as " natural factors '' in the gov- 
 ernment of their country. They would become enfran- 
 chised. But it was a matter of some importance that 
 their enfranchisement should not be effected by narrow 
 party means. This Cobden recognised. But just as he 
 had brought to bear a " superior " force upon Sir Eobert 
 Peel's intended course of action in 1842, so the Liberal 
 party coerced Cobden into surrendering what he at first 
 regarded as a national undertaking into a party policy. 
 Free trade, with all its collateral appendages, became the 
 central support of the Liberal and Kadical party. 
 
 ' There is reason to believe that inaccuracy of observation with ref- 
 erence to the degradation of the agi-icultural labourer prevailed to a 
 large extent. There existed in Cobden's days groups of people who 
 lived a sort of gipsy life. These were in a very destitute state. But 
 they did not belong properly to the agricultural interest. 
 
 2 In this way, more labour was to be employed upon agriculture, be- 
 cause we were to increase our annual returns by one-fourth. Hence 
 demand would be greater than supply, and wages would rise. 
 
FREE TBABE UNDER PROTECTION. 237 
 
 Thus political power — which Cobden denounced in his 
 days as heing a monopoly and exercised to the material 
 disadvantage of the labouring classes generally,^ but the 
 agricultural labourers in particular, because the land- 
 lords were the object of his attack — ^would become better 
 distributed. And thus the voice of the people might be 
 heard. 
 
 But let us recall the fact, likely to be forgotten in 
 the heat of argument, that though Cobden attempted 
 the destruction of what he thought was a political 
 monopoly of the aristocracy, yet he did not desire their 
 annihilation as a class. He aimed at lessening their 
 political influence as landed proprietors.^ The free- 
 traders, now become the Eadical party, do not adduce 
 this circumstance in their survey of Cobden's attitude 
 to the aristocracy and the landed interest. Because 
 Cobden wished to destroy a " monopoly " in land, more 
 for certain political reasons than economical ones, he is 
 brought forward as favouring the social destruction of 
 the " ruling class." But such conclusions are just of 
 the same fallacious nature, always inferred by the free- 
 trade enthusiast. Their error lies in keeping back the 
 true position which Cobden took up. They wilfully 
 avoid making an accurate analysis. They use such of 
 his arguments as serve their immediate purpose. The 
 lines of progress are not his, but of their own construc- 
 tion. So far as Cobden was concerned, the landed in- 
 terest stood in the way of his reforms, but only partly 
 
 ^ Pp. 35 and 136 ; also p. 144. "But a bad case at the best is the 
 condition of the agricultural labourer, and you wiU have to look out, 
 before it is too late, how you are to employ him. " 
 
 ' At first. Afterwards we find him considering the possibility of 
 another form of government. 
 
238 FEEE TRADE UNDER PROTECTION. 
 
 in the way. In the reforms of the progressists of to- 
 day, the great landed proprietors stand completely in 
 the way. And the reformers adduce Cobden as a wit- 
 ness of the justice of their cause. But the fact is that 
 Cobden recognised the importance of the aristocracy, 
 and their privileges and power, in the constitution of 
 his country. And the reason why he brought discredit 
 upon that class, is because he believed that the aris- 
 tocracy unduly increased their privileges and impro- 
 perly exercised their power. And he used the pop- 
 ularity gained in this way, as a lever to effect the 
 elevation of the mass of the people. 
 
 But were any present dificulties observed, or any 
 future ones entertained, which would interfere with the 
 maintenance of their noble project, if once attained? 
 None whatever, either immediate or remote. Material 
 prosperity, upon which was founded moral, social, and 
 political advancement, was demonstrated upon the 
 clearest evidence to continue for ever. There would 
 never be the slightest amount of labour unemployed in 
 this country, so long as all nations bought in the cheap- 
 est markets and sold in the dearest ones. We are but 
 displaying Cobden's own views. For he predicted — and 
 the certainty of such a continuance of prosperity, so 
 auspiciously begun, depended upon the falling out of 
 that prediction, — he predicted that all nations would 
 become free-traders within five years (!) of the inaugu- 
 ration of the free-trade policy by England. 
 
 It is essential to discern upon what the stability of 
 aU the subsequent reforms of the great innovator rested. 
 Their support was material prosperity .^ That material 
 
 '' Here we may allude to the fears which the manufacturers enter- 
 tained of the progress of their rivals, especially in Germany and the 
 
FREE TRADE UNDER PROTECTION. 239 
 
 prosperity was, in his opinion, the sure consequence of 
 a universal free trade. To effect this, and to give our 
 manufactured produce the supremacy over all others 
 in the markets of the world, every other interest in 
 this country was sacrificed. Given the condition of 
 the world's markets which Cobden aimed at securing, 
 and our prosperity was established. We might then 
 experience the advantages of being able to buy in 
 the cheapest market and seU in the dearest ; and of 
 diverting our capital from less to more remunerative 
 sources. But that condition is as far off now as it was 
 in Cobden's times. 
 
 § 26. Bemote consequences of remission of duties not 
 considered by free-traders, who remain content tvith im- 
 mediate effects. — The idea of a universal free trade, in 
 practice, did not first occur to Cobden's mind. And 
 perhaps the knowledge of the circumstance that free 
 trade might have been generally practised among na- 
 tions, when the affairs, commercial and otherwise, of 
 the several peoples were in process of adjustment after 
 the termination of the great struggle on the Continent, 
 exercised too powerful an influence upon him. A 
 universal free trade might then have been fairly put 
 into operation, because all surrounding conditions were 
 favourable.^ But if practicable in 1820, it does not 
 follow that it should be so in 1845. That was the very 
 
 United States. But why need they have feared, when we have it on 
 Cobden's authoi-ity that "their labour was the cheapest in the world," 
 so far as quality was concerned. Was this advantage worthy of pre- 
 servation ? 
 
 ' The petition of the London merchants, drawn up by Thomas 
 Tooko in 1821, goes to show that the opinion was entertained by many 
 of the leading men in the commercial world. It did not meet with 
 
240 FREE TRADE UNDER PROTECTION. 
 
 contention of Sir Eobert Peel, who argued that interests 
 had grown up since those times which ought to be pro- 
 tected. But seeing the popularity to which the ' Wealth 
 of Nations ' had attained, it would certainly seem 
 strange had it occurred for the first time to Cohden to 
 put the principle of free trade into operation. It would 
 have reflected either an extreme amount of prejudice 
 on the part of those statesmen who had charge over 
 the conduct of our commerce since Adam Smith's time, 
 or else an inahility to determine the consequences of 
 the new policy, in its partial development under a sys- 
 tem of protection, or in its isolated action. But such 
 is not the case. We know that William Pitt developed 
 freedom of trade under protection, when he removed 
 many restrictions which in course of time had become 
 injurious upon trade at home. And this development 
 of the freedom of trade was continued by WUliam Hus- 
 kisson when he made those extensive innovations in 
 our external commercial policy, all which, with but one 
 exception, were associated with an increased trade 
 activity. But to open up all our commerce with the 
 world, though it was possible, as it is averred, at one 
 particular period, was never seriously contemplated by 
 our leading statesmen. Sir Eobert Peel convicted Hus- 
 kisson of vacillation. But we venture to state that 
 the principle which guided the latter's commercial 
 policy has not been properly understood. Even Sir 
 Eobert Peel asserted that under our then condition, as 
 so many interests had grown up under the system of 
 protection, it was but just to those interests for the 
 
 favour, on the ground that we could not become free-traders unless 
 other nations did. 
 
FREE TRADE UNDER PROTECTION. 241 
 
 State to continue its protection to them. If all the 
 nations were to start afresh, if they had never been 
 influenced by any commercial policy, then he admit- 
 ted the principle of free trade as being efficient to 
 induce all these beneiicial results claimed for it by its 
 admirers. We had not, however, to deal with abstract 
 cases; we had certain facts of experience before us, 
 and our policy must be so framed as to develop rather 
 than injure the several interests of the nation. This 
 was Sir Eobert Peel's view,^ and it was carried down 
 from Edmund Burke, William Pitt, and William Hus- 
 kisson. But, on the contrary. Sir Eobert Peel vacil- 
 lated, and we know the reason of it. It was not simply 
 to inaugurate a grand commercial policy, but it was, in 
 his judgment, to save the State. 
 
 The idea of a universal free trade had been conceived, 
 but the opportunity of giving it effect had passed by. 
 One restraining influence which prevented many eminent 
 men from advocating what, on the first blush, appears 
 to be so fascinating a policy, was the way in which 
 such a total change would be received by other nations. 
 
 Por those nations pursued a self-interested course, 
 exactly as we did. If we changed our policy in an 
 arbitrary fashion, and to their detriment, was such con- 
 duct likely to be regarded without jealousy and without 
 
 1 Speeches, vol. ii. p. 187 : "I stated, and I am now ready to re- 
 peat that statement, that if we had to deal with a new society, in 
 which those infinite and complicated interests which grow up under 
 institutions like those in the midst of which we live, had found no ex- 
 istence, the true abstract principle would be ' to buy in the cheapest 
 market and sell in the dearest.' And yet it is quite clear that it would 
 be utterly impossible to apply that principle in a state of society such 
 as that in which we live, without a due consideration of the interests 
 which have grown up under the protection of former laws." 
 
 Q 
 
242 PEEE TKADB UNDER PROTECTION. 
 
 increasing any irritation which might be felt from ex- 
 isting commercial restrictions ? ' It might be argued, 
 and most probably would be argued by the foreigner, 
 from the nature of international treaties of commerce, 
 that England found it to her interest to remove all, 
 or nearly all, restrictions upon her external trade. 
 " What was the motive of such a policy ? To set us an 
 example, and perhaps force us to follow it. But what 
 would be the outcome of such a policy ? Certainly, 
 on the one side, England's continued prosperity. What 
 share should we possess of prosperity ? We should 
 have to produce for England what she wants. But 
 these wants are not manufactures. And our manufac- 
 tures would be certainly impaired if not destroyed. 
 The stimulus to the growth of our towns would in great 
 part be absent. And while we advanced but slowly, 
 England would be making rapid strides." Under such 
 circumstances England would be able to afford the loss 
 of all her industries which were not " natural " indus- 
 tries, and even of agriculture, which was such. 
 
 Would other nations agree to this state of commercial 
 affairs ? Experience had to decide. And that experi- 
 ence has told us that not only have foreign nations re- 
 covered from the crushing blow which our isolated 
 policy inflicted at first upon them, but also that they 
 have grown so rapidly as to be able now to retal- 
 iate upon the free-trade country the miserable con- 
 sequences of her arbitrary action. Our manufactures 
 were admitted so long as they were wanted, and we 
 
 '■ Universal free trade wo-uld have restricted, in a vei^ large degree, 
 the industries of nations. For instance, at starting, our manufactures 
 would have swamped all foreign manufactures. 
 
FREE TRADE UNDER PROTECTION. 243 
 
 received partly in return for them other articles and 
 food-stuffs. But the time has come when our manu- 
 factures are no longer received on the same favourable 
 terms. Our industries have been checked; for the 
 manufactures of other nations are protected. But all 
 the while we are compelled to depend upon foreign 
 supplies for the larger part of our food.' And thus we 
 are receiving an increasing supply of wheat and certain 
 goods, while they are taking a constantly decreasing 
 quantity of our manufactures from us. 
 
 It was to secure this result, which unfortunately for 
 the free-trade policy has not been effected, that our 
 manufacture was elevated, while all other interests were 
 left each to work out its own progress as best it might. 
 
 This was the vision which Cobden saw, and it was 
 the certainty of its becoming a reality that led him 
 into the unscientific position of applying the same kind 
 of treatment to all the various industries, as well old 
 and well-established (but one needing protection) as 
 young and growing, and therefore the more necessary 
 to be conserved, of his country. He changed our com- 
 mercial policy, but he left it with many weak points. 
 Against these are levelled the energies of all nations 
 able to take advantage of them. Now, in what way 
 does our manufacturing superiority — the stronghold 
 
 « 1 To the extent, during the last ten years, of £200,000,000 of wheat, 
 according to the statement of Lord Derby, reported in the ' Standard.' 
 But according to the economical doctrines of Cobden, we ought to pay 
 for their food with the produce of our manufacture Hence the 
 "stimulus" to our industries, which has grown so big as not to have 
 been even dreamt of by Cobden. But what he thought would be a 
 stimulus to our manufacture, time has shown to be nothing of the kind. 
 At present, year by year, we do not pay for all our food with our manu- 
 factured goods. 
 
244 FKEE TRADE UNDER PROTECTIOjSr. 
 
 which he thought he had made unassailable — make 
 amends for these inroads ? For if we lose in one direc- 
 tion, we must balance the loss by an equivalent gain in 
 another, unless we agree upon the conclusions, that the 
 nation can bear the loss without any internal derange- 
 ments ; that it is expedient for this country to experi- 
 ence a " transitory depression," so as to check the rapid 
 advance of the working classes ; and that we are doing 
 our duty to mankind in bolstering up a principle which 
 is eventually to end in the regeneration of the world,^ 
 and that in the process we must needs suffer some of 
 those adverse consequences which belong to the attain- 
 ment of this ennobling object. 
 
 Most people who are not free-traders, are witnesses 
 to the sacrifices which their country has already made 
 and is continuing to make. Is this phenomenon of 
 bleeding into other countries to go on till we ourselves 
 are so reduced as to become (when it is too late !) 
 aware of it ? Is it to proceed for the benefit of a par- 
 ticular class, who are opposed to any alteration in our 
 fiscal system on the ground that it will lead to a 
 general revision, in which their own special interest 
 (already grown too big at the expense of the general 
 public) will be relieved from the monopoly which at 
 present supports it? or for the maintenance of the 
 popularity of that party in the State, whose only claim, 
 upon the people is that it has developed the principle 
 of free trade ? But regard the conditions of the coun- 
 try when these successive increments to the power of 
 free-trade were established, and trace the underlying 
 
 1 In Cobdeu's words, "Free trade was to unite all nations in the 
 bonds of peace." 
 
FREE TRABE UNDER PROTECTION. 245 
 
 motive whicli prompted them. They were introduced 
 at such times when their results could not be otherwise 
 than favourable.^ If you question the soundness of 
 those reforms, you are presented with a series of 
 statistics to the effect that production was increased 
 and that consumers were benefited by lower prices. 
 This is supposed to be a final argument ; but the 
 problem has another aspect. It has to do with the 
 " remote " as well as the " immediate " consequences of 
 change. Will these conditions remain the same ? If 
 they alter, so that while prices are cheap, and become 
 cheaper because demand is decreased from inability to 
 acquire, the means of consumers (who are also pro- 
 ducers but in other branches of industry) are con- 
 tracted, then these so-called benefits appear of doubtful 
 advantage. Why? Because the reform which made 
 some articles cheap, has made the production of other 
 articles unremunerative. This is but one of the col- 
 lateral results of such reforms. But it takes time to 
 become sufficiently intense to be observed as a " sign." 
 In the interval, however, there was increased activity : 
 and for this blessing conferred, the support of those 
 interests are exchanged; and thus a party became 
 powerful by successive but temporary stimulations ap- 
 plied to the various trade industries of the country. 
 
 But the general public did not perceive that such 
 periods of increased activity would be temporary. It 
 was not the object of the Liberal leaders to expose the 
 evanescent nature of their action. Admit the tem- 
 
 - when, by reason of the fact that capital was being diverted from 
 agriculture, there was a glut of money in the markets, it was therefore 
 concluded that the nation could afford the remissions. 
 
246 FREE TRADE UNDER PROTECTION, 
 
 porary gain, if you please ; but you cannot argue from 
 it alone or the means by which it was effected. To 
 deduce the true conclusion, you are bound to relate this 
 temporary gain with the steady progress of each indus- 
 try before its occurrence, and the subsequent reaction 
 of depression consequent on it. It is thus that you 
 will be able to discern the real nature of such artificial 
 changes, and the fictitious support which they have 
 acquired for the innovators who made them. 
 
 But the free-traders answer that the changes wrought 
 in our commercial code are not artificial changes, but 
 sound and natural ones. To this the protectionist 
 replies, that such changes would be sound enough, did 
 subsequent events correspond with what the free- 
 traders originally predicted of them ; for with such 
 conditions the efficacy of their reforms, once begun, 
 would continue.^ The means they used to stimulate 
 our trade were not of a kind to prevent depression 
 under aU possible conditions ; so that, when once depres- 
 sion began to reign, the nation found itself absolutely 
 without control over its course. 
 
 § 27. The central force controlling our trade and com- 
 merce abandoned hy the free-traders. GdbderCs so-called 
 " natural regulator " has hrokerC^down. — That controlling 
 power, the virtue of which Pitt recognised and Huskis- 
 son would not let go, was abandoned by Cobden and 
 
 ' In other words, the action of a principle varies with changes in its 
 surrounding conditions. The free-traders predicted such an alteration 
 of those surroundings as would favour the operation of free trade. 
 But such changes have not been effected. Thus our free-trade policy 
 acted upon a set of conditions. It induced a primary change in them. 
 But now the reaction has set in, contrary to Cobden's prediction. 
 
FKEE TRADE UNDER PROTECTION. 247 
 
 the free-traders. The reins of the vehicle of our trade, 
 held with degrees of firmness according to the separate 
 surroundings of each industry, but yet capable of being 
 relaxed or tightened in each as alterations in those 
 surrounding conditions required, were laid aside. And 
 the bulk of our trade and commerce comes to be 
 likened to a ship sailing at first in smooth waters, 
 but afterwards in a dangerous channel, and without a 
 helmsman. Its direction was left to an ideal force. 
 There was a theoretic guide to conduct the whole, but 
 there were also on board several leaders whose policies 
 were antagonistic. Many deserted the unsafe craft 
 when they saw disaster looming before it. This ship 
 of commerce, whose rudder was directed by external 
 forces created to impede its progress, is nearing the 
 shoal which foreign protective tariffs have made, if it 
 be not already sunk in it. But what destroyed the 
 helmsman, for the commands of our theoretic guide 
 still find voices of free-traders to express them? It 
 was the new theoretic guide herself! This guide no 
 longer issued her commands to one country, she de- 
 livered them to all nations on the earth. Would they 
 heed them? When they were given, this was by no 
 means certain. Experience had to decide this, as all 
 other questions. But the prosperous course of our ship 
 of commerce depended entirely upon this contingency. 
 And now, while every other country has a directing 
 power, England has none over the future career of her 
 trade and commerce under free trade.^ 
 
 1 It is curious to notice that in every large system, projected with a 
 view to progress, there is somewhere a restraining influence. In our 
 commerce, protection represented it. 
 
248 FREE TRADE UNDER PROTECTION. 
 
 What, then, you will inquire, determined those ex- 
 ponents of the public opinion of an age just gone by to 
 yield up all control over our trades and commerce? 
 Was it merely national self-interest? or was it the 
 pursuit of some private views ? Both these elements 
 are found in the complex motive which led the na- 
 tion partly to believe in free trade. But the great and 
 preponderant element — the central one round which 
 the commercial reform turned — existed in the removal 
 of all restraining influences which were supposed to 
 fetter trade, to diminish the productive powers of 
 the country, and prevent commodities from becoming 
 cheap. 
 
 Eestraints upon trade — taxes and duties which were 
 fetters upon production and consumption, which inter- 
 fered with " abundance," and which caused an artificial 
 dearness at home as compared with the natural prices 
 of foreign markets ; all alike came beneath the sweeping 
 condemnation of free-traders. No matter its real action, 
 and whether or not any reasonable exception could be 
 made to any tax or duty, all taxes and duties were 
 restraints. It seems, for no other reason than because 
 some taxes and duties came at a particular period of 
 their progress, to bear heavily upon a special industry. 
 Thus taxes and duties came to be offensive to some 
 leaders of the people, not because they were so in 
 reality, but because they were made to appear so by 
 the free-traders. 
 
 We leave it to the impartial to decide whether the 
 universal proposition is valid in the instance of re- 
 straints. If they remember that those restraints had 
 various tendencies (carefully suppressed by the free- 
 
FREE TRADE UNDER PROTECTION. 249 
 
 traders), whicli were justified by the differences in the 
 surrounding conditions of each industry, then they will 
 perceive the force of the " universal " conclusion. 
 
 Now there was this grand achievement under the sys- 
 tem of protection. It harmonised the conflicting interests 
 of some industries at home, before it cast eyes upon its 
 external trade. "Take care of the home industries, 
 and let our external trade take care of itself." But 
 such a policy could not be carried out without the 
 imposition of many restraints. And yet, out of aU 
 these restraints, each interest of the nation found its 
 account.^ And with the continuance of these restraints 
 there existed the least unfavourable conditions for in- 
 ternal disorder and distress. 
 
 Eut under the policy of free trade, the home industries 
 have been left to take care of themselves ; and all efforts 
 are directed towards making our import trade as vast 
 and as cheap as possible. 
 
 This is the difference effected by the change of com- 
 mercial guides. It is impossible not to conceive that 
 the labour interest of the nation must suffer under the 
 
 ' " Protection to all is protection to none." — P. 182. "Let us, once 
 for all, recognise this principle, that we must not tax one another for 
 the benefit of one another." — P. 198. Such were Cohden's conclusions. 
 And he supported himself on what the Duke of Wellington asserted : 
 "Taxes are levied only for the benefit of the State." But Cobden's 
 position refers to a universal freedom of trade. " Protection," said he, 
 "takes from one man's pocket, and allows him to compensate himself 
 by taking an equivalent from another man's pocket. " Thus protective 
 nations take from England's revenue, but what does the free-trader get 
 in return? The "vicious" circle is interrupted. It is not the case 
 that all are robbed to enrich none. But some are robbed ; and some, 
 therefore, must be enriched, on Cobden's own showing. And the hands 
 of industry arc tied up — in what direction ? 
 
250 FREE TEADE UNDER PROTECTION. 
 
 latter condition, when the balance of imports over 
 exports is against us. For under free trade we cannot 
 conserve the industries of the country. These decline, 
 as agriculture has declined; and the order in which 
 they decline depends upon the forces they have at their 
 disposal to resist the adverse consequences of unequal 
 competition. 
 
251 
 
 CHAPTER XII. 
 
 THE ONE-SIDED PEEB-TBADERS AND INCREASING IMPORTS 
 
 "new DOCTRINES TO SUIT FRESH CONDITIONS." 
 
 " The world Is still deceived with ornament." 
 
 "There is no vice so simple but assumes 
 Some mark of virtue on its outward parts." 
 
 " Thus ornament is but the guiled shore 
 To a most dangerous sea ; the beauteous scarf 
 Veiling an Indian beauty : in a word 
 The seeming truth which cunning times put on 
 To entrap the wisest." 
 
 — Shakespeare. 
 
 THE "unexpected" DEVELOPMENT OF OOBDBN's FREE IMPORTS — IN- 
 STEAD OF QROVlflNQ 20,000,000 QTJAETEES, WE IMPORT 16,000,000 
 QUARTERS OF WIIEAT — COBDEN AND THE CHARTIST MOVEMENT — 
 THE NATURE OF THE SUPPORT GIVEN TO COBDEN — HOW IT WAS HE 
 AND HIS COLLEAOUES COULD MENACE THE PRIME MINISTER WITH 
 CIVIL DISTURBANCE — CORN IMPORTS FORM THE GREAT BULK OF 
 OUR IMPORT TRADE — EXPLAIN THE DIFFERENCE BETWEEN EX- 
 PORTS AND IMPORTS — OUR ABILITY TO PAT FOR IMPORTS DEPENDS IN 
 GREAT MEASURE UPON STATE OF OUR EXPORT TRADE — BUT LABOUR 
 INTERESTS ENCROACHED UPON BY STATE AIDS TO FOREIGN MANU- 
 FACTURES — UNIVERSAL FREE TRADE WOULD BEAR UNEQUALLY 
 
 \ UPON SMALL AND UNFAVOURABLY PLACED PEOPLES — FREE TRADE 
 AND RACE ANTIPATHIES — FOREIGN SECURITIES DISCHARGE OUR 
 CORN-BILL — TENDENCY TO DISPLACEMENT OF BRITISH LABOUR SLOW, 
 AND THEREFORE INSIDIOUS. 
 
 § 28. Free trade does not tend to induce commercial 
 equality among nations whose original surrounding con- 
 
252 FREE TRADE UNDER PROTECTION. 
 
 ditions are unequal. — We know that Eichard Cobden 
 never expected that the imports of corn into the 
 country would assume a formidable amount, under a 
 free intercourse in that commodity. And we know, too, 
 that he pointed in the direction of Russia, as being the 
 principal source whence we were to derive our addi- 
 tional supplies. How he ridiculed the idea of " valleys 
 of corn " ^ growing in the western hemisphere ! And 
 as to our colonial supply, it was so insignificant that it 
 was scarce worth keeping up.^ 
 
 But on this, as on so many other occasions, though he 
 peered into the immediate future, he did not dip far 
 enough. The remote future — that period involving the 
 first generation after him — was a blank. 
 
 "What were Cobden's sentiments in 1847 and 1848, 
 when the corn imports were respectively 11,912,864 
 quarters, and 7,528,472 quarters ? ^ and whether they 
 underwent any change or not from that original and 
 enthusiastic frame of mind, in which he set forth his 
 convictions that a free trade in corn would stimulate 
 the British farmer to produce more extensively, we do 
 not know. For Cobden never alluded to this "unex- 
 pected " development of his favourite policy. But it is 
 
 1 To this end Cobden quotes from the ' Times ' ^ "And we make no 
 doubt whatever that reasonable and candid men will be astonished 
 above measure at the universal nakedness of the land. The Baltic and 
 the Euxine, the Mississippi, are names of ten'or to some minds." — P. 152. 
 But were the alarms of the protectionists unfounded ? Who was in the 
 right, Cobden or Lord Stanley ? 
 
 - In 1841 Sir Robert Peel advocated the policy of introducing 
 colonial wheat free of duty. 
 
 ^ Kolb's ' Condition of Nations,' translated by Mrs Emma Brewer, 
 p. 76 : G. Bell & Sons. Parts of these large quantities were due to 
 the hoarding up of the surpluses of previous harvests. 
 
FREE TRADE UNDER PROTECTION. 253 
 
 now evident that his information respecting the re- 
 sources of corn-growing countries was restricted; he 
 appears not to have made this department of economical 
 knowledge as free as it might have heen made. It is 
 possible that M'CuUoch was in large degree responsi- 
 ble for this contraction of the subject. But whether 
 M'CuUoch was more influenced by Cobden, or Cobden 
 by M'CuUoch, is difficult to decide. We have a clue, 
 however, to one solution. Cobden was in favour of the 
 repeal of the Corn Laws from both an economical and 
 political standpoint. M'CuUoch was in favour of the 
 sUding-scale from an economical point of view ; but in 
 1841 he ^ considered the matter from its political aspect 
 entirely ; and he arrived at the conclusion that it was 
 expedient to repeal the Corn Laws, as being the safest 
 means by which the integrity of the constitution might 
 be maintained. M'CuUoch sacrificed his economical 
 doctrines for a political object.^ 
 
 Now, let us analyse one of the grounds which prompt- 
 ed Cobden to advocate the repeal of the Corn Laws. 
 
 As population advanced, it became necessary to 
 extend the cultivation of wheat to inferior or to new 
 soils. Such could not be effected without determining 
 more capital into the hands of the farmers. And to 
 
 1 See his pamphlet on the Corn Laws, published in 1841. The Duke 
 ofWellington also took the same line as M'CuUooh. 
 
 " It is of importance to notice, however, that M'CuUoch's judgment 
 on the question of a free intercourse in com underwent a very serious 
 change. But it may be explained from the facts, that the conditions 
 afifecting our agriculture likewise underwent a change between the 
 appearance of the ' Principles of Political Eeonomy ' in 1830, and the 
 pamphlet on the " Corn Question " in 1841. In 1830 he was on the 
 side of free trade ; in 1841, on that of protection. 
 
254 FREE TRADE UNDER PROTECTION. 
 
 bring this about, it became necessary first of all to 
 raise the price of wheat. 
 
 Now, such a measure, even in times of prosperity, is 
 not regarded with favour by the labouring classes. In 
 periods of depression, then, it would be looked upon 
 with alarm, and be the occasion of much dissatisfaction, 
 if not of a dangerous movement of the people. 
 
 When Cobden commenced the agitation for a free 
 trade in corn, the country was suffering under a nor- 
 mal^ and periodic depression. He appears to have 
 associated in his mind agricultural distress and manu- 
 facturing depression in the relationship of cause and 
 effect. And when the influence of the seasons was 
 further to be taken into account, it was obvious that 
 the contentment of the people rested mainly, if not 
 altogether, upon an efficient supply of food at a proper 
 price. 
 
 Did he entertain the probability of a political revo- 
 lution ensuing on a rise in the price of wheat, as it 
 inevitably must rise, if the soil of our country was to 
 produce an increasing supply to meet the increased 
 demand of a growing population ? It is nearly certain 
 
 ' The depression of 1836 was predicted. The coimtry had heen 
 enjoying a period of prosperity, longer than it had ever known before. 
 — Vide Mr Loyd's 'Reflections on the State of the Currency,' 1837. 
 Now, during this prosperous period, so far as the price of corn is con- 
 cerned, there are two stages : the first stage, in which the price of corn 
 is relatively high ; and the second, in which it is relatively low. But, 
 according to Cobden, when corn was high depression reigned. There 
 can be no doubt that depression existed with corn at a high price, and 
 that it exaggerated the mischief But to assert that depression always 
 existed with high prices of com, is contrary to facts. Mr Loyd ascribed 
 the depression to the abnormal state of the currency. He stated that 
 the public did not get its proper share. 
 
FREE TRADE UNDER PROTECTION. 255 
 
 that he did so ; and that, consequently, he aimed at 
 directing the spirit of revolution into an agitation for 
 cheap food. In this respect he acted patriotically,^ 
 and in the interests of the constitution. His intentions 
 were thus clearly loyal, and we can now perceive why 
 it was that he and his colleagues threatened the then 
 Prime Minister with civil disturbance if he still per- 
 sisted in opposing the voice of the people. Cobden 
 was assured of the efi&cacy of his policy in quelling the 
 spirit of rebellion which was abroad. On the other 
 hand. Sir Eobert Peel and the Ministry had the safety 
 of a great national interest in their charge. And more- 
 over, there was the question of precedent to be con- 
 sidered. Would the present agitation, if elevated to 
 the shelf of parliamentary precedents, be a source of 
 future dangers ? 
 
 The final settlement of the question, however, de- 
 pended upon a single judgment. This judgment 
 affected the strength of the popular party opposed to 
 the Government. Could it be resisted with safety to 
 the State ? Cobden had already absorbed a great por- 
 tion of the discontents. He had diverted the course of 
 the spirit of discontent. He had achieved his object in 
 part. But we must not forget the nature and extent of 
 the support accorded to him in his struggle. Knowing 
 that he had a safe, or what he took to be a saf e,^ remedy 
 at hand, he was enabled to cast all the responsibility of 
 
 ' Thus may it be said that Cobden materially influenced the course 
 of the Chartist movement, which was making considerable progress. 
 But though he stayed its powerful advance, he did not destroy it, as 
 1848 proves. 
 
 a The remedy was only safe on the supposition that free trade would 
 become universal. 
 
256 FHEE TEADE UNDEE PROTECTION. 
 
 the distressed state of the nation on to the shoulders of 
 Sir Robert Peel. And more than this, he declared that 
 the Prime Minister's hesitation directly increased and 
 continued the evil of the people. But " what measure 
 had the honourable baronet at the head of her Majesty's 
 Government to meet the present distress? Let him 
 produce it," challenged the member for Stockport. 
 
 But there was no other remedy than the natural 
 remedy.^ In what way did the distress differ from any 
 previous period of depression ? Sir Robert Peel might 
 have inquired. And perhaps in vain. For the free- 
 traders were ready with their reply. " It is to prevent 
 the occurrence of distress that we demand the cheapen- 
 ing of bread. These periodic depressions will be swept 
 off the chart of our commercial progress : we shall have 
 more work to do and less to pay for our daily bread." 
 
 These were the promises which the free-traders issued 
 to the people. Could Sir Robert Peel give better ones ? 
 Those which he had made in 1839 were not believed. 
 Could he resist the popular agitation to attain the ends 
 promised by the free-traders ? He did resist it just so 
 long as he could with safety. Why was it that he re- 
 laxed that resistance ? Because an interest supported 
 by apparently inexhaustible resources confronted him. 
 It was fortune that played into the hands of the free- 
 traders. Pirst, they deceived themselves with false 
 
 ^ That is the following : Manufacturing disturbance arose ulti- 
 mately from adverse exchanges. During these there was an exporta- 
 tion of gold, to bring about equilibrium. In the process the money 
 market took the main share of the operation. The prices of commodi- 
 ties rose accordingly. But they were not regulated by the natural 
 medium of exchange. They were determined by the money merchants. 
 — See Loyd ' On the Currency.' 
 
FREE TRADE UNDER PROTECTION. 257 
 
 doctrines ; next, they succeeded in carrying this decep- 
 tion into the midst of the people ; thirdly, the balance 
 of parties determined Lord John Eussell in throwing 
 up his fixed duty ; and then the approach of famine 
 created so great a consternation amongst all as to bring 
 this seven years' question to a sudden issue. This con- 
 tingency was eagerly grasped by Cobden, and upon it 
 the fate of the Corn Laws hung. The prospect of 
 " bread at famine prices " was not likely to soothe a 
 populace agitating for cheap bread. And the horrors 
 of a starving people were pictured in the brightest 
 colours, in order to exasperate the multitude, already 
 inflamed by the injustice from which, so they were told, 
 they suffered. But let us pause to ascertain whether 
 the picture so drawn conformed more with a purely polit- 
 ical motive than with the anticipated chain of events. 
 
 Supposing a famine to occur, it might be localised in 
 this country, or it might be general over Europe. What 
 was the amount of foreign wheat which Cobden believed 
 might be available for our needs, if the European crops 
 were favourable? About one million quarters. If, 
 therefore, the home harvest was extremely deficient, say 
 reduced to one-half, this relatively small quantity, in 
 Cobden's view, could not possibly have a paramount in- 
 fluence in lowering prices. With our ports open, then, 
 and a famine staring us in the face, the price of bread 
 " must " have been a " famine price." Of what use was 
 this free intercourse in corn, on such an emergency, if 
 Cobden's authority for the surplus supply of Conti- 
 nental wheat was to be trusted ? 
 
 But take the other supposition. With a general defi- 
 ciency of the harvests all over Europe, the surplus of 
 
 E 
 
258 FREE TRADE UNDER PROTECTION. 
 
 foreign wheat, after the wants of each people had been 
 satisfied, would be considerably reduced, if any re- 
 mained. In such a case, how could the price of bread 
 at home be prevented from reaching a famine price? 
 It thus appears that, if we draw Cobden's data to their 
 logical conclusions, he is not accurate in this part of 
 the treatment of the subject. And it might seem to 
 many that by picturing famine prices before the eyes 
 of an angry crowd, hte endeavoured, by means of the 
 support they falsely acquired, to obtain another object 
 which should redound to their benefit.^ Such an argu- 
 ment reflects upon the soundness of Cobden's method ; 
 but it does not affect the honesty of his ultimate motive. 
 It is quite possible that, inasmuch as he believed the 
 landlords to derive their rents in an unfair way,^ he 
 used means just as unfair to prevent such rents from 
 being any further raised. 
 
 The final result of this measure of free trade in corn 
 is, in the year 1888, this : We derive two-thirds of the 
 whole supply of our wheat from external sources. The 
 gradually increasing imports control prices in the home 
 markets. The disadvantage to the home producer is 
 obvious. He has to compete with a rival whose sur- 
 roundings are incomparably superior to his own. 
 
 1 This seems to be the characteristic of Cobden's procedure, to direct 
 all his energy towards the attainment of the end-object (from which 
 so much good was to flow), while he ignored the rectitude of the 
 means by which he sought to obtain it. It was as if he had promised 
 himself " free trade, and let us get it anyhow." 
 
 2 To make use of unfair means in procuring any object is to be 
 morally delinquent. Such unfair means are bound to give rise to all 
 kinds of collateral consequences, and these consequences may be the 
 source of the exaggeration of political immorality, and do certainly 
 continue that immorality. 
 
PEEE TRADE UNDER PROTECTION. 259 
 
 The cultivation of wheat, therefore, labours under 
 great disabilities. Attempts have been made to remove 
 them or to reduce their intensity. But all have failpd. 
 And the growing of wheat ceases to be a remunerative 
 occupation to the farmer. 
 
 Now it is this excessive importation of wheat which 
 swells our imports to that volume which they nowadays 
 present. Let us compare this adverse result with what 
 was originally intended should take place, in the opinion 
 of Sir Eobert Peel, Eichard Cobden, and John Bright. 
 Sir Eobert Peel stated his policy to be such as shall 
 ensure the great bulk of our supply being derived from 
 our own soil. Eichard Cobden asserted we should grow 
 one-fourth more of wheat — i.e., 20,000,000 quarters. 
 John Bright said that our agriculture must continue pros- 
 perous, for no nation could be prosperous without a 
 flourishing agriculture. 
 
 But in spite of Oobden's ridicule, valleys of corn, very 
 unexpectedly, have appeared in the Western Hemisphere, 
 capable of supplying our advancing population. This is 
 said to increase at the rate of 374,000 yearly. And to 
 meet the wants of this increment, there has to be added 
 to our corn account with foreign nations the annual sum 
 of two millions sterling. As long as we are able to pay 
 for this foreign supply of food, so long shall we be in a 
 position to supply our wants, and perhaps our increasing 
 wants. But when we compare year by year our ex- 
 ports and imports since 1875, we shall find that, while 
 our exports have remained more or less stationary, our 
 imports have gradually increased. And the interesting 
 question arises, How do we pay for this surplus of 
 imports over exports? 
 
260 FREE TRADE UNDER PROTECTION. 
 
 Before we proceed to a solution of this problem, let us 
 observe some of the changes which our free-trade policy 
 has effected in our national affairs. 
 
 It cannot be doubted that the more we import of 
 foreign commodities, the greater the depression ^ in the 
 corresponding markets at home. But the depression in 
 these markets is capable of being compensated by an 
 increase in the activity of other markets. This, indeed, 
 is nothing less than the expression of the free-trade 
 doctrine, that labour and capital tend from less to more 
 remunerative channels. If the foreigner gains one or 
 more of our markets, we also obtain an ascendancy in 
 one or more of his markets, if free trade were conducted 
 as it was originally intended it should be, else what 
 means the " swamping of foreign manufacturing indus- 
 tries," alluded to by Sir Eobert Peel and Eichard 
 Cobden ? 
 
 I 29. Free trade does not tend to carry off surplus sup- 
 plies in the hest and cheapest fashion, as Cobden foretold. 
 It allows whole markets to hecome acquired hy our rivals. 
 — On this hypothesis free trade means an exchange of 
 markets, not a mere exchange of surplus commodities.^ 
 
 ^ The free-trade doctrine asserts that prices of foreign markets 
 regulate the price of the home markets. In our own case we are aware 
 of it. But suppose the British trader goes to the United States or to 
 Germany, will he find the markets of those countries controlled by- 
 London prices ? No. Then upon whose side is the advantage ? 
 
 - Cobden stated that fi-ee trade was the best means of carrying off 
 surplus supplies. Each nation supplied itself so far as it could, and 
 derived from others the equivalent of its surplus supplies. This was 
 a wrong view, however. Take our corn supplies. Cobden said: "Let 
 the foreigner learn what our deficiencies are, and he will supply them 
 at the cheapest rate." But free trade, instead of acquiring for us a 
 "complement," has deprived us of our market. 
 
FEEE TRADE UNDEK PEOTECTION. 261 
 
 Nations would become, if they were dependent the one 
 upon another for necessaries, less inclined for warfare, 
 and more prone to pursue the arts of peace. All com- 
 mercial jealousies would then he removed at one stroke, 
 and the foundations of war sapped thereby. But it 
 occurred to the foreigner to calculate what he would 
 lose and what he would gain after such a hypothetical 
 exchange of markets. What were his natural produc- 
 tions ? Was he on the same advantageous footing with 
 these resources nature had blest him with, as other 
 nations were with theirs, and especially with England 
 with her superior manufactures? Would the balance 
 of trade be against him ; not, perhaps, when his com- 
 merce with all his neighbours was considered, but when 
 his trade with England alone was taken into the ac- 
 count ? It was certain it would be. If, therefore, he 
 became a free-trader, one result was sure to happen. 
 England would gain at his expense ; and if free trade 
 became universal, the few countries with extensive 
 natural resources would become the greatest gainers by 
 the transaction. They would become richer, and there- 
 fore, from the political standpoint, the balance of power 
 would become seriously affected. 
 
 But in the review which Cobden made of the bless- 
 ings of mutual free trade, and in the dream which he 
 dreamt of universal peace on earth, no place is given to 
 those nations which did not possess any natural pro- 
 ductions sufficiently advanced enough to compete with 
 elder rivals in the markets of the world. What was to 
 befall them ? They are inland, and so could not enter 
 into competition with seaport provinces in the culti- 
 vation of wheat, by reason of the fact that " cost of 
 
262 FREE TRADE UNDER PROTECTION. 
 
 transit " would be greater. If they were able to buy 
 manufactured goods, England would forthwith supply 
 their markets with the cheapest articles. There would 
 be nothing left to all those who did not find employ- 
 ment in the natural resources of their country (and 
 being of secondary importance, they would not suffice 
 to employ all the available labour) but to emigrate to 
 other countries where they might possibly be fortunate 
 enough to procure employment. But as an antecedent 
 to their success, there must be demand for their labour. 
 But what does the progress of manufacture tell us ? We 
 learn that with increased production the amount of 
 labour bestowed upon it is reduced. Thus the demand 
 for labour diminishes. But even go the length of sup- 
 posing that all the labour that can be got is consumed 
 in a special industry, what will happen when improve- 
 ments are introduced to lessen the cost of production 1 
 The demand for labour will decrease. Thus does it 
 seem unlikely that the normal phenomena of manufac- 
 turing progress would be affected by a policy of free 
 trade. The course of manufacture has its own inherent 
 blessings and defects, which neither protection nor free 
 trade can alter. No alteration of policy ^ can influence 
 the certain displacement of labour when improvements 
 facilitate the production of goods. 
 
 No one can decide, though there may be a multi- 
 
 1 With reference to this point, the reader will be reminded that, 
 after 1850, the emigration from this country was very considerahly in- 
 creased. What was the cause of it ? Though our manufactures were 
 heing extended, still employment could not he found for all. There 
 is, too, another factor in the consideration of this problem. Free trade 
 ought to have materially decreased the number of paupers. But the 
 fact is, that pauperism tends to increase. 
 
FREE TEADE UNDER PROTECTIOlSr. 263 
 
 plicity of opinions, -whether mutual free trade would 
 diminish trade jealousies and national antipathies. But 
 there are certain data we can use in arriving at a judg- 
 ment on this matter. Our markets for manufacture are 
 much larger than the markets of the foreigner for other 
 commodities. Which market, then, has the most ad- 
 vantages ? Suppose that a free trade did exist between 
 two nations, and the one received more than she gave, 
 there would be a difference to pay. It might be paid 
 in securities, or it might be discharged at some future 
 time by exports, or the debt might be allowed to re- 
 main and the interest alone paid, and that in one or 
 the other or both of the above-mentioned methods. 
 Would such a trade policy be the source of jealousy 
 and animosity on the part of the indebted nation? 
 
 Let us take one other supposition. In the period 
 between 1850 and 1866 our manufacturers grew enor- 
 mously rich at the expense of other nations. There 
 are many who think that our manufacturing prosperity 
 was due to free trade alone.^ But while such was not 
 the cause, let us suppose that foreign public opinion is 
 to this effect : " Had free trade been mutual, England's 
 gain would have been doubled, perhaps trebled, by our 
 markets being open to her. Could we hope to equal 
 so gigantic a success ? No. Our means are unequal. 
 The inequality would be against us under free trade. 
 But under her partial system of free trade we shall 
 make our conditions in the course of time equal, by 
 
 1 when free trade began to operate in favour of manufacture was 
 towards the end of her period of prosperity. It did not actually 
 benefit her during the first stage of prosperity. We must, however, 
 regard the "moral" influence of the policy on that stage. 
 
264 FEEE TRADE UNDER PROTECTION. 
 
 protecting our industries ; and eventually unequal, by- 
 encroaching upon her markets. Then the inequality 
 being in our favour, we shall be able to repay a 
 part of our old debt." 
 
 We take this to be the attitude of protective na- 
 tions towards free-trade England. It is as clear that 
 only on such lines could they ever hope to discharge 
 the capital of their debt, as it is clear that, had they 
 become free-traders, they certainly would have in- 
 creased it. 
 
 What has been the reaction of this free-trade policy 
 on ourselves ? It has tended to make things as cheap 
 as possible ; ^ to favour consumption while it depresses 
 production. 
 
 The old trade maxim was to curtail imports ; the 
 free-trade maxim is " increase them." The protection- 
 ist said, " Let us supply ourselves as far as we possibly 
 can ; " the free-trader rejoices that our markets are 
 open to the produce of the world. But as the progress 
 of our trade phenomena under protection has become 
 seriously altered under free trade ; as, instead of ad- 
 vancing exports to meet the wants of an advancing 
 population and relatively stationary imports, we are 
 face to face with stationary exports (without any ref- 
 erence to an annual increment of 374,000) and in- 
 creasing imports, — certain new theories of the pros- 
 perity of our trade have been framed in defence of 
 the free-traders. Thus the protectionists were wrong 
 in inferring the state of the nation from the condition 
 
 ^ But not equally. Though the tendency exists, other forces are 
 brought into operation to counteract it. Thus an irregular state of 
 prices is brought about. 
 
FREE TRADE UNDER PROTECTION. 265 
 
 of our export trade. Thus Sir Eobert Peel was wrong. 
 On this point the free-traders of to-day must allow their 
 illustrious convert to be no trusty authority. The free- 
 trade view, to meet the altered state of affairs, is that 
 the prosperity of our trade is to be measured not by 
 exports alone, but by exports and imports combined. 
 The free-traders are thus enabled to give in glowing 
 terms a very favourable description of the prosperity 
 of our " whole trade." " If we can afford to import to 
 so large an extent, and thus make our trade more pros- 
 perous, surely it is a sign rather of our growth than 
 decadence." 
 
 But it may be remarked here, so that the reader 
 may keep the true course of events clearly in view, that 
 there are two ways of regarding these excessive imports. 
 We may relate them to the capital or to the labour of 
 the nation. Taking the latter relationship first, we find 
 that the present produce of our labour is too small to 
 pay for all our imports. But we might very well em- 
 ploy more labour. And a certain proportion of our 
 labour is displaced by the free admission of commo- 
 dities which we could produce ourselves. Hence we 
 must pay for the surplus amount, beyond what is met 
 by the produce of present labour, with capital or the 
 interest of capital. This capital is the result of past 
 labour hoarded up and invested to a large extent in 
 foreign securities, and then we arrive at the free-trade 
 explanation of international debts. Such are " merely 
 deferred exchanges of labour." In this way the late 
 Professor Bonamy Price explained why it was that our 
 imports continued excessive. We are thus spending 
 some of the capital of our foreign securities at the same 
 
266 FREE TRADE UNDER PROTECTION. 
 
 time that we are consuming the interest of the rest, in 
 exchange for the produce of foreign labour.^ But the 
 Professor saw no reason to complain of such a state of 
 things. We acquired capital, or the representative of 
 capital, in bygone ages. That was a sign of prosper- 
 ity. But now we are not even paying for our imports 
 with the produce of present labour ; we are consuming 
 capital; and this is called also a sign of prosperity. 
 But what says the labouring interest of the country ? 
 " Foreign exchanges have come to affect the capi- 
 talist's interests : those who can afford to pay acquire 
 commodities at the cheapest possible price, but they 
 pay not the labour of this country but that of a 
 foreign one. But we could, and did under protection, 
 (and under protection trade was made as free as it could 
 be made, with reference to surrounding conditions), pro- 
 duce all those, or most of those, foreign commodities we 
 now consume at the expense of the national labour. 
 The interest of consumers no longer reaches to us 
 exclusively. And the consequence is, that part of our 
 productive sources are disused. How, then, can we 
 consume if we do not produce ? So far as one part of 
 the community is concerned, and it is that part of the 
 labouring community which is thrown out of employ- 
 ment by foreign competition, cheap bread has no more 
 virtue than dear bread, if we cannot earn a due and 
 proper wage." 
 
 But as regards those who are employed, can they be 
 
 1 The twofold process must not be forgotten, in spite of plausible 
 free-trade assertions. Undoubtedly we consume the interest of our 
 foreign investments. This does not, however, preclude the possibility 
 of spending some part of our capital invested abroad. 
 
FREE TRADE UKDER PROTECTION. 267 
 
 said to be in any better position (in that position, for 
 instance, -wbich Cobden expected tbey would be placed), 
 when the proportion of their wages expended on neces- 
 sary articles of consumption is the same or a little more 
 than under the old system of protection ? Add to this 
 that their rents have increased. And yet another item ; 
 that competition amongst themselves, owing to a con- 
 stantly decreasing demand for their labour, has reduced 
 their wages to the lowest point. And then inquire 
 what caused this untoward alteration in the demand 
 for their labour ? What disturbed the balance of pop- 
 ulation in town and country ? ^ And what made their 
 rents to rise ? 
 
 Cobden complained in his day, that the agricultural 
 labourer, after the payment of all his expenses, had but 
 little to spend upon luxuries and sight-seeing. Exactly 
 the same description applies to the town labourer of to- 
 day. But Cobden did not complain that they were un- 
 employed ; he desired that their wages should be rela- 
 tively higher. We complain now that they are unem- 
 ployed ; and that the cheap bread which Cobden was 
 the principal means ^ of acquiring for them, has also been 
 accompanied with a gradual, insidious, and therefore all 
 the more treacherous, deprivation of the sources of their 
 employment. Por when the springs of employment are 
 slowly destroyed, the process of destruction is apt to 
 remain unobserved, except by those who trace the ten- 
 dencies in operation to effect it. A cause acting gradu- 
 ally produces not a sharp and sudden explosion, as was 
 
 1 See table at the end of chapter. 
 
 ^ He was the head of an organisation supported by the gold of the 
 manufacturers. 
 
268 
 
 FREE TRADE UNDER PROTECTION. 
 
 the case of trade depressions under protection. It is, 
 on this account, that in social and commercial phenom- 
 ena, because we become accustomed to the slow accumu- 
 lation of effects, we are inclined to think that nothing is 
 wrong. For the reason that there is no obvious sign. 
 
 It is the prevention of this further accumulation of 
 these adverse effects which leads all those who have the 
 true interests of the whole nation at heart to display 
 their real causes and urge their counteraction. 
 
 Table showing how balance of population between town and country- 
 has not been preserred by free trade, from W. W. Good, 'Economi- 
 cal Fallacies ' (1866), pp. 377, 378. The figures for 1871 are from 
 Kolb, loc. cit, pp. 37 and 45. 
 
 
 1841. 
 
 1861. 
 
 1861. 
 
 1871. 
 
 London . 
 
 1,948,000 
 
 2,362,000 
 
 2,803,000 
 
 3,254,260 
 
 Liverpool 
 
 286,000 
 
 376,000 
 
 444,000 
 
 493,405 
 
 Birkenhead 
 
 12,000 
 
 34,000 
 
 52,000 
 
 
 Manchester 
 
 243,000 
 
 316,000 
 
 858,000 
 
 475,990 
 
 Birmingham 
 
 183,000 
 
 233,000 
 
 296,000 
 
 343,787 
 
 Leeds . . 
 
 152,000 
 
 172,000 
 
 207,000 
 
 259,212 
 
 Sheffield . 
 
 111,000 
 
 135,000 
 
 185,000 
 
 239,946 
 
 Berkshire 
 
 162,000 
 
 170,000 
 
 176,000 
 
 226,268 
 
 Essex . . 
 
 345,000 
 
 369,000 
 
 405,000 
 
 440,880 
 
 Lincolnshire 
 
 363,000 
 
 407,000 
 
 412,000 
 
 428,075 
 
 Norfolk . 
 
 413,000 
 
 443,000 
 
 435,000 
 
 430,638 
 
 "Wilts . . 
 
 256,000 
 
 254,000 
 
 259,000 
 
 244,667 
 
 ' ' Exclude from Berkshire, Reading ; from Essex, Colchester, Brent- 
 wood, Stratford, West and East Ham ; from Lincolnshire, Lincoln, 
 Stamford, and Boston; and Norwich, which increased 15,000 (1854- 
 1864), from Norfolk ; — and the result does not exceed an increase of 
 three per cent, if there is any at all." 
 
269 
 
 CHAPTER XIII. 
 
 PARTIAL FREE TRADE AND THE PRODUCTIVE SOURCES OP THE 
 
 NATION THE SUPPOSED CONFLICT BETWEEN MANUFACTURE 
 
 AND AGRICULTURE HAS BEEN TURNED INTO A STRUGGLE 
 BETWEEN PRODUCTION AND CONSUMPTION. 
 
 " With downcast eyes the joyless victor sate, 
 Eevolving in his altered soul 
 The various turns of chance below." 
 
 — Drtdbn. 
 
 the kelation between the prices of ooen and meat undek 
 peoteotion destroyed by free trade — free trade pulled 
 down one monopoly to build another — the final problem 
 to be considered is, " does free trade conduob to our self- 
 interest from (1) the material, (2) political aspects?" — 
 answered differently by nations, accoedino to the nature 
 of their surroundings — the tendency of partial free trade 
 to reduce waoes of unskilled labour — the doctrine that 
 being able to employ foreigin labour is significant of our 
 "prosperity," applicable to "luxuries" only, and not to 
 " necessaries of life " — comparison of william huskisson 
 
 AND RICHARD OOBDEN's CONDUCT RESPECTING RELATION BETWEEN 
 " CHEAPNESS AND DEMAND FOE LABOUR " — • WHAT PROTECTION 
 REALLY DID— THE ARGUMENTS OF FREE-TRADERS DERIVED FEOM 
 " DEPRESSION UNDER PEOTEOTION," AND " PROSPERITY UNDER 
 FREE TRADE" — THEY DO NOT PROPERLY CONSIDER "PROSPERITY 
 UNDER PROTECTION," AND "DECLINE UNDEE FREE TRADE." 
 
 § 30. So far as our internal trade is concerned, 
 free trade has only exchanged one monopoly for another. 
 
270 FREE TEADE UNDER PROTECTION. 
 
 — By making food cheaper at the expense of the pro- 
 ductive powers of the country, the free-traders dis- 
 turbed that relationship between production and con- 
 sumption which had existed under the old system of 
 protection. The protective system determined that the 
 sources of production should be nourished. But the 
 free-traders said, " No; let production take care of itself ; 
 all our endeavours shall be concentrated on the single 
 object of making commodities as cheap as possible to 
 the consumer."^ 
 
 There can be no doubt the free-traders anticipated 
 that by cheapening bread the manufacturing interest 
 would be aggrandised, and with it the major part of the 
 labouring interest of the community. This was the 
 free-trade intention. But whether it was to be effec- 
 tive or not, depended upon the precarious attitude of 
 foreign manufacturing markets to our own. Our pres- 
 ent object is to prove that events have not fallen out 
 in accordance with free-trade expectations. We no 
 longer possess a manufacturing supremacy abroad, and 
 even our own markets are invaded by the foreigner. 
 The possibility of this latter event, however disastrous 
 from the protectionist's point of view, was smiled at, 
 and even encouraged by the free-trader, who staked 
 the prosperity of the whole nation on the single chance 
 
 1 This is the logical conclusion of the doctrine promulgated hy 
 Cobden that foreign markets regulate the prices of the home markets. 
 Give the foreigner, said he, the opportunity of supplying our markets^ 
 and then you introduce a tendency to prevent prices from reaching an 
 exorbitant height. In other words, you " protect " the consumer. But 
 suppose the volume of foreign produce should increase to formidable 
 proportions, then what is to save the productive sources of om- coun- 
 try ? Now it was the Corn Law, in the instance of agriculture, that was 
 framed with this object in view. 
 
FREE TRADE UNDER PROTECTION. 271 
 
 of manufacture increasing and maintaining her hold 
 upon the markets of the world.^ Under these con- 
 ditions, observe the effect of cheap bread upon all classes 
 of the community. All those who were possessed of 
 capital would be distinct gainers by the reduction in 
 the price of bread. But it miist be remarked that, 
 though bread constantly decKned, other articles of 
 agricultural produce would tend constantly to rise in 
 price. Even under protection, this concomitant varia- 
 tion took place, according to the common saying of the 
 times, " Down corn, down horn ; '' " Up corn, up horn." 
 And thus, what was but a temporary fluctuation under 
 protection, would certainly become a permanent one 
 under free trade. Bread would go down in price, but 
 eggs, meat, cheese, and milk would tend to increase. 
 The relation would now be, "Down corn, up horn;" 
 for the farmer would be compelled, in self-interest, to 
 induce this alteration, in order to be able to keep his 
 income near the level it stood at when corn was dear. 
 But even what rise took place in these commodities 
 would not compensate the farmer for his losses over 
 wheat ; for foreign competition in these as well would 
 constantly tend to keep prices low. On the whole, there- 
 fore, the consumer would gain, if all protective duties 
 were abolished. 
 
 1 This was the contention of the.protectionists : that the free-traders 
 saci-ificed agriculture in order to further the interests of manufacture. 
 In 1837, we know, for Cobden tells us so, that the manufacturers 
 were then of the opinion that free trade would destroy agriculture. 
 Of. also Sir Rohert Peel, Feb. 19, 1839 : " And to how it is the 
 interest of all classes, and the interest of the manufacturing classes 
 especially, not to persevere in the fallacious notion of interfering with 
 agricultural prosperity to their own benefit." 
 
272 FEEE TEADE UNDEE PEOTECTION. 
 
 Free trade was intended to destroy monopoly by 
 annihilating, as it was the free-trade intention, the 
 greatest of all monopolies — the monopoly of the landed 
 interest. It was thought the tendencies towards infe- 
 rior sorts of monopolies would decline with it. But 
 the event has fallen out contrary to free-trade antici- 
 pation. There remained the ability to pay a certain 
 proportion of one's income for the necessaries of life. 
 As other articles got cheaper, it was foreseen that 
 buteher's-meat might, by a gradual increase in price, 
 admit of considerable improvement. Let but the in- 
 crease in price be effected imperceptibly, and people 
 will be as little alarmed by it as they are by the slow 
 displacement of the labour of the nation. But such 
 could not take place unless all competition between 
 the master-butchers ceased. It was made to do so 
 by common consent. Thus their trade became a monop- 
 oly, and, consequently, the price of butcher's-meat has 
 reached a monopoly price. 
 
 Free trade destroyed the farmer's interests, and 
 directly the labouring interest, both of town and 
 country, by making corn cheap. It destroyed one 
 monopoly in corn, which was beneficial to the public, 
 but it raised up another monopoly in butcher's-meat, 
 adverse to the interests of the community at large. 
 Nor do the profits of this monopoly go into the 
 pockets of the farmer and landlord. It remained 
 for an organisation to take advantage of the oppor- 
 tunity afforded by a general disturbance in the course 
 of our domestic affairs, and batten upon the labour of 
 the working classes. Now this is exactly what Cobden 
 
FREE TRADE UNDER PROTECTION. 273 
 
 said the landlords did with reference to the labouring 
 community of his day.i 
 
 But could he revisit the scenes of his active labours, 
 how would he regard the changes effected by free trade 
 in corn, so far as our agricultural prospects are con- 
 cerned ? Would he call the present price of butcher' s- 
 meat a " natural " price ? How would he contemplate 
 the final result of his free-trade measure, when he dis- 
 cerned that instead of nourishing that monopoly in 
 corn which he condemned, but which nevertheless suc- 
 ceeded in yielding employment to a million and a 
 half of agricultural labourers,^ he was directly con- 
 cerned in the creation of another and much narrower 
 one, the profits of which could not by any possibility 
 of means be spread over so large an extent of labour ? 
 Would he confess that the one monopoly which he 
 destroyed employed a vast quantity of labour, while 
 the one he created conferred comparatively small 
 benefits upon the labouring classes ? And would he 
 be able to trace in the numbers that emigrate, and the 
 million of paupers in our midst, the lines which labour 
 has taken in passing from less to more remunerative 
 occupations ? 
 
 All those who have the command of capital, therefore, 
 are gainers by the cheapness of commodities. They 
 suffer a relative loss owing to the " monopoly price " of 
 butcher's-meat, and the increased prices of eggs, milk, 
 butter, and cheese. But were this loss not counter- 
 
 1 And subsequent experience has shown what a serious misappre- 
 hension he laboured under. 
 
 2 John Bright, January 26, 1864. Speeches, edited by Thorold 
 Rogers, p. 447. 
 
 S 
 
274 FBEE TRADE UNDEK PROTECTION. 
 
 balanced by the fall in the price of bread, it would be 
 more than counterbalanced by the total effect of free 
 trade in reducing the prices of tea, sugar, and other 
 commodities. 
 
 Free trade, therefore, is all in favour of consumers. 
 But of that large pool which is left to the consumers, 
 a monopoly stretches forth its hand and takes away 
 profits to the annual amount of sixty millions. What 
 before went into the pockets of farmers and landlords, 
 now goes into the pockets of a small circle. Instead of 
 being distributed over a very wide area, it spreads over 
 a contracted one. In place of the maximum amount 
 of labour employed formerly, the minimum amount is 
 occupied now. Can such a result be styled an econom- 
 ical success ? 
 
 But all this would not have happened if events had 
 fallen out in accordance with free-trade anticipation. If 
 manufacture had continued to flourish, instead of main- 
 taining a feverish activity ^ for a little while, then every- 
 thing would have been in favour of the labouring interest 
 of the nation. The labourer would have had constant 
 employment, and the cost of his maintenance would have 
 been the cheapest possible. But manufacture has not 
 maintained her supremacy ; and is it just that the 
 labourers should suffer, in part or as a whole, for the 
 singular reason that free-trade expectations have not 
 been realised ? It is one thing to intend well ; and if 
 our free-trade manufacture had succeeded in swamping 
 the foreign markets with her goods, truly there would 
 
 ^ I.e., that portion of the increase of our trade (over and above the 
 effects of natural causes of increase) induced by the moral influence of 
 free trade, with the view of blighting the manufactures of our rivals. 
 
FREE TRADE UNDER PROTECTION. 275 
 
 have been no ground of complaint. But it is a very 
 different thing to give that intention effect. The free- 
 traders, and Cobden amongst them, have endeavoured 
 their utmost to persuade other nations into the belief that 
 free trade would confer increased prosperity upon them. 
 Cobden even travelled to the United States and aU over 
 the Continent, with the view of convincing other people 
 of the rectitude of his motives. But it mattered little 
 whether his motives were pure or not. The question 
 was, in the instance of each nation, "WUl the new 
 measure be to our self-interest, considered, first, from the 
 absolute ; and, secondly, from the international point of 
 view ? Shall we increase our trade by it, as extensively 
 as other nations ? If we do not, then we shall become 
 less powerful." But the scheme which Cobden designed 
 was so gigantic, that its very size made it all the more 
 transparent. It did not require any considerable astute- 
 ness to determine on which side the scale would descend. 
 Cobden argued that the scales would both rise. The 
 foreigner seemed to reply : " Yes ; but disproportionately. 
 I can perceive the ascent of the whole commercial 
 balance. But after that ascent, I should be relatively 
 in a worse political position than before. I prefer to 
 advance more equally." 
 
 If, therefore, manufacture had maintained for all time 
 that degree of prosperity which Cobden foresaw (but 
 from false causes) it would temporarily experience, free 
 trade would have been all in the interest of the labouring 
 classes. Where you suppose there is going to be con- 
 stant employment, it is but natural to make the articles 
 of consumption as cheap as you can. But it was not 
 certain that the labourers' employment in this country 
 
276 PEEE TRADE UNDEE, PROTECTION. 
 
 would be constant. Cobden strove to make it so. But 
 even that enthusiast could not shake the faith of neigh- 
 bouring nations in the protective system. To induce so 
 great a disturbance in all our commercial affairs as free 
 trade did,^ without knowing how such changes would 
 subsequently be affected by the course pursued by our 
 rivals, was nothing less than to take " a leap in the dark." 
 Even the main issues of free trade were not placed before 
 the country, chiefly owing to the over-confidence which 
 Cobden displayed in reading the future. " If all other 
 nations became free-traders, we should have nothing to 
 fear." But suppose our policy to become isolated, then 
 what would happen ? This was the other issue which, 
 from the small probability of its occurrence, was dis- 
 regarded. But the public and the labouring classes 
 ought to have been acquainted with all possible results. 
 If our arbitrary measure was not followed by other 
 people, then we should be placed at this disadvantage. 
 The productive sources of the community would stand in 
 danger of being destroyed. This was, at least, one of the 
 issues which a prescient statesman would have placed 
 before the country. 
 
 What is the fact now ? Our productive sources have 
 already been destroyed; the process of destruction is in- 
 deed gradual, but it accumulates. And because of its 
 slow progress the public, who are fascinated by the 
 assumed extravagant action of free trade during a small 
 period of sixteen years, fail to give this insidious ten- 
 dency its proper place in the causation of distress. 
 They do not analyse how that free-trade prosperity was 
 brought about. They yield to the charms of the free- 
 
 1 Internal as well as external. 
 
FREE TRADE UNDER PROTECTION. 277 
 
 traders, who still allure them by means of cheap hread, 
 cheap tea, and cheap sugar ; but they ignore, in some 
 unaccountable fashion, the circumstances of their meat, 
 butter, mUk, and cheese being higher in price as bread 
 descends, and of their rent being raised in accordance 
 with strictly economical principles. 
 
 The effect, then, of cheap bread upon the productive 
 part of the country is obvious. When the wages-fund 
 of labour has been reduced, and is being reduced by the 
 displacement of British by foreign labour, only one part 
 of the nation suffers — the labouring classes. But you 
 will say that not all, but part only of the labouring 
 classes are affected by this importation of foreign goods ; 
 that the larger part of the working classes are still 
 maintained at high wages. Perhaps in those fields of 
 labour which are skilled. But in unskilled labour, the 
 whole body suffers from the competition of one part 
 of it. Wages are lowered, and thus free trade operates 
 injuriously against the labourer. 
 
 § 31. Free trade, as practised by this country, tends to 
 approximate the " market " to the "natural " rate of wages, 
 by increasing the competition of the labourers amongst 
 themselves. — But it is admitted that part of the national 
 labour has been sent out of employment through free 
 trade. It matters not how much. For, if even the 
 smallest part has thus been displaced, some tendency 
 is in existence to displace it. Agree upon the cause. 
 What prevents this cause from growing and assuming 
 more formidable dimensions? But such a cause has 
 been and still is in operation to destroy our agriculture. 
 It has already reduced the cultivation of the soil from 
 
278 FREE TKADE UNDER PROTECTION. 
 
 four and a half millions of acres to one and a half. 
 It has been the means of reducing the capital of the 
 country by diminishing the value of agricultural stock. 
 It has taken out of the pockets of the landlords, far- 
 mers, and agricultural labourers no less a sum than 
 £200,000,000 sterling 1 duriag the ten years ending 
 1886; all which would have circulated in our own 
 country, and have been the means of employing a vast 
 amount of labour. But because " debts are merely 
 deferred exchanges of labour," ^ accordtag to the school 
 of ideal political economists, our imports must increase 
 forsooth ; such increase redounding to our prosperity, 
 because we can afford to employ so much foreign labour 
 in the attainment of luxuries. But to luxuries some 
 necessaries are to be added ; how much of these could 
 we produce ourselves? In the meantime, while ideal 
 political economists are disputing over the manner in 
 which the nation is able to meet the large surplus of 
 imports over exports, we observe the influence of the 
 doctrine just quoted on the labour of the present times 
 — " to satisfy the creed of these economists the labourer 
 must starve." "Why is such a theoretical proposition 
 
 ^ This figure was given by Lord Derby in a recent speech of his, 
 and it will be remembered that the noble lord's father was mainly in- 
 strumental in framing the protest of the Peers against the free-trade- 
 in-corn policy advocated by Sir Robert Peel in 1846. It was his firm 
 attitude that impelled Cobden to issue the following threat : "It cost 
 me some argument, as my friends know, to prevent the League from 
 going into other topics. . . . Let it be seen that a protectionist 
 statesman like Lord Stanley is prepared to get into the saddle, and to 
 spur over the country with his haughty paces, and they will hear this 
 question argued in a very different manner to what it was before. 
 They will have the whole aristocratic system torn to pieces." 
 
 " The late Professor Bonamy Price. 
 
FEEE TRADE UNDER PROTECTION. 279 
 
 to stand in the way of the material prosperity of the 
 labouring classes ? Is it of any use to them to be told 
 that we are paying our debts now with the produce of 
 a past generation's labour ? They will reply, " We have 
 no capital; we depend upon our daily work for our 
 daily bread ; the labour of a past generation cannot 
 affect us. If you do not employ us, we cannot acquire 
 the means of subsistence." 
 
 Thus, if the labouring class had fixed capital, like 
 the majority of the income-tax paying class, no com- 
 plaint would be made against the unfair action of free 
 trade upon the productive class and consumers of the 
 nation. " You, the consumers, get your commodities 
 cheap by foreign competition. As the immediate con- 
 sequence, many of your fellow-countrymen are thrown 
 out of occupation." What have the productive classes 
 in return ? All the prices of their commodities, except 
 the monopoly price of butcher's-meat, are cheap. The 
 free-trader says, " I have given you cheap bread." But 
 the labourer retorts, " And the same means which has 
 made our bread cheap has sent us out of employment." 
 Of what use is this cheap bread to the labourer when 
 he has no employment ? 
 
 § 32. The partial arguments of the free-traders. — Now 
 it appears that the free-trade experiment was conducted 
 on lines the most dangerous, and by means the most 
 imprudent. 
 
 Every alteration in our commercial policy ought to 
 affect not one only, but both of the factors which de- 
 termine the prosperity of the labouring class. But free 
 trade influenced consumption alone. It left production 
 
280 FREE TRADE UNDER PROTECTION. 
 
 to take its own course/ and that course external forces 
 would alone determine. These forces were misjudged 
 by Cobden. The manufacturers of his day miscalculated 
 the result of their manoeuvre. 
 
 This species of free trade was entirely opposed to the 
 free-trade measures of Huskisson. He was not, it will 
 readUy be allowed, an inconsiderable figure in our com- 
 mercial history. But never did he, with the single ex- 
 ception of the silk duties — and the reason why he re- 
 duced the duties on silk goods was, as he distinctly tells 
 us, to abolish smuggling — influence consumption at the 
 expense of the productive powers of the country. 
 
 Now the abstract free-traders are not on good terms 
 with Huskisson, because he advocated an imperial 
 policy with regard to our colonies, and because he 
 nourished colonial interests by keeping the duties on 
 their produce at a lower level than they stood from 
 foreign countries. Such a policy would not, according 
 to the free-trader, effect " international peace " ; but it 
 would, according to the protectionist, produce " imperial 
 stability." But none struggled more than Huskisson 
 to achieve a uniform price of corn, always with a due 
 regard to every interest engaged in its cultivation. 
 And the result of his labours, continued by Sir Eobert 
 Peel, is shown in the average of 54s. from 1830-1838.^ 
 Let us compare this with the average price of corn 
 under free trade between 1850-1858. It is 53s. 4d. 
 
 1 When it is perceived that the central object of the free-traders of 
 1837 was to make manufacture predominant in foreign markets, the 
 reason of this procedure is obvious. 
 
 2 Sir Robert Peel, in his Memoirs, vol. ii. p. 345, gives the average 
 of 1831-1837 inclusive as 52s. 6d., "the existing Corn Law being in 
 force during the whole of that period. " 
 
FREE TRADE UNDER PROTECTION. 281 
 
 per quarter.^ In what way, then, did manufacture 
 gain during this period hy a free intercourse in corn ? 
 
 " Increase consumption by all means," but you must 
 not thereby injure the productive sources of the nation. 
 This was the commercial maxim of William Huskisson. 
 He knew the importance of cheap bread with reference 
 to the labouring classes. He did all he could to meet 
 the wishes of the manufacturers on this point. But he 
 would not encroach upon the "demand for labour" to 
 effect a temporary increase of consumption. He analysed 
 the problem into its elements. He correlated this 
 cheapness with all these other consequences which 
 cheapness would bring about. And he foresaw that 
 " demand for labour " would be injured in consequence. 
 " Cheapness, without demand for labour," he concluded, 
 " is a sign of distress." ^ 
 
 But Cobden believed that this demand would be im- 
 proved by his free -trade measure. He risked the 
 chance. He could not be assured that " demand " 
 would certainly increase. He could only give his 
 opinion that it would increase, if other nations became 
 free-traders. It was a speculation, this free-trade policy 
 of his, and depended for its success upon the assumed 
 action of surrounding peoples.' 
 
 ■' This is a little higher than it would have been had the war in the 
 Crimea not intervened to raise prices in 1854, 1855, and 1866. But, 
 on the other hand, there were the deficient harvests of 1837 and 1838. 
 When both these figures are compared with 50s., which Cobden an- 
 ticipated would be the permanent price of com, it is seen that both 
 under protection and free trade forces existed to reduce prices. But 
 they were of a very different nature. The gradual descent in the price 
 of corn under protection is nearly always forgotten. 
 
 " Huskissou's Speeches, vol. i. p. 307. 
 
 ' But there is some obscurity concerning Cobden's inmost thoughts 
 
282 FREE TRADE UNDER PROTECTION. 
 
 Huskisson made no such speculation. He pursued 
 a slow, but it was a steady and sure progress. He re- 
 garded the commercial aspect of the problem of free 
 trade alone : he made our trade more free, while it still 
 progressed under protection. He was not concerned 
 in its political bearings. 
 
 Perhaps, in this latter respect, we can discern the 
 reason why Cobden speculated on the universal free- 
 trade problem. For we know that the great agitator 
 was not content with commercial renovation ; he must 
 have political renovation as well, or innovations, as the 
 matter is variously regarded by the free-trader and 
 protectionist respectively. 
 
 We can see, now, what protection really did. It 
 effected relations, all of which maintained the produc- 
 tive powers of the nation. But all those relations have 
 been destroyed by free trade. When agricultural dis- 
 tress prevailed, the labourers were taught to regard the 
 tenant-farmers and landlords as the immediate source 
 of their calamity. But we can estimate how erroneous 
 it is to rely for trustworthy information from the in- 
 flammatory speeches of the free-trade agitators.^ Now- 
 adays we are advanced enough in reasoning power to 
 test any system, not by a phenomenon which occurred 
 
 upon "isolated" and upon "universal" free tiade. On more than 
 one occasion he predicted the advent of universal free trade. And in 
 one passage, after refuting the arguments of those who rested upon the 
 fact that other nations showed no strong inclination for the new pol- 
 icy, he says, " If free trade is a good thing for us, we will have it." 
 
 1 ' ' Organised efforts, which have been made by men of great wealth 
 and local influence to exasperate and inflame the minds of the people. " 
 — Memoii-s, by Sir Robert Peel, vol. ii. p. 341. 
 
FEEE TRADE UNDER PROTECTION. 283 
 
 under it but was not produced by it, but by taking a 
 comprebensive survey of its progress as a whole. 
 
 The free-traders took a period of depression under 
 protection, and argued from it that protection was the 
 source of all the national troubles. The more sober- 
 minded of to-day will regard this period of distress as 
 but the occasion which certain reformers grasped at 
 to further their " ulterior views." They will conclude 
 not from a part, but from the whole of our commercial 
 career under protection. 
 
 But the strange error into which the free-traders 
 designedly plunged the people is continued even to 
 the present day. The free-traders take the period of 
 prosperity which occurred during the primary action 
 of the free-trade principle, and argue from it alone. 
 The argument is again from the past. And thus the 
 error, disastrous in its nature, has, from the long period 
 of power enjoyed by the Eadical and free-trade party, 
 become deeply rooted in the public mind. 
 
 Now, in the instance of protection we have all the 
 facts of the case before us. On the other hand, as re- 
 gards free trade we have only part of the facts. We 
 have a period of prosperity,^ followed by a period of 
 adversity.^ "What, then, is left for us to do ? To arrive 
 at conclusions, we are bound to consider the existence 
 of tendencies. And it is from the existence and play 
 of those tendencies, that we can alone predict the 
 
 1 The gold discoveries and the extension of railways being the most 
 important factors in its causation. 
 
 2 Our markets are fi'ee, while external markets are closed by 
 duties. 
 
Missing Page 
 
Missing Page 
 
286 FEEE TRADE UNDER PROTECTION. 
 
 policy — (1) upon our imports and exports ; (2) on pro- 
 duction and consumption ; and (3) upon the relationship 
 which formerly existed between labourer and master, 
 and this the more especially in agricultural districts. 
 It was in this latter affinity that the stronghold of the 
 old Toryism was found to exist. And it was conse- 
 quently Cobden and the free-traders' chief seat of 
 attack. 
 
 Cobden discovered here a resistance difficult to over- 
 come. It was the turning-point of the measure pur- 
 posely framed to make free trade the principle of the 
 conduct of our commerce. From a strict application to 
 economical doctrines he was compelled to deviate into 
 political problems. In the towns the vision of a con- 
 stant employment of labour was made to occupy the 
 intelligence of their inhabitants. But in the country 
 the agricultural labourers were informed that they could 
 never hope to loosen the bonds of their degradation 
 unless the political power lodged in, and as it was said 
 usurped by, the landed proprietors, was broken. Cob- 
 den felt for this degraded position of a part of the most 
 important national industry. He pitied their igno- 
 rance. But he seems at the same time to have made a 
 very practical use of it. To account for their relative 
 degradation he brought forward a false cause. The ex- 
 planation was this. Their comforts were diminished 
 because their bread was taxed; and their bread was 
 taxed owing to the selfishness of the ruling class. Not 
 self-interest,^ be it observed ; it was tyranny, abuse of 
 
 ' It is curious to compare this relative diminution of comforts ad- 
 duced by Cobden with, the absolute reduction of wages proposed at the 
 present time. Cobden's assertion is that the agricultural labourers 
 
FREE TRABE UNDER PROTECTION. 287 
 
 power, or anything else which tended to inflame the 
 ignorant and malevolent. Hence it was that he ap- 
 pealed to the 40s. franchise as the means of effecting 
 their own emancipation. Such power as he could by 
 this means raise would therefore, in some fashion, 
 neutralise the power of the aristocracy in the Com- 
 mons, and pave the way more smoothly for the intro- 
 duction of free trade. 
 
 The appeal to the ignorant agricultural labourers was 
 not without avail. They were taught that under no 
 conditions would they suffer from the action of the new 
 measure. On the contrary, Cobden convincingly proved 
 to them that they would gain — that all classes would 
 gain — for free trade, if operating, would stimulate not 
 only the manufacture but the agriculture of the country. 
 As the result, the agricultural labourers' wages would rise. 
 
 Now the comparatively small rise ^ in these wages 
 which subsequently^ took place and has been main- 
 tained, though it is doubtful whether at their highest 
 
 were deprived of comforts which they had never enjoyed. The course 
 advocated to-day is to take away from the labouring man part of the 
 enjoyments to which he has been accustomed. 
 
 ^ In 1850, we have it on Oohden's own word that the wages of agri- 
 cultural labourers had receded Is. But as the price of bread had gone 
 down 2s. 6d., they gained Is. 6d. on the exchange. But for how long ? 
 For six months perhaps — certainly not more than one year ; for during 
 1850-1860 the average price of wheat was but 2s., or 3s. at the most, 
 less than during 1830-1840. The agricultural labourer thus, over a 
 period of years, received the very handsome present of something less 
 than half-a-crown annually, as the result of free-trade cheapening of 
 bread ; while, as the effect of free imports upon agriculture, he lost 50s. 
 a-year in wages. But the free-trader claims this as a success ! 
 
 ^ As matter of fact, the wages of the agricultural labourer only 
 began to increase absolutely, when in 1860 and afterwards there 
 occurred a general exodus of labour from the country into the towns. 
 
288 FREE TRADE UNDER PROTECTIOK. 
 
 level or not, is advanced by some as direct proof of tlie 
 soundness of Cobden's views upon the question. But 
 this, like so much of free-trade opinion upon Cobden's 
 work, is based upon a partial and limited view. Cobden 
 said the wages of agricultural labour would rise. And 
 so they have done,^ relatively for a time at first — abso- 
 lutely afterwards. But Cobden explained such rise as 
 being the consequence of agricultural stimulation. 
 
 Now the free-traders take Cobden's predicted result ; 
 but they, conveniently enough for themselves, ignore 
 " the declared means " by which it was to be effected. 
 "Wages have, indeed, risen in agricultural districts, not 
 from there being an increased demand to meet a more 
 extended cultivation, as Cobden pointed out would be 
 the case ; but from a scarcity of labour. To bring about 
 Cobden's result, just the opposite process happened to 
 what he anticipated. What was that anticipation? 
 More hands employed in the farming interest, and to 
 meet this demand, increase of wages ; and therefore 
 abstraction of labour from manufacturing districts : 
 result, agricultural activity and prosperity. 
 
 Compare this vision with present facts. We are face 
 to face with agricultural depression instead of an in- 
 creased occupation of labour upon land ; there is a 
 reduction of more than two-thirds of the total number 
 
 1 But not from the cause set forth hy Cobden, and not at the time he 
 indicated. Wages rose in the agricultural districts, because the high 
 wages in the towns attracted many of the labourers thither. But there 
 was no demand for them, as shown by increasing emigration and 
 increasing pauperism (vide Returns of Pauperism, 1865). Fewer hands 
 were available for the farmer ; and thus with an increase of work wages 
 rose. Now, instead of this artificial desertion, Cobden stated there was 
 to be a real determination of labour to the soil ; wages would rise, 
 because the demand fo labour would be greater than the supply. 
 
FREE TRADE UNDER PROTECTION. 289 
 
 of labourers employed in 1850. On each farm, if under 
 cultivation, there is less labour employed, though at a 
 higher wage than under protection : result, agricultural 
 labour contracted to one-third, wages slightly increased.^ 
 But against this increase there has to be placed the rise 
 in the price of all agricultural produce, with the single 
 exception of bread, and the rise in rent. Assume, how- 
 ever, the condition of the remnant of our agricultural 
 labour to be nowadays prosperous, because they have a 
 higher wage ; is it a secure prosperity ? There is not a 
 single individual in the whole length and breadth of 
 this island who can affirm it ! 
 
 To effect an increased prosperity (but it is question- 
 able whether there has been " so great " an increase in 
 material wellbeing as to justify the boasts of the free- 
 traders) — to ensure the temporary increased weUbeing 
 of a third of our agricultural labourers, the major part 
 have been driven out of employment. Let the pro- 
 tectionist admit that a part has advanced ; the free-trader 
 also cannot deny that it has been at the expense of the 
 whole. Such an advance may correspond with "pro- 
 gress " as it is defined by ideal economists and politicians, 
 who leave stability out of all their calculation. Does 
 it tit in with the notions of improvement which the 
 comprehensive and impartial mind entertains ? 
 
 But the interminable argument is ever presented. 
 The labourers of the country found it to their interest 
 
 1 The reader will reflect upon the great injury done to the agricultural 
 labourers collectively in the attainment of a small rise of wages. Nor 
 will he forget that this rise has heen neutralised by increased prices and 
 increased rent. The question offers, Has more harm than good resulted 
 from the supposed beneficial reform ? 
 
 T 
 
290 FEEE TRADE UNDER PROTECTION. 
 
 to flock to the towns, because the wages of manufacture 
 offered greater inducements to them. 
 
 The ideal economist tells us that labour was thus 
 diverted from less to more remunerative employments.^ 
 But Cobden did not desire that the " country " should 
 be stripped of its inhabitants. It may be affirmed, 
 without any fear of contradiction, that such an event 
 was not his ultimate purpose, whatever other motive 
 he may have had (but not expressed) as to the benefi- 
 cent influence on the growth of our manufacturing 
 towns, if such a result did actually happen. His notion 
 was that there would be induced in this way a greater 
 competition for labour between the farmers and the 
 manufacturers ; and that, therefore, wages would rise 
 all the more from such competition. 
 
 If such be the case, this competition did not turn 
 out so equal as it was conceived to be. It was all in 
 favour of the manufacturers ; for they still retained a 
 certain sort of monopoly, during the first period of free 
 trade, in which agriculture was subjected to competition 
 from without. This competition was assuming such 
 an adverse direction that had it not been for the cam- 
 paign in the Crimea the agricultural industry would 
 have long since been crushed. But, as one of the results 
 of that war, the farmers became the gainers of the 
 magnificent sum of £300,000,000 sterling ; ^ and it was 
 
 ^ The opportunity existed, and the agricultural labourers strove to 
 take advantage of it. But, as the result of all large disturbances, they 
 overrated the demand for labour in the towns. They left the sub- 
 stance and pursued the shadow. Thus, instead of pauperism being 
 swept out of the towns by free trade, according to Cobden, it tended, 
 on the contrary, to be increased by it. 
 
 ^ Fallacies, Political, Commercial, and Agricultural, by W. W. 
 
FEEE TRADE UNDER PROTECTION. 291 
 
 by this adventitious support that they were enabled to 
 protract their final extinction as corn-growers. 
 
 " But not only did the rise in the wages of the farm- 
 labourer happen, as Cobden predicted, but increased 
 demand for labour in the towns occurred, as the same 
 authority declared would be the case." "We have ana- 
 lysed the causes of that increased demand, and we have 
 attempted to ascribe its proper share to free trade. 
 Yet there is a dominant inclination amongst those who 
 allow themselves still to be ruled by a once powerful 
 authority to regard the free-trade principle as the chief 
 factor in the causation of a past and unparalleled pros- 
 perity. To show that such is not the fact requires but 
 a glance at all the elements then in operation ; for the 
 free-traders steadily fix their gaze upon one. To arrive, 
 however, at a true conclusion, you must comprehend all 
 the data contained in it. Of those forces, then, acting 
 with unequal intensity, you will find that one was of a 
 constant, while free trade was of a fluctuating action. 
 The railway system must always have been of advantage 
 to our trade and commerce. This could have been said 
 with certainty ; but not so certainly was the influence 
 of free trade itself to be inferred. The railway, by 
 reducing the cost of transit, enabled the manufacturer 
 to supply a greater foreign as well as internal demand. 
 
 Good (page 347) : Edward Stanford, Charing Cross, 1866. Mr Good 
 shows that there had been withdrawn or withheld from agriculture by 
 the operation of free trade in corn (1850-1865) the sum of £425,000,000. 
 During the same period there had been a reduction of taxation (from 
 which agriculture had received no appreciable relief) to the extent of 
 £270,000,000 ; and yet the farmers had to pay an income-tax on a 
 fixed sum — "not one farthing of which," he says, "in many years 
 had ever been made." 
 
292 FREE TEADE UNDER PROTECTION. 
 
 Nothing outside us could interfere with the operation 
 of this factor, and encroach upon our area of demand. 
 But external forces might interfere with the action of 
 free trade. And such contingencies were easily within 
 the range of the constructive imagination ; but they 
 were not heeded. 
 
 Now it cannot be denied nowadays that the principle 
 of free trade has fluctuated in its action, and that other 
 nations only suffered the entry of our goods so long as 
 it was to their self-interest to do so. For a brief space 
 of time the railway and free trade ^ combined in very 
 different proportions to effect prosperity. But with one 
 force acting in an uncertain fashion, this prosperity 
 could in no sense be regarded as ensured. Nor did the 
 varying action of the free-trade principle affect merely 
 its own course ; its adverse consequences spread to the 
 other force (in operation to benefit manufacture), with 
 this result, that it lessened its efficacy. For, by our 
 partial free-trade system, the fields of our internal and 
 foreign demand have become contracted. Hence our 
 supplies are reduced, and their cost of transit relatively 
 increased.^ 
 
 All this has fallen out because, in the first instance, 
 a false view was conceived of the virtues of free trade. 
 
 ■^ Our system of free imports tended to increase our exports ; but at 
 first only so far as corn was concerned. It is certain that our large 
 exports during 1850-73 were not paid for by corn alone. Hence 
 another cause must have been at work, and that was reduced prices of 
 goods, and the resulting underselling of foreign rivals. It was the 
 railway which mostly brought this about. 
 
 ' It is important to notice this, as the explanation of the present 
 excessive railway rates. Why were not the rates excessive in 1873 ? 
 Because our trade was not trammelled, and profits continued high. 
 
FREE TRADE UNDER PROTECTION. 293 
 
 Sufficient attention was not paid to security and stability. 
 Too much was allowed to rest upon anticipations which 
 have not been realised. 
 
 § 34. Ricardo's theory of international trade criti- 
 cised. — Increased demand for labour in the towns 
 was regarded, so far as the future was concerned, as a 
 constant factor. But the fallacy underlying the whole 
 of the free-trade predictions is discovered in Eicardo's 
 ' Theory of International Trade.' This theory was used, 
 and skilfully used, by Cobden. It is this. Of two 
 nations, both the producers of hats and boots, but the 
 one able to produce hats more cheaply, and the other 
 boots at a less cost than her neighbour, it is to the 
 advantage of both parties or nations to agree that the 
 one shall supply the other exclusively with hats or 
 boots, according as she can produce these commodities 
 at the least price to the consumer. 
 
 We shall presently inquire upon what grounds this 
 trade doctrine is elevated to the dignity of being styled 
 " international." 1 At the first view it will be evident 
 that it is framed simply with regard to the benefit of 
 the consumer. He gets his commodities cheaper in 
 this way. But the producer gains as well, inasmuch 
 as reduction in price is, within certain limits, followed 
 by increased demand. So the doctrine decides. He 
 makes more hats or boots, as the case may be ; and as 
 increased production is attended with a diminishing 
 cost, his profits are raised. 
 
 Now, let us see how this arrangement affects the 
 
 1 It is so called by Professor Cairnes in his ' Logical Method of Political 
 Economy. ' 
 
294 FREE TRADE UNDER PROTECTION. 
 
 nations individually concerned in the bargain. The 
 free-trader says, " Both are gainers.'' But the protec- 
 tionist retorts, " And so hoth are losers too." 
 
 It is easy to perceive that the grounds of contention 
 are fixed (1) on the number of the inhabitants of each 
 country, and (2) on the quantity of commodities re- 
 quired by either nation, as measured by the ability to 
 pay for them. 
 
 If these numbers are unequal in the two countries, 
 and their respective abilities to pay about the same, 
 the smaller nation will gain at the expense of the 
 larger one. For in the latter a whole industry is 
 destroyed, and what is the compensation ? Her labour 
 and capital are diverted to the more remunerative occu- 
 pation. But is all this labour consumed ? No. Then, 
 so far as this mutual bargain is concerned, the loss is 
 borne by the nation which has the larger population.^ 
 Her gain refers to consumers alone. As all consume, 
 the benefit may be said to be universal. But observe 
 how the benefit is obtained. By throwing out of em- 
 ployment a certain proportion of her productive classes. 
 The smaller nation, on the contrary, gains both as a 
 consumer and a producer. The result of this transac- 
 tion is that the wealth of the larger nation diminishes. It 
 has been in such a way, but carried under the principle 
 of protection, that England in former times grew so rich. 
 
 But the statesmen who control the internal affairs of 
 the larger nation would see, with dismay, this displace- 
 
 1 The free-trader attempts to meet this argument by declaring that 
 the nation which loses to another, gains from a third. Bnt he forgets 
 that such happens only under universal free trade, which does not 
 exist. Hence the facts stand as in the text. 
 
FREE TRADE UNDER PROTECTION. 295 
 
 ment of their country's wealth. From the consumer's 
 point of view, they would regard this freedom of trade 
 with satisfaction ; but from the producer's standpoint, 
 they would see nothing but calamity — the more espe- 
 cially as constantly increasing populations would mag- 
 nify the disproportion already existing. On general 
 lines, then, the question is reduced to one of choice be- 
 tween producers and consumers. And those nations 
 who are protective have decided that production shall 
 have priority over consumption. In this they have 
 followed what is the natural sequence of events. For 
 amongst the labouring classes production precedes con- 
 sumption. They earn their daily bread by the sweat of 
 their brow. Any measure, therefore, which injures 
 production, though it favours the consuming class as a 
 whole, they steadily oppose. What would be the reaction 
 of the feeling of the larger nation, when they experi- 
 enced the phenomenon of their wealth, by this process 
 of free trade, gradually being absorbed by another 
 people ? ^ We can readily surmise it ; and though we 
 have no account of what did happen after this species 
 of free trade or international trade, we may get some 
 information concerning it from what neighbouring 
 nations have done to prevent the sources of their 
 productive powers from being sapped. For such trade 
 bargainings amongst the manufacturers of two peoples 
 cannot be called an international trade bargain. These 
 latter ought, if irritation and the results of inequality 
 are to be dispensed with, to be framed on the basis of 
 mutual, and, as far as possible, equal advantages. And 
 
 ^ Yet it was a fundamental argument with Cobden, that free trade 
 would destroy the springs of war. 
 
296 FREE TEADE UNDEK PROTECTION. 
 
 in SO far as the surroundings of every trade and industry- 
 are liable to fluctuate, to prevent any one nation from 
 receiving, by a happy accident, too large a proportion of 
 gain from another, it is essential that the " treaty of re- 
 ciprocity "be limited to a certain period of time. In 
 this manner only can it be expected that anything like 
 commercial equality shall exist between neighbouring 
 nations. 
 
 I 35. " Free trade to remove source of ivars arising 
 from commercial frictions." In reality, tears are due to 
 impulse of acquisition, and have reference, in the first place, 
 to political objects. — It was the contention of Cobden and 
 the free-traders, that the system of protection, by im- 
 posing restraints, increased commercial jealousies. It 
 prevented, they said, the sources of production from 
 being increased. Free trade, on the other hand, by 
 removing impediments, tended to draw nations into a 
 closer commercial union ; and thus to destroy at least one 
 source of war — that arising from commercial disputes. 
 
 Now it is true that free trade tends to increase pro- 
 duction, but unequally ; for, obviously, free trade will 
 favour that nation most whose advantages in the most 
 important industry of manufacture are far beyond those 
 of her rivals. England could well afford to say to the 
 nations of the world, " Only take our manufactures, 
 and we will, in return, take your food-stuffs." But this 
 argument on the part of the English manufacturers was 
 a purely selfish argument. It affected their own gains 
 alone. It did not respect the less advantageous con- 
 ditions of her neighbours. It is equally obvious that 
 free trade, so far as their productions were concerned. 
 
FBEE TRADE UNDER PROTECTION. 297 
 
 instead of increasing would diminish them. The free- 
 traders asserted that protective restrictions were the 
 causes of war. Adam Smith ascribes to commercial 
 irritation the wars of the eighteenth century. But 
 there is danger of falling into error on these important 
 questions. It was not protection but prohibition which 
 led to commercial irritation and retaliation.^ And only 
 too often commercial as well as political disputes were 
 made use of by statesmen to advance the power and 
 prestige of their country. Thus they formed, in the 
 generality of cases, not a primary but a secondary factor 
 in the causation of war. To give an instance of this. 
 It is frequently remarked that the Stamp Act was the 
 cause of the war with our American colonies. That it 
 was the "exciting" cause, no one who is acquainted 
 with the history of events embracing a period of a 
 century antecedent to it will deny. In the progress of 
 those events there will be traced a disposition on the 
 part of some of the colonies to break those ties which 
 united them with the mother country. This disposition 
 grew. And it required but some general source of dis- 
 satisfaction to give it expression, and the Stamp Act 
 succeeded in providing this source. 
 
 But behind these commercial disputes is to be dis- 
 cerned the march of political ideas and actions. And 
 as the basis of these ideas and actions, you will find 
 some position of a rival likely to become overwhelm- 
 ingly strong, and therefore to be removed as the source 
 of latent danger ; or some weak point of our own which 
 it is incumbent upon us to strengthen, with reference to 
 the future security of the kingdom. 
 
 ^ As remarked by Huskisson. 
 
298 FREE TRADE UNDER PROTECTION. 
 
 We believe that Cobden was wrong in ascribing fun- 
 damental importance to commercial disputes. Wars 
 are, or used to be, designed with reference to acquisi- 
 tion. So long as objects of acquisition exist, then war 
 will tend to break out, on a favourable opportunity. 
 But our free-trade policy was supposed to diminish this 
 tendency. It is necessary, therefore, to meet this state- 
 ment with the actual fact. The war in the Crimea, as 
 already mentioned, intervened between our farming in- 
 terest and its destruction as a corn producer. From a 
 financial point of view, it was not to the interest of 
 Eussia to enter into a conflict with us; for, by thus 
 cutting ofp her corn communication, that nation lost 
 many millions of pounds. But a more extended com- 
 mercial union between nations was, in Cobden's narrow 
 view of this matter, to destroy the basis of wars. As 
 the result of that war, let us suppose that Eussia be- 
 came more aggrandised at the expense of the conquered 
 than she would be by the peaceful arts of commerce, as 
 Cobden called them. And here it must be confessed 
 that the vision of the Eussian statesman extended a 
 little beyond that of the English one. For there are 
 in Europe and Asia objects of acquisition coveted by 
 Eussia. And pretexts wiU be framed with a view of 
 obtaining them. 
 
 The Eussian advance towards the Indian frontier was 
 considered as being of but slight moment to the interests 
 of the British empire. Imbued very probably with 
 this erroneous notion that Eussia would not seek a 
 quarrel with us, because such would immediately result 
 in her commercial disadvantage, the Liberal party, hav- 
 
FKEE TRADE UNDER PROTECTION. 299 
 
 ing already scouted the idea of a scientific frontier/ left 
 the natural frontier unprotected. Then there happened 
 what has been sarcastically described as the " unfortu- 
 nate incident " at Penjdeh, in which a few Afghans were 
 slaughtered. It is quite possible that this affair was 
 conducted merely for the sake of redressing some 
 political grievance which Eussia had against the Ameer 
 of Afghanistan, England's subsidised aUy. But it might 
 also have other bearings.^ It is evident, from the 
 activity shown by the Ministry then in of&ce, these 
 " other bearings " were entertained ; and further, that 
 the worst was apprehended. This reference to a recent 
 historical event suffices to show the falsity of what 
 Cobden, and those who thought with him, maintained. 
 The commercial reformer was so much wrapt up in 
 present effects, and those immediately consequent, that 
 the remote ones were altogether ignored. He not only 
 took a partial view, but even that view was limited. 
 But from that " incident " we may learn this lesson, 
 that Eussia would not throw away all the gains which 
 she derives from her exportation of corn, unless there 
 was a larger prize almost within her grasp. Thus it is 
 not present commercial advantages, but the require- 
 ments of her future policy, that determine her present 
 actions. So far, then, as to the removal of restrictions 
 to trade on our side, they have not been followed by 
 
 1 The united Liberal party was then under the leadership of Mr 
 Gladstone. It has since ceased to exist as such. 
 
 2 The vote of credit for the transport of troops proves that the 
 Liberal Ministers did not know what that event portended. The haste 
 with which they acted clearly shows that they were taken at a dis- 
 advantage. 
 
300 FKEE TRADE UNDER PROTECTION. 
 
 those beneficial effects which Cobden predicted of 
 them. 
 
 There is another point to consider regarding the 
 theory of international trade. It does not tend' to 
 diminish friction, as we have just seen. But what does 
 it do ? It cheapens articles to the consumers of both 
 nations ; it favours the production of the smaller nation, 
 while it injures the production of the larger. It causes 
 inequality, therefore. The free-trader wiU, of course, 
 go beyond this, and, by means of a universal proposi- 
 tion — which, to be relevant to the issue of a particular 
 case, must be qualified and limited — seek an outlet in 
 " capital and labour being diverted from less to more 
 remunerative channels." He will say that the larger 
 nation of the two under consideration will drive a 
 profitable business with another nation, this third 
 nation with some fourth one, and so on. Thus a chain 
 is formed, but it remains linear. Cobden thought it 
 would become a circle. Now it could not possibly 
 become a circle, so that each nation might have an equal 
 share of increased activity, unless all nations were 
 surrounded, more or less, by the same conditions. But 
 such is not the case now ; nor has it ever been so in 
 the history of the world. 
 
 Was it Cobden's intention to reduce all nations to 
 the same level by a universal free trade ? He does 
 not expressly state it. What he asserts is that each 
 nation would derive an increased trade activity. But 
 he does not proceed to tell us how such increased 
 activity would be distributed. There can be no doubt 
 that all the nations of the world, during Cobden's agita- 
 tion, were not similarly placed as to commercial advan- 
 
FREE TRADE UNDER PROTECTION. 301 
 
 tages. The conditions surrounding each differed, and 
 the differences in many cases were extreme. Was it 
 logical to assume that, because a certain principle 
 which he proved to the English people, or thought he 
 proved, would be beneficial to their trade intercourse 
 with foreign nations, the same principle would also be 
 associated with the same beneficial results when applied 
 to other and dissimilar conditions ? Was it prudent to 
 venture on a policy, the final issue of which could not 
 be determined with ordinary certainty ? 
 
 This theory of so-called international trade is thus 
 seen not to be a safe international trade poHcy. All 
 international trade bargains tend to aim at equal ex- 
 changes. Such an equal result can only be brought 
 about by a treaty of reciprocity. For by that method 
 alone can real equality be attained.^ 
 
 As the largest part of the labour of any community 
 is consumed when industry is protected, it follows, from 
 the circumstance of nations being on different commer- 
 cial levels, and the weaker finding it to their interest 
 to protect their trades, that the most secure and advan- 
 tageous practice of the stronger is to be self-supporting. 
 For otherwise, the weaker nation has a more extensive 
 market, if its powerful rival is a free-trader, while the 
 free-trade country becomes restricted, not only as to 
 revenue, but as to kind of productions, both from the 
 barrier which foreign duties create, as well as from the 
 competition in its own markets of foreign goods. 
 
 ^ I.e., a tendency towards equality. No system can produce an 
 actual commercial equality. Treaties are drawn up with that end in 
 view, but are allowed to run for a term of years only ; and for this 
 reason, to provide for future contingencies. 
 
302 FREE TRADE UNDER PROTECTION. 
 
 International trade would then be limited to the 
 surplus produce of each nation ; and this would be ex- 
 changed, with the least friction and the least irregularity, 
 by means of a system of reciprocity such as Huskisson 
 put into practice. A treaty framed upon this principle, 
 would be free from all objections that it had been con- 
 cocted with the view of one party deriving an unfair 
 advantage at the expense of its neighbour. The basis 
 of such a treaty is self-interest and not selfishness. But 
 in course of time, and with a change in surrounding 
 conditions, the treaty might only confer a nominal 
 equality ; it might lose its original purpose of creating 
 a real equality. And this is a sufficient argument 
 why it should be limited to a term of years. 
 
 § 36. Comparison letween reciprocity and iincgualfree 
 trade {Golden' s " ideal reciprocity "). — If, now, we contrast 
 such a reciprocal system with our isolated free-trade 
 policy, we shall find two stages at which to make the 
 comparison. While free trade made us prosperous, as it 
 is the boast of the free-traders that it was during its early 
 career the chief source of our prosperity, the impression 
 made upon the foreigner was adverse to the nation 
 acting so contrary to all past experience in the history 
 of commerce. "Go thou and do likewise," was what 
 Cobden told other communities, to sooth their angered 
 feelings. " Experience the same prosperity that we do 
 by the same means." But the foreigner revolved in his 
 mind the future as well as immediate effects of such a 
 policy. It was not an easy task to stand by and see 
 another people rapidly accumulating wealth at his own 
 expense. If he became a free-trader, he foresaw that his 
 
FEEE TRADE TJKDEK PROTECTION. 303 
 
 political power would diminish, and the progress of the 
 people be retarded ; for all the benefit to be derived from 
 mutual free trade would be conferred upon that nation 
 which originally had the greatest advantages. There- 
 fore he remained protectionist, and nursed the industries 
 of his countries. He detected that the free-trader had 
 abused those advantages which a long line of prosperous 
 merchants had gradually acquired for their countrymen. 
 He saw all those advantages frittered away ; and per- 
 haps he perceived also that the greater part of that 
 prosperity which attended free trade was dependent, in 
 the main, upon another cause. At any rate, he had the 
 power and used it to shut the markets of his country, 
 while the markets of the free-trader remained open to 
 him. 
 
 Thus it has come about that our weak points have 
 been successively attacked. The competition induced 
 by free trade has never been " unequal " in our favour. 
 But we were enabled by other forces to counteract its 
 adverse influence. These forces having lost their 
 original intensity, we now experience the gradually in- 
 creasing adverse operation of free trade. But free trade 
 is not blamed by those interested in its maintenance as 
 the cause of distress; and it appears on this ground 
 only — that it was associated with a prosperity which 
 lasted for sixteen years. Our manufacturers are now 
 aware that competition is against them, and thus it 
 becomes, in the fitful course of events, the turn of the 
 free-trader to feel resentment at inequality. We have 
 already traced how this inequality has been effected. 
 What we desire to point out, at this juncture, is its 
 adverse influence upon the labour prospects of the 
 
304 TEEE TRADE UNDER PROTECTION. 
 
 British people ; to state that if the manufacturer does 
 not prosper, it cannot be expected that his labourer 
 shall; and to inquire, Why, if manufacture has thus 
 been so rudely arrested in her steady growth by free 
 trade, agriculture was sacrificed ? '• 
 
 It is too frequently asseverated, and without due con- 
 sideration of the importance of the conclusion, that 
 high prices trespass upon the material wellbeing of 
 the labouring classes. Has this country, then, never 
 been prosperous under high prices 1 The experience of 
 the older statesmen is to the effect that ixnder protec- 
 tion prosperity increased or diminished with a rise ^ or 
 fall in the price of bread. But then it is to be recol- 
 lected that if some articles increased in price, as wheat, 
 other articles in the same category diminished, such as 
 butcher's-meat. Such variations in prices depended 
 altogether on the ability of the farmer to pay his way 
 with the different produce of agriculture. If he made 
 more by his corn, he could afford to sell his cattle at a 
 less price. So that the sum total of the labourer's 
 expenditure upon farm produce varied but little. At 
 the present time, what that labourer spends upon the 
 restricted produce of the farmer is greater in proportion 
 
 1 It cannot be too often iterated that the manufacturers in 1837 
 belieyed that free trade would destroy our agriculture. Cohden's 
 arguments for a free intercourse in corn are well known. He stated 
 that agriculture would be improved by free trade ! 
 
 ^ The sudden rises and falls are not referred to in the text. What is 
 indicated is that gradual rise or fall which embraced a term of years. 
 But it was the sudden rises and falls which formed the butt of all the 
 odium which the free-traders could mauufactui-e for the Corn Laws. 
 There can be little doubt now that these sudden rises and falls in 
 price were due to fraudulent treatment of the averages. The Corn 
 Law was not responsible, but the selfishness of the com merchants. 
 
FREE TRADE UNDER PROTECTION. 305 
 
 to what he spent when the growth of corn was pro- 
 tected. By purchasing his corn from his own country- 
 men, this part — viz., meat, butter, eggs, &c. — of the 
 farm produce would at once be diminished in price ; 
 but, at the same time, he would have to pay more 
 for his bread. As such fluctuations tend in time to 
 neutralise each other, they would eventually leave the 
 labourer's expenditure upon agricultural produce what 
 it was before the alteration was effected. Now, to 
 raise the price of bread would, on these considerations, 
 be attended with no harm to the labouring classes. 
 For just as when bread was made cheap by free trade, 
 all other agricultural produce rose in price, so if bread 
 were made dear by protection, would the prices of the 
 rest of farm produce fall. 
 
 But the very allusion to dear bread at once becomes 
 the source of ridicule to those who take a prejudiced 
 view of the question. They make a specious appeal 
 to the ignorant to the effect that " they will have more 
 to pay and less to receive." They descant upon the 
 benefits of cheap bread. As if there are any benefits 
 accruing from a mere cheapness of bread, unless at the 
 same time there is a demand for labour.^ They draw 
 invidious comparisons between high and low prices. 
 But they do not continue the discussion long enough 
 to tell the people that from an " ideal " point of view 
 low prices are well enough ; but that, in practice, low 
 prices are significant of stagnation, and that high 
 
 ' "Nothing could be more fallacious," said Huskisson, who was well 
 aware of the importance of ohtaining cheapness without deranging the 
 relations between production and consumption, "than the notion that 
 cheapness in the price of provisions was always a benefit." 
 
 U 
 
306 FEEE TEADE UNDER PEOTECTION. 
 
 prices, on the contrary, are the surest signs of internal 
 prosperity.^ 
 
 But the free-traders attempted to disprove to the 
 country that the price of wheat did not regulate the 
 price of wages. They said in 1846 that you might 
 have a low price of corn and a high rate of wages.^ 
 And having thus delivered themselves, they thought 
 the problem ended. But the price of wheat did regu- 
 late the price of wages under protection. Por, as an 
 addition to the capital of agriculture had to be made 
 before fresh soils could be brought into cultivation, the 
 price of wheat inevitably rose. That price fluctuated 
 about a higher level ; and with this increase in pricesj 
 wages of labour were raised, because there was a greater 
 demand for it. 
 
 Now in 1850, according to the authority of Sir Robert 
 Peel, bread was relatively low,^ and wages were rela- 
 tively high.* Here, then, we reach the state of blessed- 
 ness conceived by the free-traders. 
 
 The point for analysis however, is, whether this 
 altered relation was final — whether it was never to be 
 
 1 The reader will observe that even at the present the tendency 
 towards high prices is still in existence. The direction which it took 
 under protection has been diverted under free trade. It is a question 
 whether the " cost of living " has been materially reduced for the 
 labourer by free trade. 
 
 2 Such good fortune happened at times under protection. For 
 example, during 1833-1836. Now the free-traders prescribed certain 
 conditions which would be associated with low price of bread and 
 high wages. Those conditions have not been fulfilled. 
 
 ' But it was relatively high with reference to the prices of 1833-1836. 
 Indeed, during the periods 1830-1840 and 1850-1860, there is not an 
 appreciably great difference in the averages. — Vide p. 177 (note). 
 
 * The effect of an increased currency to raise wages must be con- 
 sidered. 
 
FREE TRADE UNDER PROTECTIOI^. 307 
 
 disturbed again, or whether it was only temporary, 
 occurring during a period of transition from high prices 
 and high wages to low prices and low wages. 
 
 We can conceive that this alteration would have kept 
 more or less permanent, if other nations had become 
 free-traders and our manufacture become supreme. 
 These are the conditions. And they are the conditions 
 which Cobden anticipated. But to no purpose. Instead 
 of his predicted results, we have other conditions now 
 to deal with. We have all our markets supplied by, or 
 within reach of the supply of, foreign produce, while our 
 neighbours' markets are closed, more or less, by heavy 
 duties. The importation of foreign corn has gradually 
 increased, and is increasing.^ The charges upon these 
 imports are very great. But we ought, according to the 
 Cobdenite way of arguing, to pay for our food with our 
 manufacture. The question is to-day, " Do we ? " The 
 price of wheat has been reduced, and is still receding. 
 The greater bulk of our agricultural labourers have, 
 in consequence, been forced to quit the soil. Some 
 of them were employed, during the early part of so- 
 called free-trade prosperity, in the extension of manu- 
 facture. But nowadays our labour is displaced by the 
 produce of foreign labour. Nor do we balance the loss 
 in this direction by an increased exportation to neutral 
 markets ; for those neutral markets are being supplied, 
 to our disadvantage, by the produce of our protective 
 rivals. 
 
 1 We have already remarked the deficiency of two million quarters 
 in 1887. But this event does not preclude the possibility of our being 
 supplied from external sources with increasing quantities. It merely 
 implies that our ability to pay for more was less than in the preceding 
 year. 
 
308 rE.EE TRADE UNDER PROTECTION. 
 
 It is essential, then, to understand the nature of the 
 forces operating against us. It is by this means only 
 that we can perceive where our weak points lie. We 
 have our own markets invaded by the foreigner. We 
 have an unequal competition in neutral markets. For 
 the foreign manufacturer is assisted, in some branches 
 of industry, by a bounty. The British manufacturer 
 threw off the trammels of State aid. Why did he do 
 so ? What does he blame for the present unequal con- 
 dition surrounding him ? ^ 
 
 But the displacement of our own labour is followed 
 by a fall in the rate of wages. Wages have fallen ; and 
 it is the advice of a high authority that the labourer 
 should be content with a lower wage during this period 
 of depression. 
 
 Here, then, we have the first indication of the lower- 
 ing of wages. The tendency towards this lowering is 
 still in operation, and will increase, unless it is cheeked 
 by perhaps some temporary and collateral occurrence, 
 or by Act of Parliament. We have " reduced wages," 
 tending to become more and more reduced. We have 
 a low price of bread. We are, in consequence, rapidly 
 reaching that condition, foreseen by some of the older 
 protectionists, in which a low price of bread is asso- 
 ciated with a low rate of wages. But the result has 
 taken some time to be consummated. Its progress has 
 been imperceptible. And in the transition, we have 
 seen the association of cheap bread with high wages. 
 
 1 The means which the foreigner takes to improve his resources are 
 those which properly belong to the system of protection, and pursued 
 by this country at a former time advantageously. The free-traders 
 cannot shut their eyes to the fact that the export trade of gi'eat nations 
 is increasing — under protection. 
 
FREE TRADE UNDER PROTECTION. 309 
 
 Now such a conjunction was naturally to be expected. 
 But it could not he expected to continue. For the 
 price of bread and the rate of wages, instead of being 
 governed by a single tendency/ are each of them 
 separately controlled by external forces,^ both which 
 tend to reduction. Thus a low price of bread is asso- 
 ciated in the long-run with a low rate of wages. But 
 it does not alone cause this low rate. Por the same 
 principle which cheapens bread also depreciates labour 
 in this country. 
 
 But, say you, what is the relative difference between 
 high prices and high wages, and low prices and low 
 wages ? Are not the labouring classes as weU off now 
 with low wages and low price of bread as they were when 
 wages were high and bread dear ? The answer is em- 
 phatically, " They are not." And the proof resides in 
 the existence and operation of tendencies. With a 
 higher price of bread there was an increased demand 
 for labour. This was constantly in operation in the 
 extension of the cultivation of the soil. It was occa- 
 sionally in action when improvements lessened the cost 
 of the production of goods. Thus the tendency existed 
 to improve wages. 
 
 But what is the cause of the present low rate of 
 wages? Competition amongst the labourers. Instead 
 of there being a demand for labour, the labour market 
 is overstocked. And this competition is eflfected by the 
 entry of foreign produce. 
 
 ^ Viz. , the lowest cost at which the least remunerative soils woiild 
 yield a return. 
 
 " The price of wheat regulated by the price at Chicago. The wages 
 of labour regulated by the amount of labour thrown out of employment 
 by foreign competition. 
 
310 FREE TRADE UNDER PROTECTION. 
 
 We would here remind the reader of the incomplete- 
 ness of the free-trader's treatment of the question of 
 cheapness. He says free trade has made articles 
 cheap/ and the discussion is ended so far as he is 
 concerned. He affords an instance of a prejudiced 
 mind, selecting just those very points which appear 
 to strengthen his conclusion, and exercise a fascinat- 
 ing sway over those who are ignorant of the mag- 
 nitude of the problem. The free-trader, therefore, 
 does not completely relate this cheapness of some 
 articles (1) to its reaction upon the price of other 
 articles in the same category ; and (2) to its influence 
 upon the labour of the nation. The references which 
 he makes to these points are utterly insufficient. 
 
 Now, can there be any motive which impels the free- 
 trader thus to treat what in reality is an intricate 
 problem in so one-sided a manner ? We think there is 
 such a motive, and that it is a very strong one ; and we 
 believe it is a motive which is purely political in its 
 composition.^ We go further than this. We assert 
 that, by means of the cheapness which free trade has 
 effected in certain commodities, free-trade politicians 
 have already been enabled to advance democratic 
 reforms. We are aware that they have advanced 
 some of these radical changes before their time, and 
 when the country was unprepared for them. It is 
 thus that they have become the recipients of the 
 popular favour. Thus have they pushed forward 
 
 ^ The true statement is, free trade has made some articles cheap. 
 
 ^ The principle of free trade was conceived in an economical spirit. 
 It was advocated and carried by a section of the community, to the 
 disadvantage of the whole. To carry it, Cobden used it as a political 
 lever ; and it has been put to political Tises ever since. 
 
FREE TEADE UNDER PROTECTION. 311 
 
 reforms till " order " is obscured in the agitation 
 for so - called progress. And thus it comes about 
 that certain democratic politicians demand that the 
 soil be forced into cultivation. Smaller farms are to 
 be constructed, and wheat is to be grown. But how 
 such farms are to remunerate their tenants, so long 
 as tie conditions surrounding our agriculture remain 
 as they are at present, is what they do not explain. 
 
 It is quite clear that while the question of our 
 depressed industries and agriculture is treated from 
 the political view, no hope can be entertained of their 
 erer being raised from the decline in which they are 
 sinking. In 1846, when our trades were in a state of 
 activity, and when the depression from which they had 
 just suffered had passed off, as it always did pass off 
 under protection, still the agitation for free trade con- 
 tinued. What was the reason ? Why did the manu- 
 facturers proceed to legislate, when their business was 
 in a state of activity again ? 
 
 The reason is single.^ Free trade was but the 
 harbinger of great political reforms. Those political 
 reforms had, as their immediate object, the repression 
 of the assumed tyranny of the landed proprietors, and 
 the extension of the political power of the people. 
 
 Those reforms, too, had as their basis the advance- 
 ment of the material wellbeing of the masses, and the 
 
 ^ Before the return of prosperity Cobden, had promised all sorts of 
 reforms. When prosperity arrived, if he desired still to continue 
 popular, he was compelled to go forward with them. See Cobden, 
 p. 251 i " We are financial reformers. We have a habit of doing one 
 thing at a time." Then why were not a "proper currency" and 
 national sources of improvement allowed to operate untrammelled by 
 free trade ? 
 
312 FREE TRADE UNDER PROTECTION. 
 
 concomitant improvement in their education, so that 
 they should become capable of discharging tlieir 
 functions as a political factor in the government of 
 the country. 
 
 Now the political advancement of the people has been 
 effected, but their material prosperity is being retarjled. 
 Hence the danger. The power which they have been 
 invested with wiU be used, not to the self-interest of 
 the nation as a whole, but to their own selfish ends. 
 There are sufficient signs of this at the present da,y. 
 When a member of the Ministry asserts that before long 
 there will be returned to Parliament Socialist memberi, 
 it is as much as to say that the old party lines havfe 
 been rudely torn up ; that the old Liberalism has be- 
 come incorporated with Conservatism; and that the 
 new Liberalism or Eadicalism will foster Socialistic 
 doctrines. This political phenomenon is the result of 
 the unequal operation of free trade. It is a natural, 
 though a disastrous, result of it. For a popular party 
 to remain popular, it must in the end pander to the 
 wants of the masses. 
 
 It has been stated that the verdict of 1846 is irresist- 
 ible. But it is well known that Mr Disraeli in 1850, 
 and again in 1851, attempted to dispute its soundness. 
 How was it acquired ? It was acquired mainly through 
 the influence of the manufacturers.^ It was taken to 
 be the will of the people. But the wiU of the people 
 does not differ essentially from the will of an individ- 
 ual It may therefore be supported on an erroneous 
 foundation. It certainly springs from the opinion of their 
 
 ^ In 1846 the free-trade agitation was supported by a quarter of a 
 million of money out of the manufacturers' pockets. 
 
FEES TRADE UNDER PROTECTION. 313 
 
 advisers. And that opinion, in Cobden's instance, is 
 assuredly constructed upon doctrines the most false and 
 anticipations the most vain. 
 
 But on the assumption that the will of the people 
 cannot be wrong, those who advocate free-trade doc- 
 trines, having already changed their front and argued 
 contrary to their master's speculations, come forward 
 and say that " things wiU right themselves." For this 
 conclusion what proof do they possess ? They cannot 
 derive it from the experience which the course of free 
 trade affords them. For this experience is composed 
 of three stages: the prosperous stage, the stage of 
 equilibration, and lastly, the stage of depression. They 
 are bound, therefore, to argue upon general grounds and 
 adduce tendencies. If there are tendencies towards 
 recovery, let them enumerate them ; if there are signs, 
 let them bring them forward. And at the same time, 
 let them also correlate these signs of improvement with 
 their predecessors in the stage of prosperity. Let them 
 inquire whether they reach the same significance. And 
 lastly, let them wait awhile and compare those signs 
 of increased vitality with increased depression sure to 
 foUow.i 
 
 A small sign is not enough to satisfy the labour 
 interests of the nation. It must be a sign which shall 
 indicate that our agricultural labour has not been de- 
 stroyed in vain. But for such a sign, with present 
 adverse forces in operation, we look in vain ! 
 
 1 Cf., for the proof of this, the treatment of the question of free 
 trade, in ' Free trade,' published by William Blackwood & Sons, 1887. 
 
314 
 
 CHAPTEE XV. 
 
 PARTIAL FEEE TEADE AND THE LABOURING CLASSES THE 
 
 POLITICAL POSITION OP THE INCOME - TAX - PAYING 
 
 CLASSES. 
 
 "But it may be that I shall leave a name sometime remerahered with 
 expressions of goodwill, in those places which are the ahode of men whose 
 lot it is to lahour and to earn their daily tread hy the sweat of their brow 
 — a name remembered with expressions of goodwill, when they shall re- 
 create their exhausted strength with abundant and untaxed food, the 
 sweeter because it is no longer leavened with a sense of injustice." 
 
 — Sir EoBEET Peel (1850). 
 
 EAILWAT BATES AND THE EX1STIN& DEPEESSION — THE DEPEECIATION 
 OF SIIVBE AND ITS EBLATION TO DISTEESS — BIMETAliISM NOT A 
 LASTING EEMEDY — THE APPEAEANOE OF A NEVf POWER IN THE 
 STATE — THE INOOMB-TAX-PAYINd CLASSES — UNSOUND OHARAOTEE 
 OF EAELY EEFOEMS EFFECTED THEOUGH OONTEESION OF FIXED 
 INTO FLOATING CAPITAL — MONET NOW A DEUG IN THE MAEKET 
 BECAUSE THE SOUECES OF THE EBMUNBEATION OF CAPITAL AEE 
 CONTEACTED — THE EELATIONS OF THE CAPITALIST AND LABOUEEE 
 TO (1) PEODUOTION, AND (2) CONSUMPTION — THE PEOSPEEITT 
 EFFECTED BY FEBE-TEADE CHEAPENING OP COMMODITIES A MUSH- 
 EOOM PEOSPEEITT — ITS FOUNDATIONS INSEOUEE. 
 
 § 37. The bimetaUists and the cause of depression. — 
 There is one other consideration of this question of 
 depression, which is not always regarded with that 
 respect which seems to be its due. It is the analysis 
 
FREE TRADE UNDER PROTECTION. 315 
 
 of the collateral effects of depression. The reader wiU 
 recollect the importance ascribed to high railway rates 
 by free-traders, in the causation of manufacturing de- 
 pression. Admit that these rates are excessive. Ee- 
 duce them by Act of Parliament. What does the free- 
 trader say to this interference with the course of trade 
 by the State? What difference is there between the 
 interference on the part of the railway shareholder and 
 that coming from a foreign rival ? And if you check 
 one, why, on broad principles, should you not diminish 
 the other ? 
 
 But these rates are reduced (let us suppose) ! ^ And 
 it appears that even free-traders are not altogether free 
 from protective propensities, when such assist either their 
 cause or their party. What follows ? The foreigner was 
 able to compete favourably with us before the lowering of 
 railway rates. He succeeded in underselling our mer- 
 chants, who, by free trade, strove to blight his prospects. 
 He did so by the assistance of a principle, where needed, 
 which is still in operation. It is a principle which is 
 capable of extension or contraction, according to the 
 requirements of each particular industry. It is but the 
 same policy which this country practised when she was 
 protective. But, if it may be so stated, England has 
 grown out of this principle. It did not, according to 
 the free-traders, satisfy her conditions.^ What valid 
 objection can we possibly make to a former policy of 
 
 ' A bill was tinder the consideration of Parliament in the course of 
 last year's session ; but, like many others, was transferred to the 
 present one. 
 
 '^ If it satisfies the conditions of other nations, on what grounds 
 can we object to it ? They cannot be economical, but they may be 
 political. 
 
316 FEEE TRADE UNDER PROTECTION. 
 
 ours, followed in the present day by growing nations ? 
 Is not Germany doing now just what England did a 
 century, or even half a century ago ? 
 
 If, therefore, railway rates being lowered, the position 
 of the British manufacturer is improved in neutral 
 markets, the conclusion will be jumped at, " The cause 
 of depression has been isolated and counteracted — we 
 are prosperous once more." And free-trade economists 
 will run about and cry that with cheapness there will 
 be increased demand and further production. But they 
 will, it is certain, conveniently ignore the fact that they 
 are not dealing with economical phenomena as they 
 existed under protection, but with a new and altered 
 set of conditions, induced by our partial free-trade 
 policy. Under protection it might have been asserted 
 that, by cheapening the price of an article, you would 
 increase the demand for it within certain limits. But 
 under free trade surrounding circumstances are not so 
 stable as they used to be, when protection governed our 
 commercial progress.^ We do not dispute that there 
 may be some increase of mercantile activity, as the 
 result of lowering railway rates. But what we affirm 
 is, that such an increase wiU be but temporary, and that 
 its assumed recurrence will but blind many to the 
 nature of the true depressing cause. 
 
 It will be temporary, because the causes which de- 
 press our manufactures are yet in operation ; and they 
 
 ' Our partial free-trade system has so deranged previously existing 
 relations, that it is impossible to use the economic truths which oh- 
 tauied under protection in free-trade arguments. And yet this is 
 what the free-traders are guilty of. They adduce protective pheno- 
 mena to prove their free-trade conclusions. 
 
FREE TRADE UNDER PROTECTION. 317 
 
 will be improved, to meet this new condition in the 
 struggle for manufacturing supremacy. 
 
 Now there is another result of free trade which is 
 essential to be observed. It is the displacement of 
 labour from productive to unproductive industries. As 
 the consequence of this, we are produciag less. The 
 annual income of the country is thus encroached upon. 
 There is, therefore, not only relatively but absolutely 
 less money in circulation amongst the lower classes of 
 society. Prices are in consequence lowered. But 
 against this tendency is to be set the depreciation of 
 silver, arising from our monometallic standard. When 
 demand declines, owing to the inability to acquire, the 
 greater bulk and production of silver has a reactionary 
 influence upon the almost stationary amount of gold. 
 Silver becomes cheaper. There is, therefore, accruing 
 from the appreciation of gold, a tendency for silver 
 prices to rise. In this way do we find the first endeav- 
 our on the part of the producer to maintain his income. 
 What he loses by his contracting markets he gains by 
 a rise in silver prices. But such a position is not one 
 of stable equilibrium. It is brought about originally 
 by the forcible displacement of British labour, and the 
 consequent contraction of our markets. As one of the 
 ultimate products of this derangement, we get a depre- 
 ciated silver currency. 
 
 Now it is argued by some — and it is worthy of the 
 reader's closest attention — that all the troubles from 
 which we are now suffering are due to this depreciation 
 of silver.^ 
 
 1 But if the view just stated he coiTeot, and the depreciation of 
 silver be the result of two factors, then to ascribe the present distress 
 
318 FREE TKADB UNDER PROTECTION. 
 
 And the remedy which bimetallisfcs propose for the 
 present depression is the exchange of our gold for a gold 
 and silver standard. 
 
 By this means they assert that that gold wotdd cir- 
 culate more freely which now tends to be hoarded. 
 With sUver raised by Act of Parliament to the level 
 occupied alone by gold, the volume of our circulating 
 medium would be greatly increased, and prices would 
 rise. Exchanges would thereby be multiplied and 
 enterprise stimulated. The pressure of capital from 
 above would open up the smallest channels of labour 
 below. There would be greater activity, and therefore 
 a more extended prosperity. 
 
 If such a scheme as this is only designed to tide over 
 present difficulties, it is not improbable but what it 
 might be attended with success. 
 
 It is likely, therefore, to commend itself to all those 
 whose free-trade propensities are derived from prejudice 
 or a fatal necessity. But it is clear to all who take 
 more than a limited view of the course of this "in- 
 creased circulation" that it can only be temporary. 
 By a slight stimulus you are merely deferring the evil 
 day; for, instead of destroying the outside sources of 
 depression, you are rashly increasing the vigour of 
 declining internal forces. We say rashly, because a 
 change of standard wiU not be, if effected, an unmixed 
 blessing. It will be accompanied by evils of its own 
 creation — in short, it will just act like free trade, as a 
 moral agent, operated. We shall witness, in the first 
 
 to depreciation is to ascribe tlie remote eflfect to an intermediate 
 effect, and not, as it ought to be, to the initial source of both the 
 intermediate and remote effects. 
 
FEEE TRADE UNDER PROTECTION. 319 
 
 instance, an increased activity ; and the shallow-minded 
 will think that depression has been swept from our 
 midst. But after a time, when the stimulus has become 
 spent, we shall again experience decline ; and with this 
 decline will be associated the evils of an altered 
 currency. 
 
 But why will depression return, and at no distant 
 date ? Because the demand thus created is a temporary 
 demand, exactly like that " demand " induced by free 
 trade. Does free trade supply us with a constant 
 demand from neutral and foreign markets ? No ; be- 
 cause we cannot produce even cheap enough.^ Our 
 foreign demand depends upon this element. Why, 
 then, did the British manufacturers alter the law in 
 1846? Was it not that, by cheapening the rate of 
 living, they might produce at a less cost, and thus be 
 enabled to undersell their rivals ? This was the inten- 
 tion, but it has not been carried into effect permanently. 
 For nowadays free-trade labour, in spite of the cheap 
 loaf, is dearer, instead of becoming cheaper, than the 
 labour of protective nations.^ 
 
 Thus we see that depreciation of silver, instead of 
 being the cavse, is the result of our hampered trade. 
 So long as there is a great preponderance of silver over 
 gold, and so long as gold rules the price of silver, then 
 silver must become depreciated gradually, and almost 
 imperceptibly. It has depreciated ever since the pro- 
 duction of gold became unremunerative. But it caused 
 
 ' In the case of foreign markets, the heavy duties counteract the 
 cheapness of our goods. In the case of neutral markets, this cheap- 
 ness is met by bounties. 
 
 ^ The main reason of this is found in the fact that foreign labourers 
 are content to live at a cheaper rate. 
 
320 FREE TRADE TOSTDER, FROTECTION. 
 
 no calamitous symptoms.^ Why is it, then, that this 
 factor of the depreciated silver currency should be re- 
 garded as the cause of distress ? Is it to divert atten- 
 tion from the real cause ? or is it to commence a policy 
 of commercial opportunism — a sort of policy which we 
 have seen is so disastrous in other lines of State con- 
 duct? If, indeed, the free-traders are confident that 
 other nations wiU in time foUow the commercial policy 
 which we have begun, then the reason for this oppor- 
 tunist diversion is evident. But it is not at all probable 
 that such an alteration is within a reasonable distance 
 of being accomplished.^ All the facts point to the con- 
 trary conclusion. It becomes all the more urgent, then, 
 to discern not only what a bi-metallic standard will 
 effect, but what other nations are doing ; to analyse the 
 basis upon which this depreciation of silver is afforded 
 a precarious prominence in the causation of distress. 
 
 But regard it in the light that it tends to aggravate 
 a depression brought about by another cause, and that 
 it will have no permanent influence upon our external 
 demand, and you place this factor in its true position. 
 Perceive that this demand for our goods on the part of 
 foreign and neutral markets is determined by separate 
 forces, which, as they originate in State interference 
 can only be met by State interference, and you arrive 
 at the true solution of our manufacturing distress. 
 
 1 This depreciation of silver was in operation before tlie commence- 
 ment of the depression from which we have so long suffered ; hut it 
 was unnoticed, because demand continued brisk. But without a brisk 
 demand, it comes to be regarded as a potent factor. 
 
 ^ And this in face of the recently proposed changes in the American 
 tariff. The new policy is that of making trade more free under protec- 
 tion. And it is on the same lines as Huskisson's reforms. 
 
FREE TRADE UNDER PROTECTION. 321 
 
 Limit your field of inquiry to the several elements 
 which affect this external demand for our goods, and 
 you will very soon reach the central difficulty in the 
 problem of distress. 
 
 It is for this precise reason, inasmuch as it does not 
 affect in a permanent manner our external demand, that 
 the remedy of bimetallism is to be avoided. It will 
 effect a temporary good ; but it wiU also produce col- 
 lateral evils. And when its stimulant effect has disap- 
 peared, we shall then have not only to deal with evils 
 arising from one cause, but also experience a mixture 
 of disasters, springing from a twofold source. 
 
 § 38. The construction of a " political power" out of a 
 " monopoly." — It is one thing to localise a cause ; but it 
 is quite a different one, in political matters, to impress 
 the various classes of society with its importance. It 
 is often asserted that the " people " were effective in re- 
 pealing the Corn Laws. The growing democracy was 
 led by Cobden. But then, on the other hand, it must 
 also be considered that, as society progresses, political 
 power changes its seat. Admit that the preponderant 
 power was made to reside in the " people " in Cobden's 
 times, where is it located now ? Since his days a new 
 class has arisen, not of kind but of degree. Those who 
 subsequently became the income -tax -paying classes 
 were, at the time of the free-trade agitation, compara- 
 tively a small class to what they present nowadays. 
 The authority wielded by this class is very great, but 
 it is very unequal in different sections. There can be 
 little doubt that the larger part are suffering from the 
 burdens of taxation. Both with the depreciation of 
 
322 FREE TRADE UNDER PROTECTION. 
 
 silver and the lowering of prices, they find that their 
 present incomings bear a greater proportion to their 
 outgoings than they did when prices were high and the 
 country in a general state of activity. Allow, for the 
 moment, that an income of £600 twenty-five years ago 
 is equivalent to £400 to-day, from the depression of 
 manufacture and its collateral effects, do taxes diminish 
 in the same ratio 1 On the contrary, they rise ; for, as 
 we are told, with the increasing wants of society, " as 
 progress is effected," the expenditure of the State has to 
 be increased. This misfortune does not affect all the 
 sections of the great middle class. It does not affect 
 the brewers and the public-house interest ; it does not 
 affect all those who have a monopoly of prices — the 
 master-butchers and the fish merchants. But it affects 
 adversely all those who produce articles which have a 
 reduced demand, as well as those whose fixed incomes 
 suffer from the general stagnation of busines. Hence 
 the opposite accounts of a serious state of commercial 
 affairs ; and this state asserted by some to be non-ex- 
 istent even, or, if allowed, by others, extravagantly 
 overrated. The opinion of the individual is coloured, 
 according to the degree in which he finds his resources 
 contracting. 
 
 But the statement that the verdict of 1846 was the 
 result of the " popular will " may be contested. And 
 on these grounds. Everybody knows the influence 
 then exercised by the manufacturers. They had only 
 to discover to their labourers the share which their 
 class would receive from the spoils of the new policy, 
 and they were assured of their support. Pressure, too, 
 might be brought from another direction. If they, the 
 
FREE TEADE UNDER PROTECTION. 323 
 
 labourers, did not support their masters on this occa- 
 sion, so great had hecome the difficulty with which the 
 manufacturers had to contend in foreign markets from 
 the rivalry of the foreigner, their wages would inevitably 
 have to be reduced. Now, no question can be made 
 that this difficulty, assumed (as we know from the state 
 of exports) either speciously or ignorantly, was widely 
 entertained.^ And what we have just stated is the 
 logical conclusion of that opinion. 
 
 If the manufacturers exercised so much authority in 
 1846, are they stiU masters of the same amount ? By no 
 means. Their attitude to the labourer has changed with 
 the change in the surrounding conditions of the national 
 labour. Besides, the chief power has shifted from off 
 the shoulders of manufacture and her dependants into 
 the arms of the income-tax-paying classes, of which 
 there are two chief sections. We have the brewers and 
 the licensing system, with a monopoly or two on the 
 one hand ; and the producers of goods other than neces- 
 saries, and those enjoying fixed incomes, on the other. 
 The present fiscal arrangement suits the interest of the 
 former, for it is by the continuance of the malt-tax that 
 the prices of both beer and butcher's-meat are main- 
 tained. And thus do we perceive the anomaly of a 
 section of the community deriving aid from State inter- 
 ference, when that assistance is denied to interests of far 
 higher importance. To what end, except for the purpose 
 of buying political support, is doubtful. But in the 
 
 ^ In Huskisson's times the manufacturers made complaint of the 
 opposition they experienced, both from the United States and Ger- 
 many. That statesman's advice was, to foster the interests of their 
 labour, to regard its eq[uable advancement, and to prevent it from be- 
 coming too rapidly dearer than that of their rivals. 
 
324 FEEE TRADE UNDER PROTECTION. 
 
 case of the latter section, a rearrangement of our fiscal 
 system would be beneficial. Two forces therefore appear, 
 whose tendencies are opposite, and whose respective 
 strengths are difficult to estimate.^ 
 
 But when the question comes to be openly discussed, 
 the direction which the " popular will " inclines to take 
 will be narrowly scrutinised. Leading demagogues 
 have followed the advice of Cobden, and make use of 
 other political weapons besides the 40s. franchise. If 
 the people have come, before they are properly imbued 
 with the sense of responsibihty, to exercise the authority 
 which belongs to them in a selfish manner — if they act 
 in haste and ill-advisedly — who is at fault? Not the 
 labouring classes. It is the Eadical party, which, with 
 the help of borrowed spoils, has, for its own ends, forced 
 their growth. Had their material wellbeing been 
 assured, then political advancement would have been 
 added in due course (and it matters not by which party 
 in the State) to their social improvement. But as 
 matters stand at the present, this power of the democ- 
 racy is likely to be turned towards selfish ends, for 
 the plain reason that discontent prevails amongst them, 
 arising from decline in their material prosperity. And 
 now we can see that the alteration in our policy, or our 
 free-trade •policy, as it is called, performs, in the end, 
 only part of its prescribed functions, and does it im- 
 perfectly. But do we find the labouring classes of to- 
 day at the same low intellectual level in which Cobden 
 
 1 Free trade in corn and some other commodities prevents the nation 
 from producing as much as it may. But protection to beer makes a 
 single interest grow fat at the expense of the general community, whose 
 productive powers have been and are still becoming further diminished. 
 
FREE TRADE UNDER PROTECTION. 325 
 
 found them ? No ; the forces of progress (of which 
 free trade is erroneously considered to be the chief) have 
 elevated their moral, social, and mental surroundings. 
 They are as much in front of their predecessors in 1846 
 as the latter were in front of the labouring mass in the 
 time of the first Sir Eobert Peel. Now it is those inherent 
 forces, we maintain, which have been rudely interfered 
 with by the action of free trade. Cobden appealed to the 
 intelligence of the people ; but then any one who agreed 
 with Cobden was regarded by him as an intelligent per- 
 son. He did not, however, flatter their judgment. And 
 it is upon that judgment that the case of protection will 
 largely rest. The people in Cobden's days were not in a 
 position to advance a reliable opinion on the question of 
 free trade. They trusted the judgment of their leader. 
 It is not a difficult task to discover the many sources of 
 error which pervade the whole of Cobden's work — errors 
 of fact and errors of anticipation.'- These are so import- 
 ant in their nature that they are worthy of a separate 
 treatment. But if in 1846 the labourers suffered under 
 this disability of not being able to discern the false and 
 uncertain bases on which his conclusions were supported, 
 in 1888 they are able to estimate the precise value of 
 this piece of information, " that events have not fallen 
 out according to his expectations." They may with 
 
 ^ We quote Sir Robert Peel : " To this and many other questions 
 connected with the subject [the Corn Laws] no satisfactory answer can 
 be given. We must legislate on speculation and conjecture, and on 
 assumptions which rest on no satisfactory data." — Memoirs, ii. 349. 
 One of the errors of fact was that ' ' high rents produced high prices." We 
 have seen rents maintained and prices falling. The errors of anticipa- 
 tion are in the main two : (1) that all nations within five years would 
 become free-traders; and (2) that our agriculture would be stimulated by 
 a free intercourse in corn. 
 
326 FREE TEADE UNDER PROTECTION. 
 
 facility put themselves in direct comnninication with 
 those passages in Cobden's speeches, in which he fore- 
 tells the consummation of his dreams, " that other 
 nations would become free-traders."^ 
 
 If such, then, be the case, and there can be no doubt 
 of its accuracy, we have to deal now with a set of con- 
 ditions which Cobden never even hinted at as being 
 possible. 
 
 The people, or part of the people, trusted their leader's 
 judgment. That judgment was unsound. But it re- 
 quired time to prove it. The free-traders of to-day 
 reply, that our partial free-trade system is beneficial to 
 the country. The choice, therefore, has to be made 
 between "Cobden's ideas of free trade and present 
 ideas," between " Cobden's universal free trade and 
 his successors' system of free imports." Who can 
 question the fact that out of the so-called free-trade 
 prosperity much political capital was made, and that 
 it was by falsely assumed effects that the Gladstonian 
 party was maintained so long a period in power ? And 
 who can doubt but that upon the security of free-trade 
 doctrines depends the vitality of what once was a great 
 party in the State ? 
 
 The political implication of the problem is thus of 
 large importance. There is reason, therefore, why the 
 Eadical free-traders give political answers to eco- 
 nomical questions. The malt -tax is the tax which 
 blots the " fair pages " (so they describe it) of their 
 free -trade work. The free-traders sacrificed in suc- 
 
 1 The prediction was more than once uttered by Cobden, vide 
 Speeches, pp. 207 and 242. It was not a mere boast, but a " belief," 
 therefore. 
 
FREE TRADE UNDER PROTECTION. 327 
 
 cession all those interests which had been, from 
 the paper interest down to the interest of our sugar- 
 refiners, supported by the immediate and powerful 
 assistance of protection. By protecting the interests of 
 the brewers and the licensing system, they succeeded in 
 raising up a vast political force. By its means they 
 diverted popular attention into the channels of political 
 reform. The final effort was one which was intended 
 to make the Liberal party supreme — to destroy Con- 
 servatism, and to create a parliamentary dictator. But 
 that effort was neutralised by " redistribution." Now 
 it is quite possible that this final struggle for a new 
 lease of political existence was the result of exhaustion, 
 from past endeavours to pander to the assumed wants 
 of the multitude. And that, being unable to convert 
 any more " fixed " into " floating " capital (which af- 
 forded Mr Gladstone the opportunity of reducing the 
 three and a half to three per cents) by the mass of 
 money thrown upon the markets ; being unable any 
 further to cause a miserable cheapness of goods, to the 
 detriment of the small trader and to the injury of the 
 national labour, — the free-trade economists left the field 
 of finance, and, to acquire an unworthy power, whereby 
 to support their fiscal revolution, pointed to reform in 
 the constitution of the country. Invested with this 
 power, which might bring them back to the government 
 of the people, or at least arrest any attempt to repair 
 the havqc done to the sources of the national wealth, 
 they occupy at present an uncertain position. And it 
 seems to be their desire to achieve by popular enthu- 
 siasm what they cannot gain by the instrument of 
 reason. 
 
328 FREE TRADE UNDER PROTECTION. 
 
 The hollowness of such a procedure will be evident 
 to the impartial. The mass of the people, if uninflu- 
 enced by false enthusiasm and arguments constructed 
 to inflame their imagination, find themselves in an 
 equivocal position. But let them discern the trick 
 which produced the appearance of prosperity without 
 the substance. Let them learn that all those financial 
 changes were changes which affected solely the prin- 
 cipal organs of the distribution of wealth, and that they 
 directly injured the sources of production. Let them 
 decide whether or not a nation can continue prosperous, 
 the sources of whose annual income are constantly 
 diminishing. Let them revolve these matters, and per- 
 ceive that but one choice is open to them — the choice 
 between " production " and " distribution." 
 
 § 39. It is more important for the labourer to regard 
 himself as a producer than as a consu7iier. — It was cer- 
 tainly a strange sort of " ideal " policy which excluded 
 the most important element of all from its scope of 
 action. " Protection," whatever else might be assumed 
 concerning it, at least tended to effect a due proportion 
 between the functions of production and distribution. 
 By the protection of industries, even the most insignifi- 
 cant, the results of the circulation of capital were ex- 
 perienced in the narrowest channels of labour. Prices 
 were relatively high, but the employment of labour 
 was ensured! 
 
 But as soon as a reimposition of duties is mentioned, 
 the free-trader plunges into a vivid description of the 
 horrors of war. Does the free-trader suppose that our 
 system of free imports tends to keep off war from us ? 
 
FREE TEADE UNDER PROTECTION. 329 
 
 He must indeed be more than confident who trades in 
 such dangerous falsehoods ! By growing our own corn, 
 we should throw much of foreign corn-land out of cul- 
 tivation.^ We thereby do an injury to our neighbours, 
 who have expended their capital on the expectation 
 that our free-trade system would remain a permanent 
 one. Now, to estimate the nature of that injury, we 
 must inquire, What was the condition which determined 
 this country to receive the corn of other countries ? This 
 is an important consideration, as we shall endeavour to 
 show. 
 
 The British Parliament was led, from motives of ex- 
 pediency, to permit the entry of foreign corn. But there 
 was, in the background, the anticipation that, if we 
 showed the way in freeing our trade, all other nations 
 would follow our example. So that Cobden's descrip- 
 tion was taken to be the basis of the initial progress of 
 a universal free trade. " We take your food ; and you 
 take our manufactured goods in return. The principle 
 of exchange is equality. You take a certain value of our 
 goods, and, in return, we take an equivalent of your corn." 
 
 And here we may allude to another of the interesting 
 products of free trade. By telling the nation that it 
 was to our interest " to buy in the cheapest market 
 and sell in the dearest," Cobden impressed many with 
 the soundness of his views. Our selling markets would 
 be dear, because we should have no competitor ; our 
 buying markets would be cheap, because many nations 
 would compete for our corn demand. 
 
 ^ la it not a fact that our manufacture has been checked through 
 the imposition and increase of foreign duties ? There can be no injus- 
 tice, therefore, in taxing corn. It is but a proper retaliation. 
 
330 FREE TRADE TJNDEE, PROTECTION. 
 
 The anticipation has not been verified. Those " other 
 nations" of Cobden have seen through the trick of 
 attempting to divert competition all into our own 
 favour. For if any other nation bought our manu- 
 factures dear and sold its corn cheap, how could it be 
 said, on the doctrine of free trade, to buy ia the 
 cheapest market, when it buys only in one ; and to 
 sell in the dearest market, when it has to compete 
 with others for the privilege?^ 
 
 If it was on this expectation that the British people 
 were persuaded by the artifices of a leader desirous of 
 fame to risk their material prosperity, surely it is in the 
 power of that people to reverse ^ their former decision, 
 when they learn that the expectation has not been 
 fulfilled, and that our partial system of free imports is 
 injurious to the interests of labour. 
 
 But a party stands between the employment of the 
 British labouring classes and starvation — a party com- 
 mitted to the free-trade doctrines, all which, because 
 they are universal, are not equally applicable to suc- 
 ceeding, and oftentimes so altered as to be new, sets of 
 conditions. And that party threatens ^ the nation with 
 evils worse than those which it at present experiences. 
 Not only will war be directly fostered, but our exports, 
 at present in a deplorable condition, will be further 
 decreased. But can our export trade be under worse 
 
 '■ I.e., Cobden did not place other nations in England's position. 
 He treated the problem from our, not from their point of view. 
 
 ^ Cf. Cobden, p. 253 : "If events should happen to change the 
 circumstances of the country, there is no reason why we should not 
 next year reverse the decision we may come to in the present." 
 
 ' The old stoiy of threats and menaces handed down from Cobden. 
 
FEEE TRADE UNDER PROTECTION. 331 
 
 conditions than it is ? Protective nations take what 
 they want of us, and no more. If we place a duty 
 upon their goods, it by no means follows that we shall 
 produce less, and supply them with less. Not certainly 
 till they are self-supporting will this be effected. On 
 the other hand, by conserving our interests, and draw- 
 ing our colonies into a closer commercial union, it is 
 more than probable that our export trade would be 
 increased. 
 
 But in the meantime, while other nations are con- 
 serving each its own interests ; while the chances of 
 mutual free trade and universal peace are as distant 
 as ever they were, — it suits the policy of a party which 
 has commenced the descent from its high position of 
 popularity to keep the labour of the country unem- 
 ployed. 
 
 But it is for the labourers to choose whether they 
 shall have as full employment as their case admits of, 
 and not be scared at the many delusions originating 
 from high prices, or have provisions at a cheap rate and 
 starve. "Whether they will protect the sources of labour, 
 and create a general circulation, or contribute only to 
 the circulation of capital amongst the wealthy classes. 
 Whether, lastly, they will prefer internal cohesion, with 
 all the chances of war (nor are these directly affected 
 by commercial policies), to the alarming spectacle of 
 internal disorder, induced by the exhaustion of the 
 national resources. 
 
 Eichard Cobden taught the masses to look forward 
 towards an increase of their political power. But that 
 power, it will be conceded, can never be wielded sue- 
 
332 FREE TRADE UNDER PROTECTION. 
 
 cessfully unless it is supported by material prosperity. 
 For if it is exercised in the promotion of extravagant 
 and partial measures, it will with certainty be op- 
 posed. The nation was on the brink of a civil com- 
 motion in 1846.1 For " free trade," this worst of all 
 national calamities was hazarded. It was met by 
 concession. 
 
 But even changes in the surrounding conditions of 
 political parties, and the foundations of law and order, 
 have come about since that time. The democracy may 
 be urged headlong by impetuous and selfish leaders ; 
 but the greater part of the middle classes are steadily 
 opposing its violent course. Besides, the system of 
 organisation has been absorbed into those institutions 
 which preside over the maintenance of law and order in 
 the community. As times change and improvements 
 continue, these become all the stronger. But the con- 
 sideration of these important matters does not deter 
 the demagogue from rashly staking all success of his 
 schemes upon a single throw. In a former time he 
 effected a destructive cheapness, and bought popularity. 
 In another dress, to-day, he would convince the labour- 
 ing classes that they have the same power they were 
 supposed to have in 1846. But let them not be mis- 
 taken. The source of that power was in the manu- 
 facturers. 
 
 There is sufficient reason, then, for the working classes 
 
 ^ So thought the Duke of Wellington and many others. The noble 
 Duke had, as he thought, to decide between the Corn Law and the 
 Queen's Government. Although he recognised the utility of the Com 
 Law, he abandoned it for the cause of order. 
 
FREE TRADE UNDER PROTECTION. 333 
 
 to reconsider their position. And if free trade makes 
 them accurately regard their condition from strictly 
 economical, social, moral, and political points of view, 
 it will have been the means of ensuring contentment 
 and prosperity to future generations at least, if not to 
 their own. For prosperity will require time for its pro- 
 duction. And a sure prosperity is of slow growth. 
 
INDEX. 
 
 ABTrNDANOE — depends upon favourable conditions, 42; "Plenty is 
 our motto " (Cobden), 106 ; sought after by free-traders without 
 reference to demand for labour, 44 ; one of the intended results 
 of free trade, 41 (note) ; taxes interfered with, 248. 
 
 Ambiguity respecting, 109 ; labouring classes hindered from acquir- 
 ing, through excessive imports of foreign goods, 40. 
 
 Promise of, nullified in 1887, 109 ; associated with low price of 
 bread, 118 ; commencing to decline as regards wheat, 121. 
 AeRiouLTTJEAL Labotjkers — demand for their labour to be increased 
 by a free trade in com, 53 (note) ; to have four millions more to 
 spend upon manufacture, if bread were made cheap, 137 ; how 
 Cobden gained them over, 87. 
 
 Forced to desert the soil through unequal competition with foreign 
 producers, 16. 
 
 The rise in wages of, 291. 
 AGRicuLTtTRE — Cobdeu and the corn-producing capacity of British 
 soil. 111 (note) ; destroyed by protection, 88. 
 
 Free trade to increase by one-fourth the produce of the soil, 103 
 (note). 
 
 Injured from the very first by free imports of corn, 39. 
 
 The natural protection to, 73 ; has disappeared, 76 ; no nation can 
 be prosperous without a flourishing, 261. 
 
 Gain to, resulting from campaign in Crimea, 290 ; loss from free 
 imports (1860-1865), ib. (note). 
 Aristockact, the — their tyranny, 116 ; ground down the wages of 
 labour, 92 ; grew rich at the expense of the national labour 
 interests, 209 ; Cobden aimed at lessening political influence of, 
 237. 
 
 Cobden's charges against, founded on error, 54 el seq. 
 
 Barboub, Mr D. — ' The Theory of Bimetallism ' quoted, 5. 
 Bimetallism— a remedy for depression, 318 et seq. ; would be followed 
 by evils of its own creation, 321. 
 
INDEX. 335 
 
 BoTJNTT System — ^used by the foreigner as a means of retaliating, 
 
 166. 
 Bread — cheapness of, and prosperity of labour, synonymous according 
 to Cobden, 150; effect of cheap, upon producers, 277; low price 
 of, and low wages, 309 ; "at famine prices," used by Cobden to 
 inflame the people, 257. 
 Dear between 1850 and 1860, yet labour prospered, 177. 
 With decline in price of, appear stationary exports, ] 78. 
 Effort to raise the price of, received with ridicule, 305. 
 Bebad-kiots — value of, as indicating character of social distempers, 
 
 95 (note) ; the outcome of Chartism, 117. 
 Bright, Right Hon. John — the richest and most powerful class not 
 to sacrifice the rights of a whole people, 90 (note) ; free trade, the 
 commandment of God, 124 (note). 
 Sentiments of, concerning British agriculture, 86 ; no nation can be 
 
 prosperous without a flourishing agriculture, 261. 
 An advocate of the general reduction in wages, 51. 
 Bullion — increased in Bank of England, 1850, erroneously ascribed 
 by free-traders to action of free trade ; in reality the result of the 
 withdrawal of capital from agriculture, 184. 
 Burke, Edmund^ — on the side of making trade more free under protec- 
 tion, 241. 
 
 Caienes, the late Peofessor — opinion concerning the nature of 
 prosperity, 54 ; and of rent, 79. 
 Biassed by primary and favourable operation of free trade, 46 (note). 
 
 Capital — diverted from less (agricultural) to more (manufacturing) 
 remunerative sources, 1850, 186 (note) ; acquired by a free trade, 
 70 ; foreign consumption to, averse of labouring interests at 
 home, 270. 
 
 Capitalists — free trade created a brood of, 279. 
 
 Chartism — originally political and opposed to free trade, 54 (note) ; 
 Chartist leaders did not demand any alteration in the Com Laws, 
 95 (note) ; took advantage of high prices of bread to advance their 
 ends, 117 (note). 
 
 Cleveland, President — recent reforms of, erroneously styled a free- 
 trade policy, 164 (note). 
 
 Cobden, Richaed — denounced trade under protection as not legiti- 
 mate because English exports were exchanged for the railway 
 shares and State bonds of other countries, 4 (note) ; protection, 
 the destroyer of agriculture, 88 ; the farmer's friend, 71 ; his 
 "natural regulator of trade has broken down, 246. 
 An advocate, not a judge, 87 ; his insolent attitude towards the 
 
 aristocracy, 13 (note) ; nis contempt for the protectionists, 89. 
 The means he used to advance the national cause unsound, 16 ; and 
 
 insecure, 172 ; but his end-object praiseworthy, 99, 161. 
 His errors, 54 ; misapprehension respecting Huskisson, 62 ; and the 
 Corn Laws, 14 ; did not refer to contracted currency as a cause of 
 distress, 28 ; thought erroneously that home industi-ies were de- 
 pressed owing to nigh price of bread, 56 ; supposed that cost of 
 transit of wheat from foreign ports would always remain the same, 
 
336 INDEX. 
 
 105 ; reticent regarding the evils of speculation, 114 ; did not 
 properly regard the unfortunate policy respecting the silk duties 
 in 1824 and 1826, 30 ; wrong in supposing that a principle which 
 suited England's trade would likewise benefit other nations, 
 301. 
 
 Not statesmanlike to degrade prices, 41 ; accused Sir Eohert Peel 
 of attempting to degrade prices, ib. ; his tariff not to reduce, 
 by one farthing, the price of articles of consumption, 149 ; free 
 imports to destroy the source of fluctuation in the price of wheat, 
 70, 119. 
 
 Demand for agricultural labour to he increased, 53 (note) ; with 
 low price of bread, the agricultural labourers to spend four 
 millions more upon manufactured goods, 137 (note) ; British 
 agi-iculture to become unrivalled, 152 ; his position regarding 
 the labour market assailed by fact that agricultural labour has 
 been displaced in opposition to what he predicted, 53; did not 
 differentiate between occasional and permanent demands for 
 wheat, 102. 
 
 Home market the mainstay of the manufacturers, 136 (Husldsson 
 believed the foreign market to be the goal of the manufacturers) ; 
 land not to go out of cultivation, and manufacturers not afraid of 
 competition, 150. 
 
 States, in one place, that increased price of bread came out of manu- 
 facturers' profits, 12 (note) ; and in another, that it was paid for 
 by the labourers, 64. 
 
 His central error in believing that high rent caused high price of 
 corn, 13 ; this doctrine repudiated by all economists, 54 ; belief 
 that all nations would become free-traders, 326. 
 
 Character of his comprehensiveness, 108 ; his enthusiasm, 62 ; in- 
 tentionally confused protection practised with a due and proper 
 regard to the established interests of the .country, with monopoly, 
 188 ; his factor — cheap bread — did not come into operation till 
 after 1860, 181 (note) ; did not foresee all the events of his reform 
 — price of butcher's-meat becoming a monopoly price, 149 ; en- 
 deavoured to persuade other nations to accept free trade, 276. 
 Commission — ^the Royal, to inquire into the depression of trade, 81. 
 Competition — " cheap bread will make us compete better with our 
 rivals," 10 ; drives labour and capital from less to more remuner- 
 ative sources, doctrine of the free-traders, 11. 
 
 All competition not beneficial, even in the same country, held by 
 Lord Overstone, 11 (note) ; nor when open to rival countries, 32 ; 
 amongst labourers rendered more severe by free imports, 271. 
 
 The free-traders have no wish to preserve what cannot bear the 
 climate of healthy competition, 193 (note) ; what makes it unequal, 
 
 ^lo. 
 
 Consumers — favoured by unequal free trade, 270. 
 
 CoEN Laws, the— discussed by London merchants in 1821 ; reason 
 why repeal of, not agitated before 1837, 24 ; their removal not to 
 throw an acre of land out of cultivation, 34 (note). 
 The main cause of distress in this country— free-trade view, 93 ; not 
 a cause of distress — Huskisson, 134. 
 
INDEX. 337 
 
 Abused in order to further free-trade policy, 213 ; true nature of, 
 203. 
 
 Repeal of, not economical but political, 213 ; effected by a surrender 
 of judgment, 226. 
 CUEKENCY — the state of, abnormal or improper, before 1846, 24 (note 
 — Lord Overstone) ; regulated according to the supposed wants of 
 commerce, ib. ; interfered with the true price of wheat, 7. 
 
 Additions to, a source of prosperity, 5 ; the contracted, not men- 
 tioned by Cobden, 1845, 27. 
 
 Additions to, increase wages, 306 (note). 
 
 Demand — development of the railway and the discovery of gold did 
 not artificially stimulate, 8 ; free trade did artificially stimulate, 
 87, 117. 
 Foreign, for British manufactured goods incompletely supplied 
 under protection, 9 ; artificial demand induced by free trade 
 not constant, 36 ; results of that artificial demand, 145 ; foreign, 
 the chief source of the manufacturers' profits (Huskisson), 136 (note). 
 Differentiation between occasional and permanent, for wheat not 
 undertaken by Cobden, 102. 
 
 Depression — analysis of, 16 ; under protection, occurring suddenly, 
 but of comparatively short duration ; under free trade, slowly 
 coming on and exhibiting chronic tendencies, 2 (note), 269 ; de- 
 pression under free imports not comparable with depression under 
 protection, 38 ; causes of, understood under protection, ib. ; character 
 of free trade, not discussed by free-traders, 39 ; new source of, 
 introduced by free imports, 40 ; free trade in corn to remove agri- 
 cultural, 103 ; depression induced by free imports increased on 
 the whole, though checked at times, 204 ; and the depreciation of 
 silver, 317 ; to be swept away by free trade, 256. 
 
 Dekby, the Right hon. Lord — the loss entailed upon agriculture, 
 278. 
 
 DisEABLi, Benjamin (Lohd Beaoonsfield) — disputed soundness of 
 free-trade doctrines in 1851, 312. 
 
 Distress — agricultural and manufacturing, alleviated, 80; "cheap- 
 ness without demand," a sign of, Huskisson, 44 ; with "increas- 
 ing" exports under protection, 45; with "diminishing" exports 
 under free trade, ib. ; agricultural, due to inability of farmer to 
 cultivate the soil, from want of capital (Cobden) ; manufacturing, 
 duo to high prices of wheat, 107 ; from over-trading and a want of 
 credit, 134; ought not to be treated from the political, but strictly 
 economical point, 311. 
 
 Distribution — proper proportion between production and, maintained 
 by protection, 328. 
 
 Duties — on raw materials, removed, 212 ; manufacturers gained 
 thereby directly, the country indirectly, ib. ; some foreign, at 
 present day, stand higher than our silk duties before 1824, 218 ; 
 styled "letters upon trade" by free-traders, 219 ; three stages in 
 progress of, 221 ; all consequences of remission of, not foreseen, 
 237. 
 
338 IISTDEX. 
 
 Economic Problems — not susceptible of exactness, 132 ; necessity of 
 distinguishing between assumed data and the actual factors, 133 ; 
 not ideal, ib. 
 Economists, the Ideal — not in touch with what is going on around 
 them, 123 ; axioms of, nothing but assumptions, 126 ; confusion 
 between theory of, and practice, 133 ; their paper arguments, 196. 
 Effects, the intekmixtuee of — difficulty of ascertaining true cause 
 
 from, easy to put forward a false one, 183. 
 Emigration — increased after 1850, in contradiction to Cobden's fore- 
 cast, 264 (note). 
 Exchanges — between nations of equal value, the free-trade doctrine, 
 4 (note) ; free trade makes, unequal, 300. 
 Equal, to be effected by reciprocity, 301. 
 Exports — a flourishing export trade regarded as the sign of prosperity 
 by protectionists, 267. 
 Increased value in 1850 and succeeding years to 1873, not altogether 
 due to increased volume, but part of it due to higher prices, 45 ; 
 relative shrinking of, since 1875, ib. 
 Under protection, rose with moderate imports; under free trade, 
 
 stationary with excessive imports, 143 (note). 
 Increased under protection proportionately to increased population, 
 261. 
 
 Farmers — blamed by Cobden for not expending sufficient capital on 
 the cultivation of the soil, 82 ; Cobden the friend of, 87. 
 
 Farebr, Sir T. H. — reference to revival of trade in 1879, 37 ; admits 
 depression, since 1880, to have assumed symptoms of a chronic 
 character, 3 (note) ; the country is flourishing under a system 
 of free imports, 33 ; the advancing export trade of protective 
 nations, 117 ; British exports declining, 179 (note). 
 The action of free trade, 129 ; free trade acting with less force, 
 162. 
 
 Fawoett, the late Professor — believed free trade and . prosperity 
 to be directly associated, 54. 
 
 Free Imports — our free-trade system reduced to a state of, 32 ; illus- 
 tration, 33 ct seq. 
 
 Free Trade— not alone responsible for unparalleled prosperity be- 
 tween 1850 and 1866, 18 ; its indirect action, 56 ; direct effects 
 of, 65 ; action of, differently explained by Cobden and his suc- 
 cessors, 19 ; to raise up a permanent prosperity, 38 (note) ; to 
 dismiss pauperism, 142 (note) ; moral influence of, 87, 134, 217 ; 
 not only has induced a major interruption in the course of our 
 trade, but also induces minor interferences as well, 47 ; drives 
 away capital, 85. 
 Never acted alone, 7 ; not acting with the same force, 162. 
 Attitude of surrounding nations to our partial free trade, 263 ; it 
 was to have become universal, 326 (note). 
 
 Free -Trade League, the — munificently supported by manufacturers, 
 13. 
 
 Free-Trade Question, the — political aspect of, 277; not properly 
 placed before the country in 1845, 278. 
 
INDEX. 339 
 
 Freb-Teadbrs, the — claim their cause to be "just and righteous," 
 3 ; arrogant attitude of, towards landed proprietors, ib. ; endeav- 
 oured to remove fetters from industries, instead of which they 
 have increased them, 44 ; advanced interests of labourers in one 
 generation, retarded them in the next, 51 ; do not treat problem 
 scientifically, 123, 283 ; allow protectionist explanation of pros- 
 perity, 126 ; did not foresee consequences of competition when 
 unequal, 186 ; their incomplete arguments, 310. 
 
 Free-Trade Theory, the new — prosperity to be measured by im- 
 ports and exports combined, 265. 
 
 Free Trade, Universal — to break down barriers between nations, 
 141; some nations would gain more than others by, ih.; diffi- 
 culties to be encountered under, 144 ; would have made this 
 country supreme in manufacture, ib. 
 
 Gladstone, Right Hon. W. E.— "in the long-run, imports and ex- 
 ports are equal, "19 (note) ; opposed by Cobden and Bonamy Price, 
 ib. ; "imports immediately paid for by exports," ib. ; in 1843, 
 stated that free-traders broke down one monopoly in order to 
 erect another one, 47 (note) ; opinion (1844) that the Com Law 
 of 1842 had been most successful in its operation, 75 ; extended 
 policy of free trade, 197; converted "fixed" into "floating" 
 capital, and so reduced three and half to three per cents, 327. 
 
 Good, W. W.— tables quoted, 268; the farmers, their diminished 
 income and the income-tax, 290, 291 (note). 
 
 Haggard, Mr F. T.— quoted, 46; free imports displace British 
 labour, 162. 
 
 Holland, Dr Calvert— quoted, 67 ; refutes M'CuUoch's opinion 
 that a fixed duty would do away with the evils of the Corn Law, 
 ib. ; gives cost of transit of wheat from Danzig at 3s. 6d. per 
 quarter, 105 (note). 
 
 Home Markets — no fear of being undersold in, 197. 
 
 HowORTH, Mr — free imports not beneficial to manufacturing inter- 
 ests of the country, 162 (note). 
 
 HxrSKissoN, William — his policy of making trade more free under 
 protection, 218 ; misunderstood, 20 ; disastrous results following 
 reduction of silk duties, 30 ; on the exportation of home-grown 
 wool, 214. 
 All improvements of, based upon reciprocity, 169, 302 ; the uncer- 
 tainty of the action of principles, 196 (note). 
 Endeavour of, to secure steady prices to consumer, 44, 282 ; refers 
 to influence of corn speculators in effecting sudden changes in the 
 price of wheat, 60 ; quotes cases in which the price of wheat was 
 20s. higher a fortnight before than it was immediately after the 
 harvest, 67; blamed corn merchants for errors in judgment, 110. 
 The Corn Law necessary to prevent the country from being swamped 
 with foreign corn, 93 ; not the cause of distress, 134 ; Warehoused 
 Corn Bill, 110. 
 Protected the sources of labour, 170 ; the wages of labour ought not 
 to undergo sudden fluctuations, 175 ; no analogy between corn 
 
340 INDEX. 
 
 and cotton, 121 (note) ; did not influence consumption at the 
 expense of production, 282. 
 Difficulties he had to deal with, 204 (note) ; treated free trade from 
 commercial view alone, 284 ; absti-act free-traders opposed to, 282. 
 
 Industries — home, injuriously affected by free imports, 36 ; weak 
 
 ones to go to the wall, 123 ; the "natural," of Cobden, 122 (note). 
 Three stages of manufacturing since 1850, 189, 190 ; agricultural, 
 
 gradually undermined since 1850, 199. 
 Manufacturing and agricultural, opposed to one another (Cobden), 
 
 advanced concurrently (Sir Robert Peel), 220. 
 Attempt of British manufacturers to swamp foreign manufacturing, 
 
 260. 
 Imports — demand for, in Cobden's scheme to stimulate home markets, 
 
 143 ; excessive, due to foreign wheat, 259. 
 
 Jevons, the late Professor Stanley — free trade and prosperity 
 directly associated as cause and effect, 54; high rents do not cause 
 high prices, 79. 
 
 JiTDOMENT — importance of independent, in leaders, 224 ; the surrender 
 of, effected repeal of Corn Laws, 226. 
 
 Labotte — its high price in this country, a drawback to the extension 
 of manufacturing enterprise, 10 ; demand for, diminished by in- 
 creased production and by mechanical improvements, 262 ; to be 
 improved by free trade (Cobden), 281 ; not encroached upon by 
 Huskisson, ib. ; importance of improving, 212. 
 British labour cheapened by free trade, 56 ; not equally advanced 
 by Cobden's reform, 58; cheapness of provisions without demand 
 for, a sign of distress, 281 ; intere.sts of, injured by consumption 
 of some British capital in foreign countries, 266 ; determination 
 of, to towns, 290. 
 Free trade, dearer than protective, 319. 
 
 Lloyd, Mr Sampson — the system of free imports antagonistic to 
 national welfare, 162 (note). 
 
 Manchester School, the — real object, "manufacturing supremacy," 
 85 (note) ; selfish policy of, 90 ; triumphant (?), 184. 
 
 Manttfactttrers, the — worked upon the temporary self-interest of 
 their labourers, 12 ; believed their policy to be adverse to agricu'- 
 ture, 68 ; profits of, higher than those of the landlord and fanner, 
 64; selfishness of, how concealed, 116; miscalculations of, 135 
 (note) ; attempt of, to monopolise foreign markets, 140 ; accusa- 
 tion against, rests upon three charges, 158, 159 ; object of, to 
 obtain cheap bread, 215. 
 
 Markets — free imports tend to destruction of weak, 260 ; if they can- 
 not bear healthy competition, are to go to the wall, 193 ; the ex- 
 change of, by mutual free trade, 261. 
 
 M'Cullooh, J. R. — thought that fixed duty would do away with evils 
 of the Corn Laws, 67 (note) ; on the difficulties surrounding the 
 importation of wheat, 94 ; cause of the glutted markets, 135 ; 
 
INDEX. 341 
 
 troubled state of times (1845) due to political and not economical 
 causes, 181 ; his change of front, 96 (note) ; did not separate the 
 two factors, but weighed them as a whole, 224 ; no limit to the 
 production of corn abroad, 185 ; judgment regarding corn problem 
 of, 1841, opposite to that expressed in 1830, 253 (note). 
 
 Melbotjene, Lord — description of free trade as the maddest of all 
 mad courses, 119 ; nothing to give, after the repeal of the Corn 
 Laws, 155 (note). 
 
 Mill, John Stuart — authority of this ideal economist diminished by 
 the circumstance that he was biassed by the unparalleled prosperity 
 which almost immediately succeeded the introduction of free trade, 
 46 (note) ; mistaken with regard to true relation between pros- 
 perity and free trade, 54 ; opposed to Cobden respecting relation 
 of high prices and high rents, 79. 
 
 Monopoly — attempt of British free-trade manufacturers to monopolise 
 foreign markets, 270 ; supremacy of British manufacturers in 
 foreign markets wrested from them by, 148 ; free-traders at- 
 tempted to displace one monopoly by another, 47 ; in land to be 
 destroyed, 237. 
 Of landed interest to be destroyed by free trade, 272 ; in corn bene- 
 ficial to British public, ib. ; faults of system of, laid at door of 
 protection, 188 ; synonymous with protection, 188 (note) ; the in- 
 creased price of butcher's meat the result of, 149, 272. 
 
 Newmaech, Me — quoted from D. Barbour's ' Theory of Bimetallism,' 
 "the world ought to rejoice if a new gold-field could be discov- 
 ered every few years," 5 (note). 
 
 OVBE-PEODTJOTION— the source of free-trade distress, 81 ; two sorts 
 of, 135 ; manufacturers responsible for, ib. 
 
 OvBESTONB, Lord — refers to universal fall in prices between 1828 and 
 1848, in 'Further Reflections upon the Currency,' 17; the cur- 
 rency regulated according to the supposed wants, of commerce, 24 
 (note) ; quoted, 231 ; predicted depression of 1836, 254 ; the 
 public did not get its proper share, (note), ib. 
 
 Paupeeism — to be removed by free trade (Cobden), 142 (note) ; in- 
 creased under free imports, 290. 
 
 Peace, Universal — free trade to promote (Cobden), 261. 
 
 Peel, Sie Robert — on the causes of commercial depression, 23 — 
 urged by Cobden to repeal the Corn Laws in order to remove dis- 
 tress, 29 ; pointed to increasing exports under protection, 45 ; 
 referred with satisfaction to the paralysis which the German iron 
 industry experienced at the hands of the British free-trader, 47 ; 
 opinion of, respecting the fraudulent transactions of the corn 
 merchants, 60 ; always predicted termination of depression under 
 protection, 84 ; judgment of, on adaptability of free trade to old 
 and established interests, 133 ; belief of, that free trade would 
 make this country one vast workshop, 142 ; on the importance of 
 a sufficiency in the supply of wheat, 211 ; agriculture and manu- 
 facture advanced concurrently, 220 ; policy of, to ensure great bulk 
 
342 INDEX. 
 
 of our supply of wheat being derived from our own soil, 259; 
 measured prosperity by exports alone, 265 ; condemned interfer- 
 ence of manufacturers with agriculture, 271 (note) ; notices the 
 inflammatory speeches of the free-trade agitators, 282 (note) ; 
 refers to free-trade argument, 235 (note). 
 
 Penzance, Lokd — free imports not beneficial, 162. 
 
 Pitt, William — treaty with France (1785) reciprocal, 172 ; Cobden's 
 measure compared with, 188. 
 
 PopuLATioir — and export trade increased proportionately under pro- 
 tection : since 1875, there has been no steady increase to meet 
 requirements of additional, 45 (note) ; annual increment to, 259 ; 
 of agricultural countries reduced by free trade, 268. 
 
 Pkice, the late Pkofbssor Bonamy — States that between 1850 and 
 1866 no money passed between this and other countries, 4 (note) ; 
 explained why imports continued excessive, 265. 
 
 Prices — universal fall in, between 1828 and 1848, not alluded to by 
 Cobden, 17 ; not statesmanlike to degrade, 41 (yet cheapness 
 was the motto of the free-traders and is stiU so) ; in the home 
 markets, regulated by the foreigner, 50 ; steady prices the ob- 
 ject of Huskisson's policy, 60 ; sudden rises in wheat due to 
 speculation, 59 — high prices of wheat depress manufacture, 107 
 (note) ; reduction in, by cheap bread and cheap conveyance, 146 
 (note) ; increased by influx of gold, 146 (note) ; the high price of 
 corn eventually paid by foreign consumer of English goods, 63 ; 
 fall in, 179 ; its proper place, 180 ; low prices from an ideal point, 
 305. 
 
 Production — how influenced by invention of shuttle and the develop- 
 ment of the railway and steam navigation, 156 ; increased normally 
 by railway extension, artificially by free trade (for a time) 164; 
 subsequently depressed by free imports, 264 ; relation between, and 
 consumption disturbed by free trade, 270 ; sources of, nourished 
 by protection, ib. 
 
 Progress — not equable under free trade, 116, 274 ; of part at the 
 expense of the whole, 289. 
 
 Prohibition — the cause of commercial irritations, 295 ; confused with 
 protection, 188 (note). 
 
 Prosperitt — causation of, 1 et seq. ; Cobden's distinction between true 
 and fictitious, 4 (note) ; free trade to create a true, 81 (note) ; 
 influence of railway extension in causing, 5 ; also of the gold 
 discoveries, 6 ; between, and free trade, there intervenes increased 
 circulation, 148 ; prosperity and high prices, 304 ; a sure one of 
 slow growth, 333. 
 
 Protection — under the system of, exports gradually and equally in- 
 creased, 93 ; wheat has a natural, 68 ; the cause of wars, 297. 
 
 Protectionists — predicted poor land would go out of cultivation, 
 186 ; on the drain of bullion, ib. 
 
 Protective Nations, the — sell at a cheaper rate than the free-trader, 
 200. 
 
 Railway Rates — increased during unparalleled prosperity, 21 ; such 
 increase bears hardly upon the manufacturer in times of depres- 
 
INDEX. 343 
 
 sion, 22 ; in the opinion of some, this increase the sole cause of 
 
 depression, 47. 
 Railway System — influence of, for good, interfered with by free 
 
 imports, 292. 
 Rbcipkocity — Huskisson and, 302; Cobden's free trade an "ideal," 
 
 ib. 
 Revolution — dangers of, if Corn Laws not repealed, 174 ; the French, 
 
 finally brought about Com Law in England, 206. 
 RiCAEDO, David — doctrine of, concerning the nature of rent, opposed 
 
 to Cobden's teaching, 15 ; theory of international trade criticised, 
 
 293, 294. 
 Rivalry — foreign manufacturing, to be suppressed by free trade, 147. 
 Rogers, Pbofessob Thohold — has no wish to preserve industries 
 
 which cannot bear the climate of healthy competition, 193 ; the 
 
 French Treaty of 1860 a masterpiece, 91 (note). 
 Russia — present commercial advantages of, do not hinder her from 
 
 pursuing a high policy, 299. 
 
 Scarcity — never any actual, under protection (evidence from Ware- 
 housed Corn BiU), 110. 
 
 Shebbrooke, Lobd — the French Treaty (1860) based upon reciprocity, 
 171 (note). 
 
 Shuttle — invention of, increased production, 155. 
 
 Silver — the depreciation of, assumed as cause of depression, 317. 
 
 Socialism — fostered by free trade, 312. 
 
 Speculation — Sir Robert Peel attributed distress to over-speculation, 
 23 ; fraudulent, 60, 67 (note) ; caused sudden rises in price of 
 wheat under protection, 112 ; in corn during the great war, 206 
 (note). 
 
 Speculatobs, the Corn — blamed by Huskisson for exceeding supply, 
 
 110 ; their tricks and artifices, 113 (note). 
 
 Stanley, Lord — charged Cobden with attempting to lower wages, 
 
 157 (note) ; a protectionist statesman, 278 (note). 
 Starvation — under free trade, 109. 
 State Assistance — afforded corn-growers and landlords by Corn Law, 
 
 111 ; solicited by manufacturers, 165 ; used at present time to 
 protect certain interests, 323. 
 
 Steam — introduction of, displaced labour, 153. 
 
 Tax, Malt — why stiU retained, 326. 
 
 TooKE, Thomas— -drewupLondonmerchants'petition in 1821, 239(note). 
 
 Trade — forces in operation to extend, railway extension, 152; gold 
 discoveries, 159 ; temporarily by free trade, 168 ; balance of, 
 supposed to be in our favour from free trade, 187; international, 
 theory of, 293 ; produces inequalities, 300. 
 
 Trades-Unions — influences of, increasing, 53 ; opinion of Mr Glad- 
 stone respecting, 54 (note). 
 
 Treaty — the French, of 1860, regarded by some free-traders as a mas- 
 terpiece, 91 (note); believed by Lord Sherbrooke to be essentially 
 reciprocal, 171 (note) ; reason why drawn up for a period of years, 
 196 ; the basis of a reciprocal, 296. 
 
344 
 
 INDEX. 
 
 Vincent, Mr Howard, M. P. —free imports not beneficial, 162. 
 
 Waobs— tendencies in existence, before introduction of free trade, 
 towards a rise in, 9 ; importance of keeping wages steady, 175 
 (note); regulated by the price of wheat (under protection), 306; 
 free trade introduces a new regulating factor, 310 ; rise with an 
 increase (absolute) of the currency, 306 (note) ; low, with low 
 price of bread, 308 ; of agricultural labourers to rise with free 
 imports, 289 ; from determination of labour to soil, 288 • in 
 reality, were increased from scarcity of labour, ib. ' 
 
 Wages fund reduced by displacement of British labour, 277 • general 
 
 reduction in, advocated by Eight Hon. J. Bright 51 
 Increased during early period of free-trade action, due to enlarged 
 currency, and not to extended supplies, 189 (note); reduction in 
 consequent on fall m price of bread, admitted by free-traders 19o' 
 
 w AE, Leimean— influence of, upon agricultural prices 290 
 
 Wellinoton, Duke OF-had to decide between Queen's Government 
 and Corn Law, 332 (note) ; quoted, 249 (note). 
 
 WHEAT-price of, gradually receded during protection, 65, 75 (note) • 
 the suddenly increased price brought about by speculation three 
 nionths before the harvest, went into pockets of the corn mer- 
 chants, 66 ; fluctuations in price of, as great in other counti-ies, 
 where rents were low, as m England, where rents were relatively 
 high, 67 ; price of, sometimes 20s. higher a fortnight before than 
 It was immediately after the harvest, ih. ; import! of, under pro- 
 tection 95 ; cost of transit of, from foreign parts, given at various 
 
 r^e, I'nv".^ ^r^'^ ' ^'^^'"""^ °^ ^''^ t^^-i^ '° '°^ to send up 
 prices, 107 (note) ; requirements of the country respeotin<r 108 ■ 
 
 quantity imported 1887, 109 ; influence of seasons in causing high 
 prices of, errors of corn merchants. 111; enhanced price of, id 
 not go into farmers' pockets (Cobden said), 112 (note) • fluctua- 
 tions m price of, not antagonistic to manufacture, 176 tendency 
 to lower prices, ^i. ; cultivation of home-grown, under disaMlftie^ 
 
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