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UNIVERSITY
LIBRARY
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Me'oenue of the United States.
OFFICIAL EEPOET.
BY
ME. DAVID A. WELLS,
SPECIAL COMMISSIONEK OF THE REVENUE OF THE UNITED STATES.
REPRINTED BY PERMISSION.
^0ni>on :
MACMILLAN AND CO.
1870.
LONDON :
R. CLAY, SONS, AND TAYLOR, PRINTERS,
BREAD STREET HILL.
PEEFACE
The Eeports of Mr. David A. Wells, Special Commissioner of
the Eevenue, upon the Industry and Commerce of the United
States of America, are well known in this country ; but the last
of the series, the Eeport for 1869, contains so much which is
especially valuable at the present moment, that the Committee of
the Cobden Club have determined, with Mr. Wells' consent, to
reprint it, and thus to ensure for it a wider circulation than
it might otherwise obtain on this side of the Atlantic.
To those who believe that the toiling millions of the human
race are not for ever doomed to the degradation which has
hitherto been their lot, under almost every form of civilization
and every system of government, the fortunes of the American
Union must be a subject of the deepest interest.
The success of the great experiment which the American
nation has undertaken, depends upon its firm adherence to the
two cardinal principles which presided at its birth. Union and
Freedom.
The Founders of the Eepublic, warned by the example of
Europe, knew that the people then brought together could not
long remain free unless they were united, and that they could
not long be united if they were not free ; but two inherited
defects fatal to both those principles have untü lately grown
with its growth, and strengthened with its strength—two forms
of human oppression differing in grossness, but alike in their
violation of personal liberty and the rights of labour—Slavery
and Protection.
The first has been rooted out, by unexampled efforts and sacri¬
fices it is true, but with an energy so tremendous, and a success
so complete, as to afford the most signal proof in history, of what
may be accomplished, when the conscience of a great nation is
roused in a great cause.
vi
PREFACE.
iN"o one can read Mr. "Wells' quiet but unsparing and searching
exposure of the effects of monopoly, in neutralizing the progress,
and dislocating the industrial economy, even of a country so rich
in resources as the United States, without the hope that the days
of Protection also are numbered, and that Free Exchange, like
Free Labour, will at no very distant time be among the chartered
rights of the American people.
It is diflâcult to doubt indeed after reading this Eeport, pro¬
ceeding as it does from an official source, and written for a direct
practical purpose, that the old struggle between Industrial
Monopoly and Commercial Freedom, between the rights of all, and
the privileges of the few, is becoming a great political question
in the United States ; and it is certain, if this be^so, that the
result will involve issues not less momentous to the destiny of
the American nation, and to the progress of the human race,
than those which were decided by the war of emancipation.
For it is becoming evident that in Europe alone, at least
in this generation, the forces of freedom are not strong enough,
in the present state of popular education, to assert the Law of
Free Exchange.
Even in England, where the principles proclaimed by the
Anti-Com Law League have been applied in legislation to a
certain point with unparalleled completeness and success,
the classes which carried by storm so many strongholds of
monopoly have abandoned the cause, when only partially
won, and allowed the enemy to intrench itself in new positions,
and to arrest the progress of the Free Trade policy, before it has
reached the stage at which it can effectually secure the full
rewards of labour, in an equitable distribution of the annual
product of the nation.
On the Continent the emancipation of the working classes
seems even more remote. In spite of all that has been
effected for material progress and international intercourse, by
the discoveries of science and the applications of mechanical
art, the governments are still strong enough to uphold monopoly,
under the pretext of national independence and influence,
and to plunder the people for the support of armaments and
establishments which are the scourge and scandal of the age
in which we live ; the middle classes are perverting their newly
PREFACE.
acquired political power in defending monopoly under tlie form
of protection ; and the working men are. " bettering their in¬
struction," and claiming their share of the spoil, hy aiming
at monopoly under its real name, " Communism."
Mr. Wells' forcible illustrations of the effects of the protective
system upon the various branches of American industry, and
upon the resources of the whole community, will be read
therefore with advantage in England, where the imperfect
execution of the Free Trade policy has led too many of the
uneducated classes to forget the evils of monopoly; and on
the Continent they will at least serve, it is hoped, to prevent
the example of the States from being invoked by the class of
narrow and dangerous politicians, who, while overthrowing
absolutism, theocracy, and feudalism, are doing their best to
discredit representative government, by using the liberal forces
at their command in endeavouring to establish in their stead,
what has been justly called a "Bourgeois Constitutionalism,"
founded on the rotten soil of industrial monopoly, and are thus
preparing the way for democracy founded on socialism.
But industrial monopoly is, after all—and this is the moral
which it is especially important to inculcate in England at
present—only one form of that, which in every form is in¬
compatible with the healthful economic condition of a State,
the misdirection and consequent unequal and unjust distribution
of the national earnings.
It is too much the habit of Englishmen, in speaking of
American protection, to contrast it with their own recent policy,
and to plume themselves on their superior sagacity. It
will be well for those who are disposed to these reñections, to
consider that the protective system of the United States is
maintained by a nation of 39,000,000 people, possessing
3,000,000 square miles of territory, or about 1,800,000,000
acres (one-third more than European Eussia), three-fourths of
which is available for agriculture; that of these three-fourths
403,787,850 acres are already in farms, improved and un¬
improved, and 66,709,456 acres (which may be increased ten¬
fold when required) against 11,659,855 acres in the United
Kingdom under cereal cultivation ; that this population produces
thirty-six bushels of cereals per head per annum, against sixteen
• • •
VIH
PREFACE.
bushels per head produced by the population of Europe ; and
above all, that of the land already appropriated, much even in
the older States can be purchased very cheap, and in all most
cheaply transferred, while under a recent Act of Congress any
citizen of the States, or any foreigner who declares his intention
to become one, can have a farm of 160 acres in the unappro¬
priated land, absolutely free of charge.
With such advantages and such laws in respect of land, it
must be admitted that, with all its extravagance and excesses,
the American people can better afford their present false and
costly system of industrial monopoly, than the English people
can afford their system of taxation, their artificial land laws, and
their reckless expenditure, which are relatively to their condition
more oppressive ; and that the former possess this great advan¬
tage over us, that the intelligence and conscience of the nation
is becoming alive to its dangers, while in England, even with a
reformed Parliament, there is scarcely any practical recognition
of the fact, that some of the main principles of the national
economy are radically wrong, and that their operation is only
more dangerous because it is more disguised.
Mr. Wells justly remarks at p. 71 : "The present scale of
taxation does not tell so heavily upon the people as in England,
where the great body of wealth does, and, by the aristocratic
constitution of the government, will, for a long time at least,
escape its fair share of the public burdens." *
* Without raising the larger question to which Mr. Wells refers—namely,
the share of the public burdens borne by realized property—it may be
useful to advert to the following figures :—
It is estimated by Mr. Dudley Baxter, in his work on the " N^onal
Income," that the manual labour class in the United Kingdom consists of
twenty-three million persons, and the upper and middle classes of seven
million persons, the income of the former being £324,000,000 sterling,
and that of the latter £489,474,000 sterling.
The only imperial taxes paid by the manual labour class are customs
and excise, of which, if, as is probable, it pays an equal share per head to
that paid by the other classes, it contributes £33,000,000 sterling.
Assuming that the remaining ten million of customs and excise, and the
whole of the other imperial taxes, amounting to twenty-two millions, are
contributed by the upper and middle classes, they will pay as their share
of the public revenue £32,000,000 sterling.
It thus appears that the upper and middle classes, with an income of
£489,474,000 sterling, pay £32,000,000 ; and that the manual labour class,
with an income of £324,645,000, pays £33,000,000 sterling; in other words,
that the former pay 6^ percent, on their income, and the latter 10 per cent,
on their income !
PREFACE. ix
And again at p. 45—
" The poor of this country (the United States) are not, and
never have been, the same, as a class, as the poor of Great
Britain and Continental Europe. Here poverty, as a general
thing, means deprivation of comforts and luxuries; there, on
the other hand, poverty reaches a lower depth, and implies the
deprivation of necessities and the possibility of starvation."
It is the misfortune of old countries that generations of mis-
government have so accustomed the upper classes to the low
standard of life which prevails among the great body of the
people, that they have almost come to regard it as a normal
condition of society, or at all events as ine^útable at the present
stage of civilization.
Hence arises, it must be presumed, on the one hand, the
apathy of governments on the vital question of the condition of
the people, and on the other what is perhaps a still more uneasy
symptom, the kind of action which is usually taken when
inaction has become dangerous or impossible, and which tends
more and more to State interference. State aid, and private
charity, than to the liberation of the natural forces of society—
in other words, to socialism, rather than to freedom. The
remedies applied are for the most part addressed to the palliation
of effects, rather than to the removal of causes, and can only
aggravate the disease.
To those, then, who have constantly before them the aspect
of society presented by European countries, there can be no
more profitable study than the history of the material progress
of the United States, of which the pages of Mr. "Wells' Eeport
afford ample evidence, while at the same time they encourage
the hope that a people whose happy privilege it is to combine
free institutions with practically boundless physical resources,
will be enabled to solve the problem which has baffled the
civilization of Europe, and yet teach the nations how to live.
At present it cannot be denied that the heavy sacrifices imposed
on the United States by the war, and the misdirection of
The due share of the manual labour class, if it contributed in proportion
to its income, would be £25,000,000, or £8,000,000 less than the sum which
it now pays. To this class therefore the concession of a "Free Breakfas
Table " would be a simple act of justice.
X
PREFACE.
national industry, and the loss of national wealth, caused by an
unsound commercial and financial policy, have produced incipient,
but decided, symptoms of the social disorders which are the
chronic maladies of European societies, and thus afforded many
points of comparison, as well as of contrast.
Mr. "Wells' remarks on the growth of a spirit of trading and
speculation, as opposed to a spirit of production; on the
increasing discontent among those compelled to earn their sub¬
sistence by agriculture and the industrial arts ; on the blind
efforts of the labourer to find an artificial remedy in strikes,
trades' unions, and eight hours' laws; on the greater subordination
of labour to capital, owing to the concentration of industrial
production, and consequent annihilation of small separate
industries ; and on the general tendency of the poor to grow
poorer ; indicate plainly enough the causes which are at work in
the United States in common with those which have long been
undermining the social fabric of older countries, and which.
Unless soon arrested, it will become difficult even there to eradicate.
At p. 42, Mr. Wells discusses the important question,
''Whether the influence of existing laws tends to promote such
a distribution of the annual products of labour and capital, as
best subserves the interests of the whole people."
He describes the "ancient combat," old as the dawn of
civilization, between the direct producers on the one side, and
the indirect and non-producers on the other, in which the one
class endeavours to keep, and the other to get, as much of the
results of original production as it can ; and justly observes that
as the latter class includes the more active minds, it has always
got the better of the former, and used its power in appropriating
an undue share of these results : and that even now, although
the grosser methods of the earlier stages of society, force and
fraud, are no longer adopted for this purpose, cunning has taken
their place, and so directs the current of legislation as to effect
its object under the cover of law.
He adds, that " the agitation which now pervades all civilized
countries, touching the relations of capital and labour, is but
the instinctive uprising of the great productive classes, against
the institutions, methods, and devices of the indirect and non-
productives."
PREFACE.
xi
Mucli of this criticism is applicable to England, as well as to
countries which maintain a system of direct protection.
Wherever it is found that the accumulating wealth of a
country is not accompanied by a progressive augmentation of
that portion of the annual product which faHs to the share of
the direct producers, or working classes, it is a sure sign that the
economic mechanism of the nation is disordered, and that
imperious social laws have been infringed.
In one of the last letters which Bastiat wrote to Cohden, he
quotes the following remarkable passage from an essay by
M. de Fontenay:—
"Ze capital est le signe caractéristique et la mesure du'¡progrès ;
Ü m est le véhicule nécessaire et unique. Sa mission pédale est
de servir de transition^ de la valeur à la gratuité. Par conséquent^
au lieu de peser sur le prix naturel^ son rôle constant est de Vabaisser
sans cesse."
Upon this observation, Bastiat emphatically says that it
" comprehends and resumes the most fruitful of the economic
phenomena " which he had spent his life in investigating, and
adds :
" En elle est le gage d'une reconciliation inevitable entre les
classes propriétaires et prolétaires. Puisque ce point de vue de
l'ordre social n'est pas tombé puisqu'il a été aperçu par d'autres,
qui l'exposeront à tous les yeux mieux que je ne pourrais faire,
Je n'ai pas tout à fait perdu mon temps, et je puis chanter, avec
un peu moins de repugnance, mon ^ Nunc dimittis.^"
These words of the great economist cannot be too often
remembered and repeated. To enable capital to fulfil this mission,
to provide, as far as possible, that its growing accretions shall
act directly on the productive labour of the world, by removing
all national and international restrictions on production and
exchange, and that the joint results of capital and labour shall
thus be distributed in more just proportions between those
whose services have contributed to them, is the most urgent and
the most important task to which the statesmen of all countries
can address themselves.
But the one indispensable condition of this result is inter¬
national co-operation. No nation, however rich in resources, or
PREFACE.
strong in political power, can ever accomplisli the task, unaided
and alone. The causes which prevent the international circulation
of capital are diminishing year by year. It is essential that the
causes which obstruct the free exchange of the products of
labour should equally disappear. The great law of the mutual
dependence of nations is asserting its claims to allegiance, and
enforcing obedience under intolerable penalties.
What those penalties have been, even in the United States,
we learn from Mr. Wells. Can it be believed that a self-governing
and educated people will endure much longer a system so unjust
and so unwise, and submit much more to such useless sacrifices,
and such gratuitous sufferings ? May we not rather hope that
the movement now beginning in America wiU not cease, till it
has given to the productive forces of the world the decisive
international impulse which Europe has failed to give, and hail
it as the opening dawn of a nobler policy and a happier time ?
OFFICIAL KEPORT
Treasury Department,
Office Special Commissioner of the Revenue,
Washington, D. C., December 1869.
Sm,
In accordance with the provision of law creating the
office of Special Commissioner of the Revenue, I have the
honour to submit my fourth annual report in respect to the
industry, trade, commerce, and revenues of the country; and
would request that the same may be transmitted to Congress for
consideration.
review of the progress op the nation for the year 1869.
To review the main features of our national experience in
respect to capital and industry for the past year, is but to
chronicle and affirm anew the apparent continuance of that same
wonderful rate of progress and development which, with the
exception of a period of war, has especially characterized the
history of the nation for the last quarter of a century.
The revenue receipts of the national exchequer, as in every
other year since the termination of the war, have been largely
in excess of national expenditures ; the tide of labour-seeking,
wealth-producing immigration continues to flow with increasing
volume upon our shores of the West as upon those of the East ;
the aggregate of the crops has been bountiful in quantity,
excellent in quality, and in excess of any recent average ; the
circle of settlement has been so rapidly extended, that millions
of acres are now included in its area which twelve months ago
were uncultivated wilderness ; the number of miles of railway
constructed has been greater than that of any preceding year,
and a regular daily routine of travel and traffic has for the first
time been established thereon across the continent ; the restora¬
tion of the South to a condition of prosperity, equal or greater
than that which prevailed antecedent to the war, is a work well-
nigh accomplished ; peace reigns m all our borders ; and from
B
2
OFFICIAL REFORT.
the Atlantic to the Pacific, from the St. John's to the
Pio Grande, there are few who, exempt from physical ailment,
need hunger from scarcity of food, or be idle for lack of some
opportunity for remunerative employment. In short, the
experience of another year reaffirms the principle before
announced, that the progress and growth of the country through
its elements of vitality, viz., great national resources and an
inherent spirit of energy and enterprise in the people, are in a
great degree independent of legislation, and of the impoverish¬
ment and disorder which the occurrence of a long war has
necessarily occasioned.
In support of the above generalizations, the Commissioner
would next ask attention to the following specific evidence :—
EXCESS OF NATIONAL REVENUE OVER NATIONAL EXPENDITURES.
The national revenue for the fiscal year ending June 30, 1869,
was $370,943,747 21. The national expenditure for the same
period was $321,490,597 75, leaving an excess of revenue over
expenditure of $49,453,149 46.
The following table shows the relation of receipts to
expenditures for each fiscal year since the termination of
the war :—
Years.
Receipts.
Expenditures.
Excess of receipts.
1865 66
$558,032,620 06
490,684,010 27
405,638,083 32
370,943,747 21
$520,750,940 48
346,729,129 33
377,340,284 86
321,490,597 75
$37,281,679 58
143,905,880 94
28,297,798 46
49,453,149 46
1866-67
1867-68
1868-69
REDUCTION OF THE NATIONAL DEBT.
On the 1st of September, 1865, the amount of the public
debt, then at its maximum, was, less cash in the treasury,
$2,757,689,571 43. At the commencement of the present
fiscal year, July 1, 1869, the amount of the public debt, less
cash and sinking fund in the treasury, was $2,489,002,480 58,
showing a reduction to that date of $268,687,090 85. Within
the same period, taxes which if continued to the present time
would have yielded, in the aggregate, upwards of $200,000,000
per annum, have also been abated or relinquished. To find a
parallel to such results, the financial history of other nations
will be searched to no purpose.
The amount of the public debt on the 1st of December,
1869, less cash and sinking fund in the treasury, was
$2,453,559,735 23, making a total reduction since the 1st of
OFÏIOIAL REPORT.
3
September, 1865, of $304,129,836 20, and for the current
calendar year, of $87,147,466 02.
TOTAL COST OF THE WAR.
It would seem to be desirable at this point, now that all
feeling in regard to the subject from its bearing on political
questions has apparently passed away, to place upon record the
exact cost of the war, as nearly as the same can be determined.
With this object, attention is asked to the following exhibit :—
The amount of outstanding national
indebtedness March 7, 1861, was.. $76,455,299 28
During the four years of war which
terminated in April, 1865 (April 1,
1861, to April 1, 1865), the actual
receipts of the treasury were as
follows :—
From internal revenue 314,337,317 01
From customs 280,861,618 45
From lands 1,812,083 80
From direct tax 4,668,259 31
From miscellaneous sources 74,120,413 37
Total receipts $675,799,691 94
The receipts of revenue from April 1, 1865, to June 30,
1869, inclusive, during which period'the larger portion of the
expenditures has been directly in consequence of the war, were
as follows :—
From internal revenue $967,207,221 41
From customs 729,991,875 97
From lands 7,402,188 28
From direct tax 9,017,217 30
From miscellaneous sources 194,949,122 13
Total receipts $1,908,567,625 09
The amount of outstanding indebted¬
ness, less cash and sinking fund
in treasury, June 30, 1869, was..$2,489,002,480 58
Deducting from this the amount of out¬
standing indebtedness at the out¬
break of the war ($76,455,299 28),
we have, as the sum borrowed for
war purposes and not repaid out of
the receipts above indicated 2,412,547,181 30
B 2
4
OFFICIAL REPORT,
Making the total expenditure (loans
and receipts) in eight and a quarter
years of war and its effects $4,996,914,498 33
Deducting the amount which, hut for
the war, might he taken as the ave¬
rage expenditure of the government
during this period, say one hundred
millions per annum 825,000,000 00
We shaU have $4,171,914,498 33
Which sum represents the cost of the war to the United States
Government down to June 30, 1869.
To this sum should be added the value of the pensions now
paid by the Government on account of the war, if the same
were capitalized. This, at eight years' purchase of the present
annual payment, would amount to about two hundred millions.
But this aggregate, however large, must still further be
increased by other items if we would reach the true cost of the
war to us as a people, the above representing only the expendi¬
tures of the national government.
These additional charges are substantially as follows :—
Increase of State debts, mainly on war
account $123,000,000
County, city, and town indebtedness
increased on account of the war,
(estimated)^ 200,000,000
Expenditures of States, counties, cities,
and towns, on account of the war,
not represented by funded debt,
(estimated) 600,000,000
Estimated loss to the loyal States from
the diversion and suspension of in¬
dustry, and the reduction of the
American marine and carrying trade 1,200,000,000
* The report of the comptroller of the State of lli"e"w York for 1869 states
the bounty debt of the State to have been $26,862,000 in 1867 ; and the
amount of local debt for war expenditures to have aggreirated in 1868 the
sum of $34,765,746 10. The war debt of the state of Massachusetts is at
present $16,573,244 ; the local war debt of the State is not known. The
amount paid by this State for bounties and to soldiers' families up to
January 1869, is returned at $26,801,000.
OFFICIAL REPORT.
5
Estimated direct expenditures and loss of
property by the Confederate States
by reason of the war * $2,700,000,000
These estimates, which are believed to be moderate and
reasonable, show an aggregate destruction of wealth, or diversion
of industry, which would have produced wealth in the United
States since 1861 approximating nine thousand millions of
dollars—a sum nominally in excess of the entire increase of
wealth, as returned by the census, for the whole country from
1850 to 1860.
This, then, was the cost of the destruction of slavery ; the
cost of compromise ; the cost of the unfaithfulness of those who
founded this nation to the idea by which the nation lives.
"What does it measure ? It is substantially a thousand millions
a year for nine years ; or, at the wages of five hundred dollars a
year, the labour of two millions of men exerted continuously
during the whole of that period. It is three times as much as
the slave property of the country was ever worth. It is a sum
which at interest would yield to the end of time twice as much
as the annual slave product of the South in its best estate.
"The places of those who sleep in their graves have been
filled by new labourers ; the incubus of slavery, which was
slowly but surely making the fertile South a desert scorched as
by a consuming fire, has been removed ; thousands of miles of
new railroads j inventions never before excelled in their labour-
saving character ; millions of acres of the richest lands opened
to settlement, now render labour easy and product large."
Without faltering, and without tampering with the public faith,
it is now the duty of this people to undertake the far easier task
of payment for the service already rendered. If we hesitate or
falter, dishonour, second only to that which tolerated slavery,
will overwhelm the land, and the idea of a free people governing
themselves will become a scorn and a by-word among nations.
IMMIGRATION.
The following is a revised and the most accurate attainable
statement of the course of alien immigration into the United
States since and including the year 1856 :—
* In making this estimate of the loss by the "war to the States in
rebellion, a standard of value has been taken which is between the gold
standard on the one hand, and the standard of the depreciated Confederate
currency on the other. The intention has been to take these losses at a
standard of value conforming in general to that of the Northern States
during the same period.
6
OFFICIAL REPORT.
1856 200,436
1857 251,306
1858 123,126
1859 121,282
1860 153,640
1861 91,9
1862 91,987
Total in fourteen years
Total from July 1,1865, to
1863 176,282
1864 193,418
1865 248,120
1866 318,554
1867 298,358
1868 297,215
1869 352,569
I '
2,918,213
30,1869, 1,514,816.
CHINESE IMMIGRATION.
The following table shows the course of Chinese immigration
since and including the year 1856 :—
1856
1857
1858
1859
1860
1861
1862
4,733
5,944
5,128
3,457
5,467
7,518
3,633
1863
1864
1865
1866
1867
1868
7,214
2,975
2,942
2,385
3,863
10,684
1869 12,874
Total in fourteen years 78,817
The present increment of population of the United States,
from the natural increase of births over deaths and from immi¬
gration, is probably at the rate of 1,100,000 per annum as a
minimum.
RAILWAY EXTENSION.
The number of miles of new railway constructed in the
United States during the past year will, it is believed, approxi¬
mate to five thousand ; making a total construction since and
including the year 1865, the year of the termination of the war,
of about thirteen thousand. If it is assumed that a line of
railway gives access to fifteen square miles of country on each
side of it, or thirty square miles altogether, then the thirteen
thousand miles of railway, which it is estimated have been
constructed during the five years from 1865 to 1870, will have
opened up three hundred and ninety thousand square miles of
what, for the purposes of general production, may be considered
new territory—a tract of country larger than the whole area of
France and nearly three and a half times larger than the whole
area hi Great Britain.
OFFICIAL REPORT.
rr
i
TELEGRAPHIC EXTENSION.
The telegraph systeoa of the United States has been extended
during the past year by at least seven thousand miles of new
wire, as compared with an estimated extension of six thousand
in 1868 ; three thousand in 1867 ; and two thousand in 1866.
INDUSTRIAL RESUSCITATION AND DEVELOPMENT OF THE SOUTH.
But no one circumstance pertaining to the history of the past
more strikingly illustrates the extent of the resources of the
country and the energy of its population than the recent
industrial resuscitation and development of the South. In 1865
this section of our country, which in 1860 represented nearly
one-third of the entire population, and, omitting the value of the
slaves, nearly two-sevenths of the aggregate wealth of the
nation, found itself, as the result of four years of civil war,
entirely prostrate ; without industry, without tools, without
money, credit, or crops, deprived of local self-government, and,
to a great extent, of all political privileges ; the flower of its
youth in the hospitals, or dead upon the battle-fields, with
society disorganized, and starvation imminent or actually present.
Furthermore, the first efibrts of the people of the South to
improve their condition were also in the highest degree
discouraging. During the years 1866 and 1867 the crops, both
of cotton and grain, were, to a very great extent, failures. The
freedmen were not disposed to work for hire ; demanded exces¬
sive wages, and after accepting them, too often rendered poor
service. The general result of all attempts to revive production
seemed, therefore, up to 1868, to leave both freedman and
planter in a condition more destitute and discouraged even than
at the close of the war. But the year 1868, the third year of
the free-labour experiment, at last brought an improvement.
The harvest was sufficiently abundant to furnish the people
with cheap food and to produce a large surplus for the future
and for export, while the value returned from the sale of the
exportable product of that year, in the form of cotton, grain,
sugar, tobacco, and naval stores, and the like, amounted to an
aggregate of at least three hundred millions of dollars in
currency. Such a result of efibrt and industry, which in its
very statement assumes the character of the marvellous, has
brought to the people of the South, before so enfeebled, poor,
and discouraged, a large measure of strength and prosperity.
It has restored the broken and exhausted lines of railway
intercommunication, and is creating many additional ones ; it is
enriching the soil and increasing the. quality and quantity of
the great staple per acre, through the extensive purchase and
use of fertilizers and improved 'tools and implements ; it is
8
OFFICIAL REPORT.
planting that distributor of comforts and necessities—the
country store—at the cross-roads ; and has led to a truer inde¬
pendence than could ever have been purchased through a
victory at arms. The year 1869 has also closed auspiciously.
The aggregate of the crops has almost uniformly been greater, while
prices have continued to prove highly remunerative.
The general testimony of î^orthern manufacturers is, that the
new cotton is far superior in cleanliness, strength, and uniformity
of fibre and absence of waste, than any ever before sent to
market, while " a new variety, originating in Mississippi, the
'Peeler,' has also been introduced and brought to market,
which commands a price from twenty-five to thirty per cent,
higher than any other green-seed cotton of the same grade,
because of the superior staple." The estimated product of rice for
the Carolinas and Georgia is 55,000 tierces as compared with
35,000 for the previous year; and that of sugar 80,000 to 85,000
hogsheads as compared with 37,647 hogsheads in 1867. Before
the war a large proportion of the net annual profit of the South
was expended in the purchase of labour. It is now found that
labourers can be obtained without expending anything for them,
and that the capital thus formerly diverted can be saved and
applied for the purchase of some other form of productive
power, such as tools, machinery, and animals, while the value of
manual labour can be supplemented and increased.* At present
the supply of labour to the South is not sufficient to meet the
demands of its various industries ; but to doubt that with an
assurance of profit, peace, personal freedom, and security of
property for the future, such a supply cannot be obtained, is to
doubt that the influences which have heretofore proved sufficient
to control human action and direct the movement of population
will continue to operate. But supposing the supply of labour
to remain as it is, and the circumstances attending production
to be only moderately favourable, the South gives fair promise
of deriving annually a greater amount of active surplus capital
as the results of its industry than any other section of the Union,
and of thereby attaining to a degree of prosperity which will
enable its population to become large consumers of the products of
other States and countries, f This in turn must tend to increase
* Eeport upon cotton, United States Commissioners, Paris Exposition.
+ " Since the war, experiments made to ascertain how much cotton can
be produced upon a single acre have exhibited remarkable and gratifying
results. When made with spade culture, stirring the soil deeply and often,
after enriching it with phosphates and guano, the product has been very
large. In one case reported, upon what seems to be good authority, the
product of one acre was/owr bales, or over one thousand six hundred pounds
of clean cotton. In past times one bale to the acre has been regarded as a
fair cropland two bales a very large one, on the very richest lands j while
OFFICIAL REPORT.
9
the general prosperity of the whole country, to extend trade and
commerce, to lighten, through wider distribution, the necessary
burden of taxation, and to make certain the extinguishment of
the national debt at a comparatively early period.
Furthermore, the large amount of capital thus becoming
annually available at the South will, undoubtedly, seek in great
part investment in domestic and local enterprises, and speedily
lead to the establishment of manufactures on an extensive scale.
The true diversity of employment which results from freedom
has now, therefore, become to the South, for the first time,
possible; and Southern capital can soon be advantageously
applied to the manufacture of agricultural tools and implements,
leather, waggons, wooden-ware, soap, starch, clothing, and similar
articles. These are manufactures in which iron, steel, and cloth
are raw materials. They employ the largest amount of labour
in proportion to product and capital, and warrant the payment
of high wages. On the other hand, what are commonly called
manufactures, viz., iron and steel, and cotton and woollen cloth,
are examples of concentration. They require large capital,
employ but few hands, and would naturally come much later.
We already haye in the United States an excess of cotton and
woollen spindles, and to invest caj)ital in more would be simply
a waste, when there are vast needs at the South requiring far
less capital, and warranting much greater compensation for labour
than can be paid in textile fabrics.
THE TRUE TESTS OF MATERIAL PROSPERITY.
A presentation of evidence like that above given, touching
the record of national production and development, naturally
suggests a line of inquiry, which we propose to anticipate and
answer. It is this : If the statements thus presented are not
exaggerations ; if the power of the country to repair its waste
and extend its production is as great as is represented, what
need of further investigation and legislation ? Why talk of the
burdens of the tariff, of the necessity of reforms in the internal
revenue, or of the evils of an irredeemable paper currency ? All
these questions are certainly most pertinent to the subject ; but
in asking them let us not unintentionally deceive ourselves.
The aggregate production of a nation of forty millions,
possessing the most fertile territory, with such varied conditions
of climate and culture as to render the general failure of an
annual harvest an impossibility, must necessarily be very great ;
while the annual increment of population from natural causes,
half a bale, or about two hundred and fifty pounds, was for many years a
satisfactory result in Georgia and tho Carolinas, where the lands were
badly worn."—Beport of United States Commissioners, Paris Exposition,
1867.
10
OFFICIAL REPORT.
superadded to an annual foreign immigration of over three
hundred thousand, of necessity greatly expands the cultivated
area of the State, requires an additional food product, augments
the supply of labour and consequently of capital ; which last in
turn finds its expression and use most noticeably in the con¬
struction of houses and shops, and in the extension of the means
of inter-communication.
QUESTIONS OF THE HOUR.
Not to increase, therefore, is to retrograde ; and a realization of
this truth makes it evident that the matter of vital interest to
the nation in all these investigations is not the mere ascertain¬
ment and enumeration of the aggregates of production ; but
rather, first, of the existing relations between national production
and national consumption or expenditure ; second, the deter¬
mination of the question whéther the resources and p7'ivileges
which have accrued to the nation through its inheritance of soil,
climate, race, and government, have been utilized to the best advan¬
tage ; and third, and most especially, whether the influence of
existing laws tends to promote such a distribution of the annual
products of labour and capital as best subserves the interests of the
whole people.
To construct an inventory of the national wealth without
reference to these questions would be equivalent to presenting
merely the credit side of an account as evidence of the success
of a business transaction, and of ignoring entirely the per contra,
as it may appear in the form of interest on capital, wages of
labour, or the cost of material ; and although, in the institution
of any fair and thorough comparison of things favourable with
those unfavourable, we may feel assured that the balance in favour
of the United States would be greater than that afforded by
a similar investigation into the affairs of any other country,
yet this fact renders it none the less desirable that we
should earnestly endeavour to ascertain the elements of national
weakness and the methods of remedy, as w^ell as the elements
of national strength ; inasmuch as in a State or nation, as in a
structure, the weakest point may be, and often is, the measure
of the strength of the whole.
To a discussion, therefore, of the questions above suggested,
with special reference to the results which the investigations
and experience of another year have afforded, the Commissioner
would next invite attention.
RELATION OF NATIONAL PRODUCTION TO NATIONAL CONSUMPTION
OR EXPENDITURE.
In respect to the relation which tlie aggregate of national
production sustains to the aggregate of national consumption
OFFICIAL REPORT.
11
or expenditure, it is difficult to arrive at any altogether definite
or satisfactory conclusions.
PRESENT VALUE OF REAL AND PERSONAL PROPERTY OF THE UNITED
STATES.
The value of the real and personal property of the United
States, as deduced from the census returns of 1860, subtracting
the value of the then slaves, and considering them, for the
purpose of the inquiry, as producers and consumers of wealth
and not property, was estimated in round numbers at fourteen
thousand millions ($14,183,215,628 ;)* the value of the annual
product at $3,804,U00,000 ; the value of the annual product of
each person at $121 03, and the average property of each person
in the nation at $451 26.
A valuation of Great Britain for 1868-69, which has un¬
doubtedly claim to close approximative accuracy, f gives the
following results: gross property of the nation $30,000,000,000
(£6,000,000,000.) Gross annual income, $4,070,000,000
(£814,000,000); net income, or original earnings, $2,750,000,000
to $3,000,000,000 (£550,000,000 to £600,000,000.) The
present population of the United Kingdom being 30,380,000,
we have, according to the above valuation, a fraction less than
$1,000 as the average value of property to each individual ;
and $134 as the proportion of the gross value of the annual
product to each person.
Assuming the present population of the United States to be
39,000,000, and the average value of the property held by each
person to have nominally increased from $451 26 gold in 1860,
to $600 currency in 1869-70, the present valuation of the
United States would be $23,400,000,000, an increase since
1860 of $9,216,784,372 or 65*8 per cent.
This estimate the Commissioner believes to be as large as the
evidence available on this subject will warrant, unless an
estimate be given to land in excess of its real value as pro¬
ductive capital, or what it would exchange for in money or
other marketable products, f He would further remind those
* Dr. William Elder.
+ K. Dudley Baxter.
Î Land in general is valuable as an instrument of production, and its
true measure of value is what it produces. Land to the agriculturist is
worth most when it brings him the most and best of the commodities
needed, and the largest surplus. It is worth the least to him when it
brings him the least of these, with no surplus at all. The real value of
land, therefore, is a very different thing from its nominal value for specula¬
tive purposes ; and the appraisement of land at a value greater than its
value for production, adds nothing whatever to the real wealth or capital of
a country.
12
OFFICIAL REPORT.
who may be inclined to regard this aggregate as an under¬
estimate, that the national valuation of $14,183,215,628, as
deduced from the census returns of 1860, represents the surplus
of accumulation over expenditure which had resulted up to that
date from all the labour and economy of all the people who have
inhabited the territory of the United States since its first dis¬
covery and settlement by Europeans, plus whatever of capital
has been sent to it by other nations \ and it is not reasonable to
suppose that in the single decade which has elapsed since 1860,
during nearly one-half of which time the nation was convulsed
with war, that an actual increase of wealth has been attained in
excess of sixty-five per cent, (including the enhancement of
price from the premium on gold) of the accumulation of all the
years previous, during which the United States has been a
country and a nation.
A confirmation of this result, furthermore, may be reached by
another and independent method of reasoning. The increase of
property from 1850 to 1860, according to the estimates of the
census, was from 6,174,000,000 to 14,183,000,000, or 129 per
cent. Much of this large increase, however, is known to have
been due to more accurate methods of enumeration, and to the
inclusion of many elements previously left unnoticed. A careful
review and comparison of the material of these two censuses,
made during the past summer, at the request of the Secretary
of the Treasury, by the Commissioner, in connection with
certain of the experts who prepared the census of 1860, resulted
in the conclusion that the true rate of increase during the decade
was about sixty-five per cent., or, allowing to the fullest extent
for omissions and underestimates, certainly not in excess of eighty
per cent. This last, if continued, would give a total valuation
in 1870 of $25,529,000,000, by the natural, uninterrupted gain
of population and industry; adding thirty per cent, to this
amount for the premium on gold, the currency valuation at the
present tine, according to this rate, would be $33,188,000,000.
Deducting the estimated cost of the war to the government and
to the people, from direct expenditure and from the diversion
of industry and the destruction of property, as given above,
$9,000,000,000, we should have left $24,188,000,000 as the
accumulated wealth of the country at the close of the present
decade.
VALUE OF THE GROSS ANNUAL PRODUCT OF THE NATION.
In respect to the value of the annual prodwÉ of the nation,
the data available for the formation of an opinion are also
exceedingly limited, being mainly deductions from the census of
1860; a comparison of the results of similar investigations
OFFICIAL REPORT.
13
recently undertaken in Great Britain ; and the estimated value
of the products moved annually upon the railways of the country.
As has been already stated, the gross value of the annual
product of the United. States, as deduced from the census
returns of 1860, was $3,804,000,000, and the gross value of the
product of the year to each person $121 03. The corresponding
figures for Great Britain for 1868-69, are $4,070,000,000 and
$134, respectively.
If we now assume $175 (currency) as the present value of the
annual per capita product of the whole nation, and the popula¬
tion as 39,000,000, the gross value of the annual product
becomes $6,825,000,000. Large as is this estimate, it is con¬
firmed in general by the results afforded by investigations which
have been recently made in respect to the quantity and value of
the freight moved annually upon American railways.
If the estimate of $175 currency, as the present average value
of the annual per capita product of the nation, as compared
with $121 in 1860, should appear too small, it may be well to
consider for a moment the components of the nation, who by
their labour create this value. Thus, of the present estimated
population of 39,000,000, about one-half,* or 19,000,000, are
females ; 42 per cent, of the whole number of both sexes are
below the age of 16 ; while 4|^ per cent, are over 60. Of the
proportion of the whole population between the ages of 18 and
65 who are incapacitated for labour, no accurate determination
can be made ; but adopting the data afforded by the experience
of the friendly societies of England—subject to certain local
qualifications—the number in our present population undoubted¬
ly approximates 500,000.
In Great Britain, the results of investigation show that out
of a population of 30,000,000, 54 per cent, of the whole
number are without income or wages ; or, in other words, for
every five persons who support themselves, six are dependent.
In the United States, where there is less disposition and less
necessity for women and children, or the aged, to engage in
* According to the deductions of the last census and the standard tables
of life insurance companies, the present assumed population of the United
States—39,000,000—would be exactly proportioned between the two sexes
as follows :—
Males 19,9.51,100
Females 19,048,900
Proportions below the age of 16 ;
Males 8,461,261
Females 8,162,453
Total ♦. 16,623,714, or 42 61 per cent.
Whole number of population above 60 years, 1,675,097, or 44 per cent.
14
OFFICIAL REPORT.
remunerative employments, the Commissioner believes that the
above ratio as ascertained for Great Britain will be greatly
exceeded, and that 33 per cent., or 12,870,000, will fairly
represent that portion of our population who are in receipt of
income. Now, the persons thus enumerated as in receipt of
income may be divided into two classes, viz., 1st, those whose
income is the earnings of absolute production, and as such
constitutes a direct addition to the nation's property ; and 2d,
those whose income is paid out of the income of the first class
for the use of capital, or for services not directly productive.
To ascertain, therefore, the number of those whose income is a
direct addition to the wealth of the nation, w^e must deduct
from the 12,870,000 above mentioned the following persons,
viz., those who live on the interest of fixed investments ;
members of the learned professions, and those engaged in
educational employments ; civil officers of the government—
national and State—and members of the army and navy ; all
those engaged in the amusement of the people ; in disseminating
news ; in conveying persons or things for pleasure or for mere
change from one place to another; artists ; domestic servants;
manufacturers and transporters of drinks and stimulants ;
agents, superintendents, and watchmen ; and if it is assumed
that product has contributed its maximum of wealth to the
nation when it is lodged for distribution in the hands of the
wholesale dealer, there must be further added to the number of
those whose incomes are not independent sources of wealth to
the country, all retail dealers, clerks, and distributors generally.
Making allowance for these classes, it seems probable that the
whole number of persons who by their labour add directly to
the wealth of the country is not in excess of 10,000,000, and
this number, it is to be noted, sustains as great a ratio to the
present population of 39,000,000 as did the whole number of
persons returned in 1860 as following all the various occupations
of the country, whether engaged in original production or
otherwise. Dividing, now, the assumed total value of the
annual product, $6,825,000,000, among the assumed number of
the directly productive class, we have a per capita product of
$682 50 ; which sum undoubtedly approximately represents
the first hand average annual income of the direct producers of
wealth in the nation, out of which the whole population have
to live, provide food and clothing, pay taxes and all other
expenses, and accumulate a surplus of future productive capital.
GROSS ANNUAL VALUE OF THE PRODUCTS OF LEADING
INDUSTRIES.
It wül be interesting to inquire at this point what propor¬
tion of the annual aggregate product of the nation results from
OFFICIAL REPORT.
15
the labour of the persons engaged in the various industrial
occupations productive of direct wealth.
Among these that of agriculture ranks first ; forty-one per
cent, (or one in every two and a half persons), exclusive of
the slave population, of all whose occupations were specified
according to the census of 1860, being engaged in this pursuit.
Making allowance for the above exception, it is reasonable to
suppose that of the whole number of persons in the United
States who are in the receipt of income from some industrial
occupation or the investment of capital, fully fifty per cent., or
6,435,000, are agriculturists. The value of their jper capita
product must, it would seem, be sufficient to make up for the
following requirements :—
Wages, $275 ; subsistence, $125 ; amount available to sup¬
ply waste in animals, implements, and land, 850 ; interest on
capital, $60; total, $510. This sum multiplied into the whole
number of agriculturists would give $3,282,000,000 as the pro¬
portion of their contribution of the total gross value of the
national product per annum.
ANNUAL VALUE OF THE PRINCIPAL AGRICULTURAL PRODUCTS OF
THE NATION.
An estimate of the value of the leading agricultural products
of the country for the present year may also tend to assist in
forming a judgment in regard to the total annual value of the
product in this department of national industry. The details
of such an estimate would be somewhat as follows :—
AGRICULTURE.
Cotton, 2,700,000 bales, 450 pounds
each, at 25 cents
$303,750,000
450,000,000
375,000,000
137,500,000
Corn, 900,000,000 bushels, at 50 cents.
Wheat, 300,000,000 bushels, at $1 25..
Oats, 275,000,000 bushels, at 50 cents.
Wool, 177,000,000 pounds (estimated
clip of 1868), at 42J cents
75,225,000
Tobacco, 225,000,000 pounds, at 16J
Barley, 25,000,000 bushels, at $1 20...
Hay, 25,000,000 tons, at $10
Bye, 25,000,000 bushels, at $1 10
Hides, 6,700,000, at $5 50
Potatoes, 150,000,000 bushels, at 60
cents
37,125,000
30,000,000
250,000,000
27,500,000
36,850,000
cents
90,000,000
16
OFFICIAL REPORT.
Buckwheat, 20,000,000 bushels, at |1 . |20,000,000
Flesh of atiimals, deducting value of hay
and grain consumed *400,000,000
Dairy products, deducting value con¬
sumed of farm products previously
enumerated 4400,000,000
All other products of agriculture, includ¬
ing the annual increase in the value
of cattle and horses, the value of fruits,
seeds, and garden products, the annual
addition to the value of farms and
farm buildings, and implements made
by farm labour not classed as mechani¬
cal (fences, drainage, &c., &c.) 650,000,000
Total $3,282,950,000
* The usual dietary of prisons in the United States allows about one
pound of fresh meat, or its equivalent in salt, meats or fisli, for the subsis¬
tence of the inmates. In hospitals for the insane the allowance of meat or
its equivalent is about one half-pound. The ration of the United States
army is one and one-quarter pounds or its equivalent. An estimate of
twenty dollars per head per annum as the cost of the meat food of the pre¬
sent population would yield a total of $780,000,000. When it is considered
meat is consumed in the United States by the labouring as well as by the
well-to-do classes, this will not seem an exaggerated estimate. A very
careful examination into the dietary of one of the best-conducted factory
boarding-houses in New England shows a consumption of three and one-
fifth pounds of meat, mostly fresh beef, per week for each person, at an
expense per head of a little above twenty-eight dollars a year. Of the
forty persons in this enumeration fourteen were females and four children.
f The dietary of the same factory boarding-bouse heretofore quoted,
where the operatives were in large part French Canadians, notoriously
frugal and simple in their habits, and in which they were furnished to their
own satisfaction,shows an average consumption of butter amounting to about
$16 51 a year for each person, including women and children. An average
consumption for the entire population, taken at one-half of this sum, or
$8 25 a head, would result in an expenditure on this account of
$321,750,000. A consumption of milk to the value of one cent per
day for each person would give an additional sum of $143,350,000, making
a total for these two items of $464,100,000. To this must be added the
value of cheese and eggs consumed. Any one who is acquainted with the
manner in which milk, and more especially butter, are consumed in the
families of American labouring men, as well as in the houses of the wealthy
and well-to-do classes, will acknowledge that these estimates of consumí-
tion fall considerably within the mark. In further illustration of the severa
points indicated, we append the results (see Appendix A) in full of the
inquiry into the quantity and cost of food and other necessaries of life con¬
sumed in the New England factory boarding-house thus referred to. The
investigation was made at the request of the Commissioner, and the results
are undoubtedly correct to ounces and cents. In fact, it is believed that
no similar investigation, as respects accuracy, has ever before been insti¬
tuted in'Wie United States.
OFFICIAL REPORT.
17
PRODUCTS OF OTHER INDUSTRIES.
In respect to the other wealth-producing industries, the sta¬
tistics of the manufacture of cotton, wool, iron, hoots and shoes,
and paper are sufficiently available and exact to allow of the
very accurate determination of the increased value which accrues
from the labour employed in these several departments.
MANUFACTURE OP COTTON.
Estimated number of spindles in the
United States, from the latest returns
to the Cotton Manufacturers' Asso¬
ciation 6,930,346
Capital represented, at an average of $20
per spindle $138,606,920
Estimated consumption of cotton, in
pounds, per annum 450,000,000
Average number of yarn 28
Product of cloth, allowing one-sixth for
waste, pounds 375,000,000
Value of product, on basis of twenty-five cents per pound for
cotton—'
Cotton $112,500,000
Supplies and repairs 21,000,000
Labour 42,000,000
Profits on capital, say ... 8,500,000
$184,000,000
Estimated expenses of transportation
and distribution 31,415,000
Hands employed, mostly female, esti¬
mated 125,000
Value added to material by each hand.. 404
Value of the manufactured product ready
for transportation and distribution,
exclusive of cost of raw cotton 71,500,000
MANUFACTURES OP WOOL.
Estimated amount of machinery in card¬
ing and combing, equivalent to 6,000
sets of cards. Estimated consumption
of wool and substitutes, 1868, in con¬
dition as marketed, pounds 235,000,000
Equivalent in pounds of scoured wool.. 125,000,000
Value of product :
Wool $90,000,000
Supplies and repairs 25,000,000
Labour... 35,000,000
c
18
OFFICIAL REPORT.
Profits on capital, 1868-69,
estimated at six per cent. $6,000,000
$156,000,000
Estimated expense of transportation and
distribution 25,000,000
îiumber of bands employed, mostly
males, at fifteen to each set of cards.. 90,000
Value added to material by each hand.. $455
PIG AND BAR IRON.
Present annual product of pig iron, tons 1,725,000
Value at furnace, at $36 per ton $62,100,000
Present annual product of rolling mills
and bloomeries, tons 1,222,000
Value of product of rolling mills,
1,200,000 tons, at $90 $108,000,000
Deducting value at rolling mills of pig
and scrap iron used as raw material,
say, 1,416,000 tons, at $37 50 53,100,000
Added value of rolling-mill industry .... $54,900,000
Productofbloomeries,22,000tons,at$180 $3,960,000
Deduct value of pig metal used as raw
material, say 26,400 tons, at $38 .... 1,003,200
Added value of bloomery industry $2,956,800
Eecapitulation :
Pig metal $62,100,000
Rolling-mill industry, added value 54,900,000
Bloomeries, added value.... 2,956,800
Total $119,956,800
The following is an estimate of the number of hands employed
in the primary production of iron, viz., pig and bar iron, as
returned by the Secretary of the American Iron and Steel
Association :—
At blast furnaces 12,500
Preparation of ore and fuel 42,000
At forges and bloomeries 2 500
In rolling mills 58^000
Total 115,000
OFFICIAL REPORT.
19
There are no accessible data for estimating the royalty paid
for ores, or the cost of the transportation of ores to the coal, or
vice versa. It may also be noted that the profits of iron pro¬
duction, be they large or small, are included in this sum of
$119,956,800. If it be all credited to the actual labourers, the
value of the work of each hand is $1,043 ; but a fair deduction
for labour of persons not enumerated, and for profits above six
per cent., would probably reduce this average to $700 or $750.
LEATHER MANUFACTURES.
Yalue of leather tanned and dressed in
United States $124,760,069
Deducting value of hides and skins used
as raw material 66,531,114
Value added by labour $58,228,955
Yalue of boots and shoes produced.... $246,252,000
Deduct value of all materials used,
including leather 130,169,608
Added value of boot and shoe industry $116,082,392
Yalue of other manufactures of leather,
harness, hose, belting, bags, porte-
monnaies, &c $63,300,000
Deduct value of materials, including
leather 15,000,000
Added value of above industries $48,300,000
Number of hands employed in the
manufacture of leather 30,000
Employed in manufacture of boots and
shoes 131,333
Employed in other^manufactures from
leather 19,000
180,333
Eecapitulation :
Yalue added to hides and skins in
the manufacture of leather $58,228,955
Yalue added in manufacture of boots
and shoes 116,082,392
o2
20
OFFICIAL REPORT.
Value added in other manufactures
from leather $48,300,000
$222,611,347
The total value of product in the manufacture of leather is
apportioned as follows :—
Eaw material $66,531,114
Supplies and repairs 24,328,955
Labour 20,000,000
Capital* 13,900,000
$124,760,069
Value added tp material by each hand,
(excluding cost of " supplies and
repairs") $1,130
Average wages 666§
The total value of the product of the boot and shoe industry is
apportioned as follows :—
Eaw material $130,169,608
Supplies and repairs 9,373,959
Capital 24,625,000
Labour 82,083,433
$246,250,000
Value added to material by each hand 812
Average wages 625
For a more complete exhibit of the industry of the United
States engaged in the production of leather and in the manu¬
facture of articles from leather, reference is made to the appendix
to this report marked B.
MANUFACTURES OF PAPER.
The quantity annually manufactured in
the United States is estimated for
the Commissioner by the trade, at
780,000,000 pounds, valued at.... $72,000,000
Number of hands employed 25,000
The Commissioner, however, has not the data requisite for
'separating the value of the labour from the material used.
* The capital employed in making leather is much larger in proportion
to product than in making hoots and shoes.
OFFICIAL REPORT.
21
VALUE ADDED TO PRODUCT BY RAILWAY TRANSPORTATION.
The addition, made to the annual product of the country
through the service rendered by capital and labour employed in»
railway transportation has recently been shown by competent»
authority to be at the rate of about > three hundred and sixty
millions of dollars, on an investment of capital of nearly one
thousand eight hundred millions.
FISHERIES.
Unfortunately, and almost inexcusably, the products of our
national fisheries have never been enumerated with any such
completeness as to enable an estimate of the annual value of the
production of this industry to be made with any great degree of
assurance or satisfaction. But a recent canvass of certain
fishing fields justifies the conclusion that the value of all the
fisheries of the country—including sea-coast, lake, and river
fisheries—is not less than one hundred millions of dollars per
annum.
RECAPITULATION.
A summary statement of the values created by the leading
industries of the country would therefore appear to be substan¬
tially as follows :—
Agriculture $3,282,950,000
Cotton manufacture 71,500,000
Woollen manufacture 66,000,000
Iron production, pig and bar 119,950,000
Leather manufactures 222,600,000
Eailway service 360,000,000
Fisheries 100,000,000
$4,223,000,000
This aggregate, deducted from the estimated gross product of
the country, viz., $6,825,000,000, gives $2,602,000,000 as the
product of all the industrial classes remaining unenumerated.
If we suppose the classes enumerated to embrace 7,165,000
producers (6,435,000 agriculturists and 730,000 engaged in
railway service, fisheries, and the manufactures specified), this
will leave a product of $2,602,000,000, divided among 5,705,000
producers (the total number of producers having been taken at
12,870,000), giving an average value of the labour of each one
of $455 per annum. This large body of producers includes
persons of the most various occupations and the most diverse
character as regards the capacity ol production, embracing as it
does many highly skilled and higbdy paid artisans, as well as
22
OFFICIAL BEPORT.
all the distributors of the country, and also ^eat numbers of
domestic servants, womeu and children, contributing in but a
small degree to production, and receiving minimum wages.
So far as any estimate can be made of the proportionate
number employed in mechanical employments, from the im¬
perfect data of the census of 1860, there are in this remainder
at least 1,000,000 skilled artisans, machinists, carpenters, black¬
smiths, masons, and the like, whose average wages are at least
$2 50 per day, or about $750 per year, and the value of whose
labour in the work of manufacture or production must be
estimated at the sum of their wages, with a fair rate of profit to
the employer, and the wear of tools and apparatus—say $1,000
per annum—thus making th(îm the most valuable producing
class, and consequently the largest consuming class in the
community.
If we deduct $1,000,000,000 as the value of their labour, we
have a remainder of $1,602,000,000 as the result of the work
of the 4,705,000 common labourers, domestic servants, and of
all distributors, or an average of $340 per annum to each
person. This final result would indicate that the total
estimate of annual product is an under rather than an over
estimate
It will be obvious, furthermore, that this estimate has been
made upon a currency basis, or at a depreciation of the currency
in relation to gold of from twenty-five to thirty per cent. ; and,
also, that the prices of many commodities included in these
estimates are represented at a much higher rate in relation to
gold than the nominal depreciation would indicate. What
abatement should be made on this account from the total
estimate as above given it is impossible to tell. The machinery
and tools of production, transportation, and distribution were
never before so ample or so effective ; and so soon as the evil
effect of a vicious currency and a burdensome tariff shall be
removed, it will not be too much to expect that the present
aggregate value of annual production will be maintained—^not,
of course, by maintenance of prices, but from the vastly greater
abundance, with its resulting comfort to the people.
ANNUAL INCREASE OF THE NATIONAL VALUATION.
If the estimate before given of the present value of the real
and personal property of the United States, viz., $23,400,000,000
(currency), be correct, the nominal increase in valuation, since
1860, has been at the rate of $921,700,000 per annum, or 13-4
per cent, of the value of the annual product. In this, however.
OFFICIAL REPORT.
23
is included an increase in the valuation of land, consequent upon
the increasing density of population in the older sections of the
country, and the annual rapid extension of settlement and
civilization over territory before possessed of but nominal or no
value. But such a rapid increase in the valuation of this
description of property, gratifying as it certainly is in the
abstract, does not represent to an equal extent an increase of
capital available for reproduction and an active increase of
wealth. On the contrary, in all the large cities in the country,
especially where the increase experienced in the valuation of
land since 1860 has been the greatest, much of the property thus
appreciated not only subserves no higher or more useful purpose
than before, but the increased value, as represented in increased
rents, really becomes a tax upon some classes of production, and
decreases the capital available for such purposes.
Making allowance for this element of unproductive land
valuation, the Commissioner has been led to the conclusion that
the annual increase of active capital in the United States, arising
from the excess of production over expenditure, cannot at the
present time be considered as in excess of eight per cent, of the
gross annual product, or $546,000,000 per annum.*
In presenting this analysis of the valuation, annual product,
and annual surplus of the country, the Commissioner has simply
responded to a desire, of late most frequently expressed, that
some exhibit should be made of the information available on
these subjects. For the preparation of an exact statement the
requisite data are not at present attainable. Certain elements
can, however, undoubtedly be obtained which may be regarded
* If this estimate of the annual surplus of national production over
national consumption, available as active capital for reproduction, should
appear too small and disproportionate, it should be borne in mind that
while the aggregate of the national product is proved by incontrovertible
statistics to be very great, there is also no other fact better proved by com¬
parison and observation than that the "per capita consumption of the
people of the United States is larger than that of the people of any other
^civilized nation. The habits of economy and frugality which necessity has
forced upon the masses of the people in other countries are, in general,
neither known nor practised in the United States; and all foreigners who
visit the United States for the purpose of studying its social economy are
particularly impressed with what, judging from their home standpoint of
view, seems an enormous waste both in domestic living and domestic
manufacturing. As showing, however, that this profusion in consumption
is not wholly an unmixed evil, reference is here made to a recent report of
M. Mantegazza, a member of the Italian Parliament, on the condition of
Italy, in which the opinion is expressed, that one great reason for the
physical, commercial, and financial depression of the masses of the Italian
people is that they are not sufficiently well fed. " A nation which thinks,
only far enough ahead to keep body and soul lazily together, has no energy
to spare for enterprise, no money for public purposes, no superfluity of
heart and strength to put into war or defence.
24
OFFICIAL REPORT.
as approximately accurate ; such as the aggregate valuation,
according to the census of 1860, and the per capüa property and
the per capita product of the nation at that period. The esti¬
mates which may be adopted of the increase upon these amounts
which has occurred in the ten years which have elapsed since
1860, also admit of verification, to some extent, by comparison
with the valuations and estimates arrived at in Great Britain
during the past year, where density of population, limited area,
and almost perfect machinery for investigation on the part of the
government and voluntary associations, allow of the attainment
of results far more worthy of confidence than those which can be
deduced from similar investigations in the United States, under
much less favourable conditions. On such a basis the Commis¬
sioner has conducted his investigations, and, without claiming
to speak with authority, he submits his conclusions as the best
result of much time and labour expended, in which he has been
assisted by experts in many of the leading departments of
production and industry.
RETARDATION OP NATIONAL DEVELOPMENT.
There are, however, certain departments of this inquiry where
we may leave the field of estimate and assumption and deal
with what seem to be exact and positive data ; and these data,
the Commissioner is sorry to say, are not calculated to afford
much support to those who are accustomed to indulge in
flattering estimates respecting the present amount and exist¬
ing rate of increase of the national wealth. For example, he
would ask attention to the following table, showing the
Total polls, houses, real and personal estate, and taxation in Massachusetts,
from May 1, 1861, to May 1, 1868, inclusive, as per statistics prepared by
Hon. Oliver Warner, Secretary of the Commonwealth, and published by the
legislature.
1861.
1862.
1863.
1864.
1866.
1866.
1867.
1868.
Polls.
Houses.
Personal.
Real estate.
Total value.
Taxation.
280,855
276,443
275.758
281,220
287,655
306,993
315,742
332.759
178,194
178,450
183,528
185,232
188.005
190,439
195,388
200,267
$309,397,669
315,311,213
348,500,267
324,584,847
386,079,955
430,272,298
457,728,296
469,775,322
$552,087,749
543,669.113
553,6.50,716
577,298,256
605,761,946
651,043,703
708,165,117
750,723,617
$861,485,418
858,980,326
897,150,983
901,883,103
991,841,901
1,081,316,001
1,165,893,413
1,220,498,939
$7,600,501
8,605,511
10,599.097
12,876,850
16,800,332
15,694,039
19,104,074
16,056,193
By an analysis of the above table (which we have every
reason t(j presume is comparatively accurate, errors of valuation
OFFICIAL REPORT.
35
at one period compensating for those of another) we find that
the value of the real and personal property of Massachusetts,
subject to taxation in 1861, was $3,069 to each poll, while in
1868 it was $3,668, a nominal increase of $600 per head, or
close upon twenty per cent, on the valuation of 1861. But
the valuation of 1861 was at gold rates, and, therefore, simply
to make good the individual average of wealth, the per capita
of 1868 should have been $4,142 (taking 35 as the average
premium of gold for the year for which the last valuation was
made), a gain of $1,074. The difference ($474) between this,
the gain in price necessary simply to make good the depreciation
of the currency and the sum of $600, the whole increase actually
realized, marks the falling off in the valuation of the State
per capita^ during the eight years covered by the table. In
other words, for every $100 (gold) of property possessed in
1861, there should have been $135 (currency) in 1868, on the
supposition that real values had remained stationary. There
was, in fact, however, but $119 56.
But an even more noticeable and significant fact, revealed
by the above statement, is that the increase in the number of
houses in Massachusetts does not keep pace with the increase
of population. Thus, in 1861, there were one hundred and
fifty-seven polls for every one hundred houses; but in 1868
the ratio was one hundred and sixty-six polls to every one
hundred houses ; or, in other words, the course of affairs in
Massachusetts for the eight years, 1861 to 1868 inclusive, has
been such that nine polls, or possibly as many heads of families,
in every hundred, have been crowded out of houses—deprived
by industrial causes of that degree of independence and comfort
which is involved in the maintenance of a separate household.
Surely, then, in this State, which a recent foreign economist
has characterized as the head of the industrial army, we have
an apparently unanswerable testimony to the effect that, what¬
ever may be the condition of the rich, the poorer part of the
community have certainly grown poorer. A comparison of the
valuation of Massachusetts with the whole population leads
substantially to the same conclusions.
Thus, the valuation of Massachusetts for 1850 was
$597,936,995 ; the population 994,514—making a per
capita valuation of about $600. In 1860 the valuation
was $897,795,336; the population 1,231,066—making a
x)€T capita valuation of $729.
In 1865 the valuation was $991,841,901, currency ; the
population, 1,267,031—making a per capita valuation of
$783, currency.
In 1868 the valuation was $1,220,498,939, currency; the
26
OFFICIAL REPORT.
population (estimated), 1,289,000 — making a 'per capita
valuation of $947, currency.*
This exhibit is tbe more noticeable because Massachusetts
is pre-eminently a State dependent upon manufactures, and it
would fairly be supposed that its prosperity might be secured,
if that of any State could, by the high degree of protection
afforded to its industry by the existing tariff, one of the most
severe and rigorous ever enacted for the purpose of creating and
endowing a diversified industry.
Without going into so much of detail relative to the facts of
appraisement in other States of the Union, the Commissioner
would invite attention to the general effect of the following
table, which exhibits the assessed value of real and personal
property in the States of Ehode Island, Connecticut, Ohio, and
Indiana, for the two years 1861 and 1868, and the State of
Pennsylvania for the years 1861 and 1865, at which latter date
the State tax was taken off from real property, which accordingly
is no longer assessed for State purposes. With the exception
of the State of Illinois, where, as is generally known, appraise¬
ment is habitually kept down by the provision in the State
constitution requiring a yearly tax on all property for a purpose
which is practically obsolete, these are the only States for which
the Commissioner has obtained the figures. As his object
merely is to rebut the presumption of an enormous general
increase of wealth between 1860 and 1870, a larger collection
of facts is plainly not necessary :
state.
Rhode Island
Connecticut..
Ohio
Indiana
Pennsylvania.
New York
Total value of
real and per¬
sonal prop¬
erty, by as¬
sessment of
1861.
§121,118,126
224,962, .514
892,850,084
441,562,339
569,049,867
1,441,769,430
Totalvalue ofTotalvalueof
real and per¬
sonal prop¬
erty, by as¬
sessment of
1865.
§595,591,994
real and per-1
sonal prop-;
erty, by as¬
sessment of
1868.
§187,697,591
312,574,408
1,143,461,386
587,970,549
1,766,089,140
P tD
O) Ü
> .
.7: o o
(D r-i
^ o .S
C
55
39
28
33
4f
22^
0 =■
2 3
» ^
— tí
85
85
85
35
35
35
* The note accompanying the above statement, forwarded to the Com¬
missioner from the office of the auditor of the State, adds :
" It will be observed from the above that the increase from 1850 to 1860
was natural and legitimate, while that from 1860 to 1865 was less than
would be expected, but for the fact that to that date the prices of our real
estate had not risen as they have since, and not at all in proportion to the
prices of products. At present, our fixed property is perhaps priced as
high as the personal estate, and all should be taken down at least one-
fourth to reach the gold standard, making the total $915,374,204, and
the^ßr capita $700—which is less than in 1860."
OFFICIAL BEPORT.
27
From tMs table it would appear that, so far as the appraised
value of real and personal property was concerned, the advance
in only two of the States enumerated had been equal to the
assumed premium on gold ; while, had the exact average of the
gold premium for 1868 (39 *6) been taken for comparison, only
one of these six States would have been found to make good
the gold values of 1861—and that the small and rich State of
Ehode Island. This calculation, however, has been made
without regard to any increase that may have taken place
in population during the period. If the lattér element were
taken into account, probably not one of these States would
exhibit any increase in assessed values, while some would fail
not only, as above, to make good the values of 1861 in gold,
but even to sustain a per capita valuation in currency equal
to the gold valuation of the period before the war.
At this point it may be proper to remark that the totals
of State and local taxes exhibit no such incapacity to make
good the figures of 1861. In the three important States of
Massachusetts, Ohio, and liew York, of which alone the
Commissioner has fuU reports at hand, the totals of all
State and local taxes levied in 1868 were, respectively,
$16,056,143, $20,489,148, and $44,298,436, against $7,600,501,
$11,071,127, and $20,402,276 ; an increase of 111 per cent, in
Massachusetts, 85 per cent, in Ohio, and 112 per cent, in jN^ew
York.
The Commissioner has not cited these figures of State
valuations with the idea that they prove a positive, or even
a proportionate, decline in wealth throughout the country
during the decade now closing. Something of the remarkable
and even paradoxical result exhibited is due to inherent defects
in the American system of appraisement, and to the withdrawal
of large classes of personal property from taxation ; but these
statistics, while they would not justify the inference of a decline
in wealth, certainly refute the common opinion of an enormous
increase during the period in question. Whatever they may
not prove, they clearly are sufficient to show that the large
estimates so commonly made of the present value of property
in the United States, as a whole, will not bear the test of an
examination in detail. However defective the system of ap¬
praisement in most of the States of the Union may be, the
same tendency to error certainly existed before the war as now.
Indeed, the motives to a full appraisement are evidently
stronger to-day than formerly, inasmuch as with the vast
increase of taxation which has been shown, it becomes
necessary for officials in charge either to obtain a larger
aggregate of taxable property in the community, or to permit
28
OFFICIAL B.EPOBT.
the rate of taxation to rise to such a degree as to excite
animadversion and resistance.
EXISTING AGENCIES TENDING TO IMPAIR THE RAPIDITV OP
NATIONAL ACCUMULATION.
But assign whatever of weight we may to the evidence thus
presented respecting the retardation of national development
during the past decade, there are many circumstances which
seem to indicate with certainty that the present accumulation
of new capital in the United States, available for the further
creation of wealth and values—the result of the annual surplus
of national production over national consumption or expenditure
—is at a much slower rate than it ought to be, and than it
necessarily would be under entirely healthy and natural con¬
ditions.
Some of the circumstances which seem to afford such in¬
dications are as follows :—
1. The condition of the foreign trade of the country.
At the breaking out of the war, in 1861, the distrust felt
by nearly all foreigners in the future of the United States was
so great that the larger portion of American securities—
national, State, and corporate—held in foreign countries, were
returned for sale at almost any sacrifice ; and to such an extent
was this the case that the country in 1863 may be said to have
exhibited a clean national ledger in respect to foreign in¬
debtedness. Since this date there have been transferred from
the United States to foreign countries obligations which have
raised the total of foreign indebtedness to an estimated amount
of about $1,400-,000,000, which may be classified somewhat as
follows :—
NATIONAL SECURITIES.
In regard to the amount of national securities which have
been transferred to foreign ownership since 1862-63, the Com¬
missioner finds a wide difference of opinion among American
and European bankers best capable from experience of forming
an estimate ; the minimum being, however, from eeven to ei^ht
hundred millions. The following estimate, prepared for the
Commissioner by the house of Jay Cook & Co., has not only
received the approval of some of the largest purchasers of
national securities on foreign account in New York, but has
also beeiKchecked from various other and independent sources :—
OFFICIAL REPORT.
29
Fives of 1871 and 1874 $15,000,000
Sixes of 1881 90,000,000
Five-twenties of 1862 380,000,000
Five-twenties of 1864 30,000,000
Five-twenties of 1865, May & November 120,000,000
Five-twenties of 1865, January & July 200,000,000
Five-twenties of 1867 120,000,000
Ten-forties 25,000,000
Registered bonds of all issues 20,000,000
Total $1,000,000,000
As substantiating the accuracy of the above estimate, it is to
be noted that the earlier issues of United States securities have
almost entirely disappeared from the American market, and that
transactions are now limited mainly to the issues of July, 1865,
1867, and 1868.
OTHER SECURITIES.
State.—Of State securities held abroad or on foreign account
the investigations of the Commissioner indicate a sum in excess
of one hundred millions. The following amounts are returned
as positively known to the State authorities :—
Alabama $1,483,260
Georgia 72,000
Illinois 1,400,000
Louisiana 5,235,933
Massachusetts 12,277,500
Michigan 800,000
Missouri 1,500,000
New York 2,440,999
Ohio 3,500,000
Pennsylvania 9,458,600
Virginia 7,523,500
Total , $45,691,792
This amount, it is to be noted, only includes those issues
which have been " placed " abroad originally through distinct
State agencies. To it must be added the larger amount which
has been from year to year purchased in the American market,
and either sent abroad or held here on foreign account.
Railway bonds and shares.—Of railway bonds and shares held
abroad or on foreign account, the investigations of the Com-
30
OFFICIAL BEPOB.T.
missioner indicate a total of $130,000,000 of bonds and
$113,000,000 of shares.
Of the amount of bonds specified, an aggregate of $61,350,349
has been positively reported to the Commissioner in behalf of
fourteen companies.
Of the amount of railway stocks specified, seven companies
return an aggregate of $83,449,800. A detailed statement of
this element of our foreign indebtedness would be given had not
the information been communicated under a pledge that tbe
details should not be made public.
For the companies which have not reported the amount of
their stocks and bonds held abroad, estimates have been carefully
prepared for the Commissioner by the best authorities on this
subject. The character of these statements and the represen¬
tations which accompanied them is such as to satisfy the Com¬
missioner that the aggregate given above, namely, $243,000,000
of stocks and bonds, is not an over-estimate.
Miscellaneous Securities {partially known and partially
estimated.)
Municipal bonds $7,500,000
Canal bonds 5,063,967
Mining shares and bonds 10,000,000
A careful estimate of other forms of foreign indebtedness
on li^ovember 1, 1869, gives the following additional elements :—
Capital lying in the United States in
consequence of the comparatively
low rate of interest in Europe—
credits, bills of exchange, &c $50,000,000
Cuban moneys temporarily transferred
in consequence of the revolution... 25,000,000
Foreign capital invested in mortgages
of real estate, &c 25,000,000
Recapitulation,
State bonds $100,000,000
Railway bonds 130,000,000
Railway shares 113,000,000
Mining bonds and shares 10,000,000
Municipal bonds 7,500,000
OFFICIAL BEPOHT.
31
Miscellaneous bonds and shares $5,000,000
Capital temporarily invested 50,000,000
Cuban moneys 25,000,000
Eeal estate mortgages, &c 25,000,000
Total $465,500,000
Adding $1,000,000,000 of federal securities held abroad, as
before estimated, we have, as the total of the present foreign
indebtedness of the United States, the sum of $1,465,500,000 ;
on which, at an average of 6 per cent., an annual payment of
•interest accrues to the amount of $87,930,000 ; and of which
$80,000,000 may be estimated as paid regularly.
ADVERSE FOREIGN BALANCE FOR 1868-69.
But enormous as is this sum, the process of incurring indebted¬
ness still continues as actively as ever. The account of the
United States with foreign countries for the fiscal year ending
June 30, 1869, may be exhibited substantially as follows :—
Imports of merchandise, gold value... $417,371,765
Exports (gold values) ... $275,611,591
Ee-exports, &c 10,907,753
286,519,344
$130,852,421
Less excess of foreign goods, in bond,
1869 over 1868 14,702,079
Adverse balance 1868-69 merchandise
account $116,150,342
Movement of Specie and Bullion.
Exports $42,915,966
Ee-exports 14,222,414
Total $57,138,380
Imports 19,654,776
Loss of specie and bullion $37,483,604
32
OFI-ICIAL REPORT.
If we suppose the excess of specie and bullion exports to
have been devoted exclusively to the liquidation of balances
incurred on the merchandise account, the remaining balance on
this account to be settled for in some other manner would be
$78,666,738.
To this sum must he added the following other items :—
Obligations for interest (paid), estimated $80,000,000
Excess of freights carried in foreign
bottoms * 24,000,000
* The following tablé exhibits the proportions of the total trade of the
country for each year, 1869-1869 inclusive, carried in American and in
foreign vessels, respectively, with the gain to the United States or to foreign
nations from the excess of freights carried in each year :—
Imports, exports, and re-exports.
Year.
Total trade.
American
vessels.
Foreign ves¬
sels.
Preponde¬
rance of
foreign.
Gain to for¬
eigners, cal¬
culated at 8
per cent, on
gross ex¬
cess.
1859
1860
1861
$695,557,592
762,288,550
530,569,412
$465,741,381
507,247,757
350,827,256
$229,816,211
255,040,793
179,742,156
«$235,925,170
«252,206,964
«171,085,100
C$18,874,014
c 20,176,557
c 13,686,808
1862
1863
1864
1865
1866
1867
1868
1869
435,710,714
584,928,502
669,855,034
571,131,290
1,003,066,748
873,064,840
848,527,647
876,364,060
217,695,418
241,872,471
184,061,486
146,067,245
324,141,463
5296,120,912
297,981,573
288,916,927
218,015,296
343,056,031
485,793,548
425,064,045
678,925,285
5576,943,928
550,546,074
587,447,133
319,878
101,183,560
301,732,062
278,996,800
354,783,822
280,823,016
252,564,501
2.08,530,206
25,590
8,094,685
24,138,565
22,319,744
28,382.705
22,465,841
20,205,160
23,882,416
$1,868,933,845
$149,514,706
a Excess of American over foreign, b Partly estimated, c American gain.
The proportion which the cost of freights sustains to the value of goods
transported varies of course greatly with the kinds and qualities of goods,
and the distance over which they are moved. On tea and coffee, bought
with foreign bills of exchange, the estimate prepared for the Commissioner
by experts is 5 per cent. ; on sugars and molasses the average is given at
12 per cent. ; on general dry goods and merchandise 8 per cent. ; on wool
and hemp, 10 per cent. ; on pig iron and coal, 15 to 20 per cent.
In this connection the Commissioner would state that the estimates made
for him by experts of the loss to the country from the almost complete
annihilation of the large carrying trade formerly enjoyed by American
vessels between foreign ports, as from the East Indies and other porta to
Europe, and from our non-participation in the emigrant and other
passenger-carrjing trade reach nearly twenty-four millions of dollars
additional.
OFFICIAL REPORT.
33
Expenditures of Americans in foreign
countries* $25,000,000
Assuming that the sums chargeable to smuggling and under¬
valuation of imports are counterbalanced by the undervaluation
of exports,t the sum total of the adverse balance of indebted¬
ness of the United States to foreign countries will, at the
present time, probably average about $210,000,000 per annum.
To meet and settle this constantly increasing and adverse
balance there would seem to be, under the present condition of
prices and cost of production in the United States, but one
resonrce, viz., to remit certificates of indebtedness—national.
State, or corporate. And this process is undoubtedly adopted,
and goes on, month after month and year after year, without
occasioning thus far any marked disturbance in the trade and
commerce of the country.
Now, whether so great an exchange of evidences of indebted¬
ness for foreign commodities or foreign services is advantageous
to the country at large, or how long such a method of liquidat¬
ing balances can continue, are questions which it is not necessary
to immediately consider, inasmuch as we would rather direct
attention at this point to the fact that, while before the war we
were able to wholly pay for our foreign imports and services
with the products of our own industry, including, after the
discovery of California, and up to the beginning of the war,
such a proportion only of our product of gold as it would have
been practically useless and even mischievous for us to retain,
we are not now so doing ; and this latter circumstance would
seem to prove beyond question that the aggregate of national
* The average number of citizens of the United States who arrived as
passengers in the country for the four years 1865 to 1868, inclusive, was in
round numbers thirty-seven thousand. The present average number of
foreigners amving in the United States, and not intending to remain, is
about twelve thousand per annum, leaving an apparent excess of Ameri¬
cans over foreign absentees of about twenty-five thousand. If we assume
one thousand dollars as the average expenditure of each from the time of
leaving the United States to the lime of returning, the total annual ex¬
penditure thus incurred by citizens of the United States in foreign countries
would be, approximately, twenty-five millions of dollars,
+ If we confine ourselves to the comparison of the values given to im¬
ports and exports, respectively, in previous years, this may be considered a
reasonable estimate; but for the last fiscal year it is certainly not the case.
Under the present organization of the Bureau of Statistics, the values
given to the exports of the country have been scrutinized and verified to
such an extent as to leave but little doubt that the statement for the last
year is substantially accurate and complete. The fraudulent undervalua¬
tion of imports, however, it is not within the power of such an agency to
prevent.
D
34
OFFICIAL REPOET.
production does not maintain the same proportion as formerly to
the aggregate of national consumption.
It must not be forgotten, furthermore, that by the remittance
of bonds we have simply deferred payment, and must hereafter
export products to meet these obligations ; and whenever such
export of products in payment for past imports shall be made,
it will of necessity be in addition to the export then made to
pay for current imports. Product for product is the absolute
condition on which alone commerce is possible.
DIVERSION AND DEMORALIZATION OF INDUSTRY.
Another circumstance which indicates a change in the ratio
that formerly existed between national production and national
consumption is to be found in the fact that during the last few
years large numbers of our population, under the influence and
example of high profits realized in trading during the period of
monetary expansion, have abandoned pursuits directly productive
of national wealth, and sought employments connected with
commerce, trading, or speculation. As a consequence we every¬
where find large additions to the population of our commercial
cities, an increase in the number and cost of buüdiogs devoted
to banking, brokerage, insurance, commission business, and
agencies of all kinds, the spirit of trading and speculation
pervading the whole community, as distinguished from the
spirit of production, and all the external appearances of
healthful activity. These things, however, are not to be
regarded as the legitimate growth of a really sound commerce,
but rather as the results of influences which have originated
almost exclusively in currency inflation. But be the cause what
it may, one thing is certain, viz., that national production has
suffered in consequence ; directly by the withdrawal of labour
from productive to unproductive or less productive employment,
and indirectly by infusing a spirit of discontent among those
who, by the force of circumstances, are compelled to earn
subsistence in agriculture or the mechanic arts, thereby impairing
both the quantity and quality of the products of their industry.
A most intelligent observer, the superintendent of one of the
largest manufacturing establishments in the middle States, thus
writes to the Commissioner :
"■ Those who observe the labourer find that he shows less and less interest
in the work he performs, his only anxiety being to hear the bell announce
the hour of his discharge from labour."
Another, superintendent of an extensive manufacturing
company, in answer to a question as to the comparative amount
OFFICIAL REPORT.
35
of work performed "by mechanics and labourers in 1860 and
1869, submits the following statement :
" October 1, 1869.
" In reply to your favour of the 29th, I would say that I now
employ seventy-eight men as mechanics, some of them in
building (new machinery), but most of them in the way of
ordinary repairs. It is impossible for me to state accurately the
quantity of work done by them as compared with what would
have been accomplished by an equal number of mechanics in
1860, but I think it quite safe to say it is twenty-five per cent,
less. This difference is occasioned in part by a feeling that they
are less favoured regarding the hours of labour than mechanics
who are employed % the government, but chiefly because many
of them are not really mechanics, having never served as
apprentices, and lack the skill which would have secured such
employment when help was more abundant."
"With a view of obtaining further information concerning the
relative product of labour in 1869 as compared with 1860, the
following question was appended to a circular (relative to wages)
extensively forwarded by the Commissioner to the largest and
most intelligent employers of labour in different sections of the
country : " Please state whether in your opinion mechanics and
labourers perform as much work in a day now as formerlyP
The following is an abstract of the answers returned, the
names of the parties or firms making the same being omitted :—
Maine, Portland.—" No, surely " and yet they do all they
get pay for"—"the row the mechanic now hoes is a hard one."
New Hampshire, Manchester.—" Only about two-thirds as
much."
Connecticut, Bridgeport.—"Mechanics perform more, on account
of the improved machinery, and labourers less."
Massachusetts, Worcester.—" I think we don't get as much
work as formerly by fifteen per cent." Milford.—" I think five
men did more work in 1860 than six men do now." " Good
hands more scarce now than at that time."
New York, New York City.—" I think they perform from
one-fourth to one-third less work since than before the war."
Buffalo.—"Twenty-five per cent, discount." Troy.—"No, not
by fifteen per cent, in the average." Albany.—" Three stone¬
masons or bricklayers will not do as much as two did formerly."
New Jersey, Jersey City.—" They do not perform more than
two-thirds as much as formerly."
Pennsylvania, Lancaster.—"As much as before, since the ten-
D 2
36
OFFICIAL REPOET.
hour system has hegun." Philadelphia.—"Three men do the
work of two."
Ohio^ Cleveland.—Three responded in the negative, and one to
this effect : "We think they do now, but there was a time, for
two to six years, when they did not." Cincinnati.—"Íío."
Dayton.—" íí^o,"
MÍ8miir\ St. Louis.—" JSTo, by fifteen to twenty per cent."
Illinois, Chicago.—" One-eighth less."
The Commissioner would further add, that of the answers
received^ as above, about one in nine indicated that the amount
of work performed in a given time, in 1869, compared favourably
with that performed at former periods.
The following statement, furnished to the Commissioner
the proprietor of the Morgan Iron Works of the city of
IsTew York, also indicates a change in the productiveness of
labour in this department of industry which it is to be hoped is
somewhat exceptional. Thus, in 1858, a marine engine was
built at the above works, at a cost of $23,000 (including profit
to the builder), which required 2,323 days' labour. In 1869
another engine, precisely similar as respects pattern and weight,
was constructed at the same works on contract, for $40,000.
The result was a loss to the builder of $5,000 and a necessary
expenditure of 3,538 days' labour, or 1,215 more days' labour
than was required for the performance of the same work eleven
years previously.
Here, then, are certain facts which the Commissioner, in the
discharge of his duty, is bound to make public. The labourer
appears to be less worthy of his hire than heretofore, and to
have lost his interest in his work. If an explanation of the
cause is demanded of the Commissioner, he can return but this
general answer : because a vicious currency and unequal taxation
take from the labourer a portion of the result of Ins work, and
give him no return. The labourer feels this, but knows not the
cause, and seeks in strikes, in eight-hour laws, and trades'
unions the artificial remedy, where the natural remedy would be
simply to restore to him good money, an honest measure of
value, and such laws as will secure equitable distribution of the
surplus of annual wealth which results from the excess of
production over expenditure.
Again, the general result of the business of the last fiscal
year to the merchants and manufacturers of the country is thus
expressed by a recognized industrial authority ;
" Those who, at the end of the fiscal year, have made a living and have
their capital unimpaired, should be content, for they will he doing better
than thikmajority."—Iron Age, June 24, 1869.
oï"J)xc;iAiL titïpoeT.
37
LOCAL DECREASE IN FARM STOCK AND ANIMAL PRODUCTS.
'The undoubted decrease in farm stock and animal products in
certain sections of the country also indicates a change, to at
least a limited extent, in the relations which production formerly
sustained to consumption and population. Thus, in the State
of Ohio, for whose domestic statistics a greater degree of
accuracy has been claimed than for those of any other State, the
official report for 1869 states that, comparing this latter year
with 1868, the whole number of sheep has decreased 1,416,205,
or from 7,688,845 to 6,272,640; the hogs 356,629, or from
1,812,572 to 1,455,943 ; the cattle from 1,512,666 to 1,492,581 ;
and the mules from 25,411 to 25,020. In respect to sheep
generally, extensive returns published by the Department of
Agriculture, conclusively prove a very large decrease in almost
every section of the country. This decrease for the year
1868-69 is estimated by the Bureau at not less than 4,000,000;
while others competent to judge report to the Commissioner
that the reduction in the whole number of sheep in the United
States within the last two years has been at least twenty-five
per cent. In one of the leading wool-growing States of the
West, the wool clip for 1869 is estimated at thirty-five per cent,
less than that of the previous year, 1868.
RELATION OF CAPITAL TO PRODUCT.
Another agency which has powerfully contributed to impair
the productive forces of the country, and is still most infiuential,
has been the great increase which has taken place since the
commencement of the war in the amount of capital and cost of
the instruments requisite for the prosecution and development
of industry. It is not necessary to here inquire as to the causes
which have contributed to produce this result ; but to simply
recognize the fact, which, however, is so patent as to hardly need
demonstration. lievertheless, the demonstration is afforded by
the experience of every business man, who knows that the
employment of capital to the value of two dollars currency is
necessary to return the same product which in 1860 was afforded
by the employment of one-half of that amount.
For example, in the case of the cotton manufacture, the mill
and machinery which could have been put in operation at a cost
of $15 to fit per spindle, in gold, in 1859-60, would now cost
$30 to $33 in currency. If we deduct twenty-five per cent, for
the depreciation in the currency, we have the ratio of real or
38
OFFICIAL Bï.ï'Ûïcr.
specie capital now required, viz., $22 50 to $24 75 per spindle,
or an advance of fifty per cent. The direct tax, therefore, upon
the community, from the required increase of capital in this
department, estimated at seven per cent, per annum, is from
fifty-two to fifty-three cents per spindle each year, or a sum
which would have paid more than three per cent, per annum
profit upon cost per spindles in 1859—60. Indirectly a still
greater loss to production is caused by the fact that tbe
additional capital thus employed is taken away, or kept away,
from other and perhaps equally important industries, which, are
thereby limited in growth.
A further illustration of tbe injurious influence of the in¬
creased cost of a given product of industry, thereby necessitat¬
ing the employment of a largely increased capital, neutralizing
the influence of improved machinery, diminishing exports and
restricting home consumption, is to be found in the manufacture
of boots and shoes. Thus, in 1858 the average price per case
of one-half-dozen men's "standard legged" boots was $27 25
—six months' credit. In 1868, notwithstanding the introduc¬
tion and employment of new and improved machinery and
processes, whereby the per capita product of each workman,
with a given amount of manual labour, has been increased
upwards of twenty-five per cent., the price of this number and
style of boots is $41 net cash, or fifty per cent, greater.
But in addition to the direct influence exerted in impairing
the productive forces of the country, the recent unnatural
increase in the cost of capital requisite for the prosecution and
development of industry has also been productive of another
effect,which cannot be regarded as other than prejudicial to the
interest of a people living under a democratic form of govern¬
ment, and also to the very existence of such a government
itself. This is, in short, the greater subordination of labour to
capital, through the hindrances which increased cost interposes
to the speedy attainment on the part of the labourer of that
amount of capital which is necessary to enable him to take a
position as an independent producer. Hence the rapid concen¬
tration of the business of manufacturing and of exchanging
into single and vast establishments, and the utter annihilation
of thousands of little separate industries, whose existence was
formerly a characteristic of all the older sections of the country.
To a certain extent, concentration of industrial production, by
promoting method, system, and division of labour, and thereby
reducing the cost of product, is undoubtedly beneficial ; but
when the growth of such a system is unnaturally fostered
through the necessities rather than the free will of the labourer,
the result cannot be otherwise than to render the many depen-
OFFICIAL REPOBT.
39
dent for all the elements of their livelihood upon the will of a
few rather than npon their own.
One word further is needed to present this influence of the
increased requirement and cost of capital in its true light, and
it is this : that it makes no diflerence for the time being to a
community, whether the diminution of the power of capital—
meaning thereby tools, food, clothing, building material, as well
as money—to develop industry is effected through the agency of
fire, flood, earthquake, or other physical disaster, or by the agency
of legislation, which so operates as to augment the value and
cost of all the instrumentalities through which the aggregate
of production is facilitated and cheapened. The evil of the
increased cost of all capital involved in production, or, what is
the same thing, the direct increased cost of production, is one,
moreover, that is not limited in its influence to the immediate
present, but inevitably entails a heavy burden upon the future.
A pertinent illustration of the manner in which circumstances
at^present increase the cost and requirements of capital, and also
tend to convert active into fixed capital, is afforded by the
following incident recently brought to the attention of the
Commissioner. In a block of stores now erecting in one of the
leading seaboard cities the expense of the glass (imported) used
in the same is $29,000 (currency.) An analysis of this expen¬
diture shows that one-fourth of it, $7,250, represents simply
depreciation of the currency ; one-third of the remaining cost,
or $7,250, represents the duties imposed on its iiiiport ; leaving
$14,500 as the foreign cost of the materia]^ plus the expenses
of transportation, profits, &c. liow, without discussing the
propriety of levying a tax upon this article to- meet the necessi¬
ties of the government, it unquestionably remains true that the
whole of this increase of price, amounting to one hundred per
cent., will remain so long as these stores stand, a tax on all the
industry to which they are made subservient, and also indirectly
upon other industries, by diminishing the general supply of
capital available in the country, and hence increasing its cost.
UTILIZATION OP NATIONAL RESOURCES AND ADVANTAGES.
A sufficient answer to the question whether the resources and
privileges which have accrued to the United States through its
inheritancse of soil, climate, race, and government, have been
utilized to the best advantage, is to be found in the fact that,
while as a nation we possess the greatest area of fertile and cheap
land, unrivalled means of intercommunication, and the freest
and most popula? form of government, domestic production, aa
40
OFITCIAL BBPÛBT.
measured in price, is nevertlieless carried on and maintained on
terms of less advantage to the consumer than is the case in any-
other kindred and competing nation ; a few articles for which,
through natural circumstances or peculiar inventive skill, a
marked advantage has been acquired, like cotton, petroleum,
the precious metals, sewing machines, and fire-arms, being
excepted.
The United States was formerly, and is likely soon again, to
be the main source of the supply of that fibre essential for the
cheap clothing of all nations, and its transportation in a crude
form to the seats of European manufacture involves nearly as
much labour and capital as are requisite for its home manufacture
in localities contiguous to the points of its production. Yet the
export of American manufactured cotton to other countries
does not increase but diminishes, being for the fiscal year 1869
only $5,871,000, currency, as compared with a gold value of
$10,934,000 in 1860, nominally one-half, but really one-quarter
in quantity. In his last report the Commissioner stated that
the opinion of experts communicated to him on the subject was
to the effect that if the American manufacturer could be put
upon the same basis as his foreign competitor, as regards direct
and indirect taxation, cost and excellence of machinery, and
would bring to his business the same skill and economy, he
would be enabled to produce cotton cloth, and yarn of Uo. 25
and under, at a cost which would enable him to undersell all
other producers. A revision of these data, made for the Com¬
missioner during the past year by a different but equally
trustworthy authority, leads to the more definite conclusion
that the export of cotton goods and yarns of low numbers, the
staple of consumption, could be immediately and greatly enlarged
if a reduction of cost equivalent to fifteen per cent, in the prices
of labour could be effected ; but at the same time it was added,
" that as the labourer now received but little more than was
sufficient for his bare subsistence, owing to the high prices
exacted from him for his food, fuel, clothing, and rent, to talk
of such a reduction of wages would be both inhuman and use¬
less." But the Commissioner sees that the high prices of food,
fuel, clothing, and rent are due to causes which can in a great
degree be removed by legislation, and until some steps are taken
in this direction the resources of the country, in respect to this
one great industry, are certainly not used to the best advantage.
Again, the country desires, and believes it expedient, that
another great leading branch of manufacturing industry, viz.,
that of wool, should be extended, diversified, and cheapened;
and men in the possession of the required skill and capital
stand ready to engage in new enterprises, and enlarge the
PFFICIAL BEPOBT,
41
varieties of production did circumstances favour. But circum¬
stances do not favour, mainly because a paternal government has
seen fit to ordain that the American manufacturer shall not
have that which the manufacturers of all other nations eu joy,
and which the chairman of the commissioners of the United
States to the wool and woollen department of the Paris Exposi¬
tion of 1867 has officially declared to be of ''immeasurable
advantage," viz., " an unlimited supply of every variety " of the
raw material. The manufacture of woollens in the United
States, therefore, from this and other obstructions created by
legislation, so far from being encouraged, is depressed ; wool
returns to the grower a lower price in gold than has almost ever
before been experienced ; the exports of manufactured goods
declined sixty per cent, within the last fiscal year, and amounted
in the aggregate to the paltry sum of only $160,000, as compared
with a British export of the same commodities of $129,000,000;
while the importations of woollens into the United States for
the same period increased from $32,458,884 to $34,620,943,
mainly in the very descriptions of goods which Congress has
practically declared the American workman shall not attempt to
manufacture.
Let us inquire further in this direction. A boot or a shoe
could be manufactured quicker, cheaper, and better in the United
States in 1858 than in any other country ; and since this period,
the improvements in machinery and processes have been such that
twenty-five per cent, more product results from the labour of
each workman ; and to such a degree of rapidity and perfection
has the process of manufacturing been systematized that a man
or woman may be measured and fitted with a pair of shoes, and
made expressly for them, during the time taken for an inspec¬
tion of the machinery and working of the factory. Boots and
shoes, however, cost more in gold, under the new system, in
1869, than in 1858, under the old; and other nations not
producing but consuming these products exchange the products
of their own labour for boots and shoes manufactured elsewhere,
thus depriving the American shipowner of his carrying trade,
the American manufacturer of his profit, and the American
workman of his employment. The manufacture of boots and
shoes, therefore, so far from being encouraged, is limited ; the
export value declined from $1,329^,000 in 1863, to $681,706 in
1867, and $475,050 in 1869. There being, moreover, more
workmen desirous of manufacturing boots and shoes than are
necessary to supply a consumption limited to our own country,
steady and constant employment is not afforded for the whole
number. Trade, therefore, is irregular ; production stops short
of its most profitable, maximum, while the cost of manufacture
42
OFFICIAL BEPOBT.
is maintained, from this cause alone, above its most profitable
minimum.*
If we turn next to one of the smaller branches of domestic
industry, we shall find that the United States is in the exclusive
possession of machinery which can manufacture combs, piano-
keys, and other articles from ivory, cheaper than can he done
elsewhere. But the United States does not sell these products
of their own industry to other nations, and mainly because the
price by which ivory has been increased, in accordance with
certain supposed national necessities, has been sufficient to
counterbalance all the advantages which would otherwise have
accrued from the exercise of American skill and ingenuity.
A multitude of other similar illustrations might be given ;
but those presented will sufficiently prove that in many
respects the United States does not use the advantages it
possesses in the best possible manner, and that if we annually
increase in national wealth, it is rather by reason of our great
natural resources, than from the intelligent direction through
legislation of our national economy. If in the above statements
too much significance should appear to be attached to the
possession of an export trade, it should be remembered that no
country can export an article or produit to any extent unless it
is prepared to sell the same as cheap aS oth&r nations ; and there¬
fore the ability or inability to export, hecomes a true test of the
ability or inability profitably to produce for the domestic Tnarhet.
DISTRIBUTION OF THE ANNUAL NET PRODUCT OP LABOUR
AND CAPITAL.
We come next to the consideration of the question whether
the infiuence of existing laws tends to promote such a distribu¬
tion of the annual products of labour and capital, as best
subserves the interests of the whole people ; but before endea¬
vouring to apply to this subject anything in the nature of an
immediate practical test, it seems desirable to review briefiy the
theory and practice of the past.
Production and consumption are the conditions of terrestrial
existence ; but it is not necessary, owing to the bounty of nature,
that all who consume should take upon themselves the labour of
direct and original production in order that all should exist.
* Reference is here made to the detailed statement in another part of
this report, by which it appears that thocost of boots and shoes is enhanced
eight per cent, by the taxes on the materials actually entering into the
production ; to say nothing of the indirect taxes on the food, fuel, clothing,
and shelter of the work-people, which must of necessity be made good to
them in tLeir wages, and henee appear again in the cost of their product,.
OFFICIAL BEPORT.
43
Humanity, therefore, from the first has spontaneously divided
into two classes, whom we may designate as " producers " and
" non-producers." *
Of all those who are in the receipt of any form of income
from capital or wages, the original producers include the larger
number and the slower minds ; the non-producers the smaUer
number and the more active minds.
The proper field of labour for the so-called non-producers lies
between production and consumption; their labour is in fact the
complement of the labour of production, exchange of products
being necessary to the full fruition of productive labour, and
beneficial to both producers and consumers. Up to this point
there is unity of interest in the labour of the two classes, but
here their interests separate and lead to antagonism.
The gains of the producers are derived directly from their own
labour ; but the gains of the non-producers, it is to be noted,
are derived from the labour of the producers also. The producers
create the property, and the non-producers come in to share it.
One class naturally strives to keep and the other to get as much
of the results of original production as it can ; and in this
struggle the more active minds get the better of the more sluggish,
and the few grow rich, while the multitude remain poor.
In the first stage of society, property can hardly be said to
exist, or exists in common. In the second stage, individual
rights appear, but property is to a great extent transferred by
force, and laws are devised to suppress force and prevent robbery.
In the third stage, violence being checked, theft and fraud
appear, and laws are made to prevent fraud. Eobbery and
plunder at first were more honourable than labour ; they were
the chief glories of the ancient heroes whom we are taught to
admire before we are old enough to have attained to any clear
perceptions of the principles of morality. Theft and fraud in
turn became more honourable than plunder.
We come now to the fourth st^e of society, where the grosser
methods of transferring property diminish, and cunning comes
in to take their place. This is the stage we now occupy. We
have advanced no further, and have yet no laws to prevent
transfers of property by cunning, artifice, or trickery. These
methods indeed begin to be opposed by public opinion, but that
tribunal still applauds as often as it condemns ; just as formerly
it sanctioned oftener than it censured violence.
There is, however, some progress ; and at this stage, let it be
observed, the labour of the non-producers becomes the comple¬
ment of the labour of the productives in a higher degree ^ more
* More properly, " indirect prodocers."
44
OFFICIAL BEPORT.
fully adding to the value of their products, and benefiting both
producer and consumer by improved methods of transport and
conversion, and by more just and reasonable methods of exchange
and transfer. The un productives are still animated by their
ancient spirit, and being the chief makers of the laws and
institutions for the protection of labour and ingenuity, the
increase of products, and the exchange and transfer of property,
they shape all their devices so cunningly, and work them so
cleverly, that they, the non-producers, continue to grow rich
faster than the producers. Whoever at this day watches the
subject and course of legislation, and appreciates the spirit of
the laws, cannot fail to perceive how more and more the idea of
the " transfer^^ of the surplus product of society, and the creation
of facilities for it, available to the cunning and quick as against
the dull and slow, has come to pervade the whole fabric of that
which we call government, and how large a number of the most
progressive minds of the nation have been led to accept as a
fundamental truth in political doctrine, that the best way to take
care of the many is to commence by taking care of the few :
that all which is necessary to secure the well-being of the work¬
man is to provide a satisfactory rate of profit for his employer.
The agitation which now pervades all civilized countries (fourth
stage) touching the relations of labour and capital, is but the
instinctive uprising of the great productive classes against the
institutions, methods, and devices of the non-productives. In
short, the ancient combat, old as the dawn of civilization, still
goes on ; animated on the one side by the desire to keep, and on
the other by the desire to get ; the producers combining rather
blindly and clumsily against the schemes of the unproductives,
as_ they combined at successive stages in all past history against
violence, robbery, plunder, theft, fraud, and the grosser acts
whereby property was transferred from the hands of the many
into those of the few.
PRA.CTICAL ILLUSTRATIONS.
Let us now see how far experience, in the form of positive
facts, furnishes support to the general statements above presented ;
for there can be no true theoretic conclusions which will not be
proved by the facts whenever the theory can be subjected to
practical and actual application.
In a former report (January 1869) the Commissioner stated,
as the result of extensive investigations into the industrial and
social condition of the people, that the tendency of affairs in the
United States was toward an inequitable distribution of the
OFFICIAL REPORT.
45
annual surplus of production over expenditure, and to impair
the power of the masses to accumulate property and better their
condition. These conclusions were supported by a large amount
of evidence drawn mainly from the older and more densely popu¬
lated sections of the country, and contributed in great part at
the cost of no little time and trouble, by extensive employers of
labour occupying situations which afforded especial advantages
for eliciting and determining the truth. The results arrived at,
although often questioned, and denied on the floor of Congress
and elsewhere, have never been refuted by the presentation of
any corresponding rebutting evidence ; but on the contrary have
been strengthened in the time which has since elapsed by a large
amount of additional testimony. Some of the difficulties which
may seem to stand in the way of the acceptance of the assertion
heretofore made, and which the Commissioner now repeats and
again asserts, viz., that the poor of the United States, under and
in consequence of the existing system of taxation and currency
condition combined, tend to grow poorer, may possibly be cleared
away, by remembering that the poor of this country are not, and
never have been, the same as a class as the poor of Great Britain
and Continental Europe. Here, poverty, as a general thing,
means deprivation of comforts and luxuries ; there, on the other
hand, poverty roaches a lower depth, and implies the depriva¬
tion of necessities and the possibility of starvation. Uow the
expression "the poor of the United States under the existing
system tend to grow poorer," in its widest signification means
this : that the great majority of professional men, of clerks, shop¬
men, and accountants, of whole classes of mechanics whose
products, the results of constant employment, would naturally
tend to be in excess of a consumption limited by legislation to
an exclusively domestic market, and even there restricted by
price, such as shoemakers, tailors, hatters, and ndners, and at the
present time paper-makers, and wool and cotton-spinners and
weavers ; all females who earn a livelihood in factories, in shoe-
binding and stitching, and in ordinary sewing ; and finally all
those who have only unskilled labour in its rudest forms to sell—
it means that all of these, who constitute a large proportion of
the population, find their expenses for rent, fuel, food, atid
clothing maintaining a greater ratio to their receipts than for¬
merly. As an inevitable result, accumulation is impaired and
comfort diminished. Appearances, however, are maintained ;
hence the illusion of apparently undiminished prosperity. Yet
there is no escaping the conclusions before arrived at if we pay
any regard to the weight of evidence. Of this evidence a few
examples may be cited.
In MassacWsetts, as we have already shown, nine more polls
46
OFFICIAL BEPOBT.
were crowded into every hundred houses in 1868 than was the
case in 1861.
Those conversant with the manufacture of cotton, of boots and
shoes, and of hats, in the United States, state that the former
average 'per capita^ and even the average absolute domestic con¬
sumption of these products, is not maintained ; and, if we except
the southern portion of the country, that their consumption
during the past year has noticeably diminished.
In the frequent fluctuations in the prices of cotton cloth
which have taken place since the termination of the war, it is
seen that the moment price falls below a certain point consump¬
tion enlarges to such, an extent as to immediately relieve the
market of all surplus ; thus proving that millions of our people,
for the greater portion of the time, are constantly restricting
themselves in the use of what is the cheapest and most indis¬
pensable of all fabrics. And the same is true, also, of woollen
goods, boots and shoes, coal, and lumber. If the existing
machinery of production is worked to its most profitable maxi¬
mum, the community, at present prices, cannot use the product;
so that it becomes the alternative either to restrict consumption
within limits most undesirable, or else to break down the market
at short intervals through an excess of products which cannot
be disposed of except at a sacrifice, which involves severe and
often permanent injury to capital, from which, by its necessary
relations, labour in turn must suffer.
The answers to a large number of circulais sent out by the
Commissioner during the past year to clergymen, teachers, and
other professional men, lead to the conclusion that, while their
salaries or incomes have, as a general rule, been advanced since
1861, the advance has not been equal by any means in extent to
the advance in the prices of commodities. The evidence, there¬
fore, is conclusive as regards this large and important class of
our population, that the comforts and luxuries of livelihood have
seriously diminished.
Again, the returns of savings banks are often referred to as
showing a highly prosperous condition of the masses. Properly
considered, however, they indicate a very different state of things.
Thus, the first and almost the only fact which attracts the atten¬
tion of a mere superficial observer in examining these statistics,
is a large apparent increase in deposits from 1860 to 1868 or
1869. But an intelligent examination will at once show that a
very great part of the apparent accumulation referred to is mere
inflation. For example, let us take the case of Massachusetts,
where the conditions for increase would seem to be most
favourable :
OFFICIAL BEPOBT.
47
In 1860 tlie savings-banks deposits in
this State were, in round numbers... $40,000,000
In January, 1869, in currency,
$95,000,000, or in gold at 133 71,000,000
Increase in eight years
$26,000,000
or six millions less than the aggregate deposits of 1860 would
have amounted to, in the sara^ time, at a compound interest of
seven per cent.; or, in other words, the deposits of 1860 were
not made good in 1869 without reference to the increase of
population, even if we reckon only their natural increase at
compound interest. It is evident, therefore, that some cause has
eaten into the accumulation which existed eight years previously,
and has occasioned the withdrawal of a portion of that accumu¬
lation. Of course it was to be expected that withdrawals would
take place; but in an ordinary condition of ajffairs the new
deposits would certainly equal the withdrawals, and, in an
advancing condition, would greatly exceed them. IS^ow in
Massachusetts, certainly, we do not find this to be the case.
On the contrary, the labouring classes, so far as they are repre¬
sented by the depositors of 1860, have not been able to keep at
interest the sum (reckoned in gold) which at that time they
had earned and laid by. They have either been less frugal
or more unfortunate than was in 1860 fairly to have been
expected.
In the State of ííew York the returns of the savings
banks indicate a condition of affairs not substantially dif¬
ferent from that which has been shown to exist in Massachu¬
setts. Thus :
In 1861 the savings-banks deposits of
this State were, in rourid numbers... $67,000,000
In 1868, in currency, $169,000,000, or
or only $12,000,000 more in eight years than what the aggregate
of the deposits of 1861 would have amounted to had they
been simply left undisturbed, for the same period, to accumu¬
late at compound interest. And notwithstanding the exhibit
of the census of that State for 1865, no intelligent person can
doubt that the population of New York has increased in a still
greater ratio during the period referred to.
If it be objected that it is not fair in this comparison to
in gold at 133
127,000,000
48
OFFICIAL BEPORT.
reduce currency to gold, or that a dollar is always a dollar,
the Commissioner would call attention to the fact that if
the comparison were to be drawn between the purchasing power
of these deposits in 1860 and 1868-69, respectively; that is,
as to the amount of comforts and luxuries which they would
command at ordinary retail prices, the comparison would be
found still less favourable than is obtained by reduciug currency
to gold.
But interesting and conclusive as are the statements sub¬
mitted in respect to savings banks, the story is yet but half
told. Formerly the deposits in these institutions represented
in great part the hard-earned accumulations of persons who were
entirely dependent for support upon the wages received for the
performance of daily routine labour—such as operatives in
factories, day labourers, mechanics, needlewomen, clerks, and
small traders. Now, on the contrary, all the evidence tends to
show that exactly the contrary condition of aifairs has been
established.
In short, the recent increase of savings-bank deposits in the
eastern States is chiefly due to the fact that they are more
lightly taxed than any other kind of invested property.*
* This point is well illustrated by the case of Massachusetts. Until
recently the tax on the savings-bank deposits in that ï^tate was only one-
half of one per cent., and as the investments of these institutions were
profitable, being very largely in United States bonds and bank stocks, the
depositor received a net increase of seven per cent, without risk or trouble.
The consequence was that a new class of people, for whom the savings banks
were never designed, and who had no right to avail themselves of their elee¬
mosynary character, began to use them, and to deposit the largest sums
which are permitted to draw interest. That amount in Ma.ssachusetts is
required to be less than $1,000 standing to the credit of one person : but to
avoid this, deposits are made in the names of the wife and minor children,
until they often amount to several thousand dollars. More palpable viola¬
tions of the law than this are also resorted to or permitted by some instita-%
tions which, when the depositor's account reached the legal limit, allowed
him to open another, and still another, in his own name, the pass-books
being numbered 1, 2, 3, &c. The single fact, therefore, of a recent rapid
accumulation in the deposits of savings banks " does not of itself," to use
the language of the Bank Commissioners of Massachusetts in their report
for 1867, "afford any evidence that they are performing the benefical work
expected of them."
An instance may be given of one savings bank in the interior of that
State, which having four or five years ago some $200,000 of deposits, was
taken in hand by a retired capitalist anxious to develop its possibilities,
and in the short space of three years carried up to a capital of $700,000,
the accumulations being all drawn from the population of an agricultural
district. This result was accomplished by a process of active solicitation
through the press, and by printed circulars calling on the people to bring
in their money, and promising to pay seven per cent, for it free of taxes.
OFFICIAL KEPORT.
49
Anotlier circumstance .which has tended abnormally to increase
the capital of savings banks is the dearness of real estate and
of such stocks as were generally within the reach of this class
of investors. Once a few hundred dollars would purchase for
a mechanic or labourer a decent house : but such has been the
increase of prices, resulting from a depreciated currency and
high taxation, that a far larger sum is now required to purchase
a home, and, when it is obtained, the taxes and repairs on it
are a heavy burden. Thus the savings bank has become the
depository of funds waiting for the return of better times—
of lower prices and settled values. It certainly cannot be
regarded as a symptom of healthy social condition when the
labourers of the country are in this manner prevented from
acquiring homes for their families and an established interest
in the country and its prosperity.
The following representation of the condition of operatives
engaged in the boot and shoe industry of Massachusetts, copied
from the columns of the American WorJcman of July 3, 1869,
is indorsed by the chief officer of thè Crispin organization oJf
Massachusetts as " true, every word of it : "—
W® know full well that the boot and shoe workmen as a class are, and
have been for several years, suflering at certain seasons of the year from a
lack of steady employment, and from a rate of wages that can scarcely he
called remunerative. That their condition is one that calls for relief no
one that is acquainted with it will deny ; a few individuals, favoured by
peculiar circumstances, have been able to earn at times four, five, and six
dollars per day ; but for every one who has earned four dollars per day
there have been ten equally deserving workmen who earned less than half
that sum. We know of towns where improved tools and the gang system
have not been introduced, where intelligent American workmen are unable
to earn by twelve hours' labour more than $1 50 per day. Ten years ago
the shoemakers of New England as a class were well fed, well clothed, well
housed, and had their pockets well supplied with spending money ; now
they have less surplus money, are more poorly clothed, and are crowding
themselves into smaller tenements, while many of them who formerly saw
meat and butter daily upon their tables now see those articles there but
seldom. During these ten years their Ibod and family supplies have nearly
doubled in prices, while the wages have increased but half."
The attention of the Commissioner has also been called to
the following evidence, showing an increase of pauperism in the
fourth collection district of the State of Maine.
The whole neighbourhood was absolutely drained; mortgages, loans to
mechanics and small manufacturers were called in, and an extreme strin¬
gency occurred in the local money market.
Now what has thus been found to be true of Massachusetts will undoubt¬
edly be found to be true of every other State where a system of savings
banks has been established.
E
50 OFFICIAL BEPOET.
Table showing the amounts expended by certain towns in the fourth district
of the State of Maine for the support of the poor during the year's 1861
and 1868, and the number of polls on the tax lists of said towns in the
same years.
ToAvns.
Amounts expended.
Polls.
1861.
1868.
1861.
1868.
1. Brewer
2. Dover
3 Cornish
4. Dexter
5. Orono
6. Houlton
7. Lincoln
8. Presque Isle.
9. Oldtown
10. Bangor.
Total
$577 45
782 GO
610 42
476 16
1,000 00
618 32
600 00
45 00
1,636 88
11,204 05
$1,573 00
1,367 00
1,057 10
1,166 74
1,500 00
1,630 97
800 00
300 96
4,087 30
13,931 62
532
401
Not returned.
514
Not returned.
887
Not returned.
Not returned.
645
3,335
609
421
Not returned.
536
Not returned.
431
Not returned.
Not returned.
688
3,336
$17,545 23
$27,417 69
...
...
Remakks.—Dover manufactures wool and iron—shire town, Piscataqua County;
Orono, lumber manufacturing town ; Dexter manufactures wool ; Houlton, shire town
of Aroostook County ; Oldtown manufactures more lumber than any town in New
England.
The official who comniunicates the above statements adds :
" The state of things it discloses is by no means confined to the
fourth district of Maine."
AGENCIES WHICH DISTURB THE EQUITABLE DISTRIBUTION OP
NATIONAL WEALTH.
Having thus presented some evidences tending to show
the want of equity in the distribution of the surplus product of
the nation, let us next consider the agencies which have been
instrumental in producing this result, and which further tend
to perpetuate it. The general financial result of the war was
toward impoverishment, and that to a degree which popular
judgment has thus far not accepted. Hitherto, under the
influence of currency inflation and the industrial activity
which the necessity of supplying the waste of the war
stimulated, the effect of the enormous destruction of property
which occurred continuously from 1861 to 1865, added to the
almost equally enormous waste resulting from the diversion
of industry, has been disguised and rendered less apparent
than it would have been under different circumstances. But
with the return of affairs to their normal condition, many
influences before unappreciated begin to make themselves felt.
Enforced economy begins to supplant extravagance and restrict
consumption, and restricted consumption in turn has left an
unconsumed surplus upon the market of a great variety of
products. Production, therefore, to a very great extent has
OFFICIAL BEPOET.
51
ceased to be profitable ; hence the anomalous spectacle which
has been presented during the past year of representatives of
great industries—coal-miners, paper-makers, cotton and wool-
manufacturers, bidck-makers, lumbermen, and others—^resolving
that it was expedient to diminish production ; and then carrying
the resolution into effect either by suspending work entirely, or
by reducing the hours of employment to their operatives, and
running machinery but half time.
A patriotic desire to magnify the prosperity of the country
on the part of some, or zeal in behalf of party or policy on the
part of others, may tempt to a denial of these conclusions. But
it will be to no purpose in the face of the stern logic of events
present and to come. Indeed, when we attempt to reduce to
figures the cost and consequences of the war, the wonder will
not be at any present disaster, but that the disaster has not been
greater and did not come earlier. But the impoverishment
which has resulted from the war is something which is neither
to be apologized for nor lamented. The expenditure accomplished
the result for which it was incurred, and that, for all loyal men,
is sufficient ; but the perpetuation of agencies since the ter¬
mination of the war, either through legislation or the neglect of
legislation, which tend to continue the impoverishment of the
people and to transfer unequally the gains from the producers
into the hands of non-producers, is a matter which is entitled
to no apology or extenuation. Two agencies are at the present
time in the United States conspicuously engaged in this work,
and with an effect which becomes more marked as the period
of their operations is extended through the lack of remedial
measures, viz., An inflated irredeemable currency, and excessive
and unequal taxation. How these agencies tend to distribute
the surplus of production over consumption unequally ; to
impoverish the masses; to interrupt the natural course and
development of industry, and effectually destroy all profitable
commercial relations with foreign countries, the Commissioner
next proposes to discuss, avoiding in so doing, to the greatest
extent possible, any repetition of the facts and arguments which
have before been presented.
HOW AN INFLATED, IKREDEEMABLE CURRENCY AND UNEQUAL
TAXATION AFFECT THE FARMER.
We propose to inquire, first, how an inflated and irredeemable
currency and unequal taxation affect the agriculturists of the
country, who with their families constitute fully fifty per cent,
of our whole population.
More wheat and other agricultural produce is and must be
annually raised in the United States man is needed for home
E 2
52
OFFICIAL BEPOBT.
consumptioB, and the surplus, if disposed of at all, must find
a market in foreign countries. But we can sell wheat in the
markets of the world on the single condition of selling as cheap
as others, inasmuch as, notwithstanding our magnificent natural
advantages, the comparative nearness to the markets of Europe
of the wheat-growing regions of the Baltic, the Danube, and the
Crimea, reduce our superiority within very narrow limits.* The
American agriculturist does not, therefore, command his own
price, but the price commands him ; and what wheat is worth
in Mark Lane, London, the central market of the world, is what
the United States must sell it for if it sells at all. And about
selling, or not, we have practically but very little discretion.
With an immense wheat-raising area we shall raise wheat,
even if at the end of the year half the individual farmers find
that they have not been able to pay their expenses.
Within certain limits even manufacturing does not depend
upon temporary profit, much less farming. Men must livo, and
work in the occupations in which they have invested their
capital, and upon which they have been accustomed to rely for a
livelihood. It is only within considerable periods that a general
change of industry can be eifected. Nor, after the crop has
been planted and harvested, has the farming community any
more discretion as to the time or the price at which they will
sell. Efforts have been made in the past to hold crops hack
from the market in order to secure an advance, hut in general it
must he said that such enterprises have only resulted in failure,
and even in a greater loss. The fall of hreadstuffs in 1868 was
only made more certain and more disastrous hy the ill-advised
attempt to hold hack the very abundant crop of that year.
Where producers are numbered hy hundreds of thousands,
concert and discipline in such matters are absolutely hopeless ;
and with anything like a good season, it is morally certain that
the United States will produce more of hreadstuffs than the
home demand, even when stimulated hy the cheapness of food
for men and for cattle, can absorb. That surplus will he sold
abroad, whatever it may hring.i*
* A continuous line of railroad now connects the great and fertile plains
of Hungary and the wheat region of the Danube with Paris and other
principal centres of distribution in Western Europe, and wheat and cattle
are now carried from Buda-Pesth to Paris without change of cars.
t Unquestionably, it would be better for the farming community, con¬
sidered apart from the interests of the whole country, if that surplus
could be destroyed, as the surpliw coffee of Java was destroyed by the
Dutch Company for the purpose of securing a higher price for the re¬
mainder ; but such a disposition of the surplus wheat of this country is
impossible. Remove the tail-board of a cart loaded with potatoes, to use
a homely illustration, and it is of course true that if the potatoes neai'est
OFFICIAL BEPORT.
53
THE RELATION OF AGRICULTURE TO CERTAIN SPECIAL INDUSTRIES.
It is worth while to say a word at this point in reference to
an opinion which is somewhat general, that the agricultural
interests of the country are greatly dependent upon certain
special domestic industries for a market for their products. It
needs, however, but a slight examination of the subject to show
the foundation upon which this opinion rests, and the tendency
there is to an exaggeration of its importance. According to the
statement before presented, the gross value of the annual
agricultural product of the country approximates three thousand
three huruired millions of dollars ($3,282,950,000.)
The very careful investigations made within the last few years
into the condition of the woollen and cotton manufacture of the
United States, admit of a very accurate determination of the
number of operatives directly employed in these branches of
production, viz., about 90,000 in the manufacture of wool, and
125,000 in the manufacture of cotton. The price of board for
operatives in these two industries in the United States at the
present time will not exceed three dollars per week, or one
hundred and fifty-six dollars per annum. Supposing the whole
amount to be expended on the purchase and consumption of
agricultural produce, the aggregate annual value of the product
consumed would be $33,540,000. If we add an equal sum for
the value of the agricultural produce consumed in the pig and
bar iron industry, and double the total of the whole to cover
the value of indirect consumption attributable to these industrie.««,
we have the sum of $134,160,000, or four and a tenth per cent.
of the value of the annual agricultural product of the country ;
making it evident, therefore, that the great consumers of
agricultural produce are the artisans, the unskilled labourers,
and the professional men of the country, with their families,
who do not class themselves with any of the more conspicuous
manufactures.
We will add but one other item of evidence bearing upon
this same question, and that is, that a statement has been made
to the Commissioner during the past year, by one well qualified
by information and experience to speak as authority, that the
State of Illinois alone, if cultivated to the degree of the average
of lands in Great Britain or Belgium, can produce annually a
food supply ample for the subsistence of all the population now
would not tumble out, the remainder need not; but, as the first potatoes
have no choice whether they will ohey the law of gravitation or not, the
rest must take the chance all the same as if their falling did not depend on
the action of others. In precisely the sam^way, with our own production
of wheat, some must go abroad, and if the movement does not start at one
point; it will at another.
54
OFFICIAL REPORT.
living upon the territory of the United States. There are even
counties in some of the States of the Union, composed wholly
of the finest wheat-growing lands in the world, that are larger
in area than that portion of Hungary which, as the Buda-Pesth
region, has come to be regarded as one of the granaries of
Europe.
An ordinary good crop, therefore, in the United States cannot
be held at home. The surplus must find a market abroad, and
whatever it is worth for exportation measures the price of the
whole crop, inasmuch as there cannot be two prices for the same
article, one for the home and another for the foreign market.
But the value of the surplus for exportation is much less
than it would be were the currency brought to a specie standard
and taxation reduced and equalized, and to this extent the
American agriculturist is placed at a disadvantage with his
foreign competitor, from the very outset. Let us explain. It
cannot be doubted that the cost of transportation, elevating,
storing, and managing is at least ten per cent, greater than it
would be under a normal condition of currency and taxation.
It is also certain that the exporter of the grain will not give at
the time of his purchase an exact equivalent in currency to the
gold price at the place of sale in Europe, less commissions,
transportation, and profits, inasmuch as it is always doubtful
whether the gold received sixty or ninety days hence will then
exchange for as much currency as it would at the time the grain
was first purchased. The exporter, therefore, of necessity
insures himself to the extent of one, two, or four per cent., as
the case may be. B,ut whatever these charges may amount to,
and differ as we may in reference to particulars, it must be
agreed that they are considerable, they are all reflected back and
borne by the producer, and not charged to the foreign consumer,
for the latter can at all ordinary times buy wheat from the
Baltic or the Crimea which is not subject to such charges ; and
this loss, furthermore, is not limited merely to the surplus
available for export, but, in accordance with the law above
explained, is multiplied by the whole product, and diminishes
the price for which every bushel is sold, whether the same be
intended for domestic or foreign consumption.
We have thus stated the position of the American agriculturist
in respect to what he has to sell. Let us next consider his
position in regard to that which he wishes to buy. And here it
is. necessary to bear in mind that what the grower of food and
other agricultural products wants is not money, but that which
money will buy.
We will therefore assume that the farmer has turned say one
hundred bushels of wheat into one hundred specie doUars, aud
OFPICTAL HEPORT.
55
next endeavour to trace this sum of money through its course
in procuring for its possessor the satisfaction of the wants under
the stimulus of which he has performed the labour of guiding
the powers of nature to the production of the wheat.
He has need of salt, and he finds that he can purchase it in
Liverpool or Cadiz and lay it down in the United States at from
fifteen to twenty cents per bushel ; hut the government, through
its currency and its tarifij has imposed such a tax upon it as to
make it better for him to pay from forty to forty-five cents per
bushel for American salt ; or, in other words, to take less than
liaK the quantity for the same money ; the government, at the
same time, receiving but little revenue—the ostensible object for
which a tax on salt, through the medium of the tariff, was in
the first instance imposed.
Or, perhaps, he lives in Maine, and wants coal, and could get
twenty tons from Hova Scotia for his hundred dollars. But the
government having imposed a tax of one dollar and twenty-five
cents per ton of two thousand pounds, in gold, upon its importa¬
tion, he finds it better for him to expend one dollar and a half
per ton more for transportation of coal from Pennsylvania.
Thus, thirty dollars' worth of unnecessary transportation has
been performed, the government has no more revenue, and he
has less coal.
Or, perhaps, he wishes to carpet his rooms. In London the
specie dollar received for a bushel of his wheat would purchase
of " tapestry Brussels," a yard and a third ; but in New York
he would find that government, through its currency and tariff,
had so taxed carpets that his specie dollar, even converted into
currency, will purchase only about four-sixths of a yard of the
same style and quality. If, however, his means do not allow of
the purchase of tapestry Brussels, and he should endeavour to
satisfy his wants with a coarse drugget or hocking, he would find
that the price of his grain would purchase less comparatively
than of even the more expensive and costly article. If he
wishes to invest the proceeds of his wheat in blankets, he will
find that one hundred bushels sold in Liverpool will buy him
over seven hundred pounds of this article ; but if sold in
New York, at present prices, it will not bring him an excess of
three hundred and fifty pounds. If he should endeavour to
console himself with the reflection that the treasury gains to the
extent that he loses, and that through his sacrifices the period
for the extinguishment of the national debt is shortened, he will
find the receipts from the duties on blankets under the tariff to
have been as follows; 1862, $612,283 ; 1866, $485,978;
1867, $207,598 ; 1868, $25,288.
in fact, in almost any direction in which he attempts to
56
OFFICIAL REPORT.
expend his one himdred dollars in specie—or, in other words,
for whatever article he attempts to exchange his one hundred
bushels of wheat—he finds that the government has interposed
and has dictated to him that at this present time he must either
buy what he might not have chosen, or take less than what he
might otherwise obtain.
The following table shows the purchasing power of a hundred husTwls of
wheat as measured by the price of various articles in the city of New York
in the years 1859 and 1869, respectively.
Commodities,
Wheat
English bar iron,
com'n
Coltins's axes
Ingrain two-ply
LoweU carpet¬
ing
Cut nails
Blankets, 10-4.,,.
Liverpool salt, m
bags
Men's ordinary
boots
Waxed-legged
boots
Black alpaca...
Steel, Sheffield
cast steel
Stoves, five holes
Mackerel, No, 1..
Mackerel, No, 2,.
Codfish, large,,,.
Prices in 1859.
Quantities which
100 bushels of
wheat would
purchase in
1859,
|1 45 per bus..
2Jc. per lb,
9 00 per doz.,.
75 c. per yd,
3 c. per lb,
8 50 per pah*,.
90 c, per bag
21 50 per doz ,„
4 50 per pair,,,
24 c. per yd.
Ib.,
14 c. per
6 00 each
11 OOperbbl,,,,
10 00 per bbl.,„
4 00 pr, lOOlbs.
100 bushels ,„
6, 824 pounds,
16 1-9 dozen ,
193¿ yards
4, 833 pounds,
41^ pairs
161 1-9 bags
6| dozen.
32 pairs
604 1-6 yards,
1, 035 5-7 pounds
24 1-6 stoves
13 1-5 barrels.,,,
14i barrels
3, 625 poimds.,,.
Prices in 1869,
$1 35 per bus ,
3| c, per lb,
12 00 per doz „
1 30 per yd ....
5 c. per lb..
5 50 per pair..
2 60 per bag,,,
112 00 per doz „.
6 83 per pair,.
40 c, per yd.
19 c. per lb..
9 50 each
27 00 per bbl ,„
16 00 per bbl...
7 50 pr. lOOlbs.
Quantities which
100 bushels of
wheat would
purchase in
1869.
100 bushels.
4, 154 pounds ,„.
11| dozen
10311-13 yards,
2, 700 pounds.,
26^ pairs
51 12-13 bags..,
3 1-7 dozen
20i pairs
337ï yards
710 10-19 pounds
14 1-5 stoves,.,
5 barrels
8J barrels
1, 800 pounds,
S fi
£§
Ci fc-
A p<
THE PARMER AS A PRODUCER.
It remains but to consider the position which the farmer
holds distinctively as a producer. He raises his wheat and
other produce, under a system of currency which unsettles
values, inflates prices, enhances the cost of labour and all the
elements of production, and affords daily opportunities to specu¬
lators for plunder. He raises his wheat and other produce under
a tariff which, without affording him any sufficient compensation,
unnecessarily increases the cost of his tools, his clothing, his
fuel, his fencing, and his shelter.
Wheat produced under these circumstances costs a great deal
more than it does in countries free from such embarrassments,
but it does not sell for more. On the contrary, it has to compete
in the market with wheat produced by the so-called "pauper
labour " of Europe, and returns to the farmer no more than the
price of real pauper labour in America, ^or does it cheer the
OFFICIAL REPORT.
57
grower of wheat to reflect, that while he suffers from a depre¬
ciated currency, and competes with the stable conditions, metallic
values, cheap materials, and cheaper labour of other countries,
contributing at the same time his share to the public revenues,
he also makes much heavier contributions on his clothing, iron,
lumber, coal, salt, and the like, not for revenue, but for the
profit of industries more favoured than his own, that they may
be screened from the competition to which he is forced to
submit.*
RELATION OF SPECIAL TAXES TO THE NET SAVINGS OF THE
COUNTRY.
But it is not necessary that we should confine our illustrations
of the inequality of the distribution of the net products of
* As direct practical evidcDce of the truth of the statements above made
respecting the influence of the existing systems of currency and taxation,
in reducing the income of the American agriculturist to the scale of
paupers' earnings, we submit the following table, prepared from the
columns of the Philadelphia Press, showing tbe price of some of the lead¬
ing articles of agricultural produce in that city during the last week of
July, in 1867 and 1869, respectively, with an additional column showing
the prices of similar articles in New York, on the 1st of November of the
latter year ;—
Philadelphia, Pa.,
July 30, 1867.
Philadelphia, Pa.,
July 30, 1869.
New York, N. Y.,
Nov. 1, 1869,
Beef cattle :
Common
13 a 14 eis.
14^ a 15î cts.
16 a 17 cts.
510 00 a 12 75.
10 00 a 12 00
8 75 a 9 00
1
2 20 o 2 75
1 55 a 1 60
1 17 a 1 18
90 a 93 cts.
(per hhl.) 2 25 o 2 75
6 a 7 cts.
7 a 8 cts.
9^ cts.
56 00 a 7 50
6 00 a 6 75, 8 00
6 12^ a 6 25
1 40 a 1 68
1 35
1 16 a 1 17
65 a 75 cts.
(per bbl.) 1 50 a 1 75
Prime
Choice
Flour and meal :
North-west extia.
Pennyslvania and
Ohio extra.......
Rye dour
Grain :
Wheat
Rye
Com
Oats
Potatoes
56 40 a 6 60
6 55 a 6 80
5 00 a 6 30
1 38 a 1 55
1 07 a 1 074
1 00 a 1 05
62 a 64 cts.
,
On this showing the editor of the Philadelphia Press comments us
follows : " This is an unnatural and unhealthy condition of affairs, and the
longer it continues the worse for us. High prices are not so much to be
dreaded in themselves when everything advances abreast, and the man who
pays high for what he consumes can also sell high what he produces.
When, however, prices have come honestly down, but, through the artificial
structure of society, that decline inures only to the advantage of a small
class of non-producers, it is dangerous and improper. This is precisely
our condition. Within two years the prices of staples which sustain life
and cover the ordinary table have fallen heavily and permanently, but the
people have not yet got the benefit of it. The farmer gets one-half the
jyrice he received for his wheat two years cego, but he must pay nearly the
same for what he buys." {Philadelphia Press, July 30, 1869.)
58
OFFICIAL BEPOET.
industry, resulting from the present system of currency and
taxation, to any particular class of the community. The evil is
general ; the illustrations can be made general also.
Thus we have heretofore indicated that the present net saving,
or addition to the productive capital of the country, does not
exceed $600,000,000 per annum. It is interesting to inquire
what agencies affect the distribution of this surplus, and what
is the relation borne to it by any bounty which may accrue to
special interests by the favour of existing laws.
Let us take, first, the case of pig iron. The present annual
consumption of this article in the United States (domestic and
foreign) is about 1,837,000 tons. If the price of the domestic
product of iron were less than the cost at which it could be im¬
ported, plus the tax (of $9 gold) now imposed upon foreign iron,
we should import none. Practically, this is the exact truth, the
only pig iron imported during the year 1868 being 112,000 tons,
mainly Scotch pig, an inferior variety, required by stove-founders
for mixing, by reason of its greater fusibility—an article which
is not produced in the United States, and which would doubtless
continue to be imported were the duty increased from nine to
eighteen dollars per ton. It therefore follows that the price of
American pig iron may have been maintained at $9 per ton gold,
or $11 currency, in excess of what need to have been paid by
consumers but for the tax; and if thereby the sum of
$20,000,000 was transferred to the comparatively few iron-mas¬
ters, although it may not have been all profit to them, and may
simply have warranted them in producing iron at a higher cost,
yet it represents three and one-fourth per cent, of the whole
annual saving of the nation, diverted or taken from those
who actually earned it for the benefit of probably not over
one thousand individuals, who are the proprietors of iron
furnaces.
Again, let us take the case of salt, the duty on the importa¬
tion of which in bulk is 18 cents per hundred pounds, or (with
gold at 133) 22| cents currency. The present consumption of
salt in the United States is estimated at about 39,000,000
bushels per annum, the price of which has been enhanced from
20 @ 23 cents in 1860 to 40 @ 50 cents in 1869. Now, if we
assume that the imposition of a tariff on salt of from 80 to 108
per cent, (see imports of 1868) has unnecessarily increased the
general cost of this indispensable article to the extent of only
10 cents per bushel, we have thereby subjected the community
to a tax of $3,900,000 per ^nnum, or have diverted, in the con¬
sumption of this single article, from what would have been an
otherwise natural distribution of the net earnings of the nation,
more than half of one per cent*
OFFICIAL BEPORT.
59
Similar deductions may be made in respect to lumber, the
materials which enter into the composition of boots and shoes
and the manufacture of fur and felt hats, to steel, carpets, blan¬
kets, woollen goods of every description, and a great variety of
other articles, the prices of all of which have been greatly and
unnecessarily enhanced by special and partial legislation. The
effect of these things cannot be dwarfed or made to appear of
no account, as is often attempted, by showing the insignificant
relation between the tax and some specific or individual expen¬
diture—as, for example, between eighteen cents per hundred on
salt and the cost of a barrel of pork ; between sixty per cent, on
silk and the cost of the band or lining of a common felt hat ;
between three cents per pound and ten per cent, ad valorem on
steel and the cost of an axe ; or five cents per pound on coffee
and the cost of a cup of its infusion. If there were only one
barrel of pork, one hat, one axe, and one cup of coffee affected,
the enhancement of price would most certainly be of too little
account to require notice ; but when each specific and separate
instance becomes multiplied by millions, the general effect cannot
be otherwise than to so increase the cost of subsistence Or pro¬
duction as to diminish the power of accumulation to all those
who are not able, to a corresponding degree, to increase the
aggregate of their receipts from income or wages : and that a
very large proportion of the people have not been thus able, is a
matter of fact which can neither be gainsayed nor disproved.
During the last few years the manifestations of discontent, on
the part of the real producing classes, against what has seemed
to them to be the encroachments and oppressions of capital, have
rapidly increased in number and significance. To many these
expressions of discontent have seemed unreasonable, inasmuch
as wages have generally been greatly advanced, and to some ex¬
tent the hours of labour shortened. But when we consider how
small, even under the most favoui'able circumstances, is the net
saving which annually accrues to any nation as compared with
the value of its annual gross product—the United States, for
example, in 1860, after an existence of about three-quarters of a
century as a nation, and as the result of all the labour, enterprise,
and economy of its people, having been able to accumulate only
what would be equivalent to about four years of current expen¬
ditures*—we can readily understand how difficult it must be, of
necessity, for a producer, starting without capital, to make his
first accumulation, and how slight a change in the distribution
of the net annual profit of the nation may make to the masses
* Gross value of real and personal property of the United States in 1860^
$14,183,216,000; gross prgduet of the year, $3,804,000,000.
60
OFFICIAL REPORT.
all the diíFerence that exists between abundance and deficiency,
advancement and Tetrogression.
The wonder, therefore, is, not that labour, feeling itself
aggiieved and not clearly seeing the cause of its sufferings,
should instinctively cry out and blindly accuse capital, hut rather
that the outburst of remonstrance has not been more violent
and menacing.
The following letter, with its story of simple eloquence,
addressed to the Commissioner by the head of a large seminary
of learning in one of the middle States, in response to a circu¬
lar asking for a statement of comparative expenses in 1860 and
1869, is the only additional evidence which it is proposed to
present in connection with this department of the subject :—
" October 12, 1869.
"Tn reply to your circular I will answer : All my expenses bave increased,
and the only increase in my income which has grown out of the course of
events is an advance in the price of board of those students who board with
me. To make 1869 equal to 1860 I am driven to work earlier and later :
to cut off my Utile luxuries of flowers and food ; to take fewer newspapers
and buy fewer books for my library ; to abandon my green-house ; to
relinquish watering places and travel in vacation.
" By the above curtailments, which came a little hard at first, I manage
to live comfortably, and experience as few of the real anxieties of life now
as in 1860. 1 am afraid my experience will not go for much, for I cannot
join with some of my friends who are afraid starvation stares them in the
face. I do not know as I ought to speak of it but in confidence : the calls
for charity have enormously increased, and, added to the other expenses of
living, go to swell the burden."
DISCUSSION OF REMEDIES.
We come next to the consideration of the remedies which the
situation of affairs in respect to trade, commerce, and industry,
Í.S above described, would seem to render necessary. Setting
aside minor considerations, the chief elements of disturbance
are to be found in the present condition of the currency and of
the national taxation, and it is through reform in these directions
that relief is mainly to he expected.
CURRENCY.
The phases of opinion in regard to the course to he taken in
respect to this agency are so numerous and discordant as to
render it desirable to go hack to fundamental principles and
endeavour to reach some general agreement as to the nature of
the situation.
Original use of money.—Currency has its origin in the division
of labour. No man can supply all his own wants by his own
efforts ; and in his recourse to others and theirs to him exchange
of products begins. The original method of exchange—^barter,
or the direct exchange of one article against another—^is only
OFFICIAL BEPORT.
61
possible, to any great extent, when society is in its rudest and
most primary condition. Some other method of exchange,
therefore, early became a necessity of civilization and progress ;
and the adoption of money—that is, of some common medium
for which all the products of labour should be exchanged, and
which itself should in turn be freely exchanged for all or any
of similar products, became a matter of original necessity and
spontaneous invention, as much so as the adoption of clothing,
the use of fire, or the construction of shelter.
Hence we arrive at a conclusion which is vital to any correct
ideas on this subject, that money is a means to an end : that
end the exchange of commodities, and not an end in itself.
It is an instrument to effect a specific purpose : that purpose
exchange. In performing that office it is a labour-saving machine,
as much so as a ship or a steam-engine j and, so far as the
development of trade, manufactures, and commerce is concerned,
is more efficacious in the saving of labour than any other
machine which can be mentioned. Its utility, therefore, to
society, like that of any other instrument or machine, is propor¬
tioned solely to the work it performs ; and, as is true of any
other tool or instrument, no more is wanted of this than is
simply sufficient to perform the work. If two ploughs or two
spindles are brought into existence where there is only work for
one, the evident result will be that one will work all the time
and the other lie idle ; or that both will be employed, but only
for a portion of the time in either case ; and so far as the work
to be performed is concerned, the two will have but the value
of the one previously existing. The same law holds true of
currency as an instrument, with this exception, that where an
amount larger than is necessary to perform the required work is
called into existence, the whole effort, conscious and unconscious,
of society and industry is directed to the single end of prevent¬
ing any portion of it from remaining unemployed for any appre¬
ciable length of time. But the employment of the currency
thus increased can only be effected by increasing the price of
the whole body of commodities already forming the subjects of
trade ; and this is the only way in which a greater amount of
currency can be employed to perform the service for which a
lesser amount formerly sufficed.
RELATION OP CURRENCY TO TRADE.
It is a common fallacy that the increase of money will of
itself create trade. But what is trade Í Trade is simply the
exchange of commodities already existing, according to the
wants of an organized society. An increase of currency neither
increases the amount of commodities to be exchanged nor adds
62
OFFICIAL BKPOBT.
anytTiing to the desirableness of exchange. If there i» any
more trade after an increase of currency, it can only be that the
same commodities are being exchanged more times. But this is
not tradty hut over-trading^ involving speculation and perhaps
derangement of industry. In short, the only object of exchange
at all is to convey the commodity from the producer to the
consumer. To pass it through unnecessary hands is simply to
multiply the expenses and profits with which it is charged, and
to divert an undue portion of the labour and capital of the
country to the work of distribution.
IÍOW this is the exact condition of the United States at the
present time. The currency has been increased in the manner we
have supposed, and has found employment through the increase
of prices and the multiplication of exchanges ; and this increase
of prices and multiplication of exchanges is one of the chief causes
of the disturbance of the trade and industry of the country, for
which a remedy is believed to have become imperative.
AMOUNT OF CURRENCY REQUISITE.
But it is constantly alleged, and proof in support of the
assertion adduced, that there is no more currency at present in
the country than is requisite to do the business of the country.
This is strictly true. There is no more currency than is neces¬
sary to do the business of the country upon the present scale of
prices, and with the multiplicity of exchanges which the redun¬
dancy of the currency itself has induced. And what is more,
there never will be. If the present volume of the currency
were to be increased in accordance with the demand of econo¬
mists of a certain school, even to the extent of twofold, the
relative condition of affairs would remain the same—prices
advancing and exchanges multiplying sufficiently to absorb any
excess that might be authorized.
It should also be borne in mind, that irredeemable paper
currency is not money in its true sense, inasmuch as it represents
money to the exact extent to which it can purchase, or be
exchanged for coin, and no more. How if this premise is
correct, it follows that although the legislature may authorize
the issue of any amount of irredeemable paper, it will not by
so doing add one penny to the amount of real money in circu¬
lation. On the other hand, the natural effect of an excessive
issue of irredeemable paper is J;o actually reduce the amount of
real money in circulation by creating (through speculation) arti¬
ficial and abnormal uses for capital, which under other and
healthy conditions would not be presented, or at least not to the
same extent ; and also by creating aitificial and abnormal prices
which necessitate the use comparatively of a much larger
OFFICIAL, REPORT.
63
amount of money to effect the exchange of an equal amount of
commodities. Hence the explanation of what, to the many,
seems entirely paradoxical, viz., that money should ever be
scarce in the United States at the present time when the
volume of the circulating medium has experienced so large an
increase ; or that other fact, apparent not only in the United
States, hut in all other countries cursed with an irredeemable
paper currency, that the rates of interest are always the most
advanced when there is the largest absolute amount of currency
in circulation.*
EXCESS OP THE PRESENT CURRENCY.
That the present volume of currency is in excess, is proved :
1. By the indisputable fact that the general scale of the prices
of domestic commodities, as measured by the common standard
of international commerce, is greatly in excess of the prices of
other countries, and out of all natural proportion to the prices of
the same commodities in the United States before the war. The
very common idea that this great advance in prices since 1861
is due in a greater or less degree to the depreciation of gold,
owing to its increased production, is entirely without foundation ;
as is conclusively proved by the fact that an examination of the
prices of some sixty of the leading commodities dealt in on the
London market since 1850 shows that, whatever advance in
prices, directly or indirectly attributable to this cause, actually
took place, the same occurred and reached its maximum between
the periods 1857 and 1861 ; and that since 1861 there has been,
on the average of the same articles, a steady and regular decline
in prices, t (See Appendix.)
2. The excess of the present currency is also proved by the
further fact, that the amount of currency in circulation has been
arbitrarily increased during the past eight years considerably
* In respect to this proposition, a recent Amet can writer of the highest
authority (Hon. Amasa Walker) uses the following language ; "Money is
scarce, not in proportion to its actual quantity, but to the relative demand
for it. When, therefore, in addition to the natural wants of trade, the
speculative interest comes into market, the extraordinary demand is
certain to create a pressure; so that, practically, it has always been true,
as it is now true, that an expanded currency will be the most scarce when
it is most abundant ; that collections will be most unsatisfactory when the
circulation is largest ; and that the rates of interest will be highest when
the loans of the banks are most extended.
" This important lesson the people must learn ; and if they would have
money plenty and cheap, they must insist that the amount shall be
reduced to its natural limit—to that point where it is at par with specie.
They .cannot have an easy and reliable money market until that which is
called money is truly so ; and we incur no risk in predicting that a satis¬
factory state of trade will not arrive until the currency of the nation is
equivalent in value to the currency of commarce."
t The following table exhibits the relative value of gold to silver in
London ftoin 1845 to 1868-69 inclusive. It will be observed that gold
64
OFFICIAL REPOIIT.
more than twofold, although the increase of population, pro¬
duction, and accumulated wealth during the same time has been
by general agreement in very much smaller proportion, and
although at the former date the amount of currency in circu¬
lation was not limited by any serious restrictions upon the
creation of banks or the issue of paper really or nominally
rtideeniable in specie. Furthermore, the tendency of all com¬
mercial nations is towards economy in the use of currency in its
form of specie or convertible bills, exchanges being adjusted by
checks and clearing-house settlements. The circulating medium
never advances in the same ratio with the exchanges which it serves
to carry on. In the State of Hew York, in the ten years from
1850 to 1860, the capital of banks increased one hundred and
ten per cent. ; loans and discounts seventy-five per cent. ;
deposits one hundred and thirteen per cent. ; and specie one
hundred and forty-one per cent. ; while the circulation increased
only fifteen per cent. The explanation of this phenomenon was,
that back deposits and other economical expedients had largely
taken the place of bank-notes in domestic exchanges.
It has been urged, furthermore, that by allowing the present
volume of currency to remain unaltered, the increase in business
and the development of the country would gradually dimmish
and finally remove all redundancy. To this it may be replied,
that the retaining of the present amount of currency in circulation
tends to increase no business but what is speculative, and to check
the very development which is expected to prove remedial. In
the twenty-five years which elapsed from 1835 to 1860 the
paper circulation of the country, left free and untrammelled to
expand itself, increased from one hundred and three millions to
two hundred and seven millions, or at the rate of 4*36 per cent'
per annum. How, should the future demand continue to increase
in the same ratio, it would require the lapse of forty years from
1860, or until the year 1900, to bring the wants of the country
up to the present supply. In the meantime the currency would
probably remain, as now, irredeemable or inconvertible.
CONTRACTION AND ITS INFLUENCE.
The simple, reasonable remedy for the evils of inflation would
seem, therefore, to be contraction^ pure and simple, withmt
reached its minimum relative value in 1859, and since that date has
constantly appreciated :—
1845-49 (5 years) prior to discovery of gold in California
and Australia 15^ 892
1860-52 (3 years) transition period i k «iq
1853-56 (4 years) i/i_ aao
1857-60 (4 years)
1861-66 (6 years)
1867-69 («►5-12 years)
15. 339
15. 276
15. 411
15. 580
OFFICIAL REPOBT.
65
artifice or indirection. Contraction, however, is opposed on
account of the immediate distress which it is supposed would
follow the adoption of such a policy. But it requires no gift of
prophecy to foretell that the country must soon experience all
the hardships which contraction could entail, whether contraction
and the ultimate benefits of contraction be secured or not. It
is morally certain that prices in almost every department of
industry will sooner or later be disturbed as greatly as contraction
would require : the only difference being that in the one case a
temporary hardship is submitted to for a permanent relief and
a great good; and in the other it will be suffered to no purpose,
and the causes which produced the mischief be left as entire
and powerful as ever. All the incidents and all the effects of
contraction, so far as it involves commercial disaster and in¬
dustrial distress, are inevitably coming, and speedily. The only
question which it is left us to consider is, whether we will allow
this experience again and again to repeat itself.
Thus it has already been shown that the amount of our
foreign indebtedness was increased during the past year to the
extent of over $200,000,000. Up to this time the annual
adverse balance of trade which has been experienced since the
close of the war has been mainly adjusted by the transmission
of national or other securities abroad. But it is evident that
this process cannot be indefinitely continued ; and there are
clear indications that the end is not distant. When this method
of settlement becomes no longer possible, one of two things must
follow—either importations must be checked, or the excess of
importations must be paid for in some other way than as at present.
That importations cannot be checked, to any appreciable extent
must be evident to any one who will consider what it is which
we bring from abroad, and the .wants and necessities which our
imports supply. Thus, for example, a large proportion of the
value of our imports represents the domestic consumption of
tea, coffee, sugar, spices, and molasses. Now it is evident that
the only cause which can seriously restrict the consumption of
these articles among the masses, who are the great consumers in
this country, must result from an inability to purchase, which
in turn could only be the result of a degree and extent of in¬
dustrial depression equal to anything which could be imagined
of a period of contraction. Another large proportion of the
value of imports represents the raw materials of domestic manu¬
factures, such as drugs, dye-stuffs, soda-ash, bleaching powders,
hides, tin, raw silk, and other similar products. To check the
importation of these would simply be to destroy a much larger
value of domestic industry ; while to sj^ppose that there can be
any essential curtailment in the importation of what may be
p
66
OFFICIAL REPOBT.
regarded as luxuries, would be to ignore the fact that the
tendency and effect of the present state of things is to put it in
the power of the rich to indulge in such expenditures, even at
the cost of the comforts and necessaries of the poorer classes.
We cannot, therefore, reasonably look for any diminution in the
annual volume of our foreign imports, while their continuance
on the present scale, with the inevitable speedy exhaustion of
the supply of bonds or bullion available for export, involves a
serious depreciation of the prices of domestic commodities, and a
general convulsion of trade : the very effects on account of which
contraction is opposed and deprecated.*
OBJECT TO BE ATTAINED BY SPECIE PAYMENTS.
Again, there seems a general misapprehension as to the end to
be accomplished by the resumption of specie payments, and an
exaggerated estimate of the importance of that object. Unless
resumption implied contraction, it could cure but a small portion
of the existing evils. If it were possible to substitute seven
hundred millions of gold dollars for the seven hundred millions
of paper dollars in circulation, and to hold that amount in the
country, there would be the same inflation of prices, the same
disproportion between imports and exports, and the same inability
to dispose of the products of domestic industry in foreign markets.
To be sure, it would be impossible to retain such an amount of
gold in the country except by laws of impossible barbarism ;
but wherein would the reduction of the gold currency then,
through exportation, differ from the reduction of the present
paper currency through a judicious and well-ordered withdrawal?
After such a substitution, gold would still remain what it is now,
the cheapest commodity in the country, and for that reason, as
now, would continue to be taken by foreign countries in prefer¬
ence to our other domestic products. That this now is the case,
proves that gold is relatively the cheapest commodity we have
to export. That gold also is relatively cheaper than the pro¬
ducts of our domestic manufactures, can also be shown by a
more specific illustration. Thus, in 1860 a thousand dollars
in gold would purchase for export 111 dozen cane-seat chairs.
The same amount of gold will purchase at the present time the
same number in almost any part of Europe ; but in the United
States it will now purchase but 102 dozen, thus proving that,
as measured by this commodity, gold is cheaper with us than it
* For the first four months of the fiscal year 1869-70 (July to October
inclusive), the importations of foreign goods were in excess even of the
unprecedentedly large importations of 1868-69, aggregating $149,297,278
against $¿37,164,952, an increase of nearly twelve millions.
OFFICIAIi REPORT.
67
was in 1860, anJ cheaper also with us than it is in other
countries. It is therefore sent to the points where it is most
highly esteemed, and where it can be used to the greatest ad¬
vantage ; and the chairs, in common with the cotton-cloth,
furniture, tools and implements, nails, hardware, hats, wagons,
&c., of domestic manufacture, are allowed to remain at home
and depress the market with an excess of competition.
It is a very common idea that it is Great Britain, of all the
countries of the globe, which " floods " the United States with
foreign merchandise ; hut so far is this from being the fact, that
the British Board of Trade Reports show that, in the direct
trade between the two countries for 1868, the direct exports from
the United States to Great Britain exceeded the direct imports
from Great Britain to the United States in the ratio of more
than two to one ; the value of the direct exports from the United
States being £43,063,094 ($^15,315,470), while the value of
the direct British imports was only £21,410,184 ($107,050,920).
But this other signiflcant fact should also be noted in this
connection, viz., that while the bulk of our importations re¬
present raw materials purchased from countries other than Great
Britain—as tea from China, sugar from Cuba, coffee from Brazil,
hides from Buenos Ayres, drugs, dyestuffs, ivory, skins, raw
silk, gums, and spices from India or Africa—countries all. which
require the very products of industry which the United States
especially manufactures and desires to sell, we do not pay for
such raw materials, as a rule, with such or any manufactures,
but allow Great Britain to substitute herself in our place ; or, in
other words, not being able to sell, as formerly, any of our
manufactured products to the nations producing the great raw
materials of our domestic consumption, because we cannot sell
cheaply, we settle the adverse balances by the purchase in the
first instance of bills of exchange on England, paying a banker's
profit, and probably affecting such a purchase to a greater or less
extent by selling at a discount the nation's obligations of in¬
debtedness. The debt thus transferred to Great Britain is
settled by the exportation of British merchandise, paying another
profit, and in British vessels, paying freights and commissions.
]N"ow the point to which the Commissioner would especially
direct attention, and which, although pointed out in former
reports, has received little consideration, is, that there is no
such thing possible as the resumption and continuance of specie
payments with a continuance of this abnormal system of foreign
trade and exchanges ; and for the simple reason that gold will
not stay here, and would long ago have left us to the last dollar,
had not the bonds of the national government been available for
the settlement of adverse foreign balances in the place of gold.
p 2
68
OFFICIAL REPORT.
We must reduce prices, so that foreign nations will be willing,
because it is for their interest, to exchange product for product.
And to accomplish this, there must be contraction, for, to reduce
prices 'permanemtly and equitably, while maintaining seven
hundred millions of irredeemable paper money, is simply an
impossibility.
AMOUNT OF GOLD NEEDED FOR REDEMPTION.
The question how much gold is needed to begin and
sustain a system of redemption, depends wholly upon the
answer to the prior question, how much currency there shall he
to redeem. Seven hundred millions of paper could not be kept
redeemable with less than seven hundred millions of gold,
because with such an amount of currency it would inevitably
be depreciated, and hence gold would bear a premium which
every holder of paper would be desirous to realize. With four
hundred millions of paper, on the other hand, a hundred
millions of gold would probably be ample, because the currency,
not being in excess of the wants of commerce, would not suffer
depreciation, and, gold and paper being on otherwise equal
terms, paper would be preferred for its greater convenience in
use, just as in 1860 the banks were fully able to redeem aU of
their circulation which was presented for payment, although
having but eighteen cents of specie on each dollar of immediate
liabilities. It is not the ratio between gold and paper that needs
to be regulated, but the ratio between the amount of paper in
circulation and the volume of national production and exchange,
of which it is the instrument. Much criticism has been passed
upon the treasury for not adopting the policy of hoarding gold
with a view to returning to specie payments ; but if what has
been stated above is true, such a policy could lead to no good
results unless accompanied by a measure of contraction ; while
contraction would oWiate the necessity of any such a policy,
inasmuch as gold would then come to us, or be retained by us—
our currency being in a healthful condition—to just that extent
to which it was needed, obeying the same laws as any other com¬
modity. Equally untenable is it to suppose that any progress
can be made toward resumption by a reduction, through govern¬
ment purchase and cancellation, of the principal of the funded
debt. If we had no national debt ; if the two thousand millions
of public bonds were by some process to be transformed into an
equal amount of private " securities," exchanged between citizens,
the premium on gold would not be appreciably affected. It is
not at all the condition of the credit of the nation which causes
gold to be at a premium, as is proved by the fact that in Italy,
Austria, and Eussia—countries maintaining large standing armies,
OFFICIAL REPOBT.
69
constantly tlireatened witli war, whose debts are larger, relatively
to their resources, than our own, and are in no respect in the
process of extinguishment, and whose annual expenditures, as a
rule, are in excess of their ordinary revenues—in none of these
three countries has the recent depreciation of the paper money
been more than one-half as great as in the United States ; the
reason being that this paper money is not as much in excess as
ours.*
But it is urged by some that no restriction should be laid
upon the issue of currency, or any limitation of its amount be
attempted ; but that the people themselves should be left to
determine the extent to which they will use it. This is sound
doctrine when applied to currency subject to redemption. It
is not true when applied to a currency whose sole constituent is
credit, and which circulates by force of law. Credit currency is
the alcohol of commerce ; it alternately stimulates and de¬
presses, but poisons all the time. It creates its own appetite.
It would be as reasonable to leave the drunkard, whose system
is thoroughly poisoned by alcoholic stimulants, to determine the
quantity which is good for him, as it is to assume that the body
of trade, debauched by currency stimulants originally forced
upon it, will of its own choice absorb thereafter only so much
as is conducive to its welfare. The parallel between the effects
of artificial stimulants upon the human body and the effects of
credit money upon the body industrial and commercial, holds
good in every particular, as has been shown conspicuously by the
experience of the United States since the inauguration of the
present system. The first effects have been to excite to an
abnormal action and to produce the false appearance of health
and vigour. This in turn has been succeeded by a condition of
depression, and the lassitude inevitably consequent upon undue
excitement and the violation of the laws of nature. And it is
precisely in this condition that the poor victim of drink cries out
for " more rum," and ' the broken-down body of trade feels the
strongest craving for fresh draughts of credit to carry it through
the period of reaction and prostration.
* Austria abandoned specie payments in 1848. Yet by limiting the
amount of legal-tender paper, she was on the eve of resuming specie pay¬
ments in 1859, in spite of the disorganized condition of her political fabric
which seemed to render an immediate dissolution probable. At that time,
however, the Italian war broke out ; new issues of paper money took place,
and, as was to be expected, were at once followed by an advance in the
premium on gold, Italy, with a population two-thirds as great as our own,
although weighted with an enormous debt, and suffering from a perma¬
nent and almost hopeless deficit, has thus fer limited the legal-tender
currency of the kingdom to about ninety millions. As a consequence, the
premium on gold ranges but from twelve to fourteen per cent.
70
OFFICIAL REPOBT.
Unpopular, therefore, as the declaration may he, the Com¬
missioner, in view of the above considerations, is constrained to
believe that contraction, direct and undisguised, is the one
necessity of the situation ; the only remedy for existing evils so
far as the currency has relation to them, and that the nation
cannot emerge from its embarrassments and difficulties until the
makers and administrators of the law have the honesty and
courage to take it up and carry it forward to the end.
TAXATION.
We come next to consider what remedial measures can be
effected by a change in the existing system of taxation. But
before attempting to reach any conclusions as to what ought to
be done, it is necessary, in the first instance, to inquire what is
actually feasible.
Taxation is seldom a matter of choice so much as of necessity;
not the reason of the case, but the absolute exigencies of the
government, deciding the question of imposition. Fortunately
the United States, at the present moment, through increased
efficiency in the collection of its taxes and a thorough and
searching reduction of expenditures, is in a position to choose
between taxes, and to decide upon pure economical considerations
which should be retained and which remitted. With a surplus
available for the reduction of taxation (after an ample provision
for the reduction of the debt) like that which the government at
present enjoys, it will be inexcusable if great advantages are not
secured to industry. With the power to remit, by a single act,
fifty millions of taxation, a magnificent opportunity is afforded
for removing the burdens of the people, such as has never, apMt
from our own history, been the privilege of the legislature of
any nation.
THE SURPLUS.
The excess of receipts over expenditures for the fiscal year
ended June 60, 1869, was in round numbers forty-nine millions
of dollars ; and upon the supposition that no change is made in
existing laws, we are warranted in assuming that, with an equal
amount of expenditures, the same surplus will be realized during
the present year, and this may safely be assumed as the basis of
estimate. To this amount must be added two specific items of
expenditure provided for out of the receipts of 1868-6.9, which
will not be carried over into the present year, and must therefore
be reckoned as net gain to the treasury, namely, $13,000,000 on
account of bounties, which now are substantially settled ;
$7,200,000 in gold (equivalent to $9,350,000 in currency), dis¬
bursed payment for the Alaska purchase.
OFFICIAL BEPOBT.
71
ELASTICITY OP THE REVENUE.*
The present annual elasticity of revenue, or its increase from
the growth of the country, is another and most important
element in determining the surplus of the future. It should be
noted that, while the annual increase of capital in the United
States, available for reproduction, is not probably equal to that
of Great Britain, yet the more equal distribution of wealth
among the people of the United States admits of a freer
consumption, 'per capita^ of most other articles, namely, sugar,
coffee, spices, spirits, tobacco, and the like, which will bear the
highest rates of taxation, and from which all governments find
it convenient to raise the largest proportion of their revenue.
ÍÍOW the average amount of national revenue which has been
raised annually by the British government, through its various
forms of taxation, for eight years past, namely, ¿£70,000,000
($350,000,000), closely approximates to the annual amount
which the revenue system of the United States, as at present
constituted, is calculated to produce. The "elasticity" of the
British revenue Mr. Gladstone found to average, from 1860 to
1866 inclusive, <£1,780,000 ($8,900,000) per annum, or about
two and a half per cent. ; which increment has been annually
applied, in part, for the reduction of taxes, especially the income
tax (which is always regarded as a reserve force in the British
system, to be increased or diminished according to circumstances),
and in part to meet increasing expenditures.
If, then, we have the fact of a present revenue nearly of
equal amount in the two countries, and a certain rate of increase
in one, the question whether we may expect an equal rate of
increase in the other, or that the increase would be more or less,
will depend mainly upon two considerations : first, whether the
present taxation presses more or less severely here than there—
more or less nearly up to the strength of the people (on the principle
that, if the incidence of existing taxation in either country is
really distressing and exhausting, a part at least of the otherwise
natural increase, from the natural growth in population, might
be absorbed for the relief and repair of economical interests that
liad suffered) ; and, secondly, whether the rate of increase in
population may be expected to be alike in both countries.
Both these considerations, in fact, favour the expectation of a
freer and larger growth here. The present scale of taxation
does not tell so heavily upon the people as in England, where the
great body of wealth does, and, by the aristocratic constitution
* This is the term used by British financiers to describe the natural
increase of revenue. It is evidently a misuse of the word. Growth is not
elasticity. Elasticity is the property of a body by which it yields under
pressure, but resumes its size or shape after that pressure is removed.
72
OFFICIAL REPORT.
of the government, will, for a long time at least, escape its fair
share of the public burdens. And at the same time it is noto¬
rious that the rate of increase in population here is greatly in
excess of that of the United Kingdom. On the other hand,
we have the consideration that the amount of realized and
available capital (the accumulation of past labour), whether for
the purposes of agriculture, manufactures, trade, or of luxurious
consumption, is less with us ; and therefore, while our " hands"
multiply faster, the tools they must use, and on which depends
much of their success in production, are fewer, less adapted to
their purposes, and rendered unnecessarily expensive at present
by the peculiarities of our financial condition.
On the whole, after reviewing all the circumstances, the
Commissioner is of the opinion that the average annual " elasti¬
city " of our present revenue, taking the years in groups of not less
than three, will for the present average more than has been ex¬
perienced in Great Britain, say from $12,000,000 to $15,000,000
per annum. If the increase as thus estimated takes place, it
will be in consequence of the freer circulation of society, con¬
ducing to a more rapid interchange of commodities ; the more
unitbrm distribution of wealth, allowing a larger consumption
of certain taxed articles on which government obtains the
largest revenue ; and the higher rate of increase in population,
in circumstances where no labour can, except under the most
transient conditions, be in excess of the demand.
This conclusion finds support in the fact than in no year
since 1865, in which internal revenue taxes have been repealed
or abated, has the revenue been found to decrease in proportion
to the reductions ; and this difference in favour of the revenue
has apparently amounted to from twelve to twenty-four
millions per annum.*
* In the foregoing discussion the Commissioner has purposely kept out
of view the consideration whether the ability of the government to exact
revenue, or of the people to render it, is helped or hindered, at the piesent
time, by the abnormal monetary condition of the country ; and whether,
therefore, a return to a natural order of things in this respect would
facilitate or retard the collection of taxes. It will be remembered that it
was considered necessary, in order to carry through the gigantic loans
which the necessities of the war demanded, to " float the bonds " by an
issue of paper. Now it was not supposed by anybody that this act a'lded
one cubit to the industrial stature of the nation, or that it increased by a
single dollar the real amount of property which the people had to contribute
or the government could reach by taxation. Yet, notwithstanding this
plain truth, it was then fully believed by the great majority of business
men, as by the majority in Congress, that the negotiation of the loans
actually depended on this measure of flooding the money market with
legal tender. And, while some able financiers doubted whether the step
was absolutely necessary, and thought that, in view of ultimate conse¬
quences, itiijiould be avoided if it were possible to raise the money without
OFFICIAL REPORT.
73
GAIN FROM THE REFORM OF REVENUE ADMINISTRATION.
Taking the lowest figure we have named for the natural
increase of the revenue for the current year, we shall have from
this source twelve millions more added to the surplus thus far
obtained. The further probable gain to the internal revenue
from the more efficient administration of the laws and collection
of taxes has recently been estimated by the Commissioner of
Internal Eevenue at fifteen millions ; but as more than half of
this amount was gained in the first three months of the present
fiscal year, the estimate of the Commissioner may be regarded
it, there probably was no one who doubted that the loan negotiated would
be collected far wore easily under such conditions.
The question now is, whether the present facility of taxation is due to
the continuance in part of the same causes, and may be expected to suffer in
any degree by the return of specie pa^'ments; or, on the contrary, whether
the present incidence of taxation be more painful and less productive, by
reason of the derangement of trade and the increasing discouragement of
industry, especially in those branches which look to loreign countries for
a market. The present causes are unquestionably operative to a very
great extent; and the question is, in which direction? The Commissioner
thinks there can be no ûoubt at all as to the way in which they influence
the substantial prosperity of the country ; but the ease of taxation and the
convenience of finance are not always coincident wiih the best condition of
the people. Facility of revenue may be an evil and not a good ; and the
very causes which are working permanent injury to industry may also
prove for the temporary benefit of the exchequer—just as lotteries, the
manufacture and sale of ardent spirits, and the licensed indulgence of vice
are notoriously more gainful to government, as well as less painful to those
who pay, than the contributions exacted of honest and sober industries.
All governments have found a fruitful source of revenue in the lower
appetites and passions of their people : and the same unnatural excite¬
ment which stimulates over-trading and general industrial profligacy may
increase the receipts of the Treasury. In a word, enhanced revenues may
be one of the ways which an inflated and irredeemable currency takes to
deplete and distress a people.
It seems, tiierefore, to the Commissioner that there can be no doubt
that, ather things equal—population and production remaining stationary
—it will be much harder to raise $350,000,000 of revenue in 1871, should
specie payments then have been restored, than it is now—if for no other
reason than that those three hundred and fifty millions would then be real
dollars. But the expenses of the government ought not, need not, to
remain the same. Many of its charges, to be sure, are permanently fixed,
like those on our debt. The present grade of salaries, moreover, being
generally lower than the average of private employment, and not much
above ante-war figures, would not probably be retrenched greatly on the
first return of specie payments. But there are other and important
charges of government which should decline equally with the great decline
in the prices of merchandise and labour that must accompany a restoration
to financial soundness. And while the amount of these charges—which
would be fair subjects of such a reduction in the event of a general fall of
prices—is not, perhaps, equal to the amount of those charges which must
be regarded as more fixed in their character, yet it is certain that the
present enhancement of the former by meahs of an inflated and suspended
currency much exceeds the premium on gold which measures the enhance-
74
OFFICIAL REPOBT.
as very moderate. As the receipts from customs made a very
considerable and somewhat unexpected advance during the past
tiscal year, it is, perhaps, safest, in estimating the probable
surplus of another year, with reference to the question of reduc¬
ing taxation, to estimate the receipts from this source at the
figures of the last fiscal year,. 1868-69, viz., $180,000,000.
The experience of the past five months of the current fiscal
year indicates, however, a decided gain in the above figures.
REDUCTION OF EXPENDITURES.
The gain from this source, including the reduction of the interest
charge consequent on the reduction of the principal of the debt,
is estimated by the Secretary of the Treasury at twenty-six
millions of dollars.*
ment of the charge of the debt, the diplomatic service, &c. &c. It would
require an immense amount of labour, with access to all the vouchers for
expenditures in some past year, to make any estimate in figures of the
degree to which the expenditures might be reduced by the mere return to
specie payments ; but the Commissioner has suflScient confidence in the
revenue capabilities of the country to believe that the people will bear all
the proper charges of government then as easily as they do their present
burdens.
And even of those charges which are regarded as fixed, it is reasonably
certain that a considerable portion might be retrenched in the event of a
restoration of specie payments, and the reduction of the general prices of
the country within healthful and natural limits. The charge of the debt
most assuredly can and ought to be the first to undergo reduction by any
means consistent with the public faith.
This discussion of the influence of a return to financial soundness upon
the revenue capabilities of the country has assumed that population and
production remain constant. What advance in those elements may fairly
be predicated from the experience of the last quarter century the Com¬
missioner has already attempted to exhibit.
* The following table exhibits the actual expenditures for the first
quarter, and the expenditures for the second, third, and fourth quarters
of the present fiscal year, as estimated by the Secretary of the Treasury.
Actual—
1st qr., 1869-70.
Estimated—
2d, 3d, and 4th
qrs., 1869-70.
Aggregate-
Actual and esti¬
mated.
Actual—1868-6Í
ivil service
idians and pensions....
'^ar Department
avy Department
iterest on public debt
reniium on 7.30 U. 8. i
notes )
Total
$15,102,202 05
13,547,942 79
13,595,468 05
5,782,630 96
37,452,270 74
$40,000,000 00
21,000,000 00
40,500,000 CO
14,000,000 00
93,750,000 00
$55,102,202 05
34,547,942 79
54,095,468 05
19,782,630 96
131,202,270 74
$56,474,061 53
35,519,544 84
78,501,990 61
20,000,757 97
130,694,242 80
300,000 00
$85,480,514 59
$209,250,000 00
$294,730,514 59
|$321,490,597i75
Reduction of expenditures for 1868-69, $26,760,023 16.
OFFICIAL BEPORT.
75
TOTAL SURPLUS.
The sum of these several items added to the surplus of last
year make up the large aggregate of one hundred and twenty-
four millions. Yet the most careful examination of the several
elements fails to detect any degree of misstatement or over¬
estimate. The whole calculatiou, however, assumes that the
laws imposing taxation remain unaltered, and that the industry
of the year will enjoy an average of success.
DISPOSITION OP THE SURPLUS.
The possession of a surplus so larg'e invests with more than
ordinary interest the question of its disposition. Shall the
whole of this sum be applied to the reduction of the principal of
the national debt, or shall a fair proportion of it be remitted to
the people by the abatement or removal of their taxes ? Of these
two courses the Commissioner unhesitatingly declares his con¬
viction that the latter is the more expedient—if indeed it is not
absolutely imperative; demanded alike by the highest economical
considerations and by the almost unanimous sentiment of the
people. With this view he proposes that the sum of fifty millions
be taken as the measure of the taxes to be removed or reduced ;
and that such reduction should be directed, first, to relieving
industry as much as possible of unnecessary burdens, and allowing
it to obtain its material at the minimum cost ; and secondly, to
the diminution of the cost of the elements of living to the great
mass of the people, in their capacity as consumers, irrespective
of the consideration whether they are or are not also producers
of wealth.
With this object it is proposed to consider, first, what taxes
can be best removed or abated under the head of Internal
Kevenue. The three principal sources of receipts under the internal
revenue are the taxes on distilled spirits and fermented liquors,
on tobacco, and on incomes. The rate of taxation on the first
two of these has been fixed at a standard which the experience
of the past year has proved to be most productive. The taxes
on whisky, beer, and tobacco should not, in the opinion of the
Commissioner, be modified, unless it is desired to repeat the
disagreeable experiences of former years and to perpetuate the
power of corrupt organizations. Ho change can be made, either
to raise or lower the rates, which will not,,at L ast temporarily,
inure to the benefit of other interests than those of the treasury.
THE INCOME TAX.
The tax levied under this head is of a different character, and
demands essential modification. The Commissioner would recom<
76
OFFICIAL REPORT.
mend that, beginning with the next regular assessment, the
present rate of five per cent, be reduced to three per cent, upon
the net income of individuals. The reason for this recommen¬
dation is that the tax of five per cent, is excessive and consti¬
tutes a real grievance, being greater than that ever imposed by
any other nation, except in extraordinary national exigencies.
An additional reason is that an assessment of three per cent,
would probably yield to the treasury a sum very nearly equal
to that at present collected ; inasmuch as, while the reduction
of the rate would afford a great and welcome relief to the classes
who now pay, it would at the same time bring within reach of
the tax great numbers who now either avoid giving in lists at
all, or, while doing so, force the constituents of their income so
as to escape contribution entirely. The tax as fixed at present
is evidently too high for revenue purposes, and is passing
through much the same experience as the whisky tax when at
its maximum. It should be also borne in mind that the true
measure of the onus or burden of any tax is the sum which
it would yield if fully and honestly collected ; the fact that
some portions of it are not collected bringing no relief to the
community, if, indeed, that fact does Rot work an additional
injury, by placing the honest tax-payer at a disadvantage in com¬
parison with his neighbour or business competitor who escapes.
In connection with this reduction of the general rate, the
Commissioner would recommend that, while the absolute exemp¬
tion to all persons should be allowed to remain as now fixed,
namely, at $1,000, the exemption on account of rent should not
be left indefinite, as at present, but should be strictly limited to
an amount sufficient only to relieve from taxation the rentals of
the labouring classes, for instance, $200. It is evident that no
claim can be made for the exemption of rent to any extent,
which would not be equally valid in support of the exemption
of any other expenditure ; and certainly high rents are as much
a luxury as any form of expenditure, and as little deserving of
economical sympathy. If the recommendation of the Commis¬
sioner in regard to the exemption of rentals should be adopted,
he is confident that, notwithstanding the reduction of the tax
from five to three per cent., the amount that will accrue to the
treasury from this source will not be impaired ; and, but for the
unfavourable condition of industry during the past year, there is
great reason to believe that a very decided gain would be realized.
But though the amount yielded would in this case be equal or
greater, the change would constitute a marked relief to the
community, inasmuch as a larger proportion than now would be
contributed by the classes best able to afford it, and who owe
most to the protection of the government.
OFFICIAL BEPORT.
77
In respect to the proposition, seriously advocated in many
quarters, that this tax should be wholly removed, the Commis¬
sioner thinks that the attention of the country should be called
to the fact that this tax was paid during the year 1868 by so
small a number as 250,000 persons out of the entire popula¬
tion, yet representing an aggregate income of not less than
$800,000,000, exclusive of the amounts remitted by reason of
rents and the minor exemptions. Allowing, then, for the
families of these 250,000 contributors, it is evident that only
about a million of the population are interested in having the
tax removed, while the remaining thirty-eight and a half millions
of the people are interested in having it maintained.
To sum up what has been said upon the income tax, the
Commissioner is of the opinion that a reduction of the rate of
assessment from five to three per cent, upon individual incomes,
without any other change in the law, would not reduce the
receipts from this source by more than five millions of dollars
at the outside ; while, if the exemption of rent were to be
limited as suggested, or even fixed at five hundred dollars, there
would be no falling off nor abatement in the receipts.
MISCELLANEOUS TAXES,
There then remains a large body of minor and miscellaneous
taxes under the internal revenue, which together yielded in 1868
less than fifty millions of dollars. Of these the Commissioner
would recommend that the taxes embraced in what is known as
" Schedule A," viz., the taxes assessed on watches, silver plate,
pianos, billiard tables, and carriages, should be entirely remitted.
They are inquisitorial in character, highly offensive in collection,
petty and contemptible in the revenue yielded. If these taxes
are intended to have a sumptuary bearing, they are altogether
out of the sympathies of modern civilization ; if their object is
to secure revenue, they are absurd failures. Ten times the
amount could be obtained with the same effort in some other
direction, and without exciting half as much of odium and
hostility.
As best calculated to carry out the two objects proposed at
the outset of this inquiry the (Commissioner would further
recommend the repeal of the following taxes, now levied under
the internal revenue :—
1. The whole body of what is known as special taxes or
licences—those levied on banks and bankers, and upon manufac¬
turers and dealers in spirits, beer, and tobacco, being, however,
retained. The loss of revenue on this account will not be in
excess of ten millions of dollars.
2. The taxes on the gross receipts of railroads, stage coaches,
78
OFFICIAL REPORT.
insurance, telegraph, and express companies, canals, ferries, ships,
barges, and steamboats. The loss of revenue from this source
will not be in excess of seven millions of dollars.*
3. The taxes on the sales of articles not otherwise specifically
taxed. The receipts from this source will approximate eight
millions of dollars.
Allowing, then, for the extreme possible loss under incomes,
the amount of taxation above proposed to be remitted to the
people in consideration of the present large and increasing
surplus of receipts over expenditures, would be in the
neighbourhood of twenty-six millions of dollars.
THE TARIFF.
We come next to the consideration of the expediency of
changes to be made under the tariff in view of the present
condition of industry and the important fact of a large and
increasing surplus. . The discussion of this question, however, is
attended by this peculiarity : that it has hitherto been impossible
for any one to suggest any reduction or modification whatever,
looking to the abatement of prices artificially maintained in the
interests of special industries, without being immediately assailed
with accusations of corrupt and unpatriotic motives. These
cries have thus far had the effect for which alone they are
raised, namely, to prevent discussion, and to divert the attention
of the people from the real and true issues. These issues do not
at present involve either the theory of free trade or the fact
of protection. The questions arising are practical questions
purely, concerning only the expediency of individual and specific
taxes. The question in each case is a question of proportion
between the benefit known or supposed to accrue from the
maintenance of the tax to a class or section of the community,
and the relief which would be afforded to the whole of that
community by the removal or reduction of the tax. However
doctrinaires or extremists on either side may declaim, it is
unquestionably true that, in the condition of public feeling as it
has been, and at any stage of political philosophy heretofore
reached in this country, a tax imposed under the tariff which
could be proved to be necessary to the maintenance of an
industry already established ; which employs large numbers of
* As illustrating the excessive rate and burdensome character of those
taxes, it has been officially shown that in the case of the largest telegraph
company in the United States, the direct taxes now levied are sufficient to
absorh the entire profit on one-seventh of the entire gross receipts from all
sources. If to this was to be added the increased cost of wire and chemi¬
cals, due to the infiuonce of the tariff, the aggregate of taxation for this
particular business would be represented by much larger figures.
OFFICIAL REPORT.
79
workmen and distributes fairly among them a due proportion of
the profits of manufacture ; more especially if such manufacturé
prepares an article for direct and immediate consumption in
sufficient quantity to meet the demands of the country ; it is not
to be denied that, whether wisely or not in the largest view of
the case, the past temper of the American people has approved of
such a tax. But it is furthermore equally true, and will shortly-
be found so to the satisfaction of any sceptic, that the advance in
sentiment and the diffusion of knowledge among the people on
this subject within the last two years has been such that, when
it can be proved that any tax thus laid upon the community is
not necessary to maintain a protected industry in a moderate
degree of prosperity ; if, moreover, the industry be one which,
whatever its absolute proportions, yet contributes to the general
wealth and welfare less than it requires ; if it be one which
yields its profits mainly to the capitalist, instead of dividing the
returns equitably among large classes of skilled or ordinary
operatives ; and especially if it be one whose product is to
become in turn the raw material of other and still more extensive
industries, so that the enhancement of price at the bottom is
repeated through the several successive stages, and thus becomes
a tax not only on the final consumer but on each intermediate
producer—in such cases the people of the United States will
exercise their right to think and to speak of such a tax, whoever
may seek to intimidate the official or unofficial organs of public
sentiment ; and will exercise an independent judgment without
respect to the will of highly organized and aggressive asso¬
ciations of capitalists, as to the amount in which that tax shall
be reduced, or the time in which it shall be wholly removed.
And those who deprecate such reforms, he they parties or
individuals, will find, however much they may appeal " to the
fathers," that " the children's teeth are set on edge."
THE TRUE PRINCIPLES OP TARIFF REFORM.
The experience of the last few years has been equivalent to a
demonstration that any attempt to reconstruct the tariff as a
whole, on any basis of principle, is practically impossible; the
diverse interests of the different sections of industries being
sufficiently powerful under almost any circumstances to ingraft
upon a bill during its passage such modifications as would
effectually deprive it of any pretensions to consistency or
harmony. There would therefore seem to be but one available
method of tariff reform ; which is to adopt the same course that
has been taken in respect to the reforms heretofore made in the
internal revenue, and which furthermore finds a precedent in
all the experience of Great Britain jn legislating upon thece
80
OFFICIAL REPORT.
subjects, viz. to make such modifications or removals of duties,
year by year, as experience or the condition of the treasury may
indicate as practicable and desirable ; and thus, by pruning,
rather than by reconstruction, to gradually attain the greatest
degree of simplicity and effectiveness with the least possible
burden upon industry and the people. With the adoption of
this method of reform as a matter of expediency, the following
principle should also be insisted upon as fundamental, viz. :—
That the maintenance of an average duty of forty-seven per
cent., as under the existing tarif, upon all dutiable imports, is
excessive and unnecessary, and opposed alike to the highest interests
of civilization and humanity, as well as to the proper and healthy
growth of all domestic commerce and industry ; and that under no
circumstances, except fov the supplying of certain technical omissions
in existing laws, or for the sole and avowed purpose of revenue,
should any increase of rate he hereafter permitted.
On such a basis, the work sought to be accomplished in the
way of reform would naturally divide itself under two heads :
first, reforms made purely and solely in the interest of revenue
and administration ; and second, reforms having in view the
relief of industry from contributions, a small portion only of
which accrues to the treasury ; and also a reduction to the
minimum of the contributions exacted from that large portion of
the community who are consumers of taxed articles without
being in turn the producers of protected products.
In respect to reforms pertaining to the first head there can be
no essential difference in the policy of any party, inasmuch as
the only question which can arise concerning any proposition
will be in regard to the accuracy and completeness of the facts
alleged. A fundamental consideration, furthermore, in this
connection, by universal admission, is that the number of im¬
positions should be made as few as is consistent with the ob¬
taining of the amount of necessary revenue. The people of the
United States cannot afford to have a tax collected, for revenue
purposes simply, which yields less than half a million of dollars
per annum, as a smaller sum affords no compensation for the
necessary disturbance to trade and the trouble and expense of
collection. On the other hand, the government should parti¬
cularly refrain, in the collection of its revenue, from affording
any opportunity for evasion and fraud to the dishonest importer
which will put his honest competitor at disadvantage. To fret
and divert the course of trade by petty obstructions of the
character of many now forming a part of the existing tariff, and
which have no probable or possible relation to American industry,
or to the policy advocated by any school of economists, is both
useless and mischievous. Of such a nature are the taxes on
OFFICIAL REPOßT.
81
quicksilver, seaweed, coal-oil, glycerine, gum-benzoin, lard, manu¬
factures of platinum, annato, paving-stones, and bamboo, which,
during the fiscal year 1868, yielded severally to the treasury
sums varying from $10 40 to $579, and an aggregate revenue of
$1,475 50. The experience of every year, moreover, affords
fresh evidence that in nearly every instance where the amount
of duty imposed on any article of small bulk is disproportionate
to its value and excessive in rate, the business of importing
passes to a greater or less degree out of the hands of the legitimate
trade, and into the control of the contrabandist and illicit dealer.
Most noticeable examples of the truth of this assertion are to be
found in the case of segars, camel's-hair shawls, nearly all ex¬
pensive chemical preparations, the costly varieties of lace, some
varieties of spice, and precious stones in settings. On this last
the duty collected on the importations of 1868 was $366, and
from morphine and its salts the total revenue was $160. A
leading house engaged in the importation of cloves thus writes
to the Commissioner: "From 1857 to 1862 we imported
1,258,641 pounds of cloves from Zanzibar. Of that quantity
1,222,114 pounds were entered for consumption, the duty being
from four to eight cents per pound. From 1862 to 1869 our
importation of cloves from the same place was 779,091 pounds,
of which 349,267 pounds were entered for consumption, and
the balance sold in bond. What was done with them we know
not, but have reason to suppose that, as the duty was from
fifteen to twenty cents per pound (gold), they were smuggled
back into the country. The importation of cloves, both in New
York and Boston, has been large during the last few years, and,
if our information is correct, sold mostly in bond. A duty of
ten cents per pound on cloves and five cents on clove stems
would, I feel sure, yield a large revenue, and also protect the
honest trader." The article of musk is one also in which the
regular importation is reported to the Commissioner to have
entirely ceased, although the domestic consumption remains
mainly as before. Whatever of business remains is concentrated
in the hands of a single dealer in New York City, who, by
making the matter a specialty, is enabled to supply promptly all
demands of the trade, and on terms so favourable as to admit of
no competition.
In short, of the two thousand articles which are specifically
catalogued upon the list of dutiable imports, it is probable that
at least one-third might be immediately placed uj^on the free list
without seriously diminishing the revenue, and with great benefit
to the trade, industry, and morals of the country.
In the inauguration and carrying outs,of reforms in the tariff
of the character indicated under this first head there would seem
G
82
OFFICIAL BKPOIIT.
to be, as already remarked, but little occasion for difference of
opinion ; but when we come to propositions for reform in tariff
taxation having in view a reduction of the cost of domestic
production and consumption, the case is different. Against such
reforms every special interest whose profits, although possibly
excessive, are like to be diminished, arrays itself; and it is
broadly taken for granted that whatever of legislation will
prove advantageous to the few will, at least, bring nothing of
detriment to the many. But it is from the effects of legislation
which, intentionally or otherwise, has, since 1862, been based
on just this principle, coupled with legislation based on no prin¬
ciple or intelligence whatever, that the country now more
especially demands relief. And although the truth of this
assertion has been sufficiently substantiated by a large body of
evidence submitted by the Commissioner in his previous reports,
yet the importance of the subject renders it desirable that such
further facts as the experience of another year has afforded
should also be made public. To a brief statement of these,
therefore, and to the recommendations which the facts naturally
suggest, the Commissioner would next ask attention.
INCIDENTAL INFLUENCE OP INCREASING THE DUTY UPON COPPER.
A striking illustration of the injurious effect of attempting
to exceptionally foster one of a series of interconnected and
interdependent industries is afforded by a certain curious ex¬
perience that has followed the passage of the enactment of
February 1869, increasing the duties upon copper. By this
bill the duty on all manufactures of which copper constituted a
chief component was uniformly increased to forty-five per cent.,
and included in its provisions was an article known as Dutch
metal, extensively used in the manufacture of paper-hangings as
a substitute for gold-leaf, and on which a duty had formerly
been levied of ten per cent. The result which followed such
legislation is briefly told in the following extract from a state¬
ment presented to the Commissioner by leading representatives
of the paper-hanging industry of the country :—
" The article of ' Dutch metal,' or ' Florence leaf,' is all
imported—mostly from Germany. It is composed of an alloy
of copper and zinc, and is beaten out by hand like gold leaf
It cannot possibly be made in this country, even if the present
duty was increased, owing to the high price of labour, inasmuch
as nearly the whole cost of the article represents the labour of
beating it out, the cost of the material itself being a mere
nothing. Heretofore the duty on this article has been ten per
cent., but under the provisions of the recent bill increasing the
duties «n copper the rate has been increased to forty-five per
OFFICIAL BEPORT.
83
cent. When the duty was ten per cent, we did not complain ;
but the increase to forty-five per cent, has been too much for us,
and we have all been obliged to increase the price of our goods from
five to twenty-five cents per roll^ according to the quantity of leaf
used on each roll. The consequence is that the trade are all com¬
plaining of a falling off in the sales of our goods^ owing to the
high price., and the difficulty of making the consuTner understand
the reason why we charge Tnore for them.^^
Now, although it may be said, and with truth, that there was
no intention, in increasing the duties upon copper, to increase
the duties upon Dutch metal, the fact, nevertheless, remains,
that the increase in question was effected ; that sufficient
consideration was never given to the measure to fully understand
the extent and scope of its infiuence, and that thereby serious
detriment was inflicted upon an industry which, in 1860,
employed directly more than one-fifth as many operatives as at
that time were engaged in copper mining.
RELATION OP THE TARIFF TO THE MANUFACTURE OF LEATHER.
A similar but more extensive illustration of the injurious
influence of taxation originally imposed and afterward maintained
under the tariff, most probably through lack of information or
want of consideration, is to be found in an analysis of the
present cost of the manufacture of leather and its principal
products.
Thus, for example, the value of the product of leather of
various kinds in the United States for the year 1868 was about
$124,000,000. Now it is susceptible of demonstration that the
cost of this product was enhanced, by reason of the duties
imposed on the materials which enter into its composition, to an
average of from eight to ten per cent., or to an aggregate of
nearly ten millions of dollars as a minimum ; while the whole
amount of revenue which passed into the treasury during the
fiscal year 1868, from the duties levied on undressed hides and
skins, animal oils, and tanning material, was not in excess of
two and one-half millions ; or, in other words, for every two and
a half dollars which the government took under the tariff for
the purpose of revenue it indirectly imposed seven and a half
dollars more upon consumers of an indispensable article in the
first stages of its production.*
It is further to be noted of the duties which thus augment
the cost of leather, that while, on account of the present surplus
in the treasury, they are not needed for revenue, they cannot
pretend to claim continuance on the ground of protection.
* In illustration and support of the abo^ statement the Commissioner
submits the following table (prepared by an expert), showing the relative
O 2
84
OFFICIAI, BEPOHT.
Thus, of the hides required in the first instance, the domestic
production is only sufficient for about seventy per cent, of the
domestic consumption. Before the war American leather was
largely exported, and even to England ; while the slow process
of tanning abroad, the absence of hemlock bark, the necessity
of relying almost exclusively upon chemicals to supply the
place of tanning, coupled with the lack of mechanical appliances
—all these are sufficient guarantees that the United States can
never, under any circumstances, be exposed to serious competition
in this department of industry. Of the oils used in currying,
furthermore, we possess so great a control of the market, that
in 1868 the entire imports of such oils amounted to the small
sum of $3,510.
But large as is the sum by which these unnecessary duties
increase the cost of leather, the whole story, in its bearing upon
the consumer, has not been told. Taxes thus laid upon what
may be termed the basic materials of a series of industries
repeat and enlarge themselves at every stage, and thus become a
burden upon every intermediate producer before accumulating
upon the ultimate consumer. This is strikingly exemplified in
the industry under consideration.
It has been shown in the case of leather that the cost of the
annual product is increased directly, by reason of the tariff, to
the extent of about ten millions. If we turn next to the
manufacture of boots and shoes, the analysis of a single
department presents the following exhibit :—
cost of the manufacture of waxed upper leather under the existing tariff, or
with its constituent materials free of duty :—
Existing
tariff.
Duty free.
Rio Grande or Buenos Ayres hides, 100 lbs., costing 22| cts. gold.
$22
50
$20
45
Premium on gold (135)
7
87
7
15
Commission paid by tanner for buying and credit
1
51
1
38
Co.st of tanning with bark $15 per cord
12
00
Cost of tanning with bark free of duty, or $18 50 per cord
10
80
Cost of currying with oil at 90 cts. per gallon
8
70
Cost of currying with oil free of duty, 74 cts. per gallon
8
20
Interest six months, at 7 per cent
1
84
1
64
Commission, paid by tanner for selling (5 per cent)
2
85
2
60
Product ; 180 ft. of wax leather and 15 lbs. of splits, costing
$57
27
$52
22
Value of the same, apportioned, viz. :
15 lbs. of splits
180 ft. waxed leather
34 cts. per lb.
28.98 per ft
32 cts. per lb.
26..30perft.^
28t^ less 261^ = 2^ cents per foot reduction of cost by remission of
duty, thus proving that an addition of about ten per cent, is now made to
the cost of this variety of leather through the existenoe and continuance of
the present duties.
OFFICIAL REPORT.
85
The RTimher of pairs of boots and shoes manufactured for
men's and youths' wear in 1868 is estimated by the trade at
51,500,000, possessing an aggregate value, at an average of $2^
per pair, of $129,750,000. ifow, an examination of the various
elements which enter into the composition of these products—
made for the Commissioner by experts—affords a demonstration
that the aggregate cost as above given is enhanced by reason of
the tariff to the extent of about 7^ per cent.,* or upwards of
nine millions of dollars; a sum nearly equal to the enhanced
cost which, by reason of the duties, accrues on the whole annual
domestic product of leather. But boots and shoes for men and
boys' wear constitute but a part of the product of the boot and
shoe industry; for during the year 1868 there were also
manufactured boots and shoes for women, misses, and children
to an estimated number of 47,000,000 pairs, possessing an
aggregate value of $98,500,000. If we suppose the cost of
these products to be enhanced by reason of the tariff to the
same extent as in the case of the boots and shoes manufactured
for men and boys, we must further carry to the account of
indirect taxation, to be paid by the consumer, the additional
sum of $7,387,500; making a total unnecessary burden annually
imposed upon consumers of boots and shoes in the United
States of more than fifteen millions of dollars.
One further statement is necessary to complete this exhibit.
As already stated, the product of women's, misses', and children's
shoes is about 47,000,000 pairs per annum. Of these it is
estimated that at least 15,000,000 pairs are composed in part of
two fabrics of wool, technically known as " lasting " and
" serge." Shoes thus fabricated are worn by all classes of
* Table showing the compojrative cost of the manufacture of merHs standard^
first Equality, sixteen-mch leg hip hoots under the existing tariff, and with
the materials directly or indirectly used in manufacture admitted free
of duty.
Cost of uppers, per dozen
Cost of soles, per dozen
Labour
Finding, (fee
Interest six months, at seven per cent.
Commission for selling, at six per cent.
Coat of twelve pairs of boots
Taxed.
Free.
$20 46
$18 67
8 04
7 44
8 00
8 00
2 00
1 70
1 35
1 20
2 53
2 36
$42 38
$39 37
,$42 38-39 37 = $3 01 per dozen, which is equivalent to an addition of
7t®A psr cent, to the cost of boots of the aboiie description by reason of the
imposition and continuance of the existing tariff taxes.
86
OFFICIAL EEPORT.
women, the lasting and serge being materials well adapted to the
climate of all seasons, very light, very durable, and, unlike
leather, suffering but little deterioration when worn under
rubbers in wet weather. The present import of lasting and
serges to meet the requirements of the boot and shoe industry
is estimated at about 3,000,000 yards, possessing a value of
eighty-seven cents (gold) per yard, or $2,610,000, or in currency
(with gold at 133J), $3,480,000.
On these imports the price is enhanced by reason of the
duties as follows :—
Specific duty 50 cents per pound (13
pounds per piece) $650,000
Ad valorem duty 507,000
Total gold value of duties $1,157,000
Total currency value of do., gold
at 133 J $1,542,666
which sum represents the burden annually imposed, first, on one
department of the largest specific branch of industry in the
country ; and secondly, upon the whole female population, who
are consumers of these products. And for what? Certainly
not for revenue ; and then, if for protection, for the interest of
one or two small establishments in Massachusetts, employing
but few hands and a limited capital. Or, to put the case
differently, the government, to all intents and purposes, has in
addition to all its other business become a partner in the lasting
and serge business, and runs one or two small establishments at
an expense to the people of $1,500,000 currency per annum—a
sum greater than is at present annually required to defray the
expenditures of the whole foreign intercourse of the country.
But this does not comprise all the direct taxes imposed upon
this class of manufactures. !N"early one-half of the lasting and
serge goods are fitted with elastic gores made of rubber webbing
inserted in the sides. This material is nearly all imported, and
pays from thirty-five to sixty per cent, duties ad valorem.
These duties, it is represented to the Commissioner by the trade,
are equivalent to a tax of five cents per pair on all the goods
using webbing as a constituent of their composition. We
conclude this analysis by an extract from a statement submitted
to the Commissioner by leading representatives of this branch
of the boot and shoe industry : " Before the war a cheap gaiter
boot for women's wear was sold for sixty cents ; now the same
article commands $1 05. Before the war there was a large and
increasing demand for export of our goods fox South America,
OFFICIAL BEPOKT.
87
Central America, Mexico, and the West Indies j but now, owing
to the largely increased cost of. the same goods, this trade is
almost entirely cut off, except a very limited demand for Cuba."
The result which might be expected to follow from a removal
of the above referred-to duties is thus expressed in a recent num¬
ber of the A merican Workman^ a paper published in the interest
of the " Crispin," or shoemakers' union of the United States :—
" The workmen " (in this branch of industry) " have suffered,
as every one admits, for several years, for lack of steady
employment. The quantity of boots ând shoes now required
for use is not in proportion to the number of shoe workmen;
consequently in Uew England there has been full work for them
only ten months of the year, and so wages have been low.
With the removal of the duties referred to the increase which
would follow in the quantity of boots and 'shoes to be made
would be sufficient to cause these men to be fully employed all
the year, and then there would be but little difficulty in
adjusting the rate of wages."
In view of these facts and considerations, the Commissioner
submits the following recommendations :—
First, that the importation of hides and skins of every de¬
scription, and all leather except morocco, japanned and patent
leather, be hereafter admitted free of duty. It has been shown
above to what extent the existing duty of ten per cent, forms a
burden upon the production and manufacture of boots and shoes
for American consumption, and upon the production of leather
to be used in that manufacture. An additional and even stronger
reason for the removal of the tax is found in the fact that the
present duty is, so far as the most careful canvass of the trade
allows the Commissioner to determine, the only obstacle to the
revival of the export of leather and its manufactures from the
United States at the present time. The Commissioner must
not be understood that no other cause operates to put the
American producer at a disadvantage in this line of articles ; but
that, notwithstanding the injurious effects of an inffated and
irredeemable currency upon this as upon all other branches of
business, the superior endowments and facilities enjoyed by this
country for the making of leather and for the manufacture of
articles from it, particularly boots and shoes, are so decided and con¬
siderable as to afford very strong assurance that, by removing the
duties on hides and skins, leather could again be exported in great
quantities ; while, by reducing the cost of leather to the manu¬
facturer, the export of boots and shoes to the British Provinces
and to Central and South America and Australia, which formed
BO • considerable a part of that trade before the war, will revive
at an early date. It is very suggestive in this connection that
88
OFFICIAL REPORT.
hides and skins are now heing imported from South America
into Canada (landed at New York and sent clear across the
United States under^bond for exportation), tanned there, and
exported to England in large amounts ; and that in consequence
of the advantage enjoyed by the trade in Canada from the
absence of duties upon the material, some of the most important
American establishments upon the frontier have been moved
across the line and are sharing in the benefit of a production
which enjoys access to all the markets of the world.
It must be remembered that the cost of labour (which is the
element of production on account of which protective duties are
especially claimed) is comparatively inconsiderable in the manu¬
facture of leather. At the same time, the United States, as the
producer of this article, enjoys the advantage of cheaper tanning
materials and more perfect and extensive apparatus and machinery
than any other country in the world. Bark, which in England
costs from $25 to $35 a cord, can be had here of equally good
quality for $5 and upwards, according to locality, the greater por¬
tion used probably not exceeding $6. The American superiority in
processes and machinery is no less marked. Splitting machines
are but little used in England, leather being generally reduced to
the required thickness by the old-fashioned method of shaving
down, which is equally wasteful of labour and of mkterial. So
far is this true that, even since the total cessation of our export
of leather, " splits " have been shipped in considerable quantities
to England, for the reason that they are not made there to any
extent.
The manufacture of boots and shoes has experienced the same
effects from the imposition of duties as the raw material. Indeed,
the duty upon hides may be taken as the measure of the duties
successively laid upon manufactures from them ; that is, the duty
on hides is the only thing which makes the duty on leather
necessary. Give the tanners and leather dressers of the country
free hides, and they will need, and will ask, no protection against
imported leather. Again, give the boot and shoe manufacturers
their material at such prices as could be afforded with free leather,
and they will need no protection against imported boots and
shoes. Indeed, they hardly require any at the present time for the
purpose of commanding the domestic market, even though their
material is taxed as it is. The processes of manufacture are so
much better understood here than abroad, that in both quality
and price the American trade article of pegged goods is superior
to any of French or English manufacture ; and it is only the
enhancement of the cost of production by the duty under con¬
sideration which prevents the exportation of boots and shoes at
the present time from the United States to a very great extent.
OFFICIAL REPORT.
89
Second, tlie Commissioner would furtlier recommend the free
importation of hemlock or other barks used for tanning ; of
sumac, and of the fabrics of wool known as lasting and serge,
when the same are woven or made in patterns of size, shape, and
form, and cut in such manner as to be fit for shoes or bootees
exclusively, and not combined with indiarubber.
RELATION OF THE TARIFF TO THE COST OF IRON.
The examples of tariff influence in increasing cost and restrict¬
ing production and consumption, thus far cited, are of such a
character that it would seem to be only necessary to present a
clear statement of the facts in order to insure a prompt remedy.
We now propose to cite some illustrations of a class of cases
where excessive and unnecessary duties have been imposed and
maintained, with a view of enhancing the cost of articles indis¬
pensable to many other branches of production ; and this, too,
with a full knowledge and demonstration of the fact that the detri¬
ment thereby brought to industry in general far outweighs any
measure of benefit which can possibly accrue to the special or
class interest thus favoured. Of such cases the article of pig
iron constitutes a conspicuous example.
The average expenditure requisite to produce a ton of pig
iron in the United States at the present time, induding a liberal
interest upon the capital invested and a fair allowance for repairs
and incidentals, may be fairly estimated at from $24 to $26,
currency; and as confirmatory of this estimate, the Commissioner
submits the following evidence í—
In a letter under date of September 2, 1869, Mr. George T.
Lewis, of ClarksviUe, Tennessee,^ who is endorsed as one of the
most intelligent and experienced iron manufacturers of the
South-west, says : On the line of the îiash ville and Chattanooga
Kailroad, pig iron «an be made and delivered in ííashville at a
cost of $19 per ton, currency. In the city of KashviUe itself
Mr. Lewis states the present cost, including interest on capital
and incidentals, at $22 60, currency, per ton. At Carondelet,
Missouri, Mr. S. Waterhouse, of St. Louis, in a letter under
date of February 20, 1869, states the cost of making pig iron,
including an allowance of $1 50 per ton for interest, taxes, and
insurance, at $25, currency, per ton ; and adds, this is not an
estimate, but an exhibit copied from the books of the company."
The distance of Carondelet from St. Louis, a central market, is
six and a quarter miles. An estimate furnished by one of the
largest iron-works at Pittsburg, Pennsylvania, gives $27 98 as
the cost per ton when ore of sixty-six per cent, is used, and an
allowance made of eighty cents per ton for interest and twenty-
five cents per ton for repairs and incidentals. In the valley of
90
OFFICIAL REPOET.
the Cumberland, and in the anthracite districts of Pennsylvania,
and at Scranton, the Commissioner is informed by those con¬
versant with the business that the average cost of manufacture
in the case of furnaces favourably situated, under good manage¬
ment, and with coal at ordinary prices, is not in excess of from
$24 to $26 per ton, and in some instances is much less than
this figure. These estimates furthermore, it should be observed,
include a liberal interest on the capital invested, which is
turned on an average from two to three times per annum.
The mean market price of pig iron in Great Britain for the
year 1867-68, taking Welsh pig (the best quality) as a standard,
was £á 3^. 9d. ($20 39), or (with gold at 133) $27 12.
The average price of all the varieties of pig iron in the
principal markets of the United States for the past year is
estimated by the secretary of the American Iron and Steel
Association at $35 25 per net ton. Other recognized authorities
report a higher average to the Commissioner, viz., from $36 to
$36 50 and $37 50 as a fair average in li'ew York City. The
average value at the furnaces of the Lehigh Valley during the
past year has been about $38 for Uo. 1, $36 for Uo. 2, and $34
for I7o. 3. It is therefore obvious that, adopting the minimum
market price, and allowing for the cost of one hundred miles of
railroad transportation, the price of pig iron to the American
consumers has been unnecessarily enhanced during the past year
to an average of /rom eight to ten dollars per ton; the result of
which, in short, is that, while the average cost of producing pig
iron, reckoned on a gold basis, is but little, if any, in excess of
the average cost in Great Britain, and less than the average cost
of production upon the continent of Europe, the price of iron to
the consumer in the United States is greater than in any other
civilized commercial and manufacturing nation.
Now, it is not necessary for the Commissioner to enter into
any extended argument to show the disadvantage under which
the United States is placed as a nation by reason of this state of
things, be the cause what it may. The mere fact of an increased
cost is of itself a sufficient and unanswerable argument for an
immediate abatement of the same at almost any sacrifice j inas¬
much as iron is the essential element of modern civilization, and
whatever enhances its price restricts its consumption and use,
increases the cost of all production and transportation, and
checks development. A striking illustration of the truth of
this is to be foimd in the fact that there is to-day upon all of the
inland lakes and canals of the United States hardly a single
boat or vessel constructed of iron engaged in the transportation
of merchandise, although the introduction of such boats or
vessels, reason of their smaller displacement^ would be
OFFICIAL BEPORT.
91
equivalent to an enlargement of the Erie Canal or the deepening
of St. Clair Flats (an iron vessel of 1,200 tons drawing thirteen
inches less water than a wooden vessel of the same tonnage and
hurden). To this advantage must also be added the increased
economy due to greater durability and reduction of insurance.
That the excessive cost of iron is now the principal reason
why such vessels are not constructed admits of demonstration.
In 1867 an enterprising citizen of the FTorth-west visited Great
Britain for the purpose of contracting for an iron vessel suitable
for the grain trade of the upper lakes. This vessel it was pro¬
posed to ship in sections, and with the patterns and some skilled
workmen, imported, to establish an iron ship-building yard in
the vicinity of Chicago. The project, however, was abandoned
when the aggregate of the duties on the proposed imports,
ranging from thirty-eight to sixty-six per cent., were calculated ;
and so Chicago still waits for the inception of what, at some
day, must constitute one of the greatest industries of the hiorth-
west. The Commissioner is also informed that, but for the
extreme cost of iron, a line of iron boats would have been
constructed during the present winter, and placed on the Erie
Canal during the ensuing spring.*
* On this point, also, a representative of one of the best-known establish¬
ments engaged in the construction of iron vessels thus writes to the
Commissioner :—
"Wilmington, Delaware, October 9, 1869.
" Since 1854 improvements in the machinery used by iron-ship builders
for utilizing and economizing labour have more nearly brought together
the prices at which the hulls of first-class iron and wooden ships can bo
built; and now any iron-ship builder having practical experience in his
business, and whose works possess the modern appliances for economizing
material and labour, can furnish an iron ship at the same or even less cost
than a wooden one of the same size and model can be built for, if the latter
be made of first-rate sea-coast oak, copper-fastened and coppered; while
the iron ship will outlast the wooden one in the proportion of two to one,
and alway s carry upon the same displacement fifteen to eighteen per cent,
more cargo, with the absolute certainty of no damage being sustained
from leaking.
" It is the general opinion that the English builders of iron ships have
great advantages over those of our country in the matter of greatly cheap¬
ened labour. From the personal knowledge of gentlemen well acquainted
with the methods of conducting work in the best English and Scotch
yards, and whose knowledge of the business enables them to decide intelli¬
gently upon this point, and whose information has been fully communicated
to the writer, he is clearly of the opinion that any advantages they may have
in this regard is quite counterbalanced by the superior mechanical appli¬
ances and labour-saving machinery in use at the yards of the American
builders.
"A little reflection supplies a reason for this seeming anomaly. The
high rates of labour which have ruled in this country for a number of years
have forced our American builders to avAÜ. themselves of all the labour-
saving machinery which the natural mechanical skill of our people, fostered
92
OFFICIAL BEPOBT.
But the usual and almost the only argument offered in reply
to such statements as that above given is, that a continuance of
the present duties imposed on pig iron is necessary to insure
employment to American labour. To this the Commissioner
would reply, that all the facts show that a reduction or entire
repeal of the duty would in no degree affect the manufacture,
but only reduce its profits to a par with those realized in other
branches of domestic industry ; and, furthermore, that under an
abatement or repeal of the duty no more pig iron would he
imported than at present, for the American manufacturer would
simply reduce his prices, and thus retain, as now, full command
of the domestic market. It is also to be noted that, if the duty
on pig iron were entirely removed, the American producer in the
interior would still enjoy a protection in the cost of transporta¬
tion to the extent of at least $1 50 per ton for every one
hundred miles that intervene between the place of production
and a port of entry, which circumstance renders the transport of
a single pound of foreign pig iron to any considerable distance
into the interior a matter of ordinary commercial impossibility.
It is also well, when the claim to the maintenance of high duties on
pig iron is preferred in behalf of labour, to consider what amount
of protection and opportunity for employment is thereby taken
away from other branches of industry. In the case of ship¬
building this point admits of determination with approximate
accuracy.
Tons.
Thus the sear-going tonnage that would have
been budt in the year 1866, according to
the average rate of increase from 1827 to
1857, would have been.... 500,000
Deduct the amount built in 1867 50,000
And we have 450,000
by a generous system of patent laws, has placed at their command ; and
to-day we find that a given sum of money expended in labour upon an iron
ship in an American shipyard of first class will produce as much and go as
far toward her construction as the same sum applied in England.
" In the construction of iron ships nearly six-tenths of the whole cost is
for labour alone, the remaining four-tenths representing the material
consumed, ilow it is my opinion that, if Congress would repeal the law
taxing imported iron, or at least that which was used for the purpose of
building iron ships, then American iron-ship yards would in a single yeai
rival in activity those on the Clyde, and American iron steam merchant
ships be found in every port in the world, as English-built vessels are now,
and the commerce of our country, without which no nation can rate as a
first-class Power, which to-day lies crushed and flattened ('protected* to
death), would more than regain its former measure of greatness."
OFFICIAL BEPOET.
93
An amount equivalent to six hundred ships of seven hundred
and fifty tons each. At the present ratio in England but ten
per cent, of these would have been of wood. But to build
these six hundred ships would have employed for the year a
force of about thirty thousand men, or more than two and a
half times as many as are at present directly engaged in the
manufacture of pig iron.* To man these six hundred ships six
thousand inen for the year would have been necessary ; and to
supply them with chains, canvas, rigging, and other furniture,
would have further required the labour of at least four thousand
more men. So we may estimate that this protection to the
manufacture of pig iron by twelve thousand five hundred men
directly, or fifty-two thousand five hundred, both directly and
indirectly, in 1867, so enhanced the cost of iron, as to deprive
more than forty thousand other workmen of employment during
that same year, in connection with the single industry of the
building, equipment, and sailing of sea-going vessels; to say
nothing of the construction of vessels for use upon our inland
waters. Another illustration of the benefit likely to accrue to
domestic industry from a reduction of the rate of duty on pig
iron is to be found in the recent experience of the country in
respect to imported scrap iron, which article, through a probable
oversight in the first instance, is admitted at the comparatively
low rate of eight dollars per ton, or one dollar per ton less than is
imposed on foreign pig iron. The result has been, that nearly
all the rolling mills in the country, within two hundred miles
or more of tide-water, have gladly availed themselves of the
opportunity to use this product ; and the mere ability to so use
it has, in very many instances, constituted aU the difference
between running the mills at a moderate profit, or running at a
loss, or entire suspension. Furthermore, little rolling mills,
adapted to use scrap iron exclusively, have sprung up at various
points along the seaboard, affording steady employment to large
numbers of labourers, and constituting the centre of other little
domestic industries ; and all this without bringing anything of
detriment to the revenue, to any other branches of industry,
or to the community in general ; but, on the contrary, it has
increased the revenue, developed and strengthened the business
of production, and benefited consumers.
But it is frequently asked : Why, if the production of pig iron
is as profitable as is represented, is not a greater amount of
capital attracted to its manufacture ; and why is not production
* The whole number of workmen at present engaged at the blast furnaces
of the Uniteii States is estimated at twelve thousand five hundred ; in addi¬
tion to which, however, forty-two thousand aje estimated as engaged in the
preparation of coal and ore for the same.
u
OFFICIAL BEPOBT.
stimulated to an extent sufficient to reduce prices through
competition to a minimum? The answer to this is simple:
capital does flow and is flowing into the manufacture of pig iron
in the United States to as great an extent as could he expected
in view of the present conditions of its supply and distribution,
and to a greater comparative extent than is the case as respects
any other specific branch of manufacturing industry. The
present increase in the consumption of pig iron in the United
States is at the rate of about ten per cent., or 170,000 tons per
annum, to meet and supply which not only must every existing
furnace be kept working to its present capacity, but twenty-eight
new furnaces, of a capacity of six thousand tons each, must be
annually added, involving new capital to the extent of from five
to seven millions of dollars. Anything less than this would
occasion a deficiency ; and, in fact, so closely does consumption
press upon supply, that for the last three years there never has
been at any one time a considerable surplus upon the market,
but, on the contrary, the price-currents have been characterized
expressions like the following : ^'Prices unchanged^ with
scarcely enough in market to make any business;^' " Offerings few
and stock exhausted "A^o. 1 continues very scarce, with the
demand in excess of supply ; No. 2 is also hard to findr îior is
this all ; for, in addition to the annual increase in production
necessary to meet the requirements of consumption growing out
of the natural increase of wealth and population, a further in¬
crease is constantly demanded to meet the new conditions of
civilization in respect to engineering and the mechanic arts. How
great the demand of the future is likely to prove may be inferred
from the circumstance that, while the -per capita consumption of
Great Britain and Belgium, after allowing for exportation, has
reached one hundred and eighty-nine pounds per annum, the
present annual consumption of the United States is not in
excess of one hundred pounds per capita. !No nation, further¬
more, at the present time, with the exception of Great Britain,
is producing pig iron in sufficient excess of its needs to allow of
a surplus for exportation ; and in Great Britain the prospect of
any future increase is entirely dependent upon the uncertain
condition of her being able to supply coal on a scale of con¬
sumption that is already in excess of one hundred and four
millions of tons per annum. The assumption, therefore, that the
continuance of the present protective duty on pig iron is
necessary to the maintenance and expansion of this branch of
industry in the United States, or that domestic competition
alone is likely soon to reduce prices, is one that has no good or
sufficient foundation.
In vie.w, therefore, of the above facts, the Commissioner would
OFFICIAL BEPOKT,
95
recommend a reduction of the existing duty of nine dollars per
ton on the importation of pig iron to three dollars ; and in this
recommendation the Commissioner has good and sufficient reason
to believe that he is sustained by a majority of the proprietors
of rolling mills and other workers of iron, who are not at the
same time interested in the production of pig metal; while
members of the American Iron and Steel Association have not
hesitated to express their sympathy with any movement looking
to some abatement of duty in this particular.
SALT, COAL, AND LUMBER.
The Commissioner would renew the recommendations of his
previous report in favour of the abatement of the duty on salt,
and the entire removal of the duties on coal and on manufactured
lumber, on the general ground that the benefit likely to be
experienced by the few from a continuance of these taxes affords
no sufficient compensation for the detriment which these con¬
tinuances seem to entail upon the many.
Salt.—The specific character and influence of the duties
imposed on salt were so fully discussed and illustrated in a
former report, that the Commissioner will at present call attention
only to the following points :—
1st. Their excessive character is strikingly shown by the
circumstance that if the government were to exact its duties, like
tithes, in kind, it would require that each vessel arriving in
the United States with a cargo of foreign salt should be
accompanied by another of equal size, and a third smaller craft
of from eight to fifty per cent, capacity of the former, to
convey the duty.''^
2d. That the existing duty is not required to sustain and
develop the domestic manufacture of salt is proved by the fact
that the United States annually exports upward of five hundred
thousand bushels of salt to the British Possessions, and main-
* As illustrating the actual ad valorem duty on foreign salt, the following
table, showing the amount of salt withdrawn from bond for the fisheries
in the district of Gloucester, Massachusetts, for the ihiid quarter of the
calendar year ]861>, with the value, amount of duty remitted, and the duty,
specific and ad valorem, as officially returned, is herewith submitted.
Months.
Pounds.
Rate.
Value.
Duty.
if Ol
aj .S
U c3
m Cm
PH O
155-20
159-14
148-78
July
August
September
Total
4,184,433
2,408,350
1,429,995
18 c
18 c.
18 c.
$4,853
2,724
1,730
$7,532 00
4,335 02
2,573 96
8,022,778
...
^307
14,440 98
155-16
96
OFFICIAL BEPORT.
tains sucli an export year after year in defiance of all competition ;
and further, that for the purpose of retaining full control of the
domestic market, salt is always sold by the domestic producer to
fishermen, who have the right to withdraw salt from bond free
of duty, at rates which admit of no advantage as respects price
to the use of the imported article.
3d. As regards the profits which result from the manufacture
of salt in the United States under the present system, the
Commissioner, in addition to the evidence previously presented,
will ask attention only to the following table showing the cost of
making salt at one of the principal furnaces on the Ohio Eiver
for the year 1868 :—
JSTumber of bushels (of 56 pounds each) produced 327,000
Cost of barrels .,..$23,468 99 or 7*18 cents per bushel.
Cost of coal 19,902 19 or 6'09 cents per bushel.
Wages and Salaries 21,075 96 or 6*44 cents per bushel.
Eepairs and incidentals 10,584 50 or 3*24 cents per bushel.
Total ,,...75,031 64 = 22*95 cents per bushel.
To this must be added the cost of transportation, interest,
commissions, &c.
The cost of manufacturing 319,000 bushels of salt at the
same furnace in 1860 was 13*38 cents gold per bushel, or (with
gold at 133) 17*84 cents currency. The average market price of
salt in 1860 was from 20 to 23 cents per bushel gold, or (with
gold at 133) 26^ to 30§ cents currency. The price of salt in
Cincinnati in 1868, was 48 cents currency. It thus appears
that while the cost of manufacturing has advanced 5 cents per
bushel, currency, since 1860, the market price for salt during
the year 1868 advanced 17 to 22 cents per bushel.* The
Commissioner could name the rate of dividend paid during the
year 1868 by the furnace referred to, were it not communicated
confidentially. The reader can, however, approximately determine
it by calculation, t
The Commissioner does not assert, and never has asserted,
that the manufacture of salt under all circumstances, in the
United States, is always attended with large profits ; but he
does assert, that when this industry has been established under
favourable conditions,- and is conducted with skill and energy, it
* In November 1869, the market quotations of Ohio salt in Cincinnati
were from forty to forty-five cents per bushel.
f It is pertinent to this discussion to here call attention to the fact that
one of the first acts of the new and more liberal government of Spain, on
its accession to power, was to abolish the government monopolv of salt
(heretofore an important source of revenues to sell the national " salines,"
and to permit importations.
OFFICIAL BBPOBT.
97
is sufficiently remunerative to sustain itself without the
assistance of duties ranging from eighty to one hundred and
fifty per cent. And in proof of this he asks attention to the
following extract of a communication addressed to him by the
agent of one of the largest salt-producing associations in
Western Virginia.
" The cost of making salt here is veiy variable, and dependent not only
in a large degree upon the quality of the brine and size of furnace, but
upon the personal energy of the proprietor and his acquaintance with the
business. There are some of our furnaces which I am sure are operated
with very slight or no profit, while others, by the purchase of superior
property, and free investment of capital and skill, are enabled to make sub¬
stantial profit. A furnace with a capacity of less than two hundred thousand
bushels per annum is not a profitable investment here—I mean will not
invite investment, although such furnaces are operated here, because
the small profit will keep the property in repair which one year's inactivity
will almost destroy. A furnace having that capacity, if it can be increased
to say two hundred and fifty thousand bushels, will jmd the extra quantity
almost entire profit. A larger increase in quantity would require much
more capital, but still the proportionate profit is greater on all above two
hundred thousand bushels."
ÎÎOW if there is anything of value in the above testimony,
the question in respect to the manufacture of salt in West
Virginia resolves itself simply to this. Good furnaces, properly
located and managed, can make large profits; furnaces improperly
located and improperly managed, cannot. Shall the whole
people of the United States be taxed on the consumption of one
of the necessaries of life, to help maintain branches or forms of
industry which, by the very conditions of their existence, never
can be made remunerative, and whose continuance involves a
misapplication and waste of both capital and labour?*
* In this connection, the following correspondence, addressed to the
Commissioner, has much of significance. Under date of August 2,1869,
Duncan Stewart, President of the Saginaw ("Michigan) Salt Association,
writes to the Commissioner : " Salt can now be made at Saginaw in great
abundance at very low rates, where the making of it is carried on in con¬
nection with saw-mills and shingle-mills. Using exhaust steam and waste
wood for eflfecting evaporation, I am satisfied it can he made in that way in
sufiicient quantities to supply all the western States, at a price so low that no
section of the country can compete with the Saginaw Valley in the markets
of these States. One thing is certain—no higher tariff is needed for the pro¬
tection of Saginaw salt than that now in force, and it should he cut
down one-half, the present high tariff heing simply an outrage on the hcst
interests of the country.
" If the business has not paid much in the way of profit heretofore, want
of knowledge of the business, bad management in some cases, dishonest
management in others—with a reckless competition among makers—the
hostility of Syracuse, and a steamboat combination for high freights, were
suck obstacles to success that it is a great marvel that the attempt to make
salt in the Saginaw Valley did not prove an abscrtute failure. A determined
H
98
OFFICIAL BEPOKT.
Lumher.—The following table shows the advance which has
taken place in the price per thousand feet of mixed lumber, by
the cargo, in Chicago, fi-om 1861 to 1868, inclusive :—
Mean of daily averages.
Year ended December 31, 1861... $6 50 per M feet.
March 31, 1866 14 80 per M feet.
March 31, 1867 17 70 per M feet.
March 31, 1868 15 10 per M feet.
»
5>
The following table, compiled by William G. Thomas, Esq.,
of Albany, Î7ew York, gives the relative value of pine lumber
in that market from 1859 to 1868, inclusive :—
Per M feet.
$31 21
22 12
29 83
27 42
25 95
Per M feet.
1859
.... $15 94
1864
1860
.... 16 23
1865
1861
14 46
1866
1862
15 02
1867
1863
23 69
1868
spirit of perseverance has overcome all diffidilties, and nothing now is
wanting but prudent management to give Saginaw the entire control of the
markets of the Western States."
"Sparta, Georgia, March 26, 1869.
" To the Special Commissioner of the Revenue.
"Sir,—In answer to your inquiry respecting the use and necessity of
salt in the cultivation of cotton, 1 would say I have been engaged for the
last twenty-two years in planting. I find salt to be essential to success in
the cultivation of cotton. In combination with guano and plaster it is an
almost total preventive of rust, which is one of the worst enemies the
cotton planter has to contend with. Salt makes the cotton bear longer in
the season, and stand drought better.
" The price of salt varied before the war in Savannah from fifty cents to
one dollar, according to supply. In January, 1861, I bought five hundred
sacks (two hundred pounds) of salt for fifty cents per sack. In Januaiy last
I purchased in Savannah two hundred sacks at $1 90 (which was the lowest
point) to $2 25.
" In my opinion, all means should be taken by the government to lessen
the cost of cotton, as it costs much more to produce it than formerly. All
manures should come in as raw material to be grown into crops. What is
the difference in growing raw manure into cotton-lint and manufacturing
raw material into fabrics?
" 1 am, yours respectfully,
"David Dicksoh."
The Commissioner would add, that it is now proposed to take advantage
of that provision of the existing tariff which allows of the import of ferti¬
lizers free of duty, by mixing salt with Prussian blue or unrefined petroleum,^
and then importing it as a manure ; or, in other words, of destroying a
portion of the utility of an indispensable article at some considerable cost
as a condition of enabling agriculturists to obtain it at a reduction of
price. One is tempted to inquire, in view of this circumstance, whether
we are really living in the last half of the nineteenth century, or have gone
back to the dark ages.
OFFICIAL REPORT.
99
The statement, therefore, made by the CommisaiSlffthS^H^"
report for 1868-69, and which has been question^,^
increase in the price of lumber since the commenc^menl"Ôfff5fèr
war has been far in advance of the average increa^p in the price
of labour and of other commodities," is fully confirmed.
The above tables also clearly illustrate the effect of the
imposition of the tariff on prices. Thus the existing duty of
twenty per cent, on lumber became operative on lumber imported
from the British Possessions (our only foreign source of supply)
by the expiration of the reciprocity treaty in the spring of 1866.
Idle subsequent advance in prices in Chicago was from $14 80
per thousand feet in 1865-66, to $17 70 in, 1866-67 ; and in
Albany from $22 12 per thousand feet in 1865, to-$29 83 in
1866, and $27 42 in 1867. As the prices paid for lumber,
furthermore,, have been as a rule higher in Canada since the
expiration of the reciprocity treaty and the imposition of the
twenty per cent, duty, while the sales have been larger, it is
evident that the duty falls wholly upon the American consumer.
Goal.—The Commissioner would also again renew his recom¬
mendation for the entire removal of all duties imposed upon the
importation of coal, on the broad general principle that a tax
upon coal is not justifiable except in the case of such an extreme
emergency as would justify a tax upon the breadstuffs and food
of a nation. Such an emergency of course may arise, for there
are times when taxes which trench upon and absorb capital
become necessary and justifiable ; but such extreme occasions
can be only temporary. Further than this, objections to a tax
upon coal to meet the ordinary requirements for revenue may be
briefiy stated as follows : Coal is a necessity of life—next in
importance to food; indeed,as both are in our climate absolutely
indispensable, it cannot be said that either is more or less need¬
ful than the other, for life cannot be sustained without both.
The universally recognized principle of taxation—that a tax
should be taken from what can be spared—forbids the laying
of a tax upon that which is indispensable to rich and poor alike.
Coal, moreover, is not only a necessary of life, but tlie source
of motive power. To tax coal, therefore, is to tax power; to
tax the force of the steam-engine, to starve the labourer on whose
strength we depend for work. To do this as a part of a plan of
promoting domestic industry seems the reverse of wisdom.
In 1862, when the internal revenue system was projected and
the necessities for revenue required that the system of taxation
should be all pervading, an internal tax was laid upon coal of
three and a half cents per ton. This was raised to five, and
afterward to six cents, under which rate^ $1,240,106 was col¬
lected for the year 1865-66. But it is worthy of remark that
H 2
ióo
OFFICIAL EEFOET.
this tax, trifling as it was in amount, was among the very first
to be repealed ; and this circumstance may fairly be looked upon
as conveying the sense of the country upon the expediency of
such a tax for revenue. The question of an excise upon coal
may be considered, therefore, as definitely settled. But if an
excise is unwise, can anything be said in favour of an import
duty 1 In fact, an import duty as a source of revenue is still
less justifiable. All taxes should be as equally borne by the
community as possible. A tax which reaches only one part of
the country and leaves all the rest untouched is manifestly unjust.
A law which enacted in terms that a duty of fifty per cent,
upon an article should be levied at Pittbsurg, Cincinnati, and
St. Louis, while no duty on the same should be paid in Boston
or York, would be so manifestly monstrous that the pro¬
position would not receive a moment's thought ; yet an import
duty on coal produces a precisely similar result. It can affect
only a very small portion of the country, which the rest escapes
from. Nature has been bountiful to the United States in many
things, but in none more so than in the distribution of coal over
its surface. Of the immeasurable wealth to grow out of it no
one can adequately conceive. But in this provision New
England, New York, and the Atlantic coast have no immediate
part. The coldest, and so most dependent on fuel ; the oldest,
and so most bare of wood ; the most densely peopled, and so the
largest consumers of fuel in proportion to its area—^this portion
of the country happens to be the only part upon which a coal
duty bears at all. It would seem as if no fair-minded person
could wish to have this point urged further. But when it is
considered that manufactures such as iron, in which fuel is most
largely used, are carried on in New York and New England in
competition, to a certain extent, with those parts of the country
where coal is untaxed, because found on the spot, the gross
unfairness of a tax upon the productive industry of one section
that is not borne by the other seems more obvious.
When a dutj'" is imposed on tea, coffee, or spices, it is equal
all over the country. Let us suppose that the duty on coal as
now fixed—$1 25 in gold, equal to, say, $1 50 in currency, per
ton—were levied upon all the coal used in the country, as the
duty on tea is levied upon all tea, would it be borne with
equanimity 1 The amount of such a duty, if collected, would
exceed $25,000,000 in currency. The suggestion seems mon¬
strous, and yet the coal duty now levied does actually, to the
extent of the area to which it is confined, burden the industry
subject to it to that extreme degree. It is hard to enlarge upon
such a proposition—a plain question of equity, of fair play,
needs only a plain statement, • and not an elaborate argument.
OFFICIAL REPORT.
101
But this duty is urged as a 'protective measure. The theory of
protection is the encouragement of particular industries by pro¬
hibiting or obstructing the competition of foreigners who are
engaged in the same industries ; but when its aid is invoked to
justify the obstruction of an industry in our own country, for
the gain of persons engaged in another form of industry, it
would seem to require some justification stronger than a mere
word. The protection of coal means, then, the enhancement of
its price by a duty, so that the consumer may be obliged to buy
coal raised in the United States rather than that procured
abroad. This duty is necessary because it is impossible that the
parts of the country destitute of coal should be supplied with it
as cheaply if raised in the United States as if brought from
abroad. This increased cost is not a question of skill, or capital,
or wages, but a mere question of the amount of labour necessar}'
to produce a certain result.
The cost of coal in any market consists of the cost of raising
the coal (an amount varying but little in different places) and
the cost of transportation to the place of consumption. This
latter is always the larger, and increases regularly with the
distance. Every coal-field has an area which it can naturally
supply more cheaply, i.e., with less labour per ton, than any
other can. Each place, then, has its natural source of supply.
If an obstacle to transportation exist between it and the nearest
coal-field, a more remote field is sought so long as that obstacle
exists. It may be that a railway or canal has been destroyed by
a flood, or a river course dried up by a drought ; for the time
being, the supply comes from the more remote and expensive
source. This happens sometimes on our western rivers. The
cities of Cincinnati and Louisville have occasionally seen winter
approach when there was an insufficient supply of coal on handi,
and the Ohio Eiver, their natural highway, was too low for
navigation. In this case, the railroads in Ohio are relied upon
to make up the deficiency ; but, of course, they do it at a great
increase of cost. While the low water continues they are
protected against the cheap transportation of the river. Now
this obstruction to a cheap supply, deprecated justly as a public
calamity, is in its results precisely analogous to the obstruction
offered by a duty to the cheap supply of the liorth-eastern States
with coal from ISTova Scotia.
If the enhanced price paid by the consumer for his coal, in
consequence of the existence of this duty, were all paid to the
Pennsylvania miner, it would be, of course, great injustice ; but
the country would be none the poorer because the law took
money from one man and gave it to another. But it happens
that, while the consumer pays the increase, the immediate pro-
102
OFFICIAL EEPORT.
ducer is not benefited, inasmucb as the whole enhanced price is
expended in paying for the transportation of the coal to a greater
distance—in other words, the payment is for unnecessary trans¬
portation, Le., useless labour. Now, no acquisition of skill can
change this. It is fixed by the laws of nature. To the end of
time it will cost more, i.e., it will take more labour to bring
every ton of coal from Western Pennsylvania across the Alle¬
ghany Mountains to the north-eastern seaboard, than to bring it
from Nova Scotia. So long as a duty makes it possible to
bring coal from the former source, so long that unnecessary
work will be done ; but the prico does not represent a profit,
but the cost of useless labour.
The theory of protection, then, as applied to coal, is that, in
order to promote American industry, the source of motive
power must be enhanced in price, and so production to that
extent discouraged and obstructed in order that unnecessaiy
labour may be paid for. Now, considering that the ingenuity
of man has been and is daily taxing itself to save labour in all
forms of production, and that the United States especially has
no surplus of either labour or capital, can anything be more
retrograde than such a policy? But if protection be wise in
this matter, all parts of the country should have the benefit of
it—yet that is impossible. The field of protection is as narrow
as the field of exaction ; as the duty is borne by only one
section, so the benefits of protection (if any) are enjoyed by
only one ; and so, again, the law of the equality of burdens and
benefits is violated.
In Gulliver's Voyage to Brobdingnag occurs this passage:
"And he gave it for his opinion, that whoever could make two ears
of corn, or two blades of grass, to grow upon a spot of ground
where only one grew before, would deserve better of mankind and
do more essential service to his country than the whole race of
politicians put together." The Commissioner leaves it to his
readers to make the application.
WOOL AND WOOLLENS.
In March, 1867, an act was passed by Congress increasing
the duties on the importation of wool and woollens to a degree
unprecedented, and far in advance of the average rate of the
then existing tariif. The object aimed at was to promote alike
the interests of the grower of wool and the manufacturer of
fabrics. The results attained to, however, have been so remark¬
able and so contrary to expectation, that a detailed history of the
whole movement deserves to be put on record as a most impor¬
tant contribution to politico^economic science, and as affording a
new and u^ost striking illustration of the impolicy of the oft-
OFFICIAL BBPORT.
103
renewed effort to unnaturally influence tlie course of industry
and trade by a resort to legislation.
The breaJiing out of the war in 1861, and the curtailment of
the usual supply of cotton, created both in the United States
and in Europe a greatly increased demand for wool and for woollen
fabrics, and prices, as was to have been expected, advanced in
proportion. Domestic fleece wools in Uew York rose from
thirty-five to forty-eight cents per pound in April 1861, to
ninety to one hundred and seventeen cents in August 1864;
and manufacturers who had stock on hand, or contracted for
during the first years of the war, or who afterwards bought
progressively, realized immense profits."^
At the close of the war (which was followed by a marked
decline in the prices of wool), a number of gentlemen claiming
to represent the wool-growers of the United States, but who
appear to have been more especially interested in the breeding
of sheep than in the growing of wool, conceived the idea that,
if all foreign wool could be shut out by legislation from com¬
petition with the domestic product, the war prices of domestic
wool could be maintained, and great gain be thereby made to
accrue to all concerned. Measures to accomplish this object
were accordingly set on foot ; and as the scheme looked
especially toward the promotion of the interest of the agricul¬
turists of the country, it gave promise of success from its very
outset. Meantime the manufacturers of wool, clearly perceiving
that a restriction of supply and increase in the price of wool
would place them at a disadvantage in respect to foreign com¬
petition, became alarmed, and proposed co-operation to the
Wool-growers' Association. The offer was accepted, the parties
entered into union, ^ and by means of delegates entered upon
* In his report for 1866-67, the Commissioner called attention to the
circumstance that, although the profits which had accrued in the manufac¬
ture of cotton during the period of the war were acknowledged by one of
the leading manufacturers of the country to have been " painfully large,"
yet such profits were the result of extreme advances in the prices of raw
and manuiactured material previously on hand rather than of the operations
of strictly legitimate business ; and in proof of this assumption a statement
was submitted, showing that in the case of one large cotton manufacturing
corporation in New England, if their mills had been burnt at the com¬
mencement of the war, their insurance lost, and their whole capital, other
than that invested in cotton, sunk, but the cotton on hand sold at the
highest obtainable prices, the result would have aflforded to the stock¬
holders a permanent annuity of at least twelve per cent, on their original
investment. Now, what was true of cotton manufacturing at that period
was equally true of the wool manufacture ; and in a majority of instances
the large profits realized by the woollen manufacturers of the United
States from 1863 to 1866 were due rather to the rise in the price of their
raw material than to any legitimate prufiti, derived from the manufacture
and sale of iheir productions.
104
OFFICIAL REPORT.
their work. "What was this work 1 Not to increase the revenues
of the national treasury ; not to promote the interests of the
great mass of the people to whom woollen fabrics are almost
as much a necessity as food and shelter ; nor to increase the
wages or comforts of the labourers who grow the wool or
manufacture the cloth ; but simply and exclusively to influence
legislation for the promotion of their respective private gains
and interests.
The basis of the agreement on which the two interests united
was substantially as follows :—
That the duty on raw or unwashed wools and hair, other than
wools adapted for carpets, should be fixed at rates varying from
ten to twelve cents per pound, and from ten to eleven per cent.
ad valorem. In order, then, to compensate the manufacturer
for such a prospective enhancement of the price of his raw
material, it was agreed that, in consideration of the fact that
four pounds of the cheapest imported wool (mestiza), paying an
aggregate duty of forty-six cents, were sometimes employed in
the fabrication of a pound of finished cloth, the duty on cloth
should be fifty cents per pound, and on other fabrics of wool
of varying weight a duty in like proportion. In order, next,
to give the manufacturer protection against his foreign com¬
petitor, twenty-five per cent, ad valorem was added ; and in
order to further compensate for the payment of an internal
revenue tax of six per cent., which tax was repealed in the
succeeding year^ ten per cent, more was added, thus making the
aggregate duties on cloths, shawls, and woollen goods generally,
fifty cents per pound * and thirty-five per cent, ad valorem. It
will thus be seen that if the manufacturers, as is often alleged,
did not enter into the arrangement for an increase of duties
through their own seeking, they nevertheless managed to secure
full compensation for all that was granted to the wool-growers ;
and in addition to that, through force of subsequent circum¬
stances, an additional protection in excess of what, according to
their own showing, they considered necessary.
Nearly two years have now elapsed since these measures were
consummated, giving ample time for experience to test the
principle. And what, to-day, is that experience %
1st. Wool to the agriculturist at a lower price in gold than has
almost ever before been experienced ; the average price of medium
* It is worthy of note, as constituting a valuable precedent for a certain
class of American economists, that Charles V- of Spain imposed, in 1519,
a duty similar to that of the present United States tariff, viz., fifty cents per
pound on all woollen cloth imported into the kingdom ; and that under the
influence of this and other similar measures the wool production and
woollen manufacture of Spain gradually sank into insignificance.
OFFICIAL REPORT.
105
American washed wools from 1827 to 1862 having been
42^ cents per pound (^gold), while the average price of Ohio
wools for the year 1868, reduced to gold, was only 35*21 cents ;
which is less than the average price of 1858, when, under the
influence of the disastrous crisis of 1857, a large portion of the
mills of the country were standing absolutely idle. For the
year 1869 the price paid in Ohio for medium wools, according
to estimates presented to the Commissioner, has been about 43
cents, currency.
2d. A decrease in the number of sheep in the United States,
estimated by the Commissioner of Agriculture at four millions
for the single year, 1868, while other authorities place the total
decrease as high as twenty-five per cent, since the passage of the
wool tariff.
In the whole history of the fluctuations of American industry
there never has been a more discouraging and disastrous record
than that presented by the Department of Agriculture in its
report for March and April, 1869 ; some seven pages of which
are occupied with a detailed statement of the condition of sheep
husbandry in one hundred and seventy counties of twenty-one
different States, in only one of which, Missouri, is there any^
thing which indicates a condition of even moderate prosperity
for this particular branch of industry. As illustrating the
nature of these statements, we give the following quotations :—
Vermont.—Orange County—The best wool-growers " hold
on ; " some have sold one-half, some three-fourths, and a few
have sold all. Orleans County—All sheep and lambs (fine wool)
that drovers would buy were sold for market last fall, and
twenty-five per cent, of the remainder were sold to be killed for
their pelts and tallow.
Massachusetts.—Berkshire County—Probably one-third of the
flocks of last year have been sold or slaughtered ; in some cases
the prices were scarcely more than the value of the pelts.
New York.—Chautauqua County—Ten per cent, have been
pelted or shipped off. Genesee County—Decrease of sheep thirty
per cent. Onondaga County—Perhaps one-fourth have been
sold; no such destruction has occurred for twenty years
previously.
Pennsylvania.—Butler County—One-third of last year's flocks
have been sold. Lawrence County—So great has been the
destruction that mutton has sold for twenty-five cents per
quarter all winter. Mercer County—Many slaughtered ; some
have sold seventy-five per cent, of their flocks.
Kentucky.—Greenup County—About four-tenths have been
sold to be killed for tallow and pelts.
West Virginia.—Harrison County—Stocks are being sold off ;
106
OFFICIAL REPORT.
sheep husbandry is unpopular. Ohw County—Eeduction of
sheep for pelts and tallow forty per cent.
Missouri.—Worth County—Twenty per cent, sold for mutton
and tallow. Pemiscot County—Forty per cent, of the sheep
sold out of the State for mutton.
Illinois.—Menard County—Number reduced three-tenths by
slaughter and shipment. Mercer County—At least twenty per
cent, of the sheep have left the State. Sangamon County—
Many thousands sold at about the worth of pelt and tallow.
Lee County—Many died from neglect, and many have
been slaughtered. Logan County—Many killed for their
pelts ; the number reduced from 70,000 three years ago to 18,000
now.
Indiana.—Madison County—Fully one-fourth sent out of the
State. Randolph County—Flocks reduced one-half Elkhart
County—Flocks greatly reduced by sheep being killed for pelts ;
carcases fed to hogs. Bartholomew County—Probably one-fourth
of the sheep killed for pelts and tallow.
Ohio.—Highland County—Great many sheep slaughtered for
mutton. Holmes County—Large number sold, for pelts and
tallow, at twenty-five to seventy-five cents per head ; fifteen to
twenty per cent, of the entire number. Morrow Cminty—From
one-fourth to one-third küled, or sold for pelts. Putnam County
—One-fourth of the whole stock. Tuscarawas County—One-
third of the stock. Athens County—Flocks reduced one-third
in eighteen months. Fulton County—Twenty per cent. kiUed.
Jackson County—Thirty per cent, sold for pelts and tallow.
Michigan.—St. Clair County—Large number killed for mutton.
Washtenaw County—Great number killed for pelts, tallow,
and mutton ; the latter being sold as low as one cent per pound
for inferior class. Clinton County—One man sold four hundred
at one dollar per head. Jackson County—Fifty per cent, sold,
mostly for pelts, tallow, and hams.
Wisconsin.—Milwaukee County—Stock much reduced by
slaughter. Rock County—Flocks reduced one-fourth. Buffalo
County—Flocks reduced twenty-five per cent. Ozaukee County
—Flocks reduced thirty per cent.
Minnesota.—Le Sueur County—Flocks reduced two-tenths.
Watonwan County—K. large number killed for mutton.
Iowa.—Dubuque County—Fifty per cent, sold to butchers.
Lucas County—Flocks reduced six to seven per cent. J aspar
County—Flocks reduced ten per cent. Madison County—Flocks
reduced fifty per cent. Allamakee County—Flocks reduced by
sale at low prices. Des Moines County—Stock considerably
reduced. Whole flocks sold.
3d. A condition of the woollen manufacture characterized by a
OFFICIAL BKPOBT*
107
greater depression than that of any other branch of industry in
the country, with the exception of shipbuilding ; small profits
accruing to a few, heavy losses to the many, with numerous and
constantly recurring failures. At the date of writing, liovember
1869, the attention of the Commissioner is called to the sale of
a woollen mill property, which will give to the stockholders
$105,000 upon a capital of $700,000, thus showing a loss of
eighty-five per cent, of the whole capital in from four to five
years of operations.
4th. An increase in the importation of foreign fabrics of
wool ; the imports for the fiscal year 1868 being returned at
$32,458,884, and for 1869 at $34,620,943.
5th. Encouragement of smugghng, and its apparent reduction
to a system. During the first year of the increased duties on the
imports of wool and woollens into the United States (1867), the
importation of woollen goods into Canada from Great Britain was
returned at $8,012,439 as compared with $5,489,039 in 1865,
or two years previously. Thé report of the Boston Board of
Trade for January 1869 says, significantly: "It is well known
that Canadian tailors openly solicit orders for clothing to be
dehvered here at low prices, and are countenanced in it by men
of high standing in this community."
It is also to be noted that " Cape wools," which the existing
tariff will not permit American manufacturers to import, are
now passing into Canada in considerable quantities, both by
direct importation and by transmission in bond from American
ports of entry; thus proving that certain branches of wool
industry which have been crushed out in the United States are
establishing themselves across the frontier. And it is further
the opinion of those conversant with these imports, that they
WÜ1 nearly all, in the form of fabric, ultimately find their way
into the United States without payment of any duty.
In his report for 1866-67, the Commissioner predicted that
one effect of increasing the duties on wool would be to still
further reduce the little foreign commerce which the war had
left to the United States, and to especially impair the Cape of
Good Hope and Australian trade, in which a very considerable
number of vessels were employed in carrying out the products
of American industry and receiving in payment of the same, in
great part, the wools of these respective countries, which the
United States does not produce, and which are absolutely
necessary for the maintenance and extension of certain depart¬
ments of the woollen industry. To show how far this prediction
has been verified, the Commissioner would ask attention to
the following exhibit of the imports and exports of the prin¬
cipal American house engaged in the Cape of Good Hope and
108
OFFICIAL BEPOB.T.
New Zealand trade, for the years 1859-60 and 1867-68
respectively :—
Articles.
1859-60.
1867-68.
Quantities.
Value.
Quantities.
Value.
IMPOSTS.
Wool
Sheep-skins
Goat-skins
Hides
Horns
Aloes
Argols
Arrowroot
Ostrich feathers
Total value imports..
bales, 9,226
4,625
1,958
17,249
945
lbs.,'Ï3,062
3,763
£173,197
44,076
34,394
18,322
20
532
442
90
365
bales, 2,749
577
298
1,381
• •
£34,464
3,841
9,024
318
...
£271,438 1
£47,647
EXPORTS.
Agricultural implements
and mechanics' tools..
Clothing and cloth
Building material and
furniture
Wooden ware
Manufactures of wood
and iron
Provisions and grains ...
Naval stores
Tobacco
Miscellaneous
Total
...
§66,527
56,649
85,763
4,017
21,993
182,987
7,778
103,876
3,848
• ••
• ••
• • •
§75,497
No exprts.
28,553
9,974
7,135
23,476
1,763
15,715
1,434
...
$533,438
...
$163,547
The manner in which the present extravagant duties on the
importation of foreign wools operate to prevent the prosperity
and extension of the domestic woollen manufacturing industry,
and to reduce the price of domestic wool, is a matter not diffi¬
cult of explanation.
The -w^ools of the United States are mainly the merino clothing
wools, which can he produced in any quantity, and at prices
which defy foreign competition. Wool has been raised in Texas
during the last year (1868-69) in large quantities, at an estimated
cost of seven cents gold per pound ; and has commanded readily
in the market twenty-five cents gold per pound.* It is further-
*As evidence in part of the above statement, attention is asked to the
following extract of a correspondence of the Boston Cultivator, under date
of August 21t, 1869 :—
OFFICIAL KEPORT.
109
more to "be noted that German Saxon wool^ which during the
past year has touched the lowest price almost of the century,
could not now he imported, even in the absence of all duty, and
sold at so low a price as the average prices which XX Ohio
wools have commanded during the past season in the Xew York
market.
On the other hand, wools which the existing tariff excludes
are mainly wools which are either not grown in the United
States, or grown in very limited and insuffi.cient quantities. The
American manufacturer, therefore, being restricted in the selection
of his raw material, is, of necessity, restricted in the variety of
his products ; and the great quantity of machinery brought into
existence by the demands of the war has, in consequence, been
forced, in great part, into one line of production ; overstocking
" Permit me to say a word to the readers of the Cultivator regarding the
views of Judge Colbum, given in the issue of July 24. I fully agree with
him that a tariff on wools that will prevent the importation of them will
be a great help to the Vermont wool-grower. A like policy regarding silk
and oranges might enable the amateur hot-house growers there to turn
their fancies to some account, and I have no doubt that, with sufficient
• protection,' cotton might be successfully produced in this little State—but
on the whole, would it pay ?
" What I wish to say is, that Judge C. is not well informed about the wool-
growing of Texas, because he says that it is a chimera, for the most part,
that the South-western States have so great an advantage over the Northern
States in this business. I think the reader will agree with me that it is a
very substantial chimera, when I say that one of our wool-growers, Chamber-
lin, of Bell county, has just marketed his clip of 1869 of 60,000 pounds
of wool, at twenty-five cents gold a pound. The cost of production here is
generally estimated at seven cents a pound. That ^15,000, in good round
double eagles, would, I fancy, look like a very good sort of a chimera to almost
any Vermont farmer. Chamberlin has been engaged about a dozen years in
wool-growing in Texas. He started out from the foot of Mount Ascutney,
not ten miles from where Judge Colburn still pursues the solid and sub¬
stantial business of wool-growing and tariff-making, and has cultivated the
chimera until his herds are upwards of 10,000 head of grade and fine-wool
sheep. His is not a singular case either. Numerous fortunes have been
made in sheep here. The chimera, in fact, don't reside in Texas ; it has
moved off and gone, I think, to the valleys of the Black, the Queche, and
other streams of Vermont, to stay.
"Our Texas wool-growers, though they have little to do with the govern¬
ment as yet, are very well satisfied to see Vermont wools protected. It is nuts
to them. They would be willing to see wool go up to a dollar, and would
in nowise hesitate to pocket the proceeds of their little 60,000 pound clips, at
that or any other figure that may be found necessary to keep their Vermont
friends in good humour.
" The idea 1 wished to come at, however, is this : that if Vermont wool-
growers will take their flocks and bring them to our rich pastures, with
their skill, good sense, and energy, they will, in a very few years, not only
supply the country with wool without a tariff, but make it a leading article
of export, and so an important source of wealth instead of a costly
chimera to the United States."
110
OFFICIAL REPORT.
tho markets with certain descriptions of fabrics, unnaturally re¬
ducing prices, restricting diversity and extension of production,
and bringing disaster upon the whole business of wool-manu¬
facturing.
That this has been and will continue to be the inevitable
effect of restrictions imposed by the existing tariff on importation
of desirable wools is also clearly shown by the Commissioners of
the United States to the Paris Exposition of 1867, in their
report on "Wool and Manufactures of Wool." In this report
(written by a gentleman who has no superior in general intelli¬
gence and specific acquaintance with the manufacture of wool in
the United States, but who, at the same time, ostensibly supports
the existing tariff restrictions), the author on his first page and
in his first lines gives the following as the result of his study
and inspection of the greatest variety of wools and manufactures
of wool ever brought together in one collection. He says :
" The first impression made upon an American manufacturer hy
an observation of the woollen manufactures of Europe^ as displayed
at the Exposition, is the immeasurable advantage which the
woollen manufacturer of Europe has in the command of an un¬
limited supply of wool, and other raw materials of every variety,
free of duty. The policy of the modern governments of Europe
is first and foremost to develop the manufactures of their several
countries. Freedom from duties on raw material and bread-
stufis is one method of protection."
And again : " The advantages which th£ European evjoys over
the American in the command of an unlimited supply of every
variety of ivool cannot he over-estimated. The range of fabrication
of the American manufacturer in clothing and combing wools is
limited to the produce of American fiocJcs, undjer the almost pro¬
hibitory duty upon those wools. The European can select from
the peculiar products of every clùnate and soil of the whole world.
Hence the infinite variety of European manufactures, and Jmvce
the capacity of the European manufacturer to relieve himself from
home competition by changing at pleasure the character of his
fabrics.^'
Speaking also of the qualities of the German and Australian
wools, the Commissioner to the Exposition (page 8) says :
" Without the command of wool of this character for filling, it
is hopeless to attempt the manufacture of the best face goods.
Our foreign importation of German cloths is mainly confined to
black broadcloths, cassimeres, and doeskins made from these
wools. There is no difficulty in commanding the skill required
for this manufacture, as is evinced by the goods exhibited by
Mr. Slater, of Rhode Island. All the difficulties of manufacture
can be surnjounted by the importation of German workmen.
OFFICIAL REPORT
111
Several hundred sets of machinery could be occupied here in the
manufacture of these goods demanded for home consumption.
The warps, which could be made of such American fleece as is
now grown here, would take up two-fifths of the wool required
for the manufacture. This would be so much added to the
demand for this character of wool. The relief afforded to the
manufacturer, by being able to vary his fabrics, would diminish
the competition among those compelled to manufacture only one
style of goods, and, giving more profits to the manipulator of the
wool, would secure better prices to the wool-grower."
îi"ow, if these are words of truth and soberness, if the Com¬
missioner to the Exposition has not stultified himself and spoken
falsely, there is no need of further argument. For if the European
manufacturer has by virtue of circumstances obtained an im-
measurable advantage over his American competitor, then one of
two things is certain—either the wool-manufacturing industry
of the United States must continue, as it now is, a dwarfed,
sickly, and depressed industry, to support which the people
must be taxed; or else some steps must be taken to do away
and overcome this "immeasurable advantage," and place the
American manufacturer on a fair basis of equality with his
foreign competitor. And how any man can claim to be a friend
of American industry, and to desire the independence, diversity,
and extension of American manufactures, and yet seek to
continue a state of things which places the great woollen
industry of the country for ever under "immeasurable disad¬
vantage"—a state in which, of necessity, there can never be
any permanent prosperity—is something which is entirely
beyond the Commissioner's comprehension.
But it may be said, have not the wool-growers, who out¬
number the woollen manufacturers ten to one, any claim and
right to protection % The answer to this is also very simple,
and is to be found : firsts in the fact that under the existing
tariff, which affords a protection entirely in accordance with the
wishes of those who claim to represent the interests of the wool-
grower, domestic American wool has touched and maintains a
lower price than has almost ever before been experienced ; and
secondly, this other fact, which can neither be ignored nor con¬
troverted, that the periods when the American wool-grower has
received the highest price in gold for his wool, have been
coincident with the periods when imported wools have been
subjected to the lowest duties—as from 1858 to 1860, when
wools costing less than twenty cents per pound were admitted
free of duty. This circumstance finds a ready explanation in
the fact that during the periods referred to the American manu¬
facturer was enabled to purchase cheaply and sell cheaply, and,
112
OFFICIAL BEPOBT,
competing advantageously witli the foreign producer, to further¬
more sell largely; and under the increased consumption which
followed, the supply of domestic wool became inadequate to the
demand.
All who are familiar with the history of Great Britain, more¬
over, know that when that couutry first abolished the duties on
foreign wool, the wool-growers made earnest opposition to the
measure in the expectation that their interests would be destroyed.
No such result followed ; but on the contrary, from that day to
this, the amount of wool grown, manufactured, exported, and
consumed in Gireat Britain has annually increased, and with
great profit to all who were, either directly or indirectly, inte¬
rested. That the experience of France is also to the same, effect
is shown in a recent report by M. Baudrillart to the Emperor of
the French on this subject, in which it is proved that when the
duty on wool was reduced in France from thirty-three to twenty-
two per cent, ad valorem, the price of wool increased and was
maintained at from six to eight per cent, above the former rates.
As an explanation of this M. Baudrillart says : " The home
product is not sufficient for the daily increasing wants of our
industry. Every check thrown in the way of the latter affects
its activity. As soon as manufacturers cannot procure foreign
wools they decrease their production, because they cannot find
at home the required qualities ; and French wool, which they
would have used to mix in, lies about in the markets. The
statistical tables of England lead exactly to the same conclusions
—high duty, low wool at home ; moderate duty or free wool,
prices good at home."
In his report for 1866 the Commissioner, deprecating the
proposed increase of the duties on wool, used the following
language : "To the extent to which we now deprive the
American wool-manufacturer of advantages in the selection and
cost of his raw material, to a certain if not an equal extent do
we increase those of his foreign competitors. The seventy
million pounds of foreign wool annually imported into the
United States, to meet a demand which the production of
American wool does not supply, will not cease to be produced
because the American manufacturer is forbidden to take it.
Diverted from its present channel of consumption it must find
its way to the markets of Europe, and through the diminution
of prices which always follows an excess of supply, an advan¬
tage will be given to the foreign over the American manufacturer,
largely additional to what he now possesses ; and this, coupled
with the use of shodd}'^ and cotton, will lead to an importation
of foreign woollens into the United States which no tariff short
of absolute prohibition can suppress." The Commissioner also
OFFICIAL REPORT.
113
suggested that, in conseqence of the withdrawal of the American
demand, the European manufacturer might be enabled to obtain
his supply of certain foreign wools at a less price even than the
duties alone would amount to in the United States.
Had the Commissioner been endowed with the gift of prophecy,
he could not, in many respects, have spoken more truly. Wool,
from the date of the passage of the wool-tariff bill in March
1867, has continually fallen in price in Europe, and European
manufacturers have been enabled to obtain their supplies of raw
material at such low rates as to allow them to overcome the
obstacles of the tariff and to continue their importations. That
this fall of prices has been due in a great degree to the exclusion
of foreign wools from the United States is acknowledged by all
who have examined the subject. The official report by the
French Commissioners of the Paris Exposition to their own
government assigns it as one of the principal causes ; and Mr.
Helmuth Schwartze, of London, one of the largest wool brokers in
the world, in a recent report on the wool market, takes the same
position, and in answer to objections uses the following language;
" It is argued by some that the quantity of wool imported
by the United States is so inconsiderable, compared with that
consumed in Europe, that it cannot affect prices there ; but such
people forget that it is the last million pounds that make a
scarcity or overstock."
It is also a matter of importance for those who are interested
in maintaining the price of American wools to note how the
prices of foreign wools, such, for example, as are brought from
the Cape or South Africa, have varied. Thus, in the years
1859, '60, and '61, when these wools in an unwashed state were
admitted free of duty, their cost at the port of export was from
18 to 19'4 cents per pound. In 1863, a duty of from three
cents per pound to five per cent, ad valorem having been
imposed, the price fell to 16*2 cents; in 1864, the duty having
been still further increased to six cents per pound, the price fell
in 1865 to 14*8 cents. In the first half of 1867 the price was
15*1 cents ; but in the spring of this year the duty was increased
to ten cents per pound, and eleven per cent, ad valorem^ and
for the last six months of the year the price was 13*4 In 1868
the price still further declined to 10*9, thus giving the Euro¬
pean manufacturer an opportunity to purchase at a less price
than the duties imposed under the United States tariff.*
* The report of the Boston Board of Trade, presented January 1868,
adds the following further evidence on this subject. It says : " By reference
to the table of imports it will be seen that the importation of wools of the
class Nos. 1 and 2 {i.e., Buenos Ayres, Australian, and Cape of Good Hope
wools) has nearly ceased.
I
114
OFFICIAL EEPOB.T.
But it may be said that, granting the truth of all of the above
statements ; granting that wool returns less in money to the
grower than ever before ; that the number of sheep in the
country is rapidly diminishing; that the wool-manufacturing
industry is in a most depressed and unprofitable condition;
that foreign imports are increasing, and smuggling becoming
systematized ; yet the consumer is none the worse off, inasmuch
as he is enabled to purchase his cloth at a price nearly or quite
as low as previous to the war. That this may be true in respect
to a few varieties of fabrics is not disputed,''^ but at the same
" This is looked upon by the wool-growers as a favourable result which
will lead to high prices for wool of home growth. In this they may be
disappointed. For already the wools have fallen abroad to an extent which
nearly balances the added duty, consequently they can be imported for
about the same prices as before. But these our manufacturers cannot
afford to give, to put into goods to compete with those made of the same
wool obtained at the cheap rates now ruling in Europe.
" Take, for instance, a yard of broadcloth weighing one pound, as given
in table A of the statement of the executive committee of the Fiational
Association of Wool-manufacturers, addressed to the United States Revenue
Commission, May 1866, page 36 ; we have shown that already, in less than
a year from the passage of this tariff, the prediction of Mr. Wells has been
fully verified, and that in spite of the enormously high duties a yard of
broadcloth made of these competing wools can be imported cheaper than
under the old tariff, and that consequently we can neither afford to import
wool nor to pay as much for American wool for this manufacture as we
could under the tariff of 1864, high as that was, and not nearly as much as
we did under that of 1857, when all these wools came in free. We do not
present these facts with any desire to effect an immediate change in the
tariff, but that they may be brought to the attention of the people, parti¬
cularly of the wool-growers, who, perhaps, may be induced to watch the
course of trade until they shall become convinced that the world is now too
intimately bound together to make any violent attempts to disturb the
laws of trade successfully."
* The following table, prepared at the request of the Commissioner by
the house of A. T. Sewart & Co., of New York, shows the selling price of
certain leading varieties of woollen goods in 1860 and 1869, respectively :—
1860.
1869.
Cadet cloths, government standard .
$2
75
$8
25
Harris cassimeres, 14 oz
1 37i
a 1
50
1
75 a 2
00
Cotton warp cloths, 14 oz
1 po
a 1
25
1
75
All-wool cloths, 14 oz.
1
50
2
75
Middlesex sackings
1
10
1
25
Middlesex doeskins
1
05
1
15
Middlesex shawls
7
00
7
00
Middlesex beavers
8
75
4
25
Middlesex opera flannels
47^
50
Broadbrook cassimeres
1 62|
a 1
75
1
75
Broadbrook beavers
2
75
8
00
Spring cassimeres, 8 to 9 oz
Glenham repelíanla
1 12i
a 1
25
1
25 a 1
37i
1 10
a 1
15
1
20
Glenham sackings
1
05
1
15
Swift River fancies, 11 to 12 oz
90
1
GO a 1
10
Royalston cassimeres
Aver.
1
oré
1
25
Fltehburg cassimeres
Aver.
1
07t
1
25
OFFICIAL REPOBT.
115
time, those who use this argument in support of the existing
duties take very good care not to mention the fact that the prices
of woollen goods, under the influence of wool unnaturally
cheapened, and improvements in manufacturing, have fallen
comparatively to an equal or greater extent in Europe,* while
the wages paid to the operatives of the European woollen mills
have tended during the same time to an advance. The price of
woollen fabrics generally is reported to the Commissioner, by
those qualified to judge, to be at least twenty per cent, less at
the present time in Europe than it was in 1860 ; but of this
decline, even granting that all American woollens are as low now
as they were in 1860 (which is not the case), the American con¬
sumer has evidently received no benefit. In short, the Com¬
missioner feels convinced that if the great mass of the American
people, especially the working men and the working women,
toiling to elevate themselves, with the multitude of clerks,
accountants, professional men, pensioners, and others, who deny
themselves and economize their slender incomes to make the
year's receipts balance the year's expenditures, could only once
fully realize the extent of the addition to their resources could
they be permitted to purchase clothing as cheap in the United
States as in Great Britain, they would never stop to inquire
according to what particular theory of economy tariffs were
enacted, but would at once so direct public opinion and suffrage
as to compel the abandonment of the existing policy.
In short, what is now needed to restore prosperity to the
woollen industry, is a removal of all duties on the importation of
The report accompanying the above table adds : " Tt is difficult to obtain
reliable data in respect to the comparative cost of domestic woollens in 1860
and 1869, inasmuch as there are few goods made now that are identical in
quality with those made in 1860. Of all of the above, probably the first
item, viz., cadet mixed cloths, used by the institution at West Point, is the
most reliable to show the différence of value at the different dates, on
account of not being so much subjected to caprices of fashion or to com¬
petition of other makers."
* The following table, derived from another authority from that above
cited, shows the extent of the recent reductions which have taken place in
the importing prices of standard French woollens :—
1859.
1866.
1869.
French merinos, all worsted |
Dyed mousseline de laines, all worsted |
French dyed poplins, all worsted |
%
Francs.
2-62
3 03
3-22
113
1-22
Francs.
2-40
3 00
3 15
•98
106
1-75
215
Francs.
1-90
2 00
2-40
•79
•85
119
1-69
116
OFFICIAL REPORT.
foreign wools and dyestuffs, and a general reduction of the duties
on manufactured woollen fabrics of every description to twenty-
five per cent, ad valorem. On this basis the most experienced
woollen manufacturers of the country assure the Commissioner that
they can at once extend, diversify, and secure prosperity to their
business. On this basis the cost of domestic woollen fabrics will
be so far reduced as to give great relief to the consumer, and lead
to an immediate and largely increased consumption. And on
this basis only can the wool-grower expect any immediate in¬
creased demand for his staple product of merino fleece ; while in
respect to the combing and the finer wools it is sufficient to say,
that the supply of these wools has not for the last few years in¬
creased in proportion to their consumption, and that the exten¬
sion of their use in American industry, which would inevitably
follow a remission of the duties upon their import, would so far
increase their demand as to give to the domestic producer all the
encouragement that would prove necessary.
ON THE REDUCTION OF PRICES EFFECTED THROUGH COMPETITION.
The Commissioner deems it appropriate in this connection to
say a word in reference to the idea adopted and advocated by a
school of American economists, that it is for the advantage of
the country to endeavour to effect a reduction of prices by the
creation, through legislation or otherwise, of an excessive or
artificial stimulus to production.
That the creation of an artificial stimulus to domestic pro¬
duction—such as is almost always temporarily afforded by an
increase of the tariff, or such as was afforded during the war by
the necessity for extraordinary supplies—does have the effect,
in the first instance, to increase and quicken production, and
subsequently to reduce prices through the competition engen¬
dered, cannot be doubted. But the Commissioner, after a care¬
ful examination of the subject, is fully satisfied that it can be
shown, in almost every instance where competition has thus
reduced prices, that the result has been rather to the detriment
than to the advantage of the country, the main exceptions to
the rule being in the case of certain small articles—nickel for
example—which, owing to their comparative insignificance and
limited production and consumption, are capable of being entirely
controlled and monopolized by two or three individuals or
associations. That the result thus indicated must follow as a
matter of necessity, will appear obvious upon a little reflection.
Thus the first effect of cutting off or checking the competitive
supply of a foreign product, or otherwise creating an extraordi¬
nary domestic demand, is to increase prices; which in turn
affords laig^ profits to those in the possession of ^'stocks on
OFFICIAL REPORT.
117
hand," or of the machinery of production ready for immediate
and continuous service. The fact of the possibility of the
realization of large profits immediately tempts others to engage
in the same branch of production—in very many cases with in¬
sufficient capital (raised often through the medium of a stock
company), and without that practical knowledge of the details of
the undertaking necessary to insure success. The supply of
skilled labour being at all times limited in the United States, the
producers last in the field bid against the older for the control
of specialties of labour ; wages advance abnormally, and abnor¬
mally increase the cost of the product. As production goes on,
supply gradually becomes equal, and finally in excess of demand.
The producers working on insufficient capital, or with insufficient
skill, are soon obliged, in order to meet impending obligations
or to dispose of imperfect stock, to force sales through a reduc¬
tion of prices ; and the older, in order to retain their markets
and their customers, are compelled to follow their example.
This in turn is followed by new concessions alternately by
both parties, which is accompanied by the usual resort of turn¬
ing out articles or products of inferior quality, but with an
external good appearance; slate being substituted in the place
of coal ; cinder in the place of iron ; shoddy in the place of
wool ; starch and sizing in the place of cotton ; pasteboard in
the manufacture of boots and shoes in the place of leather ; and
clay and plaster in the manufacture of paper in the place of fibre.
And so the work of production goes on, until gradually the
whole industry becomes depressed and demoralized, and the
weaker producers succumb, with a greater or less destruction of
capital and waste of product.
Affairs having now reached their minimum of depression,
recovery slowly commences. The increase of the country causes
consumption to gradually gain upon production ; and finally the
community suddenly becomes aware of the fact that supply has
all at once become unequal to demand. Then those of the pro¬
ducers who have been able to maintain their existence experi¬
ence another season of remarkable prosperity ; others again rush
into the business, and the old experience is again and again
repeated. Such has been the history of the industry of the
country for the last thirty years under the influence of the fre¬
quent modifications of the tariff, and latterly under the influence
of the war ; and such is most noticeably its present experience.
To use a familiar expression, it has always been either " high
water or low water," no middle course, and no stability. What
the people gain, as consumers, at one time from low prices, they
more than compensate for at another by the recurrence of extreme
rates, and, as producers, by periodical suspension of industry,
118
OFFICIAL REPORT.
reduction of wages, and depression of business. Meantime the
loss to the country from the destruction of capital and the waste
and misapplication of labour is something which no man can
estimate.
The specific illustrations of this experience are too striking to
admit of being passed over in silence. That afforded by the
present condition of the wool industry has already been ad¬
verted to.
A further and still more strikiug illustration is afforded in the
recent history of the manufacture of paper. Thus, in 1863-64-
65, it was found that the supply of paper of domestic manufac¬
ture was insufficient for the consumption of the country, and a
tariff of from twenty to thirty-five per cent, restricted importa¬
tions. The price of paper rose accordingly with great rapidity,
nearly or quite to the extent of one hundred per cent. ; and the
profits of the paper manufacturers who were then in the
possession of the machinery of production were so great that
the Commissioner, in his report for 1866-67, referred to them
as most anomalous and extraordinary. The usual effect followed.
A host of individuals rushed into the business, and during the
years 1864-65-66, it is estimated that more paper-mills were
constructed and put in operation than in the twelve years pre¬
vious. As a matter of course, the markets became rapidly
overstocked, prices fell with great rapidity, many abandoned the
business, and sold their mills for much less than the cost of con¬
struction; while in the spring of 1869, in the same section of
the country where the incomes of paper manufacturers in 1865
were reported as so extraordinary, the representatives of the
trade of hiew England met together in convention to consider
the advisability of " decreasing the production of paper, in con¬
sideration of the depressed condition of the business." In fact,
at the present time, the business of paper manufacturing, next
to shipbuilding and the woollen manufacture, is probably one of
the most depressed of the various industries of the country;
and while wages and the price of the raw materials used have
receded but little, the price of the finished product is nearly as
low in currency as it was in gold anterior to the war. In
October 1869, a storm of great violence swept over the northern
portion of the country, and in the flood which followed the
mills engaged in the manufacture of paper especially sustained
injury by the destruction of their dams and otherwise. A lead¬
ing Ñew England journal, in one of the paper manufacturing
districts, in commenting on the effects of the storm, uses this
language : There seems to have been an unusual fatality among
paper-mills ; but this disaster will work to the advantage of
those who escaped the flood ; and we doubt not that those that
OFFICIAL REPORT.
119
did stand will do a better business in consequence of the lessened
supply." Or, in otber words, the condition of this particular
branch of industry had become so prostrated, that the occurrence
of a great public calamity, with a vast attendant destruction of
property, had come to be regarded by some in the light of a
special blessing.
Now, the lesson of this experience, which might be further
illustrated to almost any extent, would seem most certainly to be
that whatever advantage is temporarily gained by stimulating,in¬
dustries into an unnatural growth and development, is subse¬
quently more than compensated for by a resulting waste and mis¬
application of both capital and labour. And of these two elements
of wealth and civilization, the United States, of all industrial and
commercial nations, has the least available surplus. What rather
should be sought for is that mean of encouragement—call it protec¬
tion if you will, or otherwise—which would give to every branch of
legitimate domestic industry an equal opportunity and a condi¬
tion of stability as respects supply and demand ; which would
insure permanence of price, incentives to the exercise of skill
and economy, and such a moderate degree of profit as should
effectually discourage inconsiderate and excessive competition.
Did space suffice, the Commissioner could here add a chapter of
the most interesting facts and incidents, showing the enormous
waste which as a general rule characterizes American protected
manufactures in contradistinction to European manufactures ;
and which is due, in his opinion, in great part to the fact that
the American manufacturers have so long been accustomed to
look to legislation for support, that the idea of self-dependence,
through the exercise of more economic and skilful working,
scarcely receives consideration.
With these specific illustrations and recommendations of the
influence of certain existing duties, the Commissioner would
further submit the following recommendations of modifications
of the tariff.
RECOMMENDATIONS IN THE INTEREST OF DOMESTIC INDUSTRY IN
GENERAL.
On pig iron a duty of $3 per ton. The present duty is $9
per ton, and the amount of revenue derived from the same
during the fiscal year 1867-68, was $1,011,109 96.
On scrap iron, a duty of $3 per ton. Present duty, $8 per
ton ; amount of revenue received in 1867-68, $640,294 60.
On salt in hulk, 9 cents per hundred pounds ; on salt in hags,
12 cents per hundred pounds. Present duty, 18 and 24 cents,
respectively ; amount of revenue re(;eived, 1867-68, on salt in
bulk, $395,955 17 ; in bags, $740,270 59 : total, $1,136,225 76.
120
OFFICIAL REPOBT.
The extent of revenue reduction, arising from the adoption of
the above modifications, "will, in the opinion of the Commis¬
sioner, be as follows :—
In respect to pig iron a reduction of the duty would, un¬
doubtedly, be followed by such a reduction in the price of the
domestic product as, added to freights and commissions on the
foreign article, would leave the relations between the domestic
and foreign producers the same substantially as at present. lío
material increase of imports being probable, the loss to the
revenue would, therefore, be approximately $750,000. A
reduction of $6 per ton in the cost of a domestic consumption
of 1,800,000 tons (domestic and foreign) would, however,
relieve the community of taxation, in the first instance, to the
extent of $10,800,000 per annum. The reduction of the duty
on scrap iron would probably be followed by an increase of
imports, and so compensate, to some extent, for a loss of revenue.
This loss the Commissioner estimates at $400,000. The indirect
gain to the community by the consequent tendency to cheapen
bar iron and promote industry would, however, be considerable.
A reduction in the duty on salt would probably, as in the
case of pig iron, be followed by a corresponding reduction in
the price of the domestic article ; and this in turn would prevent
any great increase in importations. The loss from this reduc¬
tion would, in the opinion of the Commissioner, approximate
$600,000; a reduction of the cost of the domestic consumption of
salt (39,000,000 bushels per annum) to the extent of 10 cents
per bushel would relieve the community of a tax, in the first
instance, of $3,900,000 per annum.
Lumber.—On all timber, round, square, or sided ; on all sawed
and unplaned planks, boards, and deal ; on laths, clapboards,
and shingles, an entire removal of all duties. Present duty,
twenty per cent. Eevenue received, 1867-68, $1,262,020 47.
In his report for 1868-69 the Commissioner estimated that, apart
from the beneficial influence of the removal of these duties
in respect to the retardation of the wasteful destruction of
American forests, the immediate and direct gain to the people,
through a reduction of the cost of lumber, would approxi¬
mate $16,000,000 per annum.
On coaly of every variety, an entire removal of all duties.
Present duties, on anthracite, 40 cents per ton ; on bituminous,
$1 25 per ton. Eevenue received in 1867-68, on anthracite,
.$30 40 ; on bituminous, $492,526 56.
On firewood, an entire removal of all duty. Present duty, 20
per cent Eevenue received in 1867-68, $42,605 12. The
Commissioner is assured that the removal of the duty on this
Article of import would greatly favour the manufacture of salt in
OFFICIAL REPOET.
121
Michigan, and prove a great boon to consumers upon all the
frontier States, where the consumption is rapidly increasing,
while the local supply is rapidly diminishing.
On copper ore, an entire removal of all duty. Present duty,
three cents per pound on each pound of pure copper contained
therein. Import, at present, substantially prohibited.
In 1869, Congress, with a view of promoting the interests of
the copper industry, largely increased the duties on copper,
copper ores, and all manufactures of copper. The immediate
effect of this law was to prohibit the importation of foreign ores
of copper, to close up and substantially destroy two great centres
of smelting industry at Baltimore and Boston, and to inflict
serious injury upon the manufacturers of paperhangings, by
increasing the cost of Dutch metal. The enactment of the law
has been also followed by a reduction, in the price of ingot
copper. Thus, the market price a short time previous to the
passage of the bill was 26 @27 cents ; immediately after the
passage of the bill the price fell to 24, and subsequently to 22
@ 23, at which point it remains.*
In the effort to promote the interests of domestic copper
production by increasing the duties on competitive imports, two
points seem to have been overlooked : first, that the United
States is a copper-exporting rather than a copper-importing
country, as is shown by the fact that in the ten years from 1859
to 1869, inclusive, the value of the exports exceeded the value
of the imports by the sum of $487,990. During the fiscal
year 1868 the exports and re-exports of copper in pigs, bars,
and ingots were returned at 1,365,144 pounds, while the imports
amounted to only the trifling quantity of 14,248 pounds. The
attempt to regulate the domestic price of an article, of which
the country produces a surplus for export, by means of an import
duty, is, therefore, on its face an absurdity, and has utterly
failed, as might have been expected. Second, an examination
of the general statistics of copper production and consumption
since 1858 shows a continued tendency to the disuse of copper
in the arts, and a substitution of iron or other cheaper metals in
its place. This is strikingly shown by the fact that, while the
actual increase in the shape of imported and produced copper in
Great Britain from 1858 to 1867 was only about 11 per cent.,
* It is reasonable, therefore, to suppose, as the copper-mining industry of
the United States is in a condition of as great depression now as at any
former period, and as every argument and fact urged in February 1869
for an increase of duties on copper is as true and as cogent now as then,
that the advocates of relief by legislation, in order to maintain their con¬
sistency, will again petition Congress to still further increase the duties,
which, judged from the point of efficiency^are so low as to demand imme¬
diate oMis^eration.
122
OFFICIAL REPORT.
the increase in the production and consumption of iron in the
same country during the same period were about 42 per cent.
It would seem manifest, therefore, from the mere presentation of
this statement, that any attempt to resist, by arbitrary legislation,
this cheapening of copper which is taking place through eco¬
nomical influences, or, what is the same thing, to resist the
substitution of a cheaper for a dearer metal, must, from the very
nature of things, not only be equivalent to attemptiug an im¬
possibility, but that the whole influence of such legislation, by
interfering with the course of trade and of prices, must be to
promote the very tendency which those interested in copper pro¬
duction especially deprecate ; and such, the Commissioner believes,
is the influence of the duties levied under the existing tariff on
copper. The Commissioner would further recommend, in this
connection, that the duty on copper in plates or sheets, known
as braziers' copper, and on copper in the form of rods, bolts,
nails, spikes, and copper bottoms, be reduced from 45 per cent.
ad valorem to 25 per cent, ad valorem on the ground that the
existing duty is prohibitive and entirely destructive of revenue.
During the fiscal year 1867-68, when the duty on these articles
was 35 per cent, ad valorem, the whole amount of revenue
received was 35 cents. Since then the duty has been increased
to 45 per cent., thus rendering it probable that not even the
receipts of the previous year will be maintained. Again, the
Commissioner would ask attention to this statement : the price
of ingot copper in Great Britain is at present 16|^ cents gold
per pound ; the price of rolled copper—braziers' sheets, such
as is used for the manufacture of copper boilers—in Great
Britain, is 17-^ cents per pound, or only one cent higher than
ingot copper. Now, the price of ingot copper in New York is
22i @ 23 cents per pound, and the price for rolled or braziers'
sheets is 33 cents per pound, or 10 @ IQi cents difference.
On jute and sun-hemp, an entire removal of all duty. Present
duty, $15 per ton. Eevenue received, 1867-68, $57,542 75.
The object of this recommendation is the development of an
industry which, although possessing gigantic proportions in
Europe, can hardly be said to have as yet an existence in the
United States. Indeed it is a fact in the history of our industrial
experience especially worthy of notice, that while as a nation
professing extreme devotion to the principle of extending
domestic industry we have not only neglected, but by the
maintenance of a high duty persistently discouraged, the intro¬
duction and development of a branch of textile industry which
in Great Britain ranks next in importance to cotton and wool ;
the import of jute fibre into Great Britain for the year 1868
having beeï^ upwards of two hundred and eighUen millions of
OFFICIAL BEPOBT.
123
pounds, while the United States, during the same period, con¬
sumed only about eight millions of pounds. In view, therefore,
of the enormous and rapidly in(;reasing use of this new raw
material, whose use in Europe as a textile fibre dates back but
little beyond the year 1852, the Commissioner would fail of his
duty did he not earnestly ask the attention of Congress to the
importance of legislating in such a manner as will help to give
henceforth to the United States a participation in the profits of
this great branch of industry.
The articles into which jute is manufactured are mainly coarse
fabrics, such as burlaps, padding, coarse canvas, carpet yarns and
twines, all of which the United States annually imports in
large quantities, but which might readily be manufactured at
home. The free admission of jute has heretofore been opposed,
mainly from the idea that it would prove a rival to domestic flax
and hemp ; but in the opinion of the Commissioner, it is really
not analogous to, and would not compete with, any of the
products of the United States. Its colour is somewhat lighter
than that of flax, while its fibre, varying from fifteen to twenty
feet in length, is coarser, weaker, and far less flexible than the
fibres of the most inferior varieties of domestic flax or hemp.
RECOMMENDATIONS IN THE INTEREST OF THE BOOT AND SHOE
INDUSTRY AND OF THE MANUFACTURE OF LEATHER.
On hides and undressed skins of every description, an entire
removal of all duties.—Present duty, ten per cent. Pevenue
received, 1867-68, $977,325 12.
Leather.—On leather of all descriptions, except morocco,
japanned, and patent leather, an entire removal of all duties.
Present duties, twenty-five and thirty-five per cent. Eevenue
received, 1867-68, $1,363,481 51.
On hemlock, oak, and all other barks used for the tanning of
leather, an entire removal of all duties. Present duty, ten
per cent.
On sumac, an entire removal of duty. Present duty, ten per
cent. Eevenue received, 1867-68, $53,608 56.
Ladings and serge.—On fabrics of wool or hair, known as
lasting and serge, when the same are woven or made into
patterns of size, shape, and form, and in such manner as to be
fit for shoes and bootees exclusively, and not combined with
India-rubber, an entire removal of all duties. Present duty,
fifty cents per pound, and thirty-five per cent, ad valorem.
Eevenue received, 1867-68 (estimated), $1,157,000.
The extent of revenue reduction, by the removal of the
124
OFFICIAL BEPOBT.
above specified duties, would, in the opinion of the Commis-
sioner, approximate $3,500,000. The burden of taxation, in
the first instance, from which the people would be relieved,
however, by the removal of these duties, taking leather and all
the manufactures of leather into consideration, will, as already
demonstrated, approximate the sum of $18,000,000.
RECOMMENDATION IN THE INTEREST OP THE MANUFACTURE OP
FAPBRHANGINGS.
On bronze or Dutch metal or Florence leaf, in leaf or powder,
an entire removal of the duty. Present duty, forty-five per cent.
ad valorem. Revenue received, 1868-69 (estimated), $20,000.
The removal of this duty, as already shown, would reduce the
cost of the manufacture of the better class of paperhangings to
the extent of from five cents to twenty-five cents per rolL
RECOMMENDATIONS IN THE INTEREST OF THE MANUFACTURES OF
SULPHURIC ACID, SOAP, GLASS, PAPER, COAL OIL, CHEMICALS,
AND OF THE BLEACHING AND DYEING INDUSTRIES.
On crude sulphur, an entire removal of the duty. Present
duty, $6 per ton, or twenty-five per cent Revenue received,
1867-68, $108,903 30.
The Commissioner would recommend, in this connection, that
the duties on fiour-of-sulphur, at present $20 per ton, and fifteen
per cent, ad valorem, be reduced to $10 per ton ; and on refined
brimstone, in rolls, that the present duty, $10 per ton, be
reduced to $5 per ton. The reason for the recommendation of
these reductions is, that the present duties are excessive and
destructive of revenue ; the revenue received from these two
sources during the year 1867-68 being only $1,119 20.
On soda-€Lsh, an entire removal of the duty. Present duty,
one half cent per pound. Revenue received, 1867-68,
$545,228 83.
On chloride of lime, or bleaching powders, an entire removal of
the duty. Present duty, thirty cents per hundred pounds.
Revenue received, 1867-68, $73,486 78.
On waste paper, or waste material of any kind fit only for the
manufacture of paper, an entire removal of the duty. Present
duty, ten per cent.
On esparto or Spanish grass, a crude material for the manu¬
facture of paper—an entire removal of all duty. Present duty,
twenty per cent.
OFFICIAL REPORT.
125
RECOMMENDATIONS IN THE INTEREST OF THE BREWERS, AND OP
THE INTERNAL REVENUE COLLECTED PROM THE TAXATION OP
MALT LIQUORS.
On harley, an entire removal of the duty. Present duty, fifteen
cents per bushel. Revenue received, 1867-68, $566,547 39.
The reasons in support of this recommendation are clearly
stated in the following communication, addressed to the Com¬
missioner by the President of the Brewers' Association of the
United States : —
" Previous to the war the average price of barley in the city of New
York was about eighty cents per bushel, and the price of beers and ales
about $6 per ban el, while the price per glass of ale or beer, containing
fully one-third more than the glasses now in use, was six cents. Since the"
duty was imposed the price of barley in New York has been as high as
$1 70 per bushel ; that of malt liquors, say, $10 per barrel, and by the
glass, say, eight cents. The cost of manufacturing by the brewers has been
fully one hundred per cent, more, exclusive of the $1 tax per barrel. The
price of barley in the United States has been from twenty-five to fifty cents
higher relatively than those of other cereals ; a fact to be attributed to the
stall crops of the former suitable for malting purposes; and as only
northern climates are adapted to the production of barley the main
dependence of the brewers has been on the production of the Canadas foi;
their lager and storing beers.
" The high cost of barley, and the expenses attendant upon the brewing
of malt liquors, has prevented the brewers from selling their beers at such
prices as would render them the popular beverage, and merely give to
them an equal increase of consumption as compared to other articles of
staple manufacture which are not interfered with by foreign importations.
To render beer popular it must be sold by the retailers at a low price, as
is the case in Great Britain and Germany.
" Long experience has proved that the barley crops of those States from
whence the brewers derive their supplies, viz.. New York, Western Penn¬
sylvania, Ohio, Illinois, Wisconsin, Iowa, and Minnesota are very unreliable
as regards the quality of the grain ; but not so of the Canadas, whose soil
and climate are admirably adapted for the production of the best American
barley."
Under these circumstances, the representatives of the
brewing interest of the United States claim that it is
both impolitic and unjust for the national government
to assess an annual sum of over six millions of dollars
on the products of their industry, and at the same time,
by imposing a duty on the importation of barley, indirectly
increase the cost of their manufacture and restrict the extension
of their business. They also claim that the removal of the duty
in question would increase the internal revenue derived from
malt liquors to an extent far more than sufficient to compensate
for any loss through the customs. The Commissioner would
add that the capital at present invested in the business of brew¬
ing in the United States is estimated by the Brewers' Associa¬
tion at $56,856,000, giving direct employment to 9,814 workmen.
126
official eeport.
beCommendatigns in the interest of the silk, pub, and
felt hat industry.
On hatter's and cut furs, an entire removal of all duties. Present
duty, twenty per cent. Revenue received, 1867-68, $282,976 40.
On silk-plush, silk linings, and silk hat-bands, cut in such
a manner as to be fit for the manufacture of hats exclusively,
an entire removal of all duties. Present duties, sixty per
cent. Revenue received, 1867-68, $600,000 (estimated). The
representatives of this most important industry, employing in
the fur and felt-hat department alone an estimated capital of
$20,000,000, state the present condition of their business as one
of extreme depression, the domestic consumption of felt and fur
hats having been reduced during the last three years at least
twenty-five per cent. The following are extracts from the
answers returned to official inquiries made by the Commissioner
respecting the latter industry :—
" Question. Was there a demand in 1860-61 for your product for exporta¬
tion]—Answer. Yes. There was a large demand from Canada, Cuba, the
West Indies, Mexico, and South America. In the years named, about one-
seventh of the sales would be shipped to points outside of the United
States ; or, in a house selling 700,000 hats, 100,000 could he reasonably
estimated as on foreign account ; to some manufacturers this would not
apply, but to others the proportion would be greater.
"Question, Does the foreign demand now continue ]—Answer. At present
there is no demand for our goods, nor has there been for several years of
any moment. Of course there are still a few goods in our line sold to
Canada, but no other market takes any, or at least the amount is so incon¬
siderable as not to enter into the calculation. The reason is that our tariff
on such materials as we consume (they are all imported) enables France,
England, and Germany to produce the same classes of goods much
cheaper, and we cannot compete with them as formerly in supplying these
markets. Had the duties remained the same as in 1860 we could have
competed with any country for the foreign trade to the countries above
mentioned, and, as we have heretofore, successfully. The present duty of
thirty-five per cent, on hats does not protect, as we pay in duties on
materials and in taxes a little above that percentage. The importation of
foreign hats increases, therefore, rather than diminishes. If we had a low
tariflp on raw materials, we could export a great many hats, not simply
upon fur hut on silk bands and bindings and skivers. Silk and satin
and bands and binding could be cut and put into such shape as to be
only available for the purpose of trimming hats."
miscellaneous.
The Commissioner in the interest of general domestic industry
would further recommend the entire remission of* the duties on
the following specific articles or classes of articles :—
OFFICIAL BEPORT.
127
Articles.
Ivory unmanufactured and imported direct from)
countries of production )
Ivory nuts, vegetable
Animals, living, of all kinds
Bristles
Chalk, white
Annato, seed or extract
Argols, or crude or partially refined tartar
Barks, all medicinal
Antimony, crude or regulus of
Camphor, crude
Cutch or catechu
Corkwood, unmanufactured
Feathers and downs for beds
Glue stock
Gums of aU kinds, unmanufactured and unrefined,)
used in the manufacture of varnish j
Gutta-percha, crude
India-rubber, crude
Kryolite
Bamboo
Willow or ozier, unmanufactured
Cudbear
Bones, crude and unmanufactured
Horns
Lithographic stones
Total
Present duty.
10 per cent.
10 per cent.
20 per cent.
15 per cent.
^10 per ton.
20 per cent.
6 cts. per lb.
20 per cent.
10 per cent.
30 cts. per lb.
10 per cent.
80 per cent.
30 per cent.
10 per cent.
10 cts. to 50.
cts. per lb
10 per cent.
10 per cent.
20 per cent.
10 per cent.
SO per cent.
10 per cent.
10 per cent.
10 per cent,
20 per cent.
Revenue re¬
ceived 1867-8.
42,117 40
1,217 20
466,404 01
79,199 40
105,714 13
188 40
126.739 11
82,246 80
8,382 20
59,893 20
10,623 60
48,260 10
4,373 61
1,266 50
1^439,039 30
2,121 80
196,911 40
13,726 40
579 90
8,661 60
4,324 60
6,234 30
2,651 60
1,710,876 56
Gunny cloth and hags.—The present duty on gunny cloth and
gunny hags is three cents per pound (gold), or within a fraction
of one hundred per cent, of their market value in bond—a rate
so excessive that the importation of these articles from Calcutta
has almost entirely ceased. Thus the import of gunny cloth,
which was returned at 75,000 bales in 1860, was reduced to
14,000 bales in 1868, and, for the year 1869, has not exceeded
5,000 bales. The latest advices from India furthermore state,
that " not a bale of gunny cloth is now loading, or to load this
season, for the States." The result of the present duty is
therefore manifestly detrimental to the revenue ; and also to
the shipping interest, inasmuch as the commodities in question
are indispensable for light or measurement freight in the India
trade, and without them no vessel can be loaded with a full
cargo for the United States. A reduction of the price of gunny
cloth would also result to the advantage of the agriculturists of
the country, affording a cheaper material for the enclosure and
transportation of cotton, corn, and other similar products. The
Commissioner would, therefore, recommend a reduction of the
duty on gunny bags and gunny cloth to one cent per pound as
the maximum.
RECAPITULATION.
The abatement or entire removal of the duties as above
recommended would, as nearly as can be estimated, reduce the
12B
OmCTAX ÄIEPOBT;
J
revenue derived from customs to the extent of ahout twelve
millions. On the other hand, the direct relief experienced by
the community through the abatement of prices which would
follow the removal or abatement of the taxes in question would,
in the opinion of the Commissioner, be not less than sixty
million dollars ; while the indirect gain, and the value of the
stimulus afforded thereby to domestic industry, must be
represented by a much larger figure.
EECOMMENDATIONS FOR MODIFICATIONS OF THE TARIFF, SUBMITTED
MAINLY WITH A VIEW OF INCREASING THE REVENUE, OR OF
FACILITATING OR SIMPLIFYING THE LAWS FOR THE COLLECTION
OF REVENUE.
The Commissioner would further recommend the following
modifications of the tariff, with a view of increasing thereby
the national revenue, or of facilitating or simplifying the laws
for the collection of revenue :—
Wines.—On all wines, irrespective of quality (champagne
and other sparkling wines excepted), a specific duty of fifty
cents per gallon is recommended.
The experience afforded since 1867 has in every respect
confirmed the assertion made by the Commissioner in his
previous report (January 1867), "that the ad valorem system
as applied to wines has proved detrimental to all legitimate
business, destructive of revenue, and an endless source of
litigation between the government and the importers." If the
rate named may seem too low a duty to be imposed on an article
so essentially a luxury as wine, the Commissioner would ask
attention to the following facts.
According to the official reports, there were imported for the
fiscal year 1867-68, 6,102,479 gallons of wine, as compared
with 9,476,814 imported in 1865-66. Of this quantity,
5,383,347 gallons were returned as valued at not over fifty ceûts
per gaUon, and paying a duty of twenty cents per gallon and
twenty-five per cent, ad valorem, or at the rate of twenty-seven
cents per gallon ; 515,580 gallons valued at over fifty cents and
not over one dollar per gallon, and paying a duty of fifty cents
per gallon and twenty-five per cent, ad valorem, or at the rate of
sixty-eight cents per gallon ; and 203,552 gallons valued at
over one dollar per gallon and paying a duty of one dollar per
gallon and twenty-five per cent, ad valorem, or at the rate of
one dollar and fifty-eight cents per gallon ; making a total
revenue from the duties on wines of $2,155,524, and the
average rate thirty-five cents per gallon. It is, therefore, evident
that the rates proposed, while they are entirely satisfactory t©
the importing interest, are really a large advance upon the
official repobt.
129
existing tariff ; and, supposing tlie importation to remain tlie
same as for 1867-68, wül yield an additional revenue of about
$900,000. The truth of the matter, however, is, that by reason
of the almost utter impossibility of accurately determining the
specific value of a wine, the imports of wines are almost always
undervalued ; and the constant differences which have arisen
between the officers of the customs and the importers have
contributed much to the interruption of the regular trade in and
importation of the products in question. With a removal of
these difficulties by the adoption of a specific duty, there is no
reason to doubt but that the importation will resume its former
average, and that the gain to the treasury will approximate two
and a half millions per annum.
If, however, it should be objected that under a uniform
specific duty the high-priced Johannisberger or Madeira will pay
no more than the common low-priced vin ordinaire, the fact
heretofore pointed out may again be cited, viz., that out of over
six million gallons imported in 1867-68 only 203,452 gallons,
or less than 4 joer cent, of the whole importation, were entered as
costing over one dollar per gallon. The Commissioner would also
caU attention to the fact that both in the United States and;
Great Britain a uniform duty on tea has been found both by the!
trade and the government to be entirely unexceptionable j and
yet the diversity in the prices of tea in China is much greater
than the range in prices of wines at the points of exportation.
Form op law.—The following form of law, covering the
importation of all wines, is recommended. On wines of all kinds
in hulk, irrespective of quality, cost of cask included, containing
not more than twenty-two per centum of alcohol, Trallds
hydrometer, fifty cents per gallon :
Provided, that upon all liquors containing more than twenty-
two per cent, of alcohol, which shall he entered under the name of
wines, there shall he levied and paid the same duty as that which
is imposed upon hrandy,^
* As illustrative of the present condition of the native wine industry of
the United States, the Commissioner would ask attention to the following
letter addressed to him on this subject by a gentleman who is everywhere
acknowledged as an authority in regard to the question under discussion
"Rahway, n.J., June 24, 1869.
it —In a recent conversation touching the effects of the high duties
levied on the importation of foreign wines on the wine produced in this
country, you requested me to give you the substance of my experience in
this matter, which I now do with pleasure.
" The history of our native wine trade is familiar to you ; I need not,
therefore, refer to the various endeavours of the pioneers in grape culture
until a perfect wine was produced from the pure juice of the Catawba grape
by Nicholas Longworth about twenty-four oç five years ago. This wine,
however, in its pure state was too acidulous to please the popular taste, but
E
130
official report.
Mineral or medicinal waters.—^The present duty on mineral
waters is three cents per bottle, and twenty-five per cent, ad
valorem. The Commissioner would recommend, if it be con¬
sidered desirable to retain the duty on these imports, that they
be made specific with the following.*
Form of law.—On mineral or medicinal waters, or waters
from springs impregnated with minerals, seventy-five cents for
each dozen bottles or jugs containing not more than one pint
each, and one dollar and twenty-five cents for each dozen bottles
or jugs containing more than one pint and not over one quart.
dteel.—At present the duties levied on steel are of two kinds,
ad valorem and specific. The attempt to impose ad valorem
duties on an article of such varying value is, however, manifestly
an absurdity, and a continued temptation to fraud through under¬
valuation or imperfect appraisement \ inasmuch as no man can
tell by the eye, or by any test readüy available in the custom-
it was much relished by the German settlers of Ohio, who were accustomed
to such wines in their own country. It, however, was a capital wine to
mix with sugar and ice for cobblers, as a substitute for sherry, and it also
made an excellent sparkling wine. Some of the latter I tasted in Chilli-
cothe, Ohio, in 1850. It struck me then that it might be popularized in
New York. I opened a correspondence with Mr. Longworth, and in 1852
had the pleasure of receiving a small invoice of it, the first that had ever
been in the city—indeed, as Mr. Longworth said, ' the first that had ever
crossed the mountains ' (the Alleghanies). The wine speedily became
popular, and continued to be until the death of Mr. Longworth, whose
agent I continued to be until that time—a period of many years. The
still wines did not succeed so well ; except for Catawba cobblers, the sale
was very limited. The truth was, our people, accustomed to the heavily
brandied wines of Europe, the sherries. Madeiras, and ports, with an
alcoholic percentage of 19 to 24 per cent., did not much fancy a pure wine
of only 8 to 9 per cent, of fixed alcohol : it was not strong enough. But
the sparkling wines with a slight addition of brandy or sugar, which by
fermentation resolves itself into brandy, met with better success.
"At this time the sparkling Catawba could be laid down in Néw York
at a cost a little exceeding that of the most popular French champagne,
' the Heidsick,' but it was sold by the case at the same price, say $14.
Yet it kept its own, and sales grew larger, notwithstanding this formidable
competitor. At that time the sale of champagne was immense, but its low
price (at wholesale) did not tempt imitators to manufacture a spurious
Heidsick and sell it for the real article. The market was full of good
brands of champagne, but the native wine was steadily growing in favour
without protection, and in spite of so many rivals. Another formidable
antagonist to the sale of native wines wets the trade! There was more
money to be made by selling imported wines, and therefore the whole
of the wine trade in New York turned its back upon sparkling
Catawba. Nevertheless it worked its way without recommendation into
favour with the public. The heavy duties imposed upon foreign wines
during the war diminished at once the greater part of the supply from that
* A large number of changes in the rates of duty upon articles of minor
importance proposed by the Commissioner are here omitted.
OFFICIAL REPOET.
131
house, whether cast steel is worth forty, fifty, or sixty pounds
per ton, or can readily distinguish, by inspection, cast steel in
bars from German steel in the same form. The result has been,
that during the past year the government and the importers of
steel have been brought into continual disagreement ; the agents
and officers of the one alleging that the steel regularly imported
was systematically and scandalously undervalued with a view of
defrauding the revenue ; while the English importers and their
commission agents in the United States, including men of the
highest reputation for integrity in both countries, have with
equal positiveness denied this accusation. Meantime the
domestic manufacturers of steel, not satisfied with the existing
duties, have earnestly besought the government to decide in
opposition to the importers, and so practically raise the tariff ;
while on the other hand the American manufacturers who use
steel as a raw material have felt alarmed at what seemed to
source. Native wines had the full benefit of protection, and besides were
free from internal tax. And we must not overlook another great advan¬
tage in their favour ; the improvements in the manufacture, the results of
experience and enterprise, had produced sparkling wines far superior in
quality to those of twenty or even ten years ago. For delicacy of flavour
and fragrance of bouquet, the sparkling Catawbas of the Pleasant Valley
Wine Company; of the Urbana Wine Company; of Cha?. Bottlers of
Cincinnati; of Week's Sparkling and Longworth's Golden Wedding (all of
which took diplomas of 'honourable mention' at the Paris Exposition,
where they were in competition with the choicest champagnes of France),
are so greatly in advance of Longworth's old wines of twenty years ago,
that a comparison between them would be like (to use a homely simile) as
• cheese is to chalk' in the list of alimentary substances.
" But great as have been the improvements in the manufacture of
sparkling wines, greater have been those in the production of still wines,
from which our sparkling wines are made.
" The southern shore of Lake Erie now seems to be our proper vine-land,
and the still Catawbas from this favoured locality will compare with credit
with the very best growth of the Rhine.
"We may instance those delicate light wines of Kelley's Island, which
are produced under the superintendence of Messrs. Kelley and Huntington,
and have acquired so marked a preference in late years. For purity and
excellence they may be put in competition with the wines of any climate.
"Now under such favourable auspices one would think the native wine
trade would thrive and prosper a hundredfold. One would think that with
vast improvements in the production and manufacture of the wines, with high
scientfic skill in the cultivation of the grape itself, with a heavy protective
duty on foreign wines and no tax at all on wines of home growth, this
important branch of industry would have increased to a magnitude corre¬
sponding to its supposed advantages.
But such is not the fact. With such an enormous amount of floating
capital seeking investment in the country at large, no measurable amount
has found its way in this direction ; no vast establishments have grown up
as it were in a day to supply the enormous deficiency caused by prohibitory
duties upon foreign wines ; the old wine establishments remain nearly as
they were before the war; native wines have not become a national
K 2
132
OFFICIAL REPORT.
them to be an unnecessary interference with their business, and
in not a few instances have declared to the Commissioner that if
any higher rates were to be imposed upon this indispensable
article they might as well abandon any idea of attempting to
extend, perfect, and diversify their special products. The
Commissioner, therefore, with a view of putting an end at once
and for ever to these difficulties, would propose the duties on
steel be made wholly specific, and on the foUowing basis:
On scrap steel, one-fourth cent per pound; on blister steel in bars,
broken up for melting, one and one-half cent per pound; on
German steel in bars, two cents per pound ; on shear steel, in bars,
two and one-half cents per pound ; on cast steel ingots, and on all
rough and unfinished castings in steel, one cent per pound ; on
castings in steel, drilled, bored, or hammered cold, one and one-
fourth cent per pound ; on cast steel in bars, two and one-half
cents per pownd ; on cast or German steel in plates to sixteen wire-.
beverage, and except by persistent private enterprise even these establbh-
ments would be financially wrecked, like so many others which were once
flourishing and wealth-producing. With all the protection a very slight
revenue tax would tax them out of existence. They are too weak to bear
this burden.
"The main cause of it all lies in this—protection of the native wine
trade means a premium on spurious wines. When real champagne is
worth per dozen from $20 to $24 in gold, and imitation champagne can be
made for $8 a dozen in paper money, the premium is in the difference
between the two sums. Vast wine-cellars for the manufacture of spurious
wines sprung up like mushrooms all over the land.
"These poisonous compounds at low prices tempt the cupidity of the
dealer. The New York label manufacturer readily furnishes the label—
the 'brand'—of any known wine. The whisky distiller furnishes the
stimulus, the chemist the flavour, the sugar-house the syrup, and the gas-
pump the effervescence. With these antagonists to contend with, good
pure wines, both native and foreign, go to the wall ; competition is out of
the question.
" In the production of native wines heavy duties increase also the costs.
As, for instance, transportation; the freight tariff is increased on the
railroads. All materials are obliged to be imported, bottles, corks, &c.,
and two freights to pay on these—duties, &c. ; and then the cost of labour
is fourfold in this country to what it is in France.
" Another great evil is that in the manufacture of ' dovfiestie toines,' i.e.,
wines made here or compounded, a class of poor native wines, or wines of
half-ripened or rotten, poorly-cultivated grapes, are eagerly bought up at
low prices, and are then doctored, coloured, whiskied, and sweetened, and
sold under the names of Madeiras, sherries, or ports.
" This gives encouragement to the worst class of vineyardists, who,
taking examples from their patrons, leam to introduce unripe blackberries,
rhubarb, cider, whisky, sugar, and water into their vile compounds. All
this stuff, being doctored, finds its way to the abodes of our citizens, to the
hospitals, and to the communion table. Shocking as all this may appear,
yet it is true. It is in everybody's experience. He who runs may read.
"Respectfully,
" Fred. S. Cozzehs."
official bepoet.
133
gaugCy inclusivej two cents per pound; from seventeen to twenty-
four^ two and one-half cents per pound ; above twenty-four^ three
cents per pound; on cast or German steel in form of wire and
sheets which are drawn or rolled cold, to sixteen wire-gauge,
inclusive-, three cents per pound ; thinner than sixteen wire-gauge,
three and one-half cente per pound. On cast steel tires for rolling
stock for railroads two cents per pound; on cast steel straight
axles, shafts, piston rods, and general forgings to pattern, one
cent per pound; do., do., rough-turned, one and one-half cent per
pound; finished ready for use, two cents per pound ; on cast steel
crank axles forged to shape, only one and one-fourth cent per
pound; rough-turned, planed, and slotted, one and one-half cent
per pound; finished ready for use, two and one-half cents per
pound. On cast steel rails, one and one-half cent per pound.^ On
steel not otherwise provided for, two cents per pound.
By a schedule of substantially this character, which can he
enlarged and made more minute if desirable, the duties on steel
can be readily determined by the eye and weight, and all
difficulties arising from undervaluations be at once and for ever
done away with. If it be objected that such a schedule
involves a lower scale of duties than is now imposed, the
Commissioner would reply that he believes that the interests of
the country and of the revenue alike demand that the existing
duties should be reduced, on the ground that they are at present
excessive and more than are required to sustain the domestic
manufactures in a condition of firm prosperity. The whole
number of persons engaged in the direct manufacture of steel in
the United States at the present time is not in excess of three
thousand five hundred. It would, however, be a low estimate
to place the number of those who use steel as a raw material in
the manufacture of axes, chisels, files, cutlery, spades, shovels,
pistols, machinery, and other tools and implements, at less than
two hundred thousand ; while an addition of those indirectly
interested in having cheap steel would swell this number to at
least one million and a half of individuals, who are at the same
time the most important and valuable of all those who by their
industry add to the annual product of the country.
drugs and chemicals.
In respect to the following articles, included in the list of
drugs and chemicals, the Commissioner would recommend an
entire removal of all duties, mainly for the reason that the
* At the time this specific rate on steel was proposed, it was the equi¬
valent of the ad valorem rate then imposed. It was not the intention of
the Oommissioner to recommend increased duties on any form of steel.—
eoitob.
134
OFFICIAL BEPOET.
amount of revenue received from them specifically or in the
aggregate is too small to compensate for the complications
thereby occasioned in the administration of the tariff and the
disturbance of legitimate trade and industry.
Asphaltum, albumen, chalk of all kinds; acids (benzoic,
carbolic, citric, gallic, muriatic, nitric, oxalic, sulphuric, tannic) ;
acetates of ammonia, baryta, iron, copper, magnesia, potasaa,
soda, and strontia ; aloes ; ammonia and its salts ; anUine, colours
or dyes ; arsenic ; assafcetida ; balsams of all kinds ; Peruvian
and other medicinal barks ; buchu leaves ; camphor, crude ;
cantharides ; chemical preparations not specified in the existing
tariff ; tartar emetic ; cubebs ; cuttle-fish bone ; dragon's blood ;
all other drugs and dyestuffs not specified in the existing tariff ;
seaweed ; dulce ; ergot ; all medicinal flowers, leaves, and plants
not specified in the existing tariff; extract of indigo; iodine,
crude, sublimed, or compounded ; ipecacuanha ; jalap ; lac, seed
and stick ; madder extract and garancine ; magnesia and its
salts; manna; musk; medicinal preparations not specified in
the existing tariff; nitrate of soda; nut galls; phosphorus;
chlorate of potash ; rhubarb ; saltpetre ; chloride of potash ;
rose leaves ; saffiower ; santonine ; sarsaparilla ; strychnine and
its salts ; barytes and its salts ; Epsom salts ; sulphate of zinc ;
clay and Fullers' earth of all kinds ; mosses, sea-weeds, and
other similar vegetable substances; all volatile, essential, and
illuminating oils not specifically provided for ; olive, palm, and
cocoa-nut oils ; tar, turpentine ; lime-juice ; cobalt ; and all
seeds and roots not specifically provided for. The loss of
revenue involved in these reductions would not, as near as
can be estimated, exceed two millions of dollars.
The Commissioner would also call attention to certain peculi¬
arities of the existing tariff in connection with the importation
of drugs and chemicals, which are especially worthy of attention.
Thus, crude camphor pays a duty of thirty cents per pound,
while " refined camphor," as it is called, is subject to a duty of
forty cents per pound. Now, the fact is that all camphor of
commerce is a crude product of special countries, more or less
impure, which can be easily refined for about three cents per
pound, and the effect of making a difference of ten cents per
pound between what is called " refined " and " crude," has been
to shut out all foreign competition in marketable camphor, and
to give an almost exclusive control of the domestic trade within
the United States to a single refiner in New York city.
Castor oil is subject to a duty of |1 per gallon (gold), or $1 10
if not imported direct from the East Indies ; in the interior of
which country, as also in Mexico and other tropical regions, the
plant grows almost spontaneously. As a rule, furthermore, it
OFFICIAL BEPOBT,
135
costs less to express and deliver tlie oil at a shipping point than
it does to deliver the oil in the heans. The existing tariff
imposes a duty of sixty cents per bushel on castor beans, which
is equivalent to thirty-five cents per gallon on the oil in the
beans. This is less sensible than to so legislate as to force the
export of all our wheat and other cereals with the straw
atûched, for, while there is some value in the straw pertaining
to the cereals, castor oil beans have no value except for the oü
they contain.
The result of such a system has been that, while castor oil
can be imported direct from the East Indies for about eighty-
seven cents per gallon in gold, the price has ruled in the
American market for the past three years at about $2 50 per
gallon in currency, and the cultivation of these cathartic beans
has been forced to a considerable extent in States that should
grow cotton and cereals ; on the other hand, the government
derives less than two cents per gallon in the place of $1 per
gallon on the whole amount, some 200,000 gallons, consumed
yearly, and some two or three parties hold a practical monopoly
in all our interior trade in this article, while the foreign com¬
merce in the commodity has practically ceased.
In like manner the tariff duties on borax, morphine, bi¬
chromate of potash, and sugar of lead, are at present all calculated
to give large and unjust profits to a few manufacturers, to the
great detriment alike of the revenue and of the masses of the
people.
It is hardly necessary to add that the adoption of the fore¬
going recommendations of the Commissioner would necessitate,
in the interests of the revenue, a change in the duties now levied
on many articles in a more advanced stage of manufacture;
inasmuch as the reduction effected in the cost of the elementary
material of certain domestic industries would render many of
the provisions of the existing tariff absolutely prohibitory, and
thus destroy the revenue at present derived from the import of
similar articles.
WHAT CONSTITUTES A REVENUE TARIFF.
The Commissioner has thus presented a statement of some of
the modifications of the tariff now in force which seem to be
immediately demanded by the present condition of industry,
rendered possible by the surplus revenue now accruing and in
accordance with existing public sentiment.
In thus providing for a reduction of the customs revenue to
an extent of about fourteen millions per annum, the Com*
nussiouer asserts, and has proved, thak'the relief to be experienced
136
OîTICIAL BEPOBT.
by the people, through the removal of indirect burdens, will be
far greater than the sum of the direct taxes abated; as the
result cannot fail to effect a reduction of the excessive cost of
very many articles of prime necessity, the artificially enhanced
price of which is now either a dead loss to the community, or
a payment of taxes which are not received by the treasury.
The Commissioner has also considered it desirable, in view of the
present general interest in the question of revenue reform, and
especially in the simplification of collection, to present a
schedule, showing in what manner a new tariff might be con¬
structed, with the primary object of obtaining from the smallest
number of articles, and without excessive duties, an annual
revenue of one hundred and fifty millions, and which at the
same time would not expose the branches of industry which
have been stimulated by protection to any danger of collapse ; it
being assumed that the relief to be experienced by manufacturers
from the abatement of taxes upon their raw materials would, to
a large extent, compensate for the reduction of duties upon
their product ; thus enabling them, through a reduction of cost,
to extend their markets, increase consumption, and resume
exports.
SCHEDULE OP A TARIFF CONSTRUCTED WITH A VIEW OF OBTAINING
FROM THE SMALLEST NUMBER OF IMPORTED ARTICLES AN ANNUAL
REVENUE OP ONE HUNDRED AND FIFTY MILLIONS OF DOLLARS.
Class 1.—Articles of food and drink.
Revenue estimated
on the basis of
receipts 1868-69.
Beer, ale, and porter $250,000
Chocolate and cocoa 100,000
Dried fruits at 2 cents per pound, and
green fruits at 10 per cent, ad valc/rem,
with no allowance for damage 3,000,000
Cigars, at $2 per pound 5,000,000
Tobacco, unmanufactured, at 25 cents per
pound 1,250,000
Coffee and substitutes for coffee 12,000,000
Molasses and melado 5,000,000
Sugars 33,000,000
Tea 10,000,000
Spirits, at $2 per proof gallon 4,000,000
Wines, other than sparkling, at 50 cents
per gallon 4,000,000
Sparkling wines at $6 per dozen 1,000,000
official report.
137
Revenue estimated
on the basis of
receipts 1868-69.
Spices $2,000,000
Eice 1,150,000
Sardines, meats, preserves, &c 150,000
Nuts 450,000
Pickles, sauces, vermicelli, macaroni, sago,
&c 150,000
Total $82,500,000
Class 2.—Textile fabrics and wares. Duties to be in specific form
as far as possible, but at the specific amount represented by the
rates named in the following list.
Silks, at 35 per cent., this being the highest
rate which it is easy or possible to collect
without great loss from smuggling.. $10,000,000
Wool and worsted manufactures, 15 to 35
per cent., averaging 25 per cent., specific 10,000,000
Cotton manufactures, 15 to 35 per cent.,
averaging 25 per cent., specific 5,000,000
Flax manufactures, 15 to 35 per cent.,
averaging 25 per cent., specific 5,000,000
Hemp and jute manufactures, 15 to 35 per
cent., averaging 25 per cent., specific ... 2,000,000
Gloves, hats, and bonnets 1,000,000
Paper and manufactures-of paper, 10 per cent 500,000
Furs and manufactures of furs 500,000
Earthen, stone, china, and glass, 25 per
cent., specific 4,000,000
Total $38,000,000
Class 3.—Metals.
Iron, steel, lead, tin, and manufactures of
same, at such specific rates as shall
amount to 25 per cent $15,000,000
Class 4.—Fancy goods, at such specific rates as shall be equivalent
to per cent, ad valorem.
Clocks, watches, embroideries, toys, musi¬
cal instruments, pipes, perfumes, orna¬
ments, feathers, fire-crackers, &c $4,000,000
Laces, braids, and fancy webbing.^ 1,000,000
138
official befobt.
Class 5.—Drugs and chemicals.
Liquorice, opium, oils, preparations con¬
taining spirits, and patent medicines $1,500,000
Class 6.—Miscellaneous^ at such specific rates as shall be equivalent
to from 15 ¿0 35 per cent, ad valorem.
Brooms, brushes, mats, millinery, manufac¬
tures of India-rubber, marble, cork, and
hair, soap, hops, &c $2,000,000
Recapitulation.
Articles of food and drink $82,500,000
Textiles and wares 38,000,000
Metals 15,000,000
Fancy goods 5,000,000
Drugs, chemicals, and oils 1,500,000
Miscellaneous 2,000,000
Total $144,000,000
The above estimates present an aggregate of $144,000,000, to
which may be added the sum accruing from fines, penalties, and
forfeitures—say $1,000,000—making a total of $145,000,000.
To this, however, must be further added the amount which
represents the elasticity of the customs revenue, arising from the
rapid increase of the country in wealth and population, which
cannot be fairly estimated at less than $5,000,000 per annum,
on an average ; and this sum, it is to be remembered, would also
represent the amount which, after the first year, would be an¬
nually applicable for the reduction of the rates upon tea, coffee,
sugar, or such other articles as might be deemed desirable.
conclusion.
The Commissioner offers no apology for the length of this
report. The subject of using the national resources for the pur¬
pose of obtaining a large, but necessary revenue, and of perfecting
the existing revenue laws, enlarges the more it is investigated ;
and although a few simple principles serve as a key to the whole
question,it has seemed expedient to the Commissioner to illustrate
their application in different ways, and in respect to many dif¬
ferent topics. As the present constitutes the last regular report
of the Commissioner (his office expiring, by limitation of law,
at the close of the present fiscal year, June 30, 1870), he has
official report.
139
endeavoured, moreover, to complete, as far as possible, the state¬
ment of the result of his investigations. And in respect to these
investigations, commenced under the Eevenue Commission in
1865, and continued uninterruptedly to the present, the Com¬
missioner claims the privilege to assert that he has endeavoured
faithfully and conscientiously to discharge the duties of his office ;
has sought to know only the truth, and to speak that only which
has seemed to him to be for the best interests of the whole
country. He is well aware that in expressing opinions and
recommendations, which have been forced upon him by conviction,
he has placed himself in antagonism to many with whom he
was formerly in close agreement; but he feels confident that
time, experience, and free discussion will confirm the correctness
of his general conclusions and vindicate his position. In confir¬
mation of this opinion he would call attention to the circumstance
that, from the very first, none of his recommendations received
at the outset anything of general support from either Congress or
the public. Thus in the case of distilled spirits : although the
impolicy and waste of the two-dollar tax were demonstrated in
1865 by facts and examples drawn from our own and the
experience of other nations, and its abatement earnestly recom¬
mended, the proposition found barely a single supporter in either
branch of Congress, while the Commissioner was accused, by
means of an anonymous circular laid upon the desk of each
member, of having been infiuenced in his statements and recom¬
mendations by corrupt and unworthy motives. A like disfavour
also attended nearly all the other principal recommendations by
him first submitted ; as, for example, the repeal of the tax upon
raw cotton : crude petroleum ; the cumulative and onerous taxes
oh all manufacturing industry; the proposition to coUect the
revenue from fermented liquors by means of stamps ; and from
tobacco by the joint application of the stamp and package system ;
the appointment of supervisors ; the uniform tax upon cigars,
and the like ; and yet the adoption of all of these measures has
been subsequently found necessary through experience, and has,
by general acknowledgment, resulted in great and permanent
benefit alike to the government and the people. Feeling confi¬
dent, therefore, from such a retrospect, as to the issues of the
future, the present report, with its recommendations, is respect¬
fully submitted.
DAVID A. WELLS,
United States Special Commissioner of B^venue,
Hon. George S. Boutwell,
Secretary of the Treasury,
140
OFFICIAL BEPOBT,
Appendix A.
Table showing the exact cost of the support of forty persons employed in
the manufacture of cotton goods in the town of , in MassadiusettSf
for the twenty-seven weeks ending November 1, 1869,
Provisions :
Meat
Flour
Potatoes
Fish
Lard
Pastry
Butter
Sugar
E^s
Crackers
Beans
Cheese
Bice
Meal
Tea
Coffee
Apples, green
Apples, dried
Pickles
Molasses
Corn starch
Raisins
Spices
Cream tartar
Saleratus
Vinegar
Salt
Milk, sweet
Milk, sour
Citrons
Cabbages
Squashes
Vegetables, Sundry
Onions
Prunes
Sundries :
Matches, stove blacking, &c
Stone jars
Lamp chimneys, burners, and wioking.
Washing fluid and bluing
Soap :
Hard
Soft
Oil:
Kerosene
Fuel :
Coal
Wood
3,464 pounds
5,920 pounds
63 bushels.....
652 poimds....
283^^ pounds .
844^ pounds ..
1,675J pounds.
269^ dozen
8^ barrels
9 quarts
316| pounds...
69^ pounds
5 pounds
79 pounds
15 pounds
15| bushels ...
55 pounds
17§ gallons ....
24^ gallons ....
14 pounds
54 pounds
Quantity.
6i pounds ...,
13 pounds ....
12 gallons...,
7 pecks
1,336 quarts ,
29 quarts ...
90 pounds.
116 pounds.
4 barrels....
51 gallons.
8,660 pounds.
6i cords
Value.
$585 D2
208 70
48 92
45 57
119 36
117 61
342 99
229 15
89 91
37 10
1 38
80 69
9 96
20
90 59
7 35
24 92
11 35
21 73
21 95
2 28
12 50
10 84
65
82
40
08
80 20
87
60
70
50
3
3
43 33
3 53
21 10
2 (
3 50
6 05
3 04
17 40
18 00
Total
value.
22 15
38 64
37 50
3 1-5 pounds.
5^ pounds.
i peck.
6-10 pound,
i pound.
12^ ounces.
14 pound.
" eggs.
l'5-4 pound.
4| ounces,
ounce.
1 1-6 ounce.
1-5 ounce.
Quantity per
week for each
person.
2^ pints.
2,292 75
15 25
35 40
22 15
76 14
2,651 69
OFFICIAL REPORT, 141
Cost of support x>f forty persons employed in the manufacture of cotton
goods^ (fee.—Continued.
Value.
Total
value.
Labour, cooking, waiting, &c. :
Boarding mistress, 27 weeks, at $13 50
One hand, 14 weeks, at $1
One hand, 7 weeks, at $1 50
One hand, one-third time for 6 weeks, at $3
Labour, washing, &c. :
One hand, one-third of each week for 27 weeks, at $3
One hand, one-third of each week for 14 weeks, at $1 50...
One hand, one-third of each week for 13 weeks, at $2 75 ...
Care of rooms :
One hand, two-thirds of each week for 21 weeks, at $3
One hand, two-thirds of each week for 14 weeks, at $1 50 .
One hand, one-third of each week for 6 weeks, at $3
One hand, two-thirds of each week for 13 weeks, at $2 75 .
$364 00
14 00
10 40
6 00
27 00
7 00
11 92
42 00
14 00
6 00
23 83
395 00
45 92
85 33
2,968 44
Number of persons hoarded, including househeeper and servants.
Adult
Adult
Children,
Children,
males.
females.
male.
female.
X OXâ>l*
May
21
18
6
5
50
June
16
22
5
2
45
July
14
14
4
2
34
August
28
12
3
3
46
September
23
13
1
2
39
October
16
17
1
2
36
Average
19|
16
3è
n
41|
üpduct for children
1%
Equal to adults
•^3
40
Cost as above ?2,968 44
Rent of house, at $350 175 CO
Twenty-seven weeks, at $116 42 $3,143 44
Or, for forty adults, $2 91 per week each. House and help competent for forty-five
boarders, which would reduce average, say $2 75 per week.
142
official report.
Appendix B.
The Tariffs of the United States.
statement showing the revenue collected each tear from 1789 to
1868, the amount of dutiable imports and free goods imported
annually, and the average rate of duty on imports annually.
From Mar. 4,
1789, to Dec. 31
1790—Aug. 10..
1791—Mar. 3..
1792—May 2..
1793
1794—June 7..
1795—Jan. 29..
1796
1797—Mar. 3..
1798
1799
1800—Mar. 13..
1801
1802
1803
1804—Mar. 26..
1805—Mar. 27..
1806
1807
1808
1809
1810
1811
1812—July 1..
1813—July 13..
1814
1815
«
1816—April 27..
1817
1818—April 20..
1819—Mar. 3..
1820
1821
1822
1823................
L824—May 22..
1825
1826
1827
1828—May 19..
1829
General
Spirits .
General
General
[ Supple- \
\ mentary )
Tariffs.
General
(Sugar audi
i wines /
íMediterra-1
1 nean fund/
Light money
( War ; "j
■J double >
I duties }
Salt
7 Min. for 1
1 proteo- I"
V tion )
( Iron and
I alum
Wines
General rise.
Í Min. ex-
\ tended
Customs.
$4,399,473 09
3,443,070 85
4,255,306 56
4,801,065 28
5,588,461 26
6,567,987 94
7,549,649 65
7,106,061 93
6,610,449 31
9,080,932 73
10,750,778 93
12,458,235 74
10,479,417 61
11,098,565 33
12,936,487 04
14,667,698 17
15,845,521 61
16,363,550 58
7,296,020 58
8,583,309 31
13,313,222 73
8,958,777 53
13,224,623 25
■ 5,998,772 08
7,282,942 22
36,306,874 88
26,283,348 49
17,176,385 00
20,283,608 76
15,005,612 15
18,475,703 57
24,066,066 43
22,402,024 29
25,486,817 86
31,653,871 50
26,083,861 97
27.948,956 57
29,951,251 90
27,688,701 11
IMPORTS.
Free.
$10,082,313
7,298,708
9,048,288
12,563,773
10,947,510
12,567,769
11,855,104
12,379,176
11,805,501
Dutiable.
•••
$52,503,411
75,942,833
68,530,979
67,985,234
85,392,565
72,406,708
67,628,964
76,130,648
62,087,026
Total
52,200,000
31,500,000
31,100,000
34,600,000
69,756,268
81,436,164
75,379,406
68,551,700
79,069,148
91,252,768
111,363,511
76,333,333
04,666,666
85,000,000
120,600,000
129,410,000
138,500,000
56,990,000
59,400,000
85,400,000
53,400,000
77,030,000
22,005,000
147,103,000
99,250,000
Per cent, on
1 dutiable.
1 Per cent, on
aggregate.
H
• ••
11
•••
m
•••
14
•••
9
•••
•••
10 -
lOi
Si
H
• ••
9
•••
16
• ••
16
•••
14
• ••
lOi
• ••
Hi
•••
Iii
•••
30
•••
12
•••
10
•••
25
Hi
•••
60
47
• ••
55
•••
25
•••
27
...
14
...
28
...
20i
35-6
29-5
31-7
28-9
32-7
28-8
37-5
31-6
371
32-8
34-6
30-7
41*3
351
39-3
SS-ff'
r 44 3
87*1
OFFICIAL REPORT.
143
The, tarifs of the, United States, &c.—Continued.
1830—May 20...
1831
1832—July 14...
1833*~~Mar. 2...
1834
1835
1836
1837
1838
1839
1840
1841—Sept. 11
1842—Aug. 30...
1843....,
1844....,
1845
1846—Aug. 6...
1847
1848
1849
1850
1851
1852
1853
1854
1855
1856
1857—Mar.
1858
1859
1860
( Mar. 2
1861 Aug.
(Dec.
1862—July 14.
1863—Mar. 3...
1864—June 30...
1865—Mar. 3...
ÍMar. 14)
May 16 V
July 28)
1867—Mar. 2...
1868
1869—Fel). 24...
f Coffee,tea, \
\ molasses j
( Modifica-1
1 tions j
Compromise
3...
2 A
Tariffs.
• ••
f Free list 1
t. 'taxed J
General rise
f Revenue "I
\ tariff J
General
General
General
Í Wool and \
I woollens J
f Copper \
1 increased )
Customs.
1,389,505 05
36,596,118 19
29,341,175 65
24,177,578
18,960,705
25,890,726
30,818,327 67
18,134,131 01
19,702,825
25,554,533
15,104,790 63
19,919,492 17
16,662,746 84
10,208,000 43
29,236,357 38
30,952,416
26,711,668 00
23,747,
31,757,
28,346,
39,668,
49,017,
47,339,
68,931,
64,224
53,025,
64,022,
63,875,
41,789,
49,565,
53,187,
865 00
071 00
739 00
686 00
568 00
326 00
865 00
190 00
794 00
863 00
905 00
621 00
824 00
511 00
39,582,186 00
49,056,398 00
69,059,642 00
102,316,153 00
84,928,260 00
179,046,630 00
176,417,811 00
164,464,599 56
180,048,426 63
IMPORTS.
Free.
,746,245
13,456,625
14,249,453
32,447,950
68,393,180
77,940,493
92,056,481
69,250,031
60,860,005
76,401,792
57,196,204
66,019,731
30,627,486
35,574,584
24,766,881
22,147,840
24,767,730
41,772,636
22,716,603
22,377,665
22,710,382
25.106.587
29,692,934
31,383,534
33,285,821
40,090,336
56,955,706
66,729,306
80,319,275
79,721,116
90,841,749
*134,559,196
*91,603,481
44,826,029
*54,244,183
54.329.588
69,728,618
39,105,708
29,804,147
41,179,172
Dutiable.
,130,675
89,734,499
86,779,813
75,670,361
58,128,152
71,955,249
97,923,554
71,739,186
52,857,399
85,690,340
49,945,315
61,926,446
69,534,601
29,179,215
83,668,154
95,106,724
96,924,058
104,773,002
132,282,325
125,479,774
155,427,936
191,118,345
183,252,508
236,595,113
271,276,560
221,378,184
257,684,236
294.160,835
202,293,875
259,047,014
279,872,327
218,180,191
183,843,458
208,093,891
275,320,951
194,226,064
375,783,540
372,627,601
343,605,301
395,847,369
Total.
311
332
742
035
217
404
132
519
,177
$70,876,920
103,191,124
101,029,266
108,118,
126,521,
149,895,
189,980,
140,989,
113,717,
162,092,
107,141,
127,946,
100,162,087
64,753,799
108,435,035
117,254,564
121,691,797
146,545,638
154,998,928
147,857,439
178,138,318
216,224,932
212,945,442
267,978,647
304,562,381
261,468,520
314,639,942
360,890,141
282,613,150
338,768,130
362,166,254
352,739,387
275,446,939
252,919,920
329,565,134
248,555,652
445,512,158
411,733,309
373,409,448
437,026,541
Per cent, on
dutiable.
Per cent, on
aggregate.
48-8
40
40-8
35-4
33-8
29
31-9
22-4
.32-6
15
36 0
17-2
31-6
16-2
25-3
12-4
37-8
17-3
29-9
15-8
30-4
14-1
32-2
15-6
23 1
16-6
35-7
15-7
35-1
26-9
32-5
26-4
26^
21-9
22^
16-2
24
20-4
23
19-2
25-2
22-3
26
22-6
26
22-2
25
22
23'5
21-1
23
20-3
25
20-3
21-5
17-7
20
14-8
19
14-6
19
14-7
18 1
11-2
26-7
17-7
33-2
23-7
37-2
31
43-7
34-2
47-06
40-2
47-34
42-8
47-86
44
45-48
41-2
* In these amounts are included imports into the Southern ports during the war, from wluch
no revenue was derived, viz.: in 1861, $17,089,234; in 1862, $90,798, and in 1864, $2,220.
tONUOK :
». CLAY, SONS, AND TAYLOR, RRINTERS,
BREAD STREET HlLt.
¡"cOODÍ^
COBDEIf
CllIB
V<íQ>CÍ)Q->
REPORT
OF THE PROCEEDINGS
AT THE
ANNTJAL DINNER
OK THE
COBDEN CLUB,
July 23rd, 1870.
THE RIGHT HON. W. E. GLADSTONE, M.P.,
The Premier^
IN THE CHAIR.
WITH LIST OF MEMBERS.
MANCHESTER: ALEXANDER IRELAND & CO.
1870
PREFATORY REMARKS.
The Cobden Club met this year ander circumstances of
peculiar discouragement.
Mr. Gladstone had been invited to preside at the
dinner in the hope that under his auspices, at a moment
when after a period of severe depression throughout
Europe, there appeared to be a prospect of renewed
industrial activity, some means might have been devised
in concert with the distinguished foreign members of
the club, which were expected to be present, of turning
to account its international organisation, in giving a new
impulse to the productive forces of the world, by the
extension of free exchange, and in thus promoting the
agencies of peace.
The outbreak of a war which Europe hoped might
have been averted, rudely dispelled this hope ; never¬
theless, this anniversary meeting of the club was
neither useless nor inappropriate.
6
COB DEN CLUB.
It is especially needful in sucli times as these,
when the real interests and destiny of our race are
forgotten in the excitements of war, and in the
momentary ascendency of passion over reason, that
those who believe in the principles of civilisation,
with which the name of Cobden is associated, should
once more enter their protest against their wanton
violation, should assert again the broad claims of
humanity at large, and of the masses of the people
in every country, as opposed to the narrow and selfish
interests of classes and nationalities, and above all
should pronounce their unshaken faith in the final
prevalence of the truths which they profess,
Mr. Gladstone has rendered to the club an inesti¬
mable service in taking upon himself on this occasion
the office of its president, and in giving to the ideas and
feelings which animated the meeting the most appro¬
priate and eloquent expression.
It is with a view of placing upon record, in a more
complete and enduring shape than by a newspaper
report, Mr. Gladstone's memorable address, and of
extending its influence to a wider audience, that the
committee has printed the following report of the pro¬
ceedings of the 23rd July.
The committee feel that the publication of Mr.
ANNUAL DINNER.
7
Gladstone's just and discriminating appreciation of Mr.
Cobden's political character is the best answer which
can be made to the narrow and superficial criticisms
which have been passed upon it by some of the principal
organs of the London press, in connection with the
recent meeting of the club.
The charge has been revived once more, which his
friends had hoped not to be called on again to repel,
that with all his admitted acuten ess, Cobden was the
victim of an amiable but foolish enthusiasm, which led
him to think that the increased commercial intercourse
of nations which has resulted from the partial adop¬
tion of the free trade policy, had rendered war a thing
of .the past, and that the time had arrived for the nations
of the earth to beat their swords into ploughshares, and
their spears into pruning hooks.
Cobden certainly believed (and in this he only shared
the opinion of most reasonable men, for it is nothing
more than a dictate of common sense) that in propor¬
tion as countries could bsled to exchange their products
freely, to multiply the points of contact between them,
and to extend their common interests, so would the
chances of war diminish, and the guarantees of peace be
increased and strengthened.
He may also have believed (although this is an
8
COB DEN CLUB.
assumption, for his mind was too practical to indulge
much in abstract speculation), that if ever a time should
come, when all the barriers that obstruct the intercourse
of nations were removed, and the material interests of
all placed under the safeguard of a common freedom (a
state of things, be it observed, which necessarily implies
the largest measure of popular government, the widest
diffusion of intelligence, and the emancipation of the
working classes from all unjust and unequal laws), the
causes of war would be reduced within such narrow
limits, as to relieve the civilised communities of the old
world from the curse of standing armies.
But it requires a very perverse ingenuity and a
strange absence of logic to discover, in the events
passing before us, anything which in any degree
impugns the wisdom of either view.
Two great nations have been brought into deadly
conflict—the one, exhibiting in its worst forms the evil
effects of protracted personal rule—and misled at last
in a final attempt to resist the progress of popular
government, by an appeal to some of its least noble
passions—its false patriotism, and its pretension to
European preponderance. The other just emerging
from one of the most artificial and complicated political
systems ever imposed on a people by courts and diplo-
ANNUAL DINNER.
9
inatists—opposed and thwarted in the necessary de-
velopement of its national life by foreign rivalry, and
thus compelled to accept the guidance of a military
government, which has too often invoked the aid of
blood and iron in working out the national salvation.
It would be satisfactory to know by what process of
reasoning the insufficiency or unsoundness of Cobden's
principles are to be deduced from this lamentable
occurrence.
In the case before us, the conditions which, in
Cobden's view, would have tended to prevent war, are
altogether absent ; and it may be safely asserted, that
the more the causes of the present war are analysed,
the more it will be found, that instead of pointing a
moral opposed to his principles, they afford the most
instructive illustration of the danger of their systematic
violation.
The memory of Cobden can suffer little from such
petty cavillings, but it is not well that they should pass
unnoticed, for the sake of that class of our countrymen
who are too easily misled by superficial statements.
The same public instructors are abroad, who were
unable to perceive that slavery had anything to do
with the civil war in America, and who will endeavour
to persuade us now that the violation of the principles
lo
COB DEN CLUB.
of political and commercial freedom bave nothing to do
with the impending conflict. We shall be told again
that man is a fighting animal—that humanity is the
same in the nineteenth as in preceding centuries—that
passion is a stronger motive than self-interest in human
affairs; but there are, nevertheless, among us, many
who will still continue to believe that the material
union, and the mutual inter-dependence of nations are
among the most powerful agencies of peace—that war
is not a normal or necessary condition of the relations
of civilised communities—that free institutions and
free trade, in tending to efface national distinctions,
will tend also to dry up the sources of national discord ;
and that the course of human progress, however
grievously it may be checked in Europe, will not be
long arrested even by the present war.
THE COßDEN CLUB.
The annual dinner of this club took place on the
evening of the 23rd July, at the Ship Tavern,
Greenwich. The majority of the members, with a
number of distinguished visitors, assembled shortly
before five o'clock at the House of Commons stairs,
whence they proceeded in the steamer specially pro¬
vided to their destination.
The Right Hon. W. E. Gladstone, M.P., the Premier,
presided, and Mr. Thomas B. Potter, M.P., occupied the
vice-chair. They were supported by the Right Hon.
the Lord Chancellor (Lord Hatherley), the Hon. John
Bigelow (United States), M. Emile de Laveleye
(Belgium), Chevalier de Schaefíer (Austrian Legation),
Signor Bosch (Second Secretary of the Spanish Lega¬
tion), Baron Melvil de Lynden, Cyrus M. Fisher (United
States), Signor Arturo de Marcoartu, the Duke of St.
Albans, Earl Dalhousie, Lord Houghton, Sir Joseph
Whitworth, Bart., Sir Louis Mallet, C.B., James Caird,
C.B., and the gentlemen whose names are indicated by
12
CO BD EN CLUB.
an asterisk in the list of members at the end of the
report.
Grace was said by the Rev. Edwin Hatch, and the
Rev. Alton Hatchard returned thanks.
Mr. Gladstone said :—My lords and gentlemen,—
Your loyal hearts anticipate the toast which is about to
be announced from my lips. In the age in which we
live there are still remaining abundant sources of
strength for the principle of monarchy. (Cheers.)
Sometimes it is consecrated by ancient traditions, asso¬
ciated with all that makes the name of our country
dear, and the origin of which is lost in ages most
remote. Sometimes it is recommended even where it
has not those advantages of ancient recollection, by
the conviction that appears to govern the mind of
Europe, that by this rather than by any other form of
government, the difficulties attending the supremacy of
power are best encountered. (Hear, hear.) Sometimes
it is also felt that monarchy wears its most gracious
aspect where it is united, as in our case, to personal
conduct that may fairly be held up to the entire com¬
munity as a model of virtuous and exemplary practice.
(Cheers.) It is our good fortune, my lords and gentle¬
men, that every one of these sources of strength and
influence are happily combined in the person of our
ANNUAL DINNER.
13
beloved and gracious Sovereign. (Cheers.) I commend
her name to you with no other preface than "God
bless the Queen Victoria." (Loud cheers.) The toast
having been drunk with enthusiasm,—
Mr, Gladstone rose to propose the toast of the
evening. He said : My lords and gentlemen,—I rise
for the purpose of proposing to you that you should
drink " Prosperity to the Cobden Club." (Cheers.)
And, gentlemen, it is with unaffected sincerity that I
express to you the wish that this task, w^hich in my
view is worthy of the most distinguished that you
could find to undertake it, had fallen into the hands
of one less exhausted than myself—("no, no")—by
the protracted labours of office—(cheers)—for I feel
that the freshest mind, the most copious and the most
accurate thought, might well be given to illustrate and
to set forth the ideas that are connected with the
meeting of to-day. (Hear, hear.) If on any other
occasion of a public gathering, it is true upon this
occasion, that those who have to recommend to
you tiie principal toast of the evening need not
fall back into the region of common place. (Hear,
hear.) You are here to commemorate no mere empty
name—(cheers)—but a name which is associated,
in the first place, with the recollection of splendid
14
COB DEN CLUB.
services performed on behalf of his own country,
and on behalf of mankind—(cheers)—and, in the next
place, with anticipations still more brilliant than
those services, for the eye of Mr. Cobden went far into
the future, and he perceived in their dim commence¬
ment, and in their embryo forms, ideas that will here¬
after mainly govern the relations of great communities.
(Cheers.)
I hope, my lords and gentlemen, you will not
think I pay you a bad compliment when I say, that
never, I believe, was there a man who lived and fulfilled
his career on this earth, who less needed than the dis¬
tinguished person under whose name you are united,
that a special association should be formed for the pur¬
pose of preserving his fame. (Hear, hear.) His fame
carried within itself the principle of its own preserva¬
tion—(cheers)—and as long as civilisation lasts it could
not die. The works that he had done, the truths that he
had proclaimed or anticipated, were so profoundly asso¬
ciated with the welfare of mankind, and in particular
with the welfare of the masses of mankind—^nay, were
so profoundly associated, not merely with the increase
of material wealth, but with the predominance of the
highest moral principles, that until thß powers of evil
shall wholly eclipse and extinguish the powers of good,
ANNUAL DINNER.
15
we may rest confident in the belief that, whatever
becomes of any particular association, mankind will
not be so ungrateful as to forget the liame of our
illustrious friend. (Cheers.)
There are many of us, my lords and gentlemen,
who remember Mr. Cobden,—there are many of us
who had the honour and privilege of calling him
friend—there are many of us who knew the breadth,
the power, the purity, the simplicity of his character—
(cheers)—and who were tempted to murmur at that
dispensation of Providence which removed him, too
early as we thought, from amongst us, for we grudged
the loss of all that instruction which we believed
to be locked in his mind, and which might have
proceeded from his lips and his pen. (Cheers.) But
it was a higher Power,—it was a less erring judg¬
ment, that determined the moment at which the lot of
his life was fulfilled. To us it is left to turn to
account, as well as we can, the heritage which he left—
(hear, hear)—to cherish the memory of his virtues and
his deeds, and to endeavour, if we can, to extract from
them the means of future benefit for this and other
generations. (Cheers.)
My lords and gentlemen,—It is impossible in
meeting you on an occasion of this kind not to
i6
COB DEN CLUB.
admit, and to admit with grief and concern too
deep for words, that the moment is not that
which best harmonises with the associations and
that spirit of peace which belonged to the name of Mr.
Cobden. (Hear, hear.) Within the last few days has
gone forth, as with the voice of trumpets, the proclama¬
tion of war,—the proclamation of war between two of
the greatest military powers in Europe, between two of
the nations most civilised and most distinguished—two
nations whose names and history are inextricably,
inseparably mixed with the history of all that is great
and good in the past records of Christendom—(hear,
hear)—two nations fitted with the apparatus of destruc¬
tion in a greater state of perfectness perhaps than ever
has been known, and animated with those motives of
unshrinking patriotism in the masses of the people
which, however innocent, however honourable, however
admirable they may be in themselves, as they dwell
in the individual breast, we cannot witness without
commiseration when we reflect on the bloody record
that so much human energy will probably leave
upon many fields of battle before this lamentable
war has run its course. (Hear, hear.) It is not
for us who are here assembled, still less is it for
me in the office I have the honour unworthily
ANNUAL DINNER.
17
to hold — (no, no) — to attempt to anticipate the
judgment of posterity upon the great events that are
now of daily occurrence. (Hear, hear.) But this I
may say, without assuming the office of dispenser of
praise or blame, to which I am totally unequal, that the
pen of the historian will, I believe, hereafter relate that
among all the wars by which the course of the 19th
century has been chequered there is none more unspeak¬
ably tragic—(hear, hear)—more unmixedly sorrowful,
more full of every painful association for those who love
their kind, than that war" which is at this moment pre¬
vailing. (Cheers.) May it be tempered by the humane
spirit of civilisation ; may it be narrowed and restricted
by the wisdom of those who are mercifully exempted
from its range—(cheers)—and may the Almighty who
disposes the hearts of men, turn towards peace and
mercy the hearts of those upon whom it shall depend
how long the rivers of human blood are to flow, and
how long earth is to blush for the follies of those who
live from her breast. (Loud cheers.)
My lords and gentlemen,—this association, over and
above all others, may justly profess that it takes no
note of international distinctions. (Hear, hear.) We
are here as Christians—we are here as brothers—we
are here as men—(cheers)—we are here upon the
B
i8
COB DEN CLUB.
broadest ground of wbicli the conditions of humanity
admit) and that is the ground marked out for us hy
the man whose name is commemorated in the title of
this association. (Cheers.) I am glad to think that
even as we now meet there are those assembled round
this board who testify to the breadth of character and
ideas that belong to the Cobden Club. From France
and from Germany we should have found on this
occasion illustrious friends, had their approach to
us not been intercepted by the calamitous circum¬
stances of war. (Hear, hear.) I have in my hand
a letter frum M. Michael Chevalier, whose name
is well known to you as one of the most distin¬
guished, most ardent, most intelligent, and most con¬
sistent of the friends of Mr. Cobden—(hear, hear)—
in which he deeply laments that the duties imposed
upon him by his political position have, at the last
moment, made it impossible for him to appear, and I
think that those more immediately connected with the
official duties of the Club will be able to tell you that
both from France and Germany similar testimonies
could be rendered. I rejoice to think that that country
near to us, limited in its extent, secondary in popula¬
tion, but illustrious in history, and dear to Europe for
the example it presents—(cheers)—the country of
ANNUAL DINNER.
19
Belgium, is represented at this board as you would wish
it to be. (Loud cheers.) I rejoice also to think that
that great power, across the broad Atlantic, which
has already asserted and demonstrated its own capacity
to weld an entire continent into a single State
is well represented at this board—(cheers)—and, in
truth, gentlemen, I feel, that often as you may meet
round the hospitable board, you will find, not merely
from rational conviction, but from corporeal evidence
in the presence of illustrious strangers, that the world¬
wide character and capacity of this institution, and
of the man whose name it bears, are acknowledged
wherever civilisation spreads. (Cheers.)
My lords and gentlemen,—Mr. Cobden was a man
whose mind was too large to be confined to a narrow
range of subjects. (Hear, hear.) I do not deny that
he was one whose intense interest, in the matters to
which his powerful intellect was applied, was of an
absorbing character; but yet, when we put together
all the particulars of those various subjects to which at
different times he applied his attention, we see that
nothing could be a greater error than to treat him as
a man of one idea. (Hear, hear.) On the contrary,
nothing to him was foreign that really embraced the
welfare and the interests of human kind. (Cheers.)
20
COB DEN CLUB.
Mr. Cobden never failed in bis attachment to his own
country. If his pulse had not heat more quickly when
«
the name of England was mentioned, he never could
have been what he was. (Cheers.) No blessing or
benefit will ever attend the efforts of those who
lay the foundations of a cosmopolitan philanthropy
upon any abnegation of their own land. That
which we assert for ourselves we acknowledge
for others. (Hear, hear.) We do not expect, we
do not wish, those distinguished men who sit here,
and who owe their birth to other lands to feel
the same interest in our country as in their own ; but
while we cherish those particular attachments, we
assert that though they may be the beginning, they
ought not to be the end, and while we rear our convic¬
tions within them, we ought also to extend those con¬
victions* beyond them. Such convictions, with the
intellectual process by which they are accompanied
never can have their perfect work as long as they
recognise war, or set up walls of separation to divjde
nation from nation, as if the interests of the one were
irreconcileable with the interests of the other by some
M
law of history established as the condition of human life,
instead of being perfectly reconcileable as they are by
that law of peace and brotherhood which is the glory of
ANNUAL DINNER.
21
the people and the greatest triumph of human nature.
(Cheers.)
Now, my lords and gentlemen, no doubt we shall
all be disposed to admit that which I take even to
be the general opinion, that Mr. Cobden was a man
gifted with a singular endowment of political prevision.
(Hear, hear.) For my own part, though it has been
my happy fortune to know and to be associated with
many public men of great distinction during the
last thirty or forty years, men whose names I
believe will be honourably remembered by posterity,
I do not know there has been one among them who has
had so much of that special and eminently precious gift
of insight into the future as Mr. Cobden. (Hear, hear.)
But it may be said, and it is true, that this
club, whilst it recognises the breadth and scope that
characterised Mr. Cobden in general, has also an
especial regard to those subjects with which his name
is peculiarly associated. (Hear, hear.) There is no
doubt it was as the apostle of free-exchange, if I may
so say, that Mr. Cobden was principally known both in
this and other lands. Nor do I wish in any manner
to qualify that admission, except by this assertion
appended to it, that Mr. Cobden's mind was of far
too elevated a cast to be confined at any period to mere
22
COB DEN CLUB.
calculations as to the increase of wealth. (Hear, hear.)
Mr. Cobden knew that, if wealth is precious as a
means of procuring comfort, it is likewise perilous as
an idol and a snare, and unless it is used for the
benefit of mankind, it is a curse to its possessor.
But Mr. Cobden had a larger view of that political
economy, of which he was amongst the best, the most
enlightened, and powerful professors. No doubt he
recommended the preaching and teaching throughout
the length and breadth of the land of that doctrine
of free exchange which is at the foundation of our
rapid, certain, and continuous increase of wealth ;
but he brought to the service of that cause his
ardent and devoted character, not for the mere
sake of multiplying millions, but for the pecuniary
benefit of the masses. His eye surveyed the condi¬
tion of mankind, and he felt how large a proportion
of his brethren and sisters had difficulty in supply¬
ing themselves with the necessaries of life—(hear,
hear)—and he wished to substitute for the crushing,
grinding poverty, which has been the lot of so large a
portion of society, a reasonable abundance, earned by
honest labour. (Cheers.)
But Mr. Cobden was also a politician, and I need not
say he was a Liberal politician—(hear, hear)—^yet he
ANNUAL DINNER.
23
was not a man who could be supposed, in any way, to
look with a jealous eye upon any privileged order or
ancient institution. He took, and took faithfully, the
institutions of his country as he found them ; but he
wished to bind together the people of this land by
cementing them in a bond of friendship and affection,
and he felt that the performance of his great work—the
work of futurity—while it aimed at the creation of
wealth, was a work of eternal justice to all. (Cheers.)
He felt that the performance of that work would,on the
whole, contribute to harmonise all masses of this great
community, and it was for jfchis moral and social purpose,
which he never lost from his view, that the mission he
took upon himself in connection with the promotion of
industry, and the development of capital in the country,
derived its noble characteristics. (Cheers.)
I know not what is to be the immediate effect of
the ideas of Mr. Cobden; but of one thing I am
perfectly certain, and that is, that while we English¬
men, who have received from him, as it were, a special
commission and a special charge, while we endeavour
to be diligent in performing the duties of that com¬
mission, and in testifying to the soundness of the
principles which he recommended for governing the
intercourse of nations, I am quite certain we should
24
COB DEN CLUB.
commit a fundamental error if we were ever in such a
manner to recommend those principles, as to give the
slightest countenance to that error, for which I think
we are ourselves in a great degree responsible—that
error which prevails among many persons abroad,
and in many countries, namely, that free trade, as
it is called popularly, is a very good thing for
England, but a very bad thing for the rest of the world.
(Hear, hear.)
Now, I do not think we are very much better, or
very much wiser, than our neighbours—on the con¬
trary, I am ready to confess that in various impor¬
tant respects we are less wise, and instead of being
better, are inferior to our neighbours—(hear, hear)—
but every country has its own special work, and it
seems to be the wise design of Providence to employ
each country in solving, and working out practically,
certain social, moral, and political problems for the
advantage of other countries. (Hear, hear.) They
are, as it were, put through the fire in order to try
the effect of the process, and when they come out,
the experience they have had is placed on record for
the benefit of mankind. (Cheers.) None went more
deeply, more passionately, more obstinately into the
system of protection than ourselves ; none clung to
ANl/UAL DINNER.
25
it more fondly, and none suffered from it more
deeply. (Hear, hear.) No country has ever felt, and
no country, I believe, can ever feel, the mischiefs of
that system more than we have done, not only in its
immediate and economical aspect, but in the manner
in which for the last 25 years it disturbed—though its
disturbing operation has now happily in a great degree
gone by—the whole working of the Parliamentary
institutions of the country. (Hear, hear.)
What we hope is, that other nations of the world will
not be too proud to observe and profit by our experience,
and to appropriate to- themselves its results, without
paying for them the price which we have been content
to pay. (Hear, hear.) What I am propounding is no
fanciful, paradoxical doctrine. It is so in a thousand
other ways. Take, for example, railway communica¬
tion. There is, no doubt, th^t by England—I am not
speaking for America, but as far as Europe is con¬
cerned—there is no doubt that the whole of the great
problem of railway communication has been solved in
England for years, and the consequence is, that, while
we are compelled to admit that in developing that
system we have managed, somehow or other, to throw
¿£100,000,000 into the sea—or, being nearer to the
windows of the Houses of Parliament, to throw it
26
COB DEN CLUB.
into the river Thames, it has been open to
every other country to watch our proceedings, to
profit by our blunders, to avoid the obstacles and
dangers we had to encounter, and to secure
to themselves the same benefits that we have secured,
without paying the same price for them.
So I trust it may be in the subject of free-trade.
I think it is impossible for a man calmly regarding
that question not to see that, on the whole, it is a
sound and undeniable truth, whatever may be said
of peculiar and exceptional cases,—and even with
respect to those I should be most jealous—that by
free exchange,—by observing those qualities of soil,
climate, and condition which fit particular countries
for producing particular commodities, and by estab¬
lishing to the utmost degree, without the interven¬
tion of obstacles imposed by law, that faculty of ex¬
change among mankind—we do the most in our power
to fulfil what we must conceive to be the design of a
benevolent Providence, namely, that the gifts which
this earth pours forth in profuse abundance shall be
made available to the utmost for the comfort and happi¬
ness of His creatures. (Cheers.)
And that is not all. I spoke just now of the view with
which Mr. Cobden prosecuted his great mission at home
ANNUAL DINNER.
27
as the apostle of free-trade. When he assailed the
gigantic error—we might almost say the gigantic iniquity
of the Corn Laws, he looked not merely to the economical
results, but to the political and social harmony which
was to result from the working of a system of free-
trade ; and when the patriotic Briton cast his gaze beyond
the shores of his own country, and considered the
relations which bound together the nations of the
civilised world, he saw that by removing that canker
of injustice from the mind of the people he was, in the
prosecution of what was apparently a mere material
object, attaining a great moral end, not only for his
own country but for the world, by enlarging the inter¬
course of foreign countries. (Cheers.)
That intercourse, as he knew, was an exchange of bene¬
fits. It is not that one country extorts from another that
which another reluctantly yields as the dictate of an im¬
perious necessity ; but that each freely and intelligently
gives to each that which each can best afford, and for which
it receives in return far more than the value. (Hear,
hear.) In performing that process human beings are
brought into contact with one another; relations of
kindliness are formed ; units of each community, that
gradually swell into crowds, become acquainted with
corresponding units similarly swelling into crowds in
28
COB DEN CLUB.
other communities ; a friendly spirit grows and spreads
where formerly prejudice and hostility had prevailed ;
the tone of public opinion is by degrees modified—
softened—harmonised, and melody instead of discord
rises from all the countries of Europe. (Cheers.)
And even now, my lords and gentlemen, notwith¬
standing the dark and saddening circumstances of the
hour, which render it almost impossible—I speak for
myself—^to raise the mind to any kind of cheerful
anticipation—(hear, hear)—even now, amidst all this
discouragement and bitter disappointment, this weeping
and blushing for the 19th century—(loud cheers)^—in
which we Have lived, and for which we have lived,
and the history of which we have desired to
hand down without a stain—even now, I believe
that the great permanent principles associated with
the name which your club is proud to bear, have
a deeper and firmer foundation than any momentary
follies, or any heated passions of mankind—(cheers)—
that after this cloud has passed away, and this storm
has burst, and the atmosphere of the civilised world has
regained its equilibrium, the principles you seek to
promote will make their progress along with the pro¬
gress of knowledge and intelligence in every nation of
the civilised globe, and will from year to year, from
ANNUAL DINNER.
29
generation to generation, write deeper and deeper their
happy record upon the breasts of a grateful mankind.
(Loud cheers.)
The Lokd Chancellok : My lords and gentlemen,—
A difficult task has been imposed upon me in having to
propose a toast, and in attempting to make a speech,
after the address which you have just listened to. I
shall not attempt to follow in the track which has been
cut out by my right hon. friend, because I feel that no
effort of mine can keep up that state of feeling which
you have just experienced in listening to the address
which has been delivered. But the subject which I
have to present to your notice is one which I believe
will command your deepest sympathy. I have, my
lords and gentlemen, to propose to you " the health of
the foreign members of the club "—(loud cheers)—and
to couple with that toast the name of the Hon. Mr.
Bigelow, who has done a good deal to promote the
objects of the club in America. (Cheers.)
It may be regretted by all that the principles of Mr.
Cobden have not made as much progress in America
as could be desired, but I hope that before long those
principles will be more extensively appreciated and
prized in that country.
We have also present a distinguished gentleman
30
COB DEN CLUB.
from Belgium, M. de Lavelaye, who has done much
to promulgate the principles of Mr. Cobden on the
continent. (Cheers.)
For myself, I place great reliance on the principles
which Cobden advocated, and I am certain that as soon
as they become understood, they will be universally
prized and adopted.
Although I have not mixed much in politics, I have
paid a good deal of attention to all the great questions
that have agitated the public mind for no small number
of years. As far back as 1815, my attention was first
turned to corn-law questions. I read, about that period,
Adam Smith for the first time, and that was the original
cause of my taking up the principles to which I have
ever since adhered. (Cheers.) At that time there
existed slavery in our colonies, religious tests in our
own country, Roman Catholic Disabilities, the protec¬
tion laws, and an un reformed Parliament. Since then
all those impediments to progress have been swept
away, and now the principles of justice and right meet
with pretty general approval. I have no doubt the
great principles with which Mr. Cobden's name was
associated have done much to accomplish this happy
change. Those principles, so far as they relate to free
trade, I can recommend both to my friend on the right,
ANNUAL DINNER.
31
M. de Laveleye, and on the left, the Hon. Mr. Bigelow.
(Cheers.)
It is but too true that the peace of Europe
is disturbed, and that the carrying forward of Mr.
Cobden's desire, for the fraternisation of mankind is
for the present far from realisation. I will not
attempt to offer an opinion on one side or the other
as to the circumstances which have led to the war, but
I will venture to say—or rather I will venture to pro¬
phesy—that the country which shall triumph in the
contest will be certainly and assuredly the country
that is in the right. (A laugh.) I hope that success
\^ill attend that country which is most imbued with,
and desirous of acting upon, the principles which Mr.
Cobden held so dear at heart. I had the honour of
knowing Mr. Cobden, and I have a great attachment
for the principles which he promulgated. I believe
that the more those principles are kept before the eyes
of the world the better it will be for mankind, and the
greater will be the service rendered to Him who gave
us life and being. (Cheers.)
The Hon. Mr. Bigelow, on rising, was loudly cheered.
He said, Mr. Gladstone, my lords, and gentlemen—I
feel highly honoured in having my name associated
with the toast, and in being allowed to take ever so
32
COB DEN CLUB.
humble a part in commemorating the memory of Mr.
Cobden. I had the privilege of being able to call
him my friend. I enjoyed the acquaintance of the
lamented gentleman, not for a long period, it is true,
but whilst it lasted it was rather intimate. It was when
my country was steeped in the affairs of war. I then
became acquainted for the first time with the breadth
of sympathy, the soundness of understanding, and the
love of humankind which distinguished Richard Cobden
above all other men I have ever known. (Cheers.)
I feel proud and happy to see that it is quite un¬
necessary for anybody to interpret the enthusiasm of
the English nation for the memory of Mr. Cobden.
That enthusiasm is well represented this evening.
The noble and learned lord who has just sat down
has made some allusion to my country, and the little
progress which Mr. Cobden's principles have made in
America. Now, I have some apology to make on that
head. I am not in the habit of praising the legislation
of my country, or the wisdom of her government, and
am not going to do so now, but I am bound to say that
as I hold the opinions of Mr. Cobden greatly at heart, I
am sorry, indeed, that those principles have not taken
extensive root in my country up to the present time.
It must be remembered, however, that the United
ANNUAL DINNER.
33
States have passed through great troubles of late ; that
we have just emancipated many millions of our fellow-
citizens, that we have been under the necessity of exer¬
cising for a long time great forbearance and patience in
bringing about a recognition of the different portions of
the Union under one banner, and that it was not until
the present that our nation could look upon itself as
in a concentrated and somewhat satisfactory position,
politically and financially.
The policy and acts of the Legislature, at Wash¬
ington, during the past winter, show, I think, that
the days of protection are fast drawing to a close, and
there is good reason to believe that ere long the
principles of Cobden will penetrate the minds of the
great mass of the American people. (Cheers.)
In the present state of Europe there is a particular
reason why the principles of Cobden should be kept
before the public of all countries. I hope that England
win keep out of the contest that has just commenced ;
but if she is unhappily drawn into it, I think the
people of this country may place every reliance on
the distinguished statesman who is now at the head
of affairs. (Cheers.)
Sir L. Mallet : I rise to propose a toast which will,
I doubt not, be cordially received by this assembly—
c
34
COB DEN CLUB.
" The writers of the Essays on Land Tenure published
during the present year by the Cobden Club."
As a member of the committee to which was dele¬
gated the task of devising and preparing the volume, I
have a peculiar pleasure in thanking the writers of the
essays for the able manner in which they have dis¬
charged the task which they undertook, and for the
valuable service which they have rendered to the club
by these contributions.
It was felt by the committee, in view of the complex
and difficult problems surrounding the question of land
law reform, and of the wide divergence of opinion even
among their own body, that it was necessary for the
club, in issuing the volume, to maintain a strictly
neutral attitude, and not to attempt the advocacy of
particular measures.
It has, therefore, been no slight satisfaction to some
of us to find that, without any concert or communication
between them, writing under totally different condi¬
tions, and treating of totally different systems, these
eminent authorities all agree in presenting, as the one
thing needful, the removal of all restraint (whether by
entail, or settlement, by unregistered titles, and all the
cumbrous forms of conveyance, so dear to lawyers, and
so hateful to- economists,) upon the sale and purchase of
ANNUAL DINNER.
35
land. This is what Cobden meant by "free trade in
land."
There is one other feature in the volume to which
I may, perhaps, be allowed to refer. It must be
admitted that the English system of land tenure,
whatever may be its merits or defects, presents many
characteristics of an exceptional and local nature. It
was one of the chief objects of the club, in the publi¬
cation of their volume, to supply information drawn
from a wider experience than that of any one particular
country, and thus to impart to their work, that inter¬
national character, which ought to belong to everything
which emanates from a body bearing the name of the
" international mau."
I have much pleasure in coupling with this toast,
my lords and gentlemen, the name of M. Emile de
Laveleye, a gentleman whose claims to our regard you
will, I am sure, cordially recognise, not only on account
of his eminent services as an enlightened economist
and liberal politician, and as one to whose future
sympathy and co-operation we confidently look, in our
international work, but also as the representative here
to-night of a country which has been conspicuous for
its adhesion to the cause of free exchange.
Mr. Gladstone : I must add my testimony to the
36
COB DEN CLUB.
distinguished services which the writers of those essays
have rendered, one of the most able of whom sits on my
right, M. de Laveleye. (Cheers.)
M. de Laveleye returned thanks in French. He
said he attached very great importance to the principles
which Mr. Cobden taught. They were, to his mind,
principles which applied to all countries, and to all the
divisions of mankind alike. They were principles which
tended to the reduction of armaments, and the suppres¬
sion of all warlike tendencies, and were such as could
be applicable to all ages. They were principles which
were recognised equally in the commercial chambers of
England, of France, and of Belgium, and of all conti¬
nental nations. They led to the abolition of everything
that interfered with the freedom of commerce, and the
well-being of the human race. He hoped that the
immortal principles associated with the name of Mr.
Cobden would before many years overspread the whole*
earth. (Loud cheers.)
Mr. T. B. Potter, M.P., who was received with much
cheering, proposed the chairman's health in the following
terms : It is my pleasant task, on behalf of the com¬
mittee of the Cobden Club, to propose the health of the
right hon. gentleman who has this day presided over
our meeting.
ANNUAL DINNER.
37
I cannot forget that when the Cobden Club was
started in 1866, its origin rested with a right
hon. gentleman whose absence all of us regret. I
mean the President of the Board of Trade. (Loud and
prolonged cheering, Mr. Gladstone rising to his feet
and leading off the plaudits.) There is no one here
but will join me in regretting the illness which has
kept that distinguished orator and statesman from his
place in the House of Commons. (Cheers.) In 1866
the suggestion of such a club as this came from him,
and I remember that the first member in the House of
Commons whom I asked to join the club was our
chairman and our Premier. (Cheers.) His acquiescence
and his support encouraged me, and you will remember
that his interest was so great that he did us the
honour to preside over the first dinner.
I may tell you that long before I entered Parliament, I
heard Kichard Cobden say that Mr. Gladstone had always
been a progressive reformer, and that, as a public man,
he should not be judged by the point from which he
started. (Laughter.)
There is no doubt that Mr. Gladstone has led
the Liberal party to victories it would not other¬
wise have achieved. You have only to look at the
industry, the tact, and temper he has shown in the
38
COBDEN CLUB.
House of Commons, and at the measures he has carried
during the last two years to find proof of his capacity.
(Cheers.)
The House of Commons is grateful to him, and
so is the country ; and although we are now passing
through difficult times, and war threatens Europe with
devastation, we feel confidence that the right hon.
gentleman will steer our country through the dangers
that surround us, and enable us to maintain a strict
and honourable neutrality—(loud cheers)—and when
the turmoil of war is passed, he will lead us to further
victories under the banner of our club—" Free Trade,
Peace, Goodwill among Nations." (Loud cheers.)
Mr. Gladstone, in reply, said : I am deeply grateful
to you and to my friend Mr. Potter, for the hearty
manner in which this toast has been given. It would
be very wrong if I were to expatiate upon the feelings
which are aroused within me. A first offence is par¬
donable ; a second always entails a severer penalty. I
have offended once to-night. (No, no.) But the sub¬
ject of the Cobden Club and the great name that is
connected with it might form my excuse on the present
occasion. It is now totally unnecessary that I should
do more than assure you that during what may remain
to me of political life I shall continue to feel the same
ANNUAL DINNER.
39
unfailing anxiety both for the personal fame of Mr.
Cobden and the gratitude of the country to him for his
distinguished services, and even more for the preva¬
lence of the principles to which his life was devoted,
and which, had he been spared, would have been still
more efficaciously promoted. (Loud cheers.)
CoBDEN Club.
LIST OF MEMBERS,
CORRECTED TO JULY, 1870.
o
The Club now consists of 383 ordinary members, of whom 173 are
members of the Legislature. There are also 82 honorary members,
most of whom are foreigners of distinction.
Names in Italics are those of Honorary Members.
* Present at the Annual Dinner.
A.
1870 Adam, W. P., M.P.
1868 Adams, C. F., Ü. S. America.
1869 Adams, J. Quincy, U. 8. America.
1869 Agnew, J. Henry.
1869 *Agnew, William
1867 Airlie, Earl of, K.T.
1866 Allen, W. Shepherd, M.P.
1866 Amberley, Viscount.
1867 * Andrew, Charles.
42
COB DEN CLUB.
1870 Anning, James.
1870 Akroyd, Lieut.-Colonel Edward, M.P.
1867 Anstey, T. Chisholm.
1869 Anstruther, Sir Robert, Bart., M.P.
1866 Argyll, Duke of, K.T.
1867 Arles-Bufour, M., France.
1866 ^Armitage, Benjamin.
1868 Armitage, Sir Elkanah.
1867 *Armitstead, George, M.P.
1868 Ash ton, Philip James.
1868 ♦Ashton, B-obert.
1866 Ashton, Thomas.
1867 *Ashurst, Wm. Henry.
1866 Ash worth, G. L.
1869 Atkinson, Edward, Ü. S. America.
1868 Avison, Thomas.
1870 Ayrton, Right Hon. A. S., M.P.
B.
1869 Backhouse, Edmund, M.P.
1867 Barry, Right Hon. Charles R., Q.C.
1866 Bass, M. Arthur, M.P.
1866 Bass, M. T., M.P.
1867 *Bastard, Thomas Horlock.
LIST OF MEMBERS.
43
1869 *Batchelor, T. B.
1866 Baxter, Bichard.
1866 ^Baxter, W. E., M,P.
1866 Bazley, Sir Thomas, Bart., M.P.
1867 *Beal, James.
1866 *Beales, Edmond.
1867 *Beaumont, Henry F., M.P.
1869 *Beaumont, Somerset A., M.P.
1868 Beaumont, W. B., M.P.
1869 BeecheVy Rev. Henry Ward, U. S. America.
1870 * Benson, Bobert.
1869 Bentall, E. H., M.P.
1870 Besohrasoffy M. W.y Russia.
1866 *BigeloWy John y U. S. America.
1870 *Benzon, E. L.
1870 Bancrofly GeorgCy Ü. S. America.
1870 Blewitt, William.
1869 *Bolckow, H. W. F., M.P.
1867 Bowen, Charles.
1768 Brady, Dr. John, M.P.
1867 Brand, Bight Hon. H. B. W., M.P.
1869 Brand, Henry B., M.P.
1869 *Brassey, Henry A., M.P.
1866 Brassey, jun., Thomas, M.P.
1866 Bright, Jacob, M.P.
44
COB DEN CLUB.
1866 Bright J Bight Hon John, M.P.
1867 Bright, Sir Charles T.
1867 *Broadwater, Robert.
1866 *Brodrick, Hon. G. C.
1869 Brogden, Alexander, M.P.
1869 *Brown, Alexander Hargreaves, M.P.
1866 Bruce, Right Hon. H. Austin, M.P.
1869 Bryant, W. 0., U. 8. America.
1866 Buckley, Nathaniel.
1870 *Bullock, William Henry.
1870 Burchardt, Otto.
1866 Buxton, Charles, M.P.
1870 Bunsen, George, Prussia.
1870 Browning, Oscar.
1870 Brocklehurst, W. C., M.P.
c.
1870 *Carr, Jonathan T.
1866 *Caird, James, C.B.
1867 Caldicott, Rev. J. W-
1870 *Campbell, Henry, M.P.
1866 Candlish, John, M.P.
1868 *Carter, Samuel
1870 *Carter, R. M., M.P.
LIST OF MEMBERS.
45
1869 *Cartwright, W- C., M.P.
1866 Cavendish, Lord Frederick, M.P.
1869 *Chadwick, David, M.P.
1866 Cheetham, John.
1866 Cheetham, J. F.
1866 Chevalier, M. Michel, France.
1866 Childers, Eight Hon. Hugh C. E., M.P.
1867 Clement, W. J., M.P.
1866 Coleridge, Sir J. D., Q.C., M.P.
1866 Collier, Sir E P., Q.C., M.P.
1870 *Cobb, Ehodes.
1870 Gastelar, Emilio, Spain.
1870 *Coats, Sir Peter.
1870 *Clayden, P. W.
1867 Colman, J. J.
1867 Col vile, Charles Eobert.
1869 Coote, Thomas.
1869 Couvreur, M. Auguste, Belgium.
1866 Co wen, Joseph, M.P.
1869 *Cracroft, Bernard.
1867 *Crompton, Charles.
1867 *Crooke, John.
1866 Crossley, Sir Francis, Bart., M.P,
1870 Corsi, Signor Tommaso, Italy.
46
D.
1869 *Dasbwood, Capt. Fred. L.
1869 Davison, John Robert, Q.C., M.P.
1867 De Grey and Ripon, Earl, K.G.
1870 Deheselle, M. Victor, Belgium.
1869 Delitsch, M. Schultze, Prussia.
1870 De Molinari, M. 0., France.
1867 Dilke, Sir C. W., Bart., M.P.
1868 Dixon, George, M.P.
1869 *Dodds, Joseph, M.P.
1866 Dodson, J. G, M.P.
1867 Dolfus, M. Jean, France.
1870 *Dowse, Richard, M.P.
1870 Ducie, Earl.
1866 Duff, M. E. Grant, M.P.
1870 Dufferin, Lord.
1869 Diirckheim, Count, Austro-Hungarian Empire.
1870 *Dymes, D. D.
1870 Delahunty, James, M.P.
1870 *Draper, John.
1870 Day, Edward.
1870 *Dalhousie, Earl of, G.C.B., K.T.
1870 Dixon, James, Sweden.
LIST OF MEMBERS.
E.
1867 Eastwick, Captain W. J.
1868 *Edwards, Henry, M.P.
1868 Edwards, Charles.
1869 Emerson, R. W., Ü. S. America.
1866 *Evans, Francis Henry.
1866 *Evans, William.
1866 *Ewing, H. E. Crum, M.P.
1868 *Eykyn, Koger, M.P.
F.
1869 Faucher, Dr. Julius, Prussia.
1866 Fawcett, Professor Henry, M.P.
1867 Fenton, William.
1868 Field, Gyrus, U. S. America.
1869 Field, David D., U. S. America.
1869 Figuerola, Signar, Spain.
1866 Fildes, John.
1869 *Finnie, William, M.P.
1867 *Fisher, Kichard C.
1868 Flower, E. F.
1867 Forçade de la Roquette, M., France.
48
COB DEN CLUB.
1870 Fordyce, W. Dingwall, M.P.
1866 Forster, Charles, M.P.
1866 Forster, Eight Hon. W. E., M.P.
1866 Fortescue, Eight Hon. C. S., M.P.
1869 Fothergill, Eichard, M.P.
1866 *Fowler, Eohert.
1869 *Fowler, William, M.P.
1869 Freeman, Henry W.
1870 ^Fletcher, Isaac, M.P.
1870 Fenwick, E. M.
G.
1868 Oarihaldi, General, Italy.
1869 Garfield, General J. A., U. S. America.
1869 Garrison, W. Lloyd, U. S. America.
1869 Gibbs, Frederick, W., C.B.
1866 Gilpin, Charles, M.P.
1870 *Gillibrand, Philip.
1866 *Gladstone, Eight Hon. W. E., M.P.
1866 Gladstone, Eobertson.
1870 Glyn, Hon. G. Grenfell, M.P.
1866 Goldsmid, Sir Francis H., Bart., M.P.
1866 Goldsmid, Julian, M.P.
1866 Göschen, Eight Hon. G. J., M.P.
LIST OF MEMBERS.
49
1869 Gourley, E. T, M.P.
1868 *Gow, Daniel.
1866 Graham, William, M.P.
1870 Gaskell, Charles Milnes.
1867 Graham, John.
1867 *Graham, Peter.
1866 Granville, Earl, K.G.
1867 Gray, Sir John, M,P.
1869 Greville, Lord.
1870 Greg, Louis.
1870 Guest, Montague J., M.P.
1870 Greigy ÏÀeut.-Geneml, S. Prussia.
H.
1866 Hadfield, George, M.P.
1867 Hammond, J. Lempriere.
1866 Hardcastle, J. A,, M.P.
1866 Hardcastle, Henry.
1867 Harris, John Dove, M.P.
1869 Harcourt, W. Vernon, Q.G, MP,
1870 Hartington, Right Hon. Marquis of, M.P.'
1869 Harwood, Samuel.
1870 *Hatch, Rev. Edwin.
1867 *Hatchard, Rev. J. Alton.
D
50
COB DEN CLUB,
1870 *Hatherley, Lord.
1869 Haviland-Burke, E., M.P.
1867 *Heape, Robert Taylor.
1867 *Heape, Benjamin.
1866 Henderson, J., M.P.
1866 Hey wood, James.
1870 *Harris, William B<edford.
1870 Hargreaves, William.
1866 Hibbert, J. T., M.P.
1866 Hoare, Sir Henry, Bart., M.P.
1870 Hobart, Lord.
1866 *Hodgkinson, G., M.P.
1866 *Holden, Isaac.
1869 *Holms, John, M.P.
1870 *Hopwood, Charles Henry.
1869 *Hoskyns, Chandos Wren, M.P.
1866 *Houghton, Lord.
1869 *HoAvard, James, M.P.
1869 Hudson, Sir James, G.C.B.
1867 *Humphreys, A. C.
1870 :*Hunting, Richard.
1870 *Holden, Angus.
1870 *Hoyle, William.
1870 *Holland, Samuel, M.P.
LIST OF MEMBERS.
51
I.
1869 *Illiiigworth, Alfred, M.P.
J-
1866 Jackson, Henry Mather.
1866 Jackson, Sir William, Bart.
1866 Jeffery, J. R.
1868 Jenkins, Edward.
1869 Jessel, George, Q.C., M.P.
1869 Johnson, Reverdy, U. S. America.
1869 *Johnston, Andrew, M.P.
1870 * Johns, Captain J. W.
1870 James, Henry, Q.C., M.P.
1870 Jerrold, Blanchard.
K.
1868 *Kay-Shuttleworth, U. J., M.P.
1870 Kimberley, Earl.
1866 King, Hon. P. J. Locke, M.P.
1869 Kinsky, Count Engine, Austro-Hungarian
Empire.
52
COB DEN CLUB.
1866 Knatchbull-Hugessen, E. H., M.P.
1869 Kübech, Baron Max Von, Austro-Hungarimi
Empire.
1870 King, Charles Allen.
L.
1868 Labouchere, Henry.
1869 Lacaita, Sir James.
1869 *Lack, Henry Reader.
1867 *Lambert, John.
1870 Lamport, Charles.
1869 Lavergne, M. de, France.
1867 Lancaster, John, M.P.
1868 Lanyon, C. Mortimer.
1869 *Laveleye, M. Emile de, Belgium.
1866 *Lawson, Sir Wilfrid, Bart., M.P.
1867 Lawson, Right Hon. J. A.
1867 *Lean, Vincent Stuckey.
1869 *Leake, Robert.
1866 *Leatham, E. A., M.P.
1869 Leavitt, Joshua, D.D., U. S. America.
1866 *Leeman, George.
1869 Leese, J. E.
1866 Lefevre, Geo. Shaw, M.P.
LIST OF MEMBERS.
ft.
53
1870 Lehardy de Beaulieu, Professor Gh., Belgium.
1870 Lehardy de Beaulieu, Adolj^he, Belgium.
1867 Leslie, T. E. Cliffe.
1869 Levy, Edward.
\
1870 Lewis, J. Delaware, M.P.
1870 Lieber, Francis, U. S. Ame^nca.
1869 *Liebert, Beraliard.
1869 Lloyd, Sir Thomas Davies, Bart., M.P.
1869 Loch, George, M.P.
1870 Longfellow, II. W., U. S. America.
1870 Lubbock, Sir John, Bart., M.P.
1870 *Lehmann, F.
1870 Lycett, Sir Francis.
1870 Lesseps, Vicomte de, France.
M.
1870 *Marling, Samuel S., M.P.
1870 *Mather, William.
1870 *Marcoartu, Signer Arturo de.
1870 Maereu, M. Corr- Vander, Belgium.
1869 McArthur, Alexander,
1869 McArthur, William, M.P.
1868 Macaulay, C. Z.
1869 Macfie, Bobert Andrew, M.P.
54
COB DEN CLUB.
1869 Mackay y Baron, Holland.
1868 Mackie, Ivie.
1870 MsClean, J, Robinson, M.P.
1866 *McClelland, James.
1869 McClure, Thomas, M.P.
1869 *Macmillan, Alexander.
1866 Mallet, Sir Louis, O.B.
1867 *Marriott, Wm. Thackeray.
1867 *Marsden, Mark Eagles.
1866 Mason, Hugh.
1867 Melly, George, M.P.
1866 *Menzies, Graham.
1870 Meredith, George F.
1870 *Macintosh, Alexander.
1870 McCarthy, Justin.
1867 Merry, James, M.P.
1870 Mitchell, T., Russia.
1866 Mill, John Stuart.
1866 Milner-Gibson, Right Hon. T.
1867 Milton, Viscount, M.P.
1866 Moffatt, George.
1866 *Monk, C. J., M.P.
1868 Moore, George.
1869 *Moore, Joseph.
1868 Moran, Benjamin, Ü. 8. America.
LIST OF MEMBERS.
55
1870 *Morgan, G. Osbome, M.P.
1866 Morier, E,. B. D., C.B.
1866 Morley, Samuel, M.P,
1867 Murphy, Nicholas D., M.P.
1869 Mundella, A. J., M.P.
1869 Müntz, P. Henry, M.P.
1869 Muspratt, E. K.
1870 Moräo, F. F. de Figanière, Portugal.
1870 Minghetti, Signar Marco, Italy.
N.
1869 Napoleon, H.I.H. Prince Jerome, France.
1868 Nein, Robert.
1870 Northbrook, Lord.
1868 Novelli, A. H.
o,
1866 O'Donoghue, The, M.P.
1869 Ollivier, M. Emile, France.
1866 *0'Loghlen, Right Hon. Sir Colman, Bart., M.P.
1866 Onslow, Guildford, M.P.
1869 G'Reilly-Hease, Mathew, M.P.
1869 Osborn, Wm. H., U. 8. America.
56
COB DEN CLUB.
1868 OsborD, Captain S., RN., C.B.
1866 Otway, Arthur J., M.P.
1870 Overbeck, M. Augustus Von, Austria.
P.
1870 Paris, H.R.H. Comte de, France.
1867 Pagan, Jobn Thomson.
1866 Paulton, A. W.
1867 *Payne, F. T.
1867 Pease, Joseph W., M.P.
1869 Peel, Arthur W., M.P.
1866 *Pennington, F.
1866 Peto, Sir S. Morton, Bart.
1868 *Phillips, Charles.
1866 Philips, R. N., M.P.
1866 Pilkington, James.
1866 Piatt, John, M.P.
1869 *Playfair, Dr. Lyon, M.R
1869 Plimsoll, Samuel, M.P.
1869 *Pochin, Henry Davis.
1866 Pollard-Urquhart, W., M.P.
1866 Pope Samuel.
1870 *Paterson, John.
1870 *Pocock, William.
LIST OF MEMBERS.
57
1860 Potter, Edmund, M.P.
1868 Potter, Edmund Crompton.
1866 Potter, J. Gerald.
1866 *Potter, T. Bayley, M.P.
1866 Potter, Thomas Ashton.
1869 Price, William Edwin, M.P.
1866 Price, W. P., M.P.
1866 Probyn, J. W.
1870 Potter, John Henry.
R.
1870 Ranees y Villanueva, His Excellency, Spain.
1870 Rae, W. Eraser.
1867 Rathbone, Samuel Greg.
] 867 Rathbone, William, M.P.
1866 Rawson, Henry.
1869 Redpath, James, U. S. America.
1867 ^Reynolds, James.
1870 Reyntiens, M., Belgium.
1866 Rich, Anthony.
1869 *Richard, Henry, M.P.
1869 Richards, E. M,, M.P.
1869 Richter, 0., Norway.
1868 *Robertson, David, M.P.
58
COB DEN CLUB.
1867 *E.obinson, John.
1869 *Roden, W. S., M.P.
1866 *E,ogers, Professor J. E. T.
1870 Rollo, Lord.
1870 *Robarts, C. N.
1867 Rouher, M., France.
1867 Roundell, Charles Savile.
1866 Russell, Earl, K.Q.
1866 *Rutson, Albert.
1869 Rylands, Peter, M.P.
1867 Ryley, Thomas C.
1870 Ruggles, Samuel B., ü. S. America.
S.
1870 Seymour, Alfred, M.P.
1870 Schuster, Francis J.
1866 Salwey, Colonel Henry.
1869 Salomons, Sir David, Bart., M.P.
1868 *Samuda, J. D'Aguilar, M.P.
1870 Samuelson, Henry B., M.P.
1866 Sand with, Humphrey, C.B.
1869 Sapieha, Prince, Austro-Hungarian Empire.
1870 *Saxton, N.
LIST OF MEMBERS.
59
1869 *Schaeffer, Chevalier de, Austro'Hungarian
Empire.
1866 *Scrivens, William.
1868 *Seligmaii, Isaac.
1869 *Seely, Jan., Charles, M.P.
1867 *Shaen, William.
1869 *Sbarpe, Charles.
1869 Shaw, Richard, M.P.
1868 Sheriff, Alexander Clunes, M.P.
1867 Sidgwick, Rev. W. C.
1870 *St. Albans, Duke of.
1870 Sargeaunt, William E.
1870 *Sellar, A. C.
1870 Sands, Maulan, U: S. America.
1869 *Simon, Sergeant, Q.C., M.P.
1870 Simon, M. Jules, France.
1869 Smith, Herr Prince, Prussia.
1866 Smith, B. L.
1866 Smith, Professor Gold win.
1867 *Smith, Professor Henry J. Stephen.
1866 *Smith, Thomas Eustace, M.P.
1870 Spencer, His Excellency Earl, K.G.
1866 Stänsfeld, Right Hon. J., M.P.
1868 Steinthal, Rev. Samuel Alfred.
1868 Stern, Sigismund J.
6o
COB DEN CL ÜB.
1868 *Stepney, W. F. Co well.
1869 Stevenson, J. C., M.P.
1867 Sullivan, Right Hon. E.
1868 Sumner, Charles, U. S. America.
1866 *Sykes, Colonel, M.P.
1869 Szechenyi, Count Beta, Augtro^Hungarian
Empire.
1870 Strahan, Alexander.
1870 Seisal, His Excellency Vicomte de, Portugal.
T.
1870 Talahoí, M. Paulin, France.
1870 Tourqueneff, M. Niedas, France.
1866 *Taylor, Francis.
1866 *Taylor, P. A., M.P.
1866 Thomasson, Thomas.
1867 Thompson, George.
1866 Thompson, H. Yates.
1869 Thurlow, Hon. T. H.
1869 Tite, Sir William, M.P.
1866 Trelawney, Sir J. S., Bart., M.P.
1866 Trevelyan, G. G., M,P.
1867 Trimble, Robert.
1868 *Turner, J. Fox.
LIST OF MEMBERS.
6i
1868 *Turner, Wright.
1868 *Tweedale, John.
1870 Thomas, Christopher J.
V.
1866 Villiers, Right Hon. G. P., M.P.
1870 *Vickers, James.
1870 Valpy, Richard.
1870 *Vivian, William.
1870 *Vivian, Jun., William.
w.
1870 Walker, Amasa, U. S. America.
1869 Walker, George, U. S. America.
1866 Walters, Edward.
1867 Watts, Sir James.
1867 Watts, Samuel.
1870 Wells, David A., U. S. America.
1866 Westhead, J. P. Brown, M.P.
1869 Whi'pple, E. P., U. S. America.
1870 *Whitbread, Samuel, M.P.
1866 *White, J., M.P.
1867 *Whiteley, G. Crispe.
02
COB DEN CLUB.
1869 *Whitwell, John, M.P.
1866 *Whitworth, Benjamin.
1867 *Whitworth, Sir Joseph, Bart.
1870 Whitworth, Bohert.
1869 Whitworth, Thomas, M.P.
1870 Wilke, Hermann G., Consul-General, NoHh
Germany.
1870 *Watson, T. Clemens.
1870 White, Wm. Thompson.
1870 * Warren, Edward.
1869 *Willans, Thomas Benjamin.
1869 *Willans, W. H.
1867 *Willett, Henry.
1866 Williams, John.
1869 Williams, Watkin, M.P.
1869 Wilmott, Henry.
1866 Wilson, George.
1870 Woods, Henry, M.P.
1869 Wolowshi, M., France.
1868 Worthington, James.
1870 Willardin, Theodore, Sweden.
1870 *Wills, George.
LIST OF MEMBERS.
63
Y.
1866 *Young, Eichard.
1870 Young, Eight Hon. George, M.P.
Guests prescfit at the Dinner :
Baron Melvil de Lynden, Cyrus M. Fisher, United
States ; Signer Bosch, Captain Cosset, deputy
Sergeant-at-arms ; Mr. White, Mr. White, jun.
A. Iveland àfi Co., Printers, Manchester.
COBDEI
CLUB
t
«<<r<îXf>^
COMMERCIAL TREATIES:
FREE TRADE
and
INTERNATIONALISM.
Reprinted from the " Manchester Examiner and Times."
BY
A DISCIPLE OF RICHARD COBDEN.
"Licere cuivis genti quamvis alteram adire cumque eâ negotiari."—Gkotius.
" The ships that travel between this land and that are like the shuttle of the loom
that is weaving a web of concord between the nations."—Gladstone.
Honlron:
MACMILLAN AND CO.
iföancijestcr :
ALEXANDER IRELAND AND CO.
1870.
COMMERCIAL TREATIES.
I.
The reply given by the Chancellor of the Exchequer
to Colonel Akroyd and the deputation from the Cham¬
bers of Commerce in regard to commercial treaties involves
issues of such transcendent importance to the future com¬
mercial policy of the empire that I trust you will allow me
space enough to examine the general bearings of thé question,
and, at a moment when an unusual amount of confusion
exists in the public mind as to the raison d^Hre of commer¬
cial treaties, to inquire into the hrst principles which govern
the subject, and to which, however we may dislike the
process, appeal will sooner or later have to be made.
No man possessed of the brilliant and, as I believe, the
honest intellect which characterises Mr. Lowe, could, in so
short a speech as that recorded in Times of the 25th
ultimo, have stumbled over so many fallacies, unless his
reason were cramped by the trammels of a dogma. Now
the dogma to which the Chancellor of the Exchequer gave
official expression on the occasion referred to may be con¬
cisely defined to be " that commercial treaties, as such, are
incompatible \vith a policy of free trade."
B
H
COMMERCIAL TREATIES.
To a person only acquainted with the modern commercial
conventions of which the Anglo-French treaty of i860 was
the inauguration and has continued the type, it would, I
believe, be absolutely impossible to explain by what process
of reasoning this incompatibility has been established as a
so-called politico-economical maxim. To enable such a
person to understand the process it would be necessary to
furnish him with the anterior history of commercial treaties,
and to explain how an unscientific generalisation from a
particular kind of treaty had influenced the imagination of
political economists to a degree which caused them to mis¬
take the accidental attribute of one treaty for a general law
inherent in all treaties. It is the history of every dogma.
A relative truth is enthroned by the enthusiasm of those
who first recognise it into the position of an absolute
truth, and, when once there, the strongest minds accept the
situation unquestioningly. Moreover, the odium tkeologicum
is by no means restricted to theological dogmatism, it is a
vice in the blood of every dogmatic school, and in none
more conspicuous than in that of the political economists.
With his dying breath, M'Culloch vented his impotent
anathemas on the great work of Richard Cobden, and
amidst the mightiest triumphs of the French treaty the
muttered protests of the school of which Mr. Lowe has
now proclaimed himself the representative were audible to
those who had ears to hear.
The Chancellor of the Exchequer was the most brilliant
of the many brilliant luminaries who shone at Oxford at
COMMERCIAL TREATIES.
15
the time when Aldritch's logic was the gospel of that
University; he will allow me, therefore, to use the old
familiar formulas, and to demonstrate the fallacy of the
school he represents according to the strict rules of the art
in which he was formerly so great a proficient.
The error I am combating takes the form of the following
syllogism ; —
All treaties of commerce are incompatible with a policy
of free trade.
The treaty concluded in i860 with France, and the
t treaties proposed to be concluded with Spain and Portugal
are treaties of commerce.
Therefore these treaties are incompatible with a policy of
free trade.*
Against the formal correctness of this syllogism I have
nothing to say. I join issue with my opponents on the ma¬
terial correctness of the major premise : " All treaties of
* Nothing can be more general than Mr. Lowe's condemnation,
"He must frankly state that he is not in favour of treaties of commerce ;
he was not in favour of their negotiation . . the plan for negotiating
foreign treaties of commerce was mother of the heresy of reciprocity as
against free trade !" He refuses, it is true, " to enter into the question
of the French Treaty, the negotiation of which was under peculiar cir¬
cumstances," thus slurring over a difficulty he did not like to face—for
that treaty was either right or wrong : if right, we should continue the
policy, if wrong, Mr. Lowe should use his influence in the Government
to denounce the treaty when the lease falls in. He will hardly venture
to do that. His hostility, however, to the treaty at the time it was
concluded is matter of history.
i6
COMMERCIAL TREATIES.
commerce are incompatible with free trade," and I deny in
toto the accuracy of the proposition.
For the mere purposes of argument it would be sufficient
for me to establish this negation, and to reduce the state¬
ment to that which is a correct description of the facts, viz.,
" Some treaties of commerce are hostile to a policy of free
trade."
As, with this major premise and the minor premise, "The
treaty with France and the proposed treaties with Spain and
Portugal are treaties of commerce," it would clearly be a
logical fallacy to deduce the conclusion, " Therefore
these treaties are hostile to a policy of free trade," I could
throw upon my adversaries the onus of proving that the
treaty with France and the proposed treaties with Spain and
Portugal belonged to the particular class of treaty incom¬
patible with free trade. I will, however, do more, and not
only prove that the general proposition on which the argu¬
ment is based is erroneous, but also that, though there are
treaties of commerce incompatible with free trade, there are
others not only not incompatible with free trade, but of the
essence of free trade and its only true and definite expression.
It is not difficult to prove that the general terms in which
treaties of commerce, as such, are denounced are wholly
unscientific, and contain in themselves their own reductio ad
absurdum. A treaty is an international agreement to do, or
to abstain from doing, something. An instrument of this
kind having reference to commerce is a treaty of commerce,
and there are innumerable agreements connected with
COMMERCIAL TREATIES.
commerce existing in fact, and conceivable in theory, which
by no ingenuity could be described as in any way trenching
upon the province of free trade. That which is meant
therefore when the wholesale anathema is pronounced, is
not a treaty of commerce as such, but a treaty of commerce
having reference to the duties under which the contracting
parties agree that the merchandise of their respective sub¬
jects shall find its way into their respective countries ; in a
word, it is tariff treaties that are intended, and the proposi¬
tion can therefore be narrowed down to the following:
" All tariff treaties are incompatible with a policy of free
trade."
Now, if we review the tariff treaties which, from the com¬
mencement of the last century until now, have been con¬
cluded by ourselves and other European States, we shall at
once perceive that, amidst every variety of detail and the
greatest differences on subordinate points, they can be col¬
lected into two antagonistic groups, differing from each
other as light does from darkness, the raison d^être and the
principle of the one group being protection and monopoly,
the raison d'etre and the principle of the other being free
trade and the strangulation of monopoly.
The one class has for its object to bind the contracting
parties by means of international engagements not to lower
their tariffs., the other employs the same machinery to bind
the contracting parties not to raise their tariffs. The one
compels the parties to maintain restrictions on trade, even
if altered circumstances should make it advantageous to
i8
COMMERCIAL TREATIES.
remove them, the other compels them pro tanto to remove
restrictions from trade, and precludes them during the
period for which the treaty runs from re-imposing those
restrictions, even if a momentary hallucination should make
the one or the other of the contracting parties long for the
flesh-pots of protection.*
The well-known Methuen treaty concluded with Portugal
in 1703 maybe taken as the type of the one class, the Anglo-
French treaty of i860 may be taken as the type of the other
class. By the former England engaged herself, for all time
to come, not to lower her duties on French wines to the
level of her duties on Portuguese wines. By the latter, both
parties engaged for the period during which the treaty was
to run, not to raise their duties against each other above the
level fixed by the tariffs appended to the treaty, France
knowing at the time she concluded the treaty that England,
having given up differential duties, would at once admit all
the world to the same rates of duties as those agreed to with
her, England knowing that it was the intention of France to
grant her conventional tariff to all states willing to negotiate
treaties with her on the basis of the Anglo-French treaty.
* That this most important function of commercial treaties, in a
free trade sense, should be so absolutely ignored as it is in England,
with the recent experience of what has taken place in France before our
eyes, is one of the many proofs to what mere lip service the Cobdenic
gospel has dwindled down. Where, I should like to know, in the poli¬
tical hurricane which has lately swept over France, would Monsieur
Chevalier and the French free traders be, if they had not had the sheet
anchor of a great international compact to rely upon ?
COMMERCIAL TREATIES.
19
By this great international compact, therefore, for the first
time in the history of commercial treaties, the object sup¬
posed to be of the vital essence of a commercial treaty,
viz., the securing of exclusive advantages, was solemnly dis¬
carded, an international sentence of death was pronounced
against monopoly, and free trade celebrated one of its
greatest triumphs. That with these facts staring them in
the face a large number of intelligent Englishmen should
persist in talking of that treaty as a departure from the
principles of free trade is a signal proof of the iron rod with
which doctrinaires rule public opinion.
How completely Mr. Lowe has failed to realise this con¬
genital difference between the two kinds of international
engagement we are discussing, to what extent his mind is
still under the influence of the old form of commercial treaty,
how wholly unable he is to divest himself of the idea that a
treaty of commerce as such is an engagement not to lower
one's tariff, is apparent from his extraordinary statement to
the effect that he thought it " extremely undesirable that a
Chancellor of the Exchequer should be precluded from
removing duties when they ought to be taken off." To any¬
body the least conversant with the history of tariff treaties
for the last ten years it must be evident that to talk at the
present day of a treaty by which the contracting parties
should bind themselves not to remove duties would be much
the same thing as to ventilate the idea .of a treaty for the
extradition of runaway slaves or the surrender of heretics.
The Alpha and Omega of the modern treaty of com-
20
COMMERCIAL TREATIES.
merce is the setting up of an international barrier against
the raising of Custom duties, and, by the action of the
most favoured nation clause, the securing that every tariff
reduction made by one state shall be shared by the great
commercial confederacy, bound together by the network of
treaties which owe their origin to the Anglo-French Treaty
of i860, and to that great heresiarch Richard Cobden. By
means of this network, of which few Englishmen seem to
be aware, while fewer still know to whom they owe it, all
the great trading and industrial communities of Europe, i. <?.,
England, France, Holland, Belgium, the Zollverein, Austria,
and Italy, constitute a compact international body, from
which the principle of monopoly and exclusive privilege
has once for all been eliminated, and not one member of
which can take off a single duty without all the other
members at once partaking in the increased trading facilities
thereby created. By the self-registering action of the most
favoured nation clause, common to this network of treaties,
the tariff level of the whole body is being continually
lowered, and the road being paved towards the final em¬
bodiment of the free-trade principle in the international
engagement to abolish all duties other than those levied
for jevenue purposes.
That such an engagement will, doubtless, be a restriction
of that individual liberty of action which to the Chancellor
of the Exchequer jappears as the summum honum of inter¬
national intercourse is undoubtedly true. But that this
restriction is a restriction made in favour of individual
COMMERCIAL TREATIES.
21
liberty, is what his school persistently shut their eyes to.
We need not go back to Saint Paul to prove that law and
liberty are correlative terms. To secure individual liberty
we keep up a police force, whose business it is to prevent
one set of citizens from interfering with the individual liberty
of another set of citizens by murdering or robbing them.
To argue that this is an undue interference with the individual
liberty of murderers and burglars, and to protest against a
police force on that ground, is to plead in favour of anarchy
and pro tanto against liberty.
Now, what municipal law is to the individual citizen, in¬
ternational engagements are to the international unit. The
modem commercial treaty, therefore, to the extent to which
it keeps down protection, is a law preventing one set of
human beings from robbing another set of human beings,
and an international compact against Customs duties other
than of a fiscal kind, should it ever be realised, will be a
general law against international robbery.
To the policy which I have thus imperfectly attempted to
describe, a policy inaugurated by us and stamped with the
name of Cobden, but which our leading statesmen are now
openly repudiating, we have it in our power to give an
almost incalculable impulse by the negotiation of twin trea¬
ties with Spain and Portugal. By sacrificing out of our four
millions of surplus some two or three hundred thousand
pounds of wine duties, we could at once reduce the tariffs
of those two countries to a level which would open up the
markets of the Peninsula to our manufactures. But this
22
COMMERCIAL TREATIES.
would be but a small part of the victory gained in the cause
of free trade. The conventional tariff agreed to with us
would form the basis on which each of the two countries
would negotiate treaties with the other states within the
network ; it is next to certain that from each they would in
return get some remissions of duty below the present level
—each such concession as shown above would not only be
shared in by us, but by all those states, and thus by the
time Spain and Portugal had completed their cycle of trea¬
ties, the area of what may be fairly termed the " Anti-
Monopoly International Alliance" would not only have
been increased by two states of first magnitude, but the
tariff level of the entire body would have been materially
lowered.
The favourite argument of M'Culloch and his disciples,
that because it is in the interest of a country to lower its tariff
irrespectively of other countries lowering theirs, it is immoral
to add supplementary inducements—in other words, that it
is immoral to bribe people to do that which it is in their
own interests to do, is so supremely silly as not to deserve
serious refutation. We might as well say that a child who
refuses to take medicine unless the taste has been first dis¬
guised, should be allowed to die rather than that the sugar
should be put in, because it is for its advantage to take the
medicine whether sweetened or not. I want the child free
trade to live, and I maintain that it ought to be the national
policy of Great Britain to use every legitimate means to save
so valuable a life. Manchester, and Manchester only, can
COMMERCIAL TREATIES.
23
force a policy of this kind on the Government The re¬
organisation of the Manchester school, on the larger and
more philosophical basis of international co-operation, is an
imperative necessity. The Chancellor of the Exchequer, as
I began by observing, possesses, in my opinion, an honest
intellect ; but a man at his time of life, especially a Cabinet
Minister, does not reconsider his opinions unless forced to
do so. Moreover, in all he says and does there is a flavour
of infallibility which points to the necessity of using con¬
siderable pressure from without. I can only hope that his
utterances on the 25th of February were not made ex
cathedra^ and that an appeal may therefore be attempted
with success, a Papa male informato ad Papam melius
informandum."—I am, sir, your obedient servant,
A Disciple of Richard Cobden.
24
COMMERCIAL TREATIES.
IL
" Give a good dog a bad name, and you may as well hang
him," is a saying the correctness of which is very generally
admitted. I am inclined to believe that the converse of the
proposition is equally true, " Give a good name to a bad
dog, and for any further use that you may hope to derive
from the name you may as well erase it from your vocabu¬
lary."
This is pre-eminently the case with the word "reciprocity."
A more innocent word I think it would be difficult to find.
Though, strictly speaking, neutral, so that it can be applied
as well to the returning of evil for evil as of good for good,
yet I must confess that, until lately, I had associated some¬
thing of kindliness and geniality with it. Somehow it
seemed to me rather the companion of such rules as " Do
unto others as you would they should do unto you," than
of maxims like " Treat a friend as if he may some day be an
enemy," and the like. We awake one fine morning and all
this is changed. " Reciprocity" has become a by-word
among the nations. It is the name of a heresy for the
professors of which "San benitos" and " auto da fes" must
COMMERCIAL TREATIES.
^5
be prepared. The bad dog, Protection, has re-christened
himself with it, and the hue and cry of free traders and
pseudo free traders are pursuing him through the streets
and lanes of the town. " Hurrah for Free Trade ; down
with Reciprocity"—"Hurrah for Reciprocity; down with
Free Trade," are the delightfully logical cries which assail
our ears. Now, this may be all right and proper as a
question of party warfare, and is, I have no doubt, in addi¬
tion very amusing to the political gallery ; but to the serious
political economist, who knows the imperative necessity, in
every scientific inquiry, of a hypercorrect use of language,
and who has been taught by experience how endless are the
fallacies which crop up from the slightest phraseological
carelessness, it is profoundly irritating.
The Chancellor of the Exchequer told the deputation
from the Chambers of Commerce " that the plan for nego¬
tiating commercial treaties was mother of the heresy of
Reciprocity versus Free Trade."
Let us examine the exact value and meaning of these
words. The most obvious fact in connection with them is
that they assert the existence of a direct opposition between
the idea involved in reciprocity and the idea involved in
free trade. Nothing in which the idea of reciprocity enters
is compatible with free trade ; nothing in which the idea of
free trade enters is compatible with reciprocity. Now, what
are the ideas expressed by the two terms, " free trade " and
"reciprocity," between which this opposition is supposed
to lie ?
26
COMMERCIAL TREATIES.
Trade presupposes the existence of two or more parties
between whom an exchange of merchandise takes place.
Free trade, or rather free exchange, which is the much more
correct term used by our French neighbours, implies that
this exchange shall take place freely, without let or hin¬
drance. The particular kinds of let and hindrance asso¬
ciated with the idea of free trade, or its reverse, are Customs
duties of a prohibitive or protective kind. It is clear that
until all these lets and hindrances are removed, it is an incor¬
rect use of language to talk of free trade. If one of two
countries, between which exchanges take place, lowers its
Customs duties and the other does not, or if one removes
them altogether and the other only lowers them, there is a
diminution of the lets and hindrances, and " pro tanto," a
step taken in the direction of free trade ; but freedom of
trade itself has as yet no existence. A slave has chains on
both his hands and both his feet. You remove them from
one hand and one foot, and he has a freer use of his limbs
than he had before, but he is as much a slave as formerly ;
his freedom has as yet no existence.
Free trade between two countries, therefore, means the re¬
moval of prohibitive and protective duties by both countries.
Reciprocity as a statement of fact implies the existence
of two parties, each of which treats the other as that other
treats it. As an enunciation of principle it may either
mean the putting forth of the claim that others should do
unto me as I do unto them, or, the reservation of the right
to do unto them as they do unto me.
COMMERCIAL TREATIES.
27
We have seen that free trade cannot be predicated of the
commercial intercourse between two countries until all
restrictions in the way of Customs duties other than fiscal
have been removed.
In the case therefore of two countries, A and B, one of
which, A, has taken off all its Customs duties other than
fiscal, and the other, B, has only lowered its Customs duties,
free trade cannot be predicated. As regards these countries,
free trade will only come into existence when B has done,
the same thing as A—/.<?., has removed all its Customs
duties other than fiscal ; /.<?., when B treats A as A treats B;
when perfect reciprocity has been established between
them.
Here, therefore, instead of finding the idea of reciprocity
arrayed in opposition to the idea of free trade, we find the
two to be inseparable companions, and the one inconceivable
without the other. Instead of a heresy, it is an article of the
Catholic faith to which our analysis has conducted us.
Let us now examine the word reciprocity as descriptive
of the principle authorising us to claim as a right that others
shall treat us as we treat them.
The question may be thus put : Having thrown open our
ports to the world, is it a heresy to free-trade principles to
claim as a right that the world shall throw open its ports to
us 1
After what has been already said, to state the question is
to answer it. For when once it is admitted that the establish¬
ment of free trade between two or more countries implies
28
COMMERCIAL TREATIES.
the removal of restrictions by all the parties concerned, it is
clear that if one of these parties, having by an autonomous
act removed all prohibitive and protective duties along its
own line of frontier, claims reciprocity as a right, it is in
reality claiming free trade as a right, and that it cannot
therefore be guilty of a heresy against free trade.
Whether such a claim can be defended on other grounds,
and can be brought into harmony with received rules of
international intercourse, is a distinct question which I do
not propose to examine, though I may incidentally express
my conviction that it is implied in that great natural law
which Grotius has laid down as ruling international relations,
viz : that it is the indefeasible right of every nation to draw
nigh to, and traffic with every other nation :—"Licere cuivis
genti quam vis alteram adire cumque eâ negotiari."
There only remains to examine reciprocity as descriptive
of the principle in virtue of which we may claim the right to
treat others as they treat us.
It is clear that it is under this aspect of the question, and
this only, that the cloven foot of protection can be detected.
But even here there are two broad distinctions to be made.
A man might combine with perfect fidelity to free trade
principles the belief that, by a system of tariff reprisals, the
great object of a general removal of restrictions might be
effected. Supposing, for instance, that we had the absolute
certainty that by hermetically closing our ports for six weeks
every protectionist tariff in Europe and America would be
swept away, it would clearly be the duty of every orthodox
COMMERCIAL TREATIES.
29
free trader to urge such a measure. It is not, therefore,
from the points of view of orthodoxy or heterodoxy that the
unwisdom of tariff reprisals must be condemned, but on the
ground of their utter worthlessness for the object proposed.
In our search for the disguised protectionist, therefore, we
are reduced to the application of tlve principle of reciprocity
in its most purely negative form as equivalent to the axiom
that no tariff reduction should be made, except in return for
a corresponding tariff reduction.
That this view is held theoretically by many protectionists,
and that some few fossil remains of the old school, like Mr.
Newdegate, are ready to push the doctrine to its legitimate
consequences, and to urge that we should re-impose our pro¬
tective tariff, and wait till other nations come and offer us
equivalents, is very probably true, but this is no reason for
putting a strained and unnatural meaning on the Queen's
English, and talking of reciprocity generally as if it could
be used only in this specific and exceptional sense.
Had Mr. Lowe been addressing a deputation, headed by
Mr. Newdegate, I should have had no objection to his say¬
ing, " Under the specious name of reciprocity you are really
advocating a return to protective duties," but to tell a depu¬
tation from the Chambers of Commerce, headed by Colonel
Akroyd, and, therefore, a free trade body, " In asking for a
commercial treaty you are asking for reciprocity, and in
asking for reciprocity you are asking for protection," was to
use transparently incorrect language, and, in doing so, to
betray a misconception of the true nature of free trade,
c
30
COMMERCIAL TREATIES.
When the cry for reciprocity was raised last autumn in
England, i.e., in a country in which protection is dead and
buried, the natural interpretation to put upon it was that it
rose from men smarting under a sense of injustice, and who
claimed as a right that others should treat them as they
treated others.
That the working classes should awake to the sense that
foreign tariffs are an injury inflicted upon them, and that
every British export prevented by a foreign tariff, represents
a corresponding import withheld from the British consumer,
and should be loud in their demand that these tariffs should
be swept away from the face of the earth, I, as a free trader,
hail as the best of omens. Could we hope that such a feeling
were likely to manifest itself generally amongst the working
classes in Europe and America, the triumph of free trade
would not be far distant.
But for the dogmatic error in regard to commercial
treaties and the laws of exchange entertained by the school
of economists of whom Mr. Lowe has made himself the
mouthpiece, it would, I believe, have been easy for the
free traders to utilise this force and employ it as a lever to
carry out their principles, instead of letting protectionists
obtain a vested interest in it and use it for their purposes.
I can only hope that Colonel Akroyd and the Chambers of
Commerce will make up for lost time.—I am, sir, your
obedient servant,
A Disciple of Richard Cobden.
COMMERCIAL TREATIES.
31
III.
Since writing the letter which you were so good as
to publish in your impression of the 9th ultimo, my atten¬
tion has been called to a speech delivered by Mr. Lowe, on
the 17th of March, 1865, which contains a much more ex¬
plicit account of the anti-commercial treaty doctrine than
that which, as Chancellor of the Exchequer, he vouchsafed
to impart to Colonel Akroyd and the deputation from the
Chambers of Commerce. It is worth while to examine this
account in the light of that economical science of which
Mr. Lowe claims to be the infallible high priest.
The occasion of the speech was a proposed reform of the
Board of Trade. I will quote from it the following pas¬
sages bearing upon the question under discussion.
After giving an historical account of the origin of the
consultative department in the Board of Trade, and refer¬
ring to the time when commerce was supposed to be a mys¬
terious art, requiring the constant interference of Govern¬
ment, Mr. Lowe goes on to say : " I had laboured under
the impression that the time had come when we had dis¬
covered that there are no mysteries to communicate on this
subject, when the whole question has resolved itself into a
single maxim, and when the entire business which the
Government have with the trade of the country might be
32
COMMERCIAL TREATIES.
described by the pithy axiom of Lord Melbourne—* why
can't you let it alone f " In other words, Mr. Lowe urges
the " laissez faire " doctrine, according to which it must
be assumed either that foreign duties are not injurious to
trade, or that trade will be able to get rid of them with¬
out the intervention of Governments " That
being the view I am disposed to take of the subject,
I should have been better pleased if the committee had
recommended that this consultative department should be
swept away and abolished altogether. .... If I were
inclined to concede that there is anything in the wants and
necessities of the public service corresponding to the duties
of the Board of Trade, I can imagine nothing worse than
the principle of having a consultative department. For
one department to advise and another to act is to fritter
away responsibility altogether." Here, I am glad to say, I
am altogether agreed with the right hon. gentleman.
Nothing can be more anomalous than the position of the
commercial department of the Board of Trade. Instead of
a consultative department in an independent office, we
require a responsible department in the office to which all
the other international relations of the country are confided.
Mr. Lowe is of opinion that the Government should have no
commercial policy, and would simply destroy the depart¬
ment which has hitherto been the depository of the free-trade
traditions of the nation. I maintain, on the other hand, that
the Government should have a very distinct and positive
free-trade policy, and that the consultative department of
COMMERCIAL TREATIES.
33
the Board of Trade should be henceforth incorporated as
an integral portion of the Foreign Office, and be made the
responsible instrument for carrying out that policy.
" But then it will be urged, I dare say, that we ought to
have a Board of Trade in order to help us to m^ke commer¬
cial treaties. Now, sir, I have been a free trader all my
life, and I hope, therefore, the House will bear with me
when I confess to a sort of scepticism with regard to this
new-fangled plan of carrying into effect free-trade principles.
I am not going back now to the old system of proposing,
for instance, to give Portugal a monopoly for her wines if
she would give us a monopoly for our flannels—that is not
what I now speak of ; but it is the stipulation with a foreign
country that it shall take off certain duties upon our exports,
and that, mind, not with a view to its own revenues, but to
our trade. If this really is our policy, we have taken it up
too late. We should have kept on our duties till we got an
equivalent for taking them off." Mr. Lowe seems to forget
that we still levy the trifling sum of some ,^20,000,000 per
annum in the shape of revenue duties, which for the purpose
of equivalents, if such are wanted, are quite as good as pro¬
tective duties. "... Then hitherto we have been an
example to other nations — the missionaries of a sound
political economy, and, no doubt, from our great prosperity
we have been most powerful missionaries in that behalf.
But are we so now ? Are these commercial treaties which
we are negotiating teaching the nations around us true
principles of political economy 1" It is apparently of greater
34
COMMERCIAL TREATIES.
importance in Mr. Lowe's eyes that the Cabinets of Europe
should possess a theoretical knowledge of Adam Smith than
that they should practically addict themselves to the pursuit
of free trade. As I showed in my first letter, every modem
treaty of commerce involves pro tanto a step taken in the
direction of free trade and away from monopoly by all
the great commercial communities of Europe. Now
every such step actually taken appears to me worth a
great deal in the way of theoretical teaching ....
"What is the true language of political economy on the
subject of imports and exports % Political economy says,
' Lower your duties, in order that you may get the produc¬
tions of other nations as cheaply as possible '—that is, for
the sake of the consumer ; and it is sound doctrine. But
what do we virtually say when we negotiate a commercial
treaty 1 We say, ' The end of commerce is not what poli¬
tical economy would teach you—the obtaining of imports,
but the sending out of exports. The summum bonum is to
send out as much as possible.' We say to foreign countries,
' Allow us to export to you, and we will allow you to export
to us, not because it is a good thing for us to receive your
exports, but because it is a profitable thing to send you ours.'
Thus we excite them to look to the means instead of to the
end, and we teach them to believe that the wealth of nations
consists, not in what we get, but in what we send away.
Thus we are leading foreign nations to believe that our
advantage and their advantage are very different things,
instead of being one and identical ; we are teaching them to
COMMERCIAL TREATIES.
35
regard our exports as an injury to them and theirs, as an
injury to us," &c.
In the passages above quoted, Mr. Lowe uses, for the
purpose of rhetorical effect, the well-known device of put-
ting into the mouth of his imaginary opponent language
which no free trade advocate of commercial treaties, and no
British negotiators of such treaties, ever used, and then pro¬
ceeds to the easy task of demolishing these self-generated
arguments. It would have been well for his reputation as a
political economist if he had done no more than this ; but,
by placing into marked juxta position, what political eco¬
nomy is supposed to say, and what the advocates of an
unsound doctrine are presumed to affirm, he has allowed his
zeal against commercial treaties to betray him into a posi¬
tion which, economically speaking, is radically false.
This position I will proceed to examine, but before
doing so I must enter a protest against a piece of what I can
call by no other name than unscientific claptrap, common to
the school represented by Mr. Lowe, and which he himself
has not succeeded in keeping quite clear of in the above.
I mean the different tone in which the consumer and the
producer are spoken of, as if the former stood upon a sort
of moral pedestal high above the latter. When treating of
imports, these people treat of them abstractedly as an
economical force, as they ought to be treated ; and in the
only way in which in a scientific inquiry they can be treated ;
but when treating of exports they conjure up before us the
concrete mercantile exporting firm bent on making a profit, as
36
COMMERCIAL TREATIES.
if this profit were something selfishly extorted from the foreign
producer, and with which the consumer had nothing to do.
Now, it seems almost impossible for language of this descrip¬
tion to be used unless the idea of a money profit were
present to the mind of the person using it. This is, of
course, a return to the fallacy of the " mercantile system,"
and it seems impossible to acquit Mr. Lowe of having un¬
consciously relapsed into this fallacy in regard to exports,
after having thrown it overboard in treating of imports.*
To work oneself up into a state of philanthropic ecstacy in
regard to the consumer, and to speak sneeringly and dis¬
paragingly of the producer and his profits, might perhaps
have been excusable eighty years ago, at the period of the
first recoil from the fallacies of the " mercantile system,"
but it is altogether inexcusable in the present state of
economical knowledge.
* According to Mr. Lowe, it is a fallacy to talk of a maximum of
exports as the " summum bonum, " and to export profitably is appa¬
rently something different from, and opposed to, the good derived from
receiving the foreigners' exports. But political economy teaches—first,
that a maximum of exports is only another name for a maximum of im¬
ports, and that it is, therefore, quite as correct to talk of the one as
' ' summum bonum " as of the other ; second, that a " profitable
export " is only another name for a plus of imports—i. e., of " foreigners'
exports " Any language which differs from this must imply that the
exporters' profit is something different from this plus of imports, which
something can only be money. Now, of course, I do not mean to
imply that Mr. Lowe is a victim to these fallacies ; I only mean to point
out how, by attempting to defend an indefensible position, he has been
betrayed into language diametrically opposed to his own principles.
COMMERCIAL TREATIES.
37
To return to the position taken up by Mr. Lowe in his
speech of 1865. What he says really amounts to this :
Home duties concern the consumer, whose interest it is the
duty of the state to look after. In removing them every¬
thing which the consumer has a right to demand has been
granted. Foreign duties concern the producer, who can
take care of himself, and whose interests the state need not
look after.*
According to this theory the consumer or importer is, in
the first place, divorced from the producer or exporter, and
the two classes are opposed to each other as if production
* According to Mr, Lowe, political economy says : " Remove
duties in order that you may get the productions of other countries as
cheaply as possible," i.e., the maximum of cheapness wiU be obtained
by the one-sided removal of duties on the part of the importing country,
or in other words the maximum of imports will be attained irrespectively
of whether the importing country is prevented or not by the prohibitive
or protectionist tariffs of the countries it trades with, from exporting
the equivalents necessary to pay for the imports. This would be,
indeed, a charming prospect, for by this means we should get our
imports for nothing. Unfortunately, political economy tells a very
different story. It says : do what you will your exports and your imports
must balance each other. It is a law, as inexorable as that of the ebb
and flow of the tide, that you cannot import one grain of mustard seed
without exporting a value equivalent to that grain. Everything which
limits your exporting power limits your importing power. Every
foreign duty, therefore, withholds something from the home consumer.
Mr. Lowe and his school are so exclusively bent on demonstrating the
one side of the truth, viz., " that exports are limited by imports," that
they seem to have altogether forgotten the other side, viz., "that
imports are limited by exports."
38
COMMERCIAL TREATIES.
and consumption, exports and imports, instead of being
indissolubly associated as cause and effect, could be con¬
ceived independently of each other as self-existing entitles ;
and, in the second place, home duties and foreign duties
are treated as if they were essentially different in kind, and
their incidence affected commerce in radically different ways.
But what does political economy teach us 1
It teaches us that although, as regards individuals, a dis¬
tinction can be drawn between consumers and producers,
this distinction cannot be drawn internationally, which is the
only sense with which political economy is concerned with
consumers and producers, when trade is the subject under
discussion. Every community is as such both producer and
consumer, it produces in order that it may consume, and, in
trading with other communities, it exchanges articles which
it has produced in order to put itself in possession of articles
which it may consume. Production is the means, consump¬
tion is the end ; exports are what we buy with, imports are
what we buy ; the one idea is the correlative of the other—
i.e., neither is conceivable otherwise than in its relation to
the other. Now, consumption being the end, the consumer's
interest is very properly that with which political economy
occupies itself, and which the state—i.e., the organ through
which the producing and consuming community acts—has
to look after ; but how can it possibly provide for this end
otherwise than by looking to the only means by which this
end can be compassed? No import being possible without
a corresponding export, how can the question of exports be
COMMERCIAL TREATIES.
39
Otherwise than one of primary and vital importance to the
consumer ? The exporter's profits sneered at, as indicated
above by those economists who have not emancipated them¬
selves from the thraldom of the "mercantile" theory, are in
the light of political economy, nothing else but the " plus "
of consumable articles placed at the disposal of the consumer
over and above what would have been the total to be con¬
sumed if the exchange resulting in that profit had not taken
place.
The reason why this set of phenomena and this side of
the question of free trade have been so persistently ignored
in England is solely owing to the historical accident that
when we set ourselves to think on these subjects, and be¬
came converts to the true gospel, we were already in pos¬
session.of an enormous cosmopolitan trade, and that a large
number of our customers, like the King of Dahomey and
others, not being civilised enough to have prohibitive or pro¬
tective tariffs, it was sufficient for us to open one valve, the
importing valve, for such a rush to take place through the
other, the exporting valve, as sufficed at once to double or
treble our imports. With our parochial tendency to gene¬
ralise from specific British facts as if they were necessarily
exhaustive in each case, and to argue as if every other coun¬
try were circumstanced prècisely as we are ourselves, we
have not ceased to talk as if it were a law of nature that
exports should be able to take care of themselves, and that
a maximum of exports should follow upon the one-sided
removal of duties at the importing frontier, and we have
40
COMMERCIAL TREATIES.
refused, and refuse at this present moment, to admit that
any country can be so circumstanced as to make it a matter
of vital importance to its imports, i. e., to its consumers,
that the tariffs of the countries it trades with should be
modified. Our commercial relations with Spain and Portu¬
gal are a case in point. The Spaniards and Portuguese urge
that they desire nothing more than to estáblish a trade with
England, and to import our products, but that in order to
do so it is necessary that we should take the trouble of ex¬
amining under what conditions they can pay for the products
which they desire to buy. They have no cosmopolitan trade,
no various industries, they have just one article of export,
one kind of coin with which to pay, viz., wine. England
being the greatest consumer of this article, it is of vital im¬
portance to their entire trade, i. <?., to their importing power,
/. to the Spanish and Portuguese consumer, that no arti¬
ficial difficulties should be placed by the British Customs in
the way of receiving this coin. Now what they urge is that,
by our-method of raising these duties, we do place artificial
difficulties in the way of their wine exports, which militate
directly against the interests of the Spanish and Portuguese
consumers of British produce. We choose, for the purely
selfish purpose of our revenue, and in order not to disturb
the routine of our Custom House officers, to treat wine and
pure alcohol, which, though they chance to have certain
chemical qualities in common, are, as articles of trade and
of human consumption, absolutely different, as if they were
the same article. It is as if, in a town in which there
COMMERCIAL TREATIES.
41
existed " octroi " duties on meat, the excise officers were to
levy a duty on atmospheric air because nitrogen is a principal
constituent both of air and meat. Thanks to this system,
urge the Spaniards and Portuguese, we have, in the teeth of
all our fine free trade protestations, practically set up a sys¬
tem of differential duties in favour of French wines as
against the produce of the Spanish and Portuguese grape.
To these arguments the Chancellor of the Exchequer
replies by personal vituperation and by language which
seems to involve the strange proposition that we should not
sell to, or buy from, persons who have passed through a
Court of Bankruptcy.
I have now to consider the second deduction from Mr.
Lowe's speech, viz., that home and foreign duties are essen¬
tially different in kind, and that their incidence affects com¬
merce in radically different ways. After what has already
been said, it almost seems superfluous to point out the fal¬
lacy involved in this position. The moment the idea that
imports are limited by exports in exactly the same way that
exports are limited by imports has been clearly apprehended,
it stands to reason that, as regards the consumer, it is exactly
the same thing whether the imports are indirectly prevented
by difficulties placed in the way of exports, or directly pre¬
vented by difficulties placed in their own way.
If we could once realise the fact that in trade it is the
goods that circulate^ and not the money (the peculiarity of
the so-called circulating medium being that it does not
circulate), we should have an image to our hand which
42
COMMERCIAL TREATIES.
would for ever prevent a relapse into error; for the
moment the idea of circulation is once fairly seized it be¬
comes self-evident that in order to stop this circulation,
either wholly or partially, one obstruction is sufficient, and
that it is absolutely indifferent at what point in the circle
the obstruction is interposed. The arteries are fed by the
veins ; the veins are fed by the arteries ; the valves into and
out of the two auricles of the heart must be continually
opening to permit of the exchange between the venous and
arterial blood ; but one ligature suffices to impede the entire
circulation, and it is quite indifferent whether this ligature be
applied to the trunk vein or to the pulmonary artery. So of
exports and imports. As between any two countries—say
England and France—the imports into either country will be
equally obstructed, whether the protective duties are set up
at Dover or at Calais, and the sufferer will be the English
no less than the French consumer.*
* The attempt is sometimes made to invalidate this irrefutable posi¬
tion by a wholly irrelevant argument drawn from the sound doctrine of
the equation of international exchanges. As all imports, it is argued,
must be paid for by exports, it is just the same whether we carry on a
direct or indirect trade. We can always get the products of a country
with a prohibitive or protective tariff by first buying gold with our pro¬
ducts, and then with the gold buying the products of the country which
refuses to take our products in exchange. Thus, as Mr. Bonamy Price
puts it in a recent article against commercial treaties published in the
"Contemporary Review," trade becomes three-cornered instead of
being a direct interchange ; but the substance is the same in both cases.
The fallacy on which this argument is based consists in confounding the
COMMERCIAL TREATIES.
43
We are now in a position to substitute for Mr. Lowe's
imaginary conversation between political economy and the
British negotiators of commercial treaties what those respec¬
tive personages did say, or at all events what they ought to
have said.
Political economy never said " Lovfer your duties in order
that you may get the productions of other nations as cheaply
as possible," because science is incapable of saying what is
not the truth, and the above is scientifically untrue. What
phenomena exhibited by the individual case with the general results to
the community of a three-cornered instead of a direct interchange. Let
us take the imaginary case supposed by Mr. Bonamy Price, of there
being a demand for French ribbons in England, and of France refusing
to take English cotton goods in exchange, and insisting upon being
paid in gold. In this case, to obtain the ribbons we shall have first to
export cotton goods to San Francisco, and then tö ship the Californian
gold we obtain in exchange for these goods to a French port. Now, of
course, to the individual manufacturer of cotton goods it is all the same
whether he sells them to an American firm or a French firm. He will
get the ordinary profits of the trade in either case. But to the English
consumer of French ribbons the difference between a direct trade and a
three-cornered trade is the difference between the freight of a cargo of
cotton goods from Liverpool to Bordeaux and the freight of a cargo of
cotton goods from Liverpool to San Francisco, />/us the freight of the
gold from San Francisco to Bordeaux. The injury really inflicted,
however, is not confined to the consumer of ribbons ; the whole com¬
munity, including the manufacturer of cotton goods, are the losers to
the extent of the entire capital wasted in the unproductive expenditure
caused by the unnecessary voyage to San Francisco. No amount of
pseudo-scientific verbiage can get rid of the fact that it is shorter to go
straight to Bordeaux from Liverpool than to go there viâ San Francisco.
44
COMMERCIAL TREATIES.
political economy does say is, " In order to get the produc¬
tions of other nations as cheaply as possible, all duties must
be lowered, those of other nations as well as your own. For
the sake of the consumer, therefore, never relax for one
moment in your endeavours to get all these duties removed.
But, of course, as half a loaf is better than no bread, you
will not continue your own vicious system because you
cannot persuade others to give up theirs. Do not, how¬
ever, when you have got rid of your own protective duties,
rest on your oars and fancy the work is done, for it is not
done, and free trade has as yet no existence. Remember
there are a thousand ways of influencing other nations, and
that all that truth requires in order to prevail is a body of
believers whose faith is strong. Remember also that fiscal
duties may be as great hindrances to trade as protective
duties. Examine your revenue duties from this point of
view, and see whether you are not sacrificing the interests of
your own consumers and those of the consumers of other
countries to the symmetrical exigencies of Mr. Lowe's
budget."
In the next place, no English negotiator ever said, cer¬
tainly Mr. Cobden never did, " The end of commerce is not
the obtaining of imports, but the sending out of exports."
Still less have they importuned foreign countries with the
strange solicitation " to allow them to export to them, not
because it is a good thing to receive their exports, but
because it is a profitable thing to send out ours." Nor, on
the other hand, have they used that very professional
COMMERCIAL TREATIES.
45
argument, which is apparently the only one which Mr. Lowe
would allow them to use, viz., that the foreign country should
lower its duties for the sake of its own revenue. This would
be simply a piece of international impertinence which at all
events it must be hoped no British negotiator has had the
bad taste to be guilty of.
The argument of the British negotiator is a very simple
one. He addresses the foreign Government as follows :
" We desire to buy in your markets, but in order to be able
to do so you must accept as legal tender the only coin we
have to offer, viz., our products. At present, before we can
enter in at your gates, we are fallen upon by a set of ban¬
ditti, in the shape of Custom House officers, who rob us of
this coin, and when at last we find our way into your market
place we stand before the well-stocked stalls with empty, or
half-empty, pockets. We have thrown open our markets to
your consumers as far as lies in our power to do so, and we
appeal to you in the name of international comity to do the
same by us. Until you do so, both your consumers and
ours must continue to sow that others may reap, and give
up the hope of obtaining the fruit of their toil. It is time
this highway robbery should be put a stop to. Let us bind
ourselves from henceforth to treat it like piracy or any other
international crime."
But I have already sufficiently trespassed on your space
for to-day. I reserve my concluding observations for a last
letter, and remain your obedient servant,
A Disciple of Richard Cobden.
d
46
COMMERCIAL TREATIES.
IV.
I think I have said enough in my former letters to
prove not only that commercial treaties as such are not
contrary to the doctrine of free trade, but that the modem
treaty of commerce, of which the characteristic function is
to do away with differential duties, and to bind the con¬
tracting parties not to raise their duties, is necessarily the
only international form in which free trade, a necessarily inter¬
national idea, can permanently embody itself. I have also
done my best to point out the strange hallucination which
prevails upon this question in the minds of an important
portion of the free-trade school in England, and the still
stranger arguments by which these people endeavour to
justify their crotchety hostihty before the common sense of
mankind. According to Messrs. Lowe and Bonamy Price,
England is not to bind foreign nations by treaty to lower
their tariffs, lest the foreign Ministers who sign such treaties
should be led to adopt the theoretical error that it is more
profitable to export than to import ! When we meet in the
mouths of grown-up persons of the male sex with arguments
whose natural home would be the schoolroom of young
ladies in their teens, we may be certain that the thesis thus
defended rests upon ground wholly different from that
COMMERCIAL TREATIES.
47
occupied by the arguments themselves, and that these,
like Peter Plymley's razors, are made not to cut but to sell.
We may, in the next place, be very nearly certain that
recourse is had to such arguments because the persons
using them, either consciously or unconsciously, are pre¬
vented by shame, or some other motive, from publishing to
the world the real grounds of their faith. I shall therefore
proceed to inquire what the real motives are which dictate
the intemperate language of our free traders against com¬
mercial treaties ; but before doing so I must call attention
to the ignorance respecting the facts connected with free
trade and protection abroad, exhibited by the argumentation
of Mr. Lowe.
According to the views examined in my last letter, foreign
governments and foreign statesmen, including such men as
Rouher in France and Delbrück in Prussia, are no better
than a set of ignorant schoolboys, who have never heard of
Adam Smith, and to whom it is necessary to teach the ABC
of political economy in short and easy lessons. But what
is the real state of the case ? I speak advisedly when I say
that with scarcely any exception the governments of Eu¬
rope are, on the question of commercial policy, far in ad¬
vance of the public, opinion of their respective countries.
The circumstances which prevailed in France at the time
that the Anglo-French Treaty was concluded may be con¬
sidered as typical of the phase through which the commer¬
cial communities of Europe are all of them passing. Every¬
where the Executive, from its ground of vantage, sees the.
48
COMMERCIAL TREATIES.
practical injuries inflicted on the country as a whole by pro¬
hibitive and protectionist tariffs ; but everywhere it is con¬
fronted by a serried phalanx of vested interests. Every¬
where, standing at the elbow of the Executive, is a body of
free traders by conviction, who, penetrated by the truth of
their doctrine, refuse to see difficulties and wish to hurry
forward irrespectively of consequences. Everywhere the
same " Deus " steps out of the same " machina " in the
shape of a foreign Government, by negotiating with which
the Executive is able to inspire itself with the ideas of the
scientific free traders, and to detach and bring over to its
side a portion of the vested interests more particularly con¬
cerned in the particular trade of the country with which the
treaty is to be concluded. In this way France by the help
of England, the Zollverein by the help of France, Austria
by the help of the Zollverein and England, each made their
first great step forward on the path of free trade, and the
treaty network by which, as explained in my first letter, every
tariff reduction made in one of those countries at once
becomes the common property of all, was definitely estab¬
lished. There is not a free trader abroad—and at the pre¬
sent moment I have no hesitation in saying that the free
trade school is far more ably and far more brilliantly repre¬
sented abroad than it is in England—who does not admit
that, under existing circumstances, this is the only possible
road along which free trade can travel, and who does not wring
his hands in despair at the self-satisfied obstinacy which
makes English statesmen persistently refuse to lend a helping
COMMERCIAL TREATIES.
49
hand in this great work of international co-operation. To the
Chevaliers, the Fauchers, the Prince Smiths, the language of
Mr. Lowe, and the attitude taken up by the British Treasury,
is incomprehensible. That the Chancellor of the Exchequer
for the time being should make one reduction after another in
the tariff of the largest importing community in the world on
his own account, and without, apparently, so much as con¬
sulting the President of the Board of Trade or the Foreign
Minister, and finding out whether such reductions might not
be made available to enlarge the international free-trade
area, thus conferring the double instead of the single benefit
on the British and foreign consumer, is a piece of insular
eccentricity very trying to the temper of the foreign free¬
trader, who would much prefer the active co-operation of
Great Britain in the work of pulling down actual duties to
the " missionary " tracts to whose distribution Mr. Lowe
would apparently restrict the action of our diplomacy.*
* I will not now refer to the reductions in the wine duties, which Mr.
Lowe refuses to make for the sake of treaties with Spain and Portugal,
but which, in all probability, he will sooner or later consent to, inde¬
pendently of Spain and Portugal and without securing any interna¬
tional tariff reductions, in obedience to a cry, identical with that raised
in the Peninsula, now coming to us from the Cape and our other wine¬
growing colonies, to the effect that their wines are excluded from our
markets by the premium virtually given to French wines by the present
Custom House system. Put I will cite, as cases illustrative of the asser¬
tion contained in the text, the reduction made a few years back of the duty
on manufactured tobacco from ps. to 5s., and the reduction of the sugar
duties to one-half in this year's budget. Both cigars and sugar are
articles of manufacture in which the Zollverein and other European
COMMERCIAL TREATIES.
Still more incomprehensible to the foreign free trader is
the fact that with all our " tall talk " about free trade we
should not have established it even within the limits of our
own dominions, and that, whilst we are wracking our brains
to imagine some common basis of imperial policy upon
which to poise the complex fabric of our colonial empire,
trading communities are highly interested ; and I have no doubt that
these reductions might, had they been introduced in a treaty shape,
have been used with the greatest advantage in assisting the German
free-traders to carry those reductions of the iron duties which so greatly
interest us, and for which, single-handed and unaided, they have hitherto
agitated in vain.
It seems on all sides to be assumed as incontrovertible that revenue
duties have a noH me tangere character adhering to them which alto¬
gether precludes them from being taken into account in commercial
agreements of an international" kind. For my part, I am strongly
inclined to hold a different opinion, and to consider, as a question of
international morality, that where a revenue duty levied by one State
greatly cripples the trade of another State, and, pro tanto, diminishes
its consuming power, it is a question of international comity for the
State which levies the duty, if it can do so without injury to itself, to
find some other means of filling its coffers. This is pre-eminently the
case in regard to- Spain, Portugal, and our wine-growing colonies. Are
we justified, except in presence of a strong financial necessity, which,
with a surplus of four millions, does not exist, in preventing the
Spaniards and Portuguese and our own colonists from importing our
manufactures, thereby, pro tanto, diminishing their material well-being
because we choose to consider wine and alcohol as one and the same
thing ? Has it ever struck the British free traders, who cry out for a
cheap breakfast table for themselves, that if the foreign producer on his
side is well fed and warmly clad, instead of being ill fed and badly clad,
he will produce more than he would otherwise do for the British con¬
sumer ?
COMMERCIAL TREATIES.
5'
we should not at least insist upon freedom of exchange as
one main " article of union " between the subjects of our
common Sovereign, thus putting an end to the scandal of
what we pretend to view as international robbery being
practised with impunity as between the colonies and the
mother country. To be told, when negotiating a treaty of
commerce with Great Britain, that although ratified by the
Sovereign of an Empire on which the sun never sets, it will
only admit their goods to the ports of the United Kingdom,
but will give them no guarantee that the existing protective
duties in tho remaining ports of the Empire may not any day
be screwed up to a prohibitive height, is one of those expe¬
riences which opens the eyes of foreign countries, and gives
them the means of measuring the difference between our
theory and practice. It would be well if it taught our
statesmen a little more modesty when they caracole their
hobby horses before a mixed public of foreigners and natives.
There now only remains to me to attempt the diagnosis
of these morbid symptoms, and to account for the hysterical
affection by which the economists of whom I have been
treating are attacked at the mere mention of commercial
treaties. The solution of the enigma is, I believe, to be
found not in political economy, but in national temperament
We have to deal not with scientific error, which is only an
accidental and secondary symptom, but with habits and
attitudes of mind, the result of deep-seated national peculi¬
arities. For, owing to a concurrence of circumstances never
before witnessed in any of the great communities which
5^
COMMERCIAL TREATIES.
have hitherto played a prominent part in history, our national
character, like everything else of British growth, is a com¬
promise—i.e., an inorganic and illogical union between two
different and antagonistic types. We are not made up of
one set of ingredients, but of two sets of ingredients, of the
most opposite and contradictory kinds. We are not cast in
one mould, but in two moulds, and the images thus moulded
are welded together most un artistically, and to the utter
confusion of all unity and harmony of conception. We
are at one and the same time, and that on a scale never
before reached, a trading and industrial community, and a
military power. We clothe the world with our manufac¬
tures, and we are engaged in a cosmopolitan commerce of
which Venice, Holland, and the Hansa offered but dim
prototypes ; whilst at the same time we hold in subjection
an empire of one hundred millions by the iron grasp of our
battalions and the prestige of our maritime supremacy. No
greater contrast can be imagined than that afforded by the
virtues and vices generated by these antagonistic forms of
national education.
On the one hand, we are brought under the influences of
co-operation, interdependence, exchange of good offices, the
rendering of service for service, individual enterprise—^in a
word, internationalism. On the other, we are forced to be
self-reliant and self-dependent, to cultivate patriotism and
loyalty and the sense of coherence and corporativeness—in
a word, to develop nationalism.
Now, though these two classes of virtues belong to
COMMERCIAL TREATIES.
53
opposite types, and though there may be great difficulty in
cultivating them pari passu., they are not necessarily incom¬
patible. It is possible to be patriotic, and yet to have a
nice sense for the rights of others ; to cultivate self-reliance,
and yet to admit that our own welfare depends upon the
welfare of others. It is not, therefore, between the virtues
which result from these types that the absolute incompati¬
bility lies, but between the vices which, like shadows, are
thrown out by these virtues. To what depths of political
degradation the one-sided development of the commercial
type may lead, it is not now our purpose to inquire. We
have recently had brought home to us, in a manner
which Englishmen will not easily forget, of what sort is the
political community built up out of a nationality whose
mental activity has for many generations been exclusively
absorbed by commercial transactions. Unrivalled in the
arts of exchange, and as individual merchants outtopping in
the vastness of their conceptions, and the subtle combina¬
tion of details, their rivals in the whole world, the only form
of government which the Greeks, left to themselves, have
been able to call into life, is that combination of political
klephts and klepht politicians, whose last exploit has been to
plunge all England into mourning. Into this type, thank God,
we are, for the present at least, not likely to degenerate. It
is, on the contrary, the strange predominance of the military
type amongst the classes who ought to be especially under
the humanising influences of the commercial type which
causes the phenomena with which we are concerned. If the
54
COMMERCIAL TREATIES.
features generalised under the terms British insularity,
which in the eyes of foreigners constitute our national
character, such as pride, contempt for everything not
English, incapacity to understand or appreciate social
and political forms not specifically our own, disregard
for the feelings of others, and an over^bearing manner
in our international deaUngs, were confined to the class
which naturally represents the military tendencies of the
nation, there would be no glaring incongruity; but when
we see national arrogance and self-conceit, and profound
contempt of foreigners rampant amongst political econo¬
mists and the instructors of the people on commercial
matters, and pervading those very mercantile classes, the
raison d^être of whose existence is inter-communion and
international co-operation, we become conscious of the dis¬
harmony in our national type, and we perceive that our
language and our actions diverge into contrary directions.
The hands are the hands of Jacob, but the voice is that of
Esau. When we hear a man like Lord Salisbury emphatically
protesting from his place in the House of Lords against
allowing the unanimous verdict of foreign countries in any
way to influence our own views in regard to a question like
that of the Irish Church, we are unable to sympathise with
the sentiment ; but we feel that it is in harmony with the
man who utters it, and with the atmosphere of the place in
which it is uttered. It represents one of the living forces in
the state, and is in unison with a particular type. When, on
the other hand, we see the Finance Minister of a would-be
COMMERCIAL TREATIES.
55
"bourgeois" government snorting forth international defiance
on the occasion of a friendly exchange of ideas upon com¬
mercial topics with the official representatives of the trading
community, we are shocked by a sense of incongruity. We
feel that this fiery spirit should be at the Horse Guards or
the Admiralty, organising an Abyssinian expedition or some
kindred enterprise. Like the man in armour at the Lord
Mayor's show, he has not even the merit of grotesqueness—
he is simply a man in the wrong place.
We hope the day may be far distant when true patriotism,
such as that which lies latent in the British character, and is
only called out on great occasions, shall die out. But there
is a false patriotism as well as a true one ; to respect one¬
self is not the same thing as to despise others ; national
pride becomes a noble or ignoble sentiment according to
the national qualities in which it roots itself. The pride
caused by superior national wealth is of an essentially igno¬
ble kind ; and what^ I especially object to in the utterances
of the Chancellor of the Exchequer is their Plutocratic
ring and the Dives-like self-sufficiency which breathes out of
them. I perfectly understand the difficulty there must be
in keeping down this sentiment when one's time is taken
up in dispensing an income of 70 millions, but it is a matter
of national dignity that it should be kept down, or, at all
events, not exhibited in public. A purse-proud, shopkeeping
nation, wallowing in a surplus of four millions, and, like an
alderman at the sight of a beggar, kindling into ferocity at
the mere mention of two pauper governments like those of
56
COMMERCIAL TREATIES.
Spain and Portugal, is not a beautiful sight either in the
eyes of gods or men.
I confess that I should wholly despair of seeing a change
for the better in our conception of our international duties,
were it not for the presence of one statesman, who has
seized, as no other living statesman has seized, the higher
and nobler issues involved in the gospel of free trade. With
the exception of Cobden, Mr. Gladstone* appears to me to
be the only modern politician who has realised that political
economy is not the art of national money-making, but the
science of the wealth of nations—/. <?., the science of the
foundations upon which a civilisation of the human race, as
distinct from a mere national civilisation, and therefore the
edifice of a higher human culture, as distinct from a mere
national culture, can be built up.
* I am perfectly aware that Mr Gladstone has expressed himself in
regard to commercial treaties in a very different sense from that in wMch
I have been pleading for them. I believe this, however, to be solely
owing to the vitiated atmosphere with which the fallacies of the British
free-trade school have surrounded him ; for it should not be forgotten
that Mr. Gladstone is peculiarly sensitive to the '• climate of opinion ''
in which he happens to be living. Even Cobden himself was not free
from this influence, and on more than one occasion spoke in an apolo¬
getic tone of his own great work. If Mr. Gladstone were, to be Foreign
Minister for six months, and thus to acquire a practical knowledge of
the working of the commercial treaty network, to which I have so
often alluded, I have no manner of doubt that he would very soon
admit that the modem commercial treaty is the only instrament with
which he could mould into plastic form those large-hearted international
ideas to which he hiw devoted so much of his splendid oratory.
COMMERCIAL TREATIES.
57
Two great impulses have been given to mankind since
Europe turned its back upon the middle ages, in the direc¬
tion of this higher and nobler form of human society which,
for want of a better term I must designate as "Inter¬
nationalism." The one in the i6th century, by those giants
who created the science of international law. The other in
the 18th and 19th centuries, by the discoverers of the laws
of political economy. Conformably to that strange rule
which seems to demand that a race of dwarfs should in¬
variably succeed to a race of giants, the followers of Grotius
dwindled down into a set of pettifoggers, mainly taken
up with the rules of court etiquette, the precedence of
ambassadors, and the like, and we in our own day have
witnessed the way in which the name of Adam Smith has
been made to cover the worst and meanest forms of egotism.
As long, however, as Mr. Mill and Mr. Gladstone are
amongst us, we feel that the quickening spirit of the doctrine
which established upon scientific grounds that the material
welfare of each member of the international family depends
on the material welfare of all, and the welfare of all on the
welfare of each, is still stirring amongst us, in spite of the
dwarfs and their friends.
It is this international chord which it has been my earnest
desire to set vibrating by the appeal which you have allowed
me to make in your columns. They are, however, but dry
bones which I have been able to lay before your readers,
and I must appeal to the prophet to clothe them in human
flesh and blood and to quicken them into life. I shall best
58
COMMERCIAL TREATIES.
succeed in doing so by concluding my letter with two quo¬
tations, one from Grotius, the other from a speech of Mr.
Gladstone.
The first, taken almost at random from the " Mare Libe¬
rum," is one of an innumerable number of similar passages
showing how the mere instinct of internationalism and the
a priori appeal to the dictates of universal justice had en¬
abled the great jurist of the i6th century to seize the fun¬
damental principles of free trade two centuries before the
advent of Adam Smith. Would that the free-traders of the
present century could penetrate themselves with his spirit !
The second is taken from a speech delivered by Mr.
Gladstone at Glasgow on the ist of November, 1865. My
space does not allow me to do more than give a few short
extracts where I would wish to reproduce the whole in ex¬
tenso. It would be a good deed done to reprint it for sepa¬
rate circulation.
Loquitur Grotius : " The justice of our position is estab-
" lished by that fundamental rule of the law of nations, or
" primitive law, the authority of which is at all times clear,
" certain, and unchangeable, viz., that it is the indefeasible
" right of every nation to draw near to, and traffic with,
" any other nation whatsoever,—licere cuivis genii quamvis
" alteram adire cumque eâ negotiari. God himself declares
' ' this truth by the voice of natme. The wisdom of the Creator
" has denied to each country the exclusive production of all
" the necessaries of life, and has given to some nations, and
withheld from others, a special aptitude for certain arts.
COMMERCIAL TREATIES,
59
Why is the world so ordered, if it be not for the purpose
" of maintaining union between the various populations of
" it by means of reciprocal abundance and necessity, lest any
" one nation, supposing itself sufficient for its own require-
" ments, should withdraw altogether from the society of
" others In a word, the Almighty has destined each nation
" to supply by its abundance the wants of others, so that,
" as Pliny says, the produce of each locality should appear
" to have been everywhere produced. It is to this that the
poet alludes in the words :—
" Nec vero tarrse ferre omnes omnia possunt,
" Excudeant alii, &c.
" Those who desire to exclude this reciprocal succour would
" banish all society from the human race, annihilate the
" means of mutual beneficence, and violate the precepts of
" nature. Why is the vast ocean navigable from shore to
" shore, why blow the winds now this way and now that, if
" it be not intended by nature that all nations should have
" free access to each other ? Seneca esteemed it as a
" benefit conferred by nature on mankind that she has con-
" founded and dispersed the human race into different loca-
" lities, and distributed the surface of the globe into different
" regions, in order that she might thereby impose upon men
" the obligation of entering into commerce with each other."
Loquitur Gladstone : " If I am to look back upon the
" enumeration I have made of those various chapters of
" legislative and constitutional improvement, I confess that
6o
COMMERCIAL TREATIES.
" amongst them all the most fertile in beneficial results,—
" I say that without the least disparagement of the rest,—
" I believe they are all twined together in a silver cord, and
" that you cannot have the one without the other,—the
" most fertile of them all in beneficial results is perhaps
" that which you describe in the two now so well known,
" familiar, and well-beloved monosyllables—the promotion
" of/ree trade. It is quite unnecessary before this audience—
" I will venture to say it is unnecessary before any audience
" of my countrymen—to dwell at this period of our expe-
" rience, upon the benefits that have resulted from free
" trade, upon the numerous augmentations of national power
" which it has produced, , or even upon the increased con-
" cord which it has tended so strongly to carry throughout
" the various sections of the community. But it is a
" characteristic of the system which we so demonstrate
" that, while it comes forward with homely pretensions,
" and professes, in the first instance, mainly to address
" itself to questions of material and pecuniary interests,
" yet, in point of fact, it is fraught and charged throughout
" with immense masses of moral association and political
" results. I will not speak now upon the very large share
" of those results which is domestic, but would ask you to
" consider with me for a few moments the effect of a system
" of unrestricted intercourse upon the happiness of the
" human family at large. As far as that happiness is
" connected with the movements of nations, war has been
"its great impediment, and what have been the causes
COMMERCIAL TREATIES.
6i
" of wars % They do not come upon the world from
" an inevitable necessity, or through a Providential visita-
" tion I need not say that, as respects colonies,
" they have ceased to be, I would almost venture to say, a
" possible, at any rate a probable, cause of war, for now we
" believe that the greatness of our country is best pro-
" moted in its relations with our colonies by giving to them,
" freely and largely, to enjoy every privilege that we possess
" ourselves ; and, so far from grudging it, if we find that
" there are plenty of American ships trading with Calcutta,
" we rejoice in-it, because it contributes to the wealth and
" prosperity of our Indian Empire ; and we are perfectly
" assured that the more that wealth and prosperity is pro-
" moted the larger will be the share of it accruing to us
" through the legitimate operation of the principles of trade.
" But the beneficial influence of free trading intercourse is
" wider far than this. A. treaty with France is, even in
" itself, 2¿ measure of no small consequence ; but that which
" gives to a measure of that kind its highest value is its ten-
" dency to- produce beneficial imitation in other quarters.
It is the influence which is given to the cause of freedom
" of trade by the necessary example held out by the two
" most powerful nations of Europe ; it is the fact that,
" in. concluding that treaty, we did not give to one a
" privilege which we withheld- from another, but that
" our treaty with France was, in fact, a treaty with
" the world, and wide are the consequences which en-
" gagements of that kind carry in their train. I know
62
COMMERCIAL TREATIES.
" not whether there is any part of the providential govem-
" ment of the world that tends more deeply to impress
" the mind with a sense of the profound wisdom and
" the boundless benevolence of the Almighty than when we
" observe how truly and how naturally great effects spring
" from small causes, and high effects from causes that appear
" to be mean. We have said that with respect to freedom of
" commercial intercourse, reduction of tariffs, abolition of
" duties, re-adjustment of commercial laws, those are things
" which, in the first instance, touch material interests, and
" there are some men so widely mistaken as to suppose that
" they touch material interests alone. There are some men,
" ay, and high-minded men too, who would bid you to beware
" of such things, lest they should lead simply to the worship
" of Mammon. The worship of Mammon is a very dan-
" gerous thing to us all ; but as far as regards the most
" numerous mass of the community, in my opinion all
" that portion of the human family which at present has
" not much to spare in respect of the essentials of raiment,
" of food, and of lodging, has hardly yet reached the
" province within which the worship of Mammon is to be
" dreaded The relation of landlord to
" tenant, of master to servant, of manufacturer to operative,
" the whole of these, and all similar relations, beget attach-
" ment on the one side and the other where they are pro-
'' perly conducted—ay, where they are honestly conducted.
Their natural tendency is to peace and goodwill, not to
" divide man from man, but to unite man with man
COMMERCIAL TREATIES.
63
by the experience of benefits reciprocally conferred and
reciprocally received. And is not that the case with
nations too 1 When a ship leaves the port of Glasgow
for a port in France or America, or when a ship leaves a
port in America or France for the Clyde, that means that
certain parcels of goods are forwarded on the one side and
paid for by other parcels of goods forwarded on the other.
But is that all that it means ? Does it not mean a great
deal more ? Does it not mean this—that human beings
on the two sides of the water are coming to know one
another better, and esteem one another the more ; that
they are beginning to be acquainted with one another's
common interest and feelings ; that they are beginning
to enlarge the prejudices which make us refuse to give
to other nations and to people in distant lands credit
for being governed by the same motives and principles
as we are ourselves? I would say that, labelled on
almost every one of those parcels of goods, there is like¬
wise, so to speak, a kindly feeling that goes from one
country to another ; and the ships that travel between
this land and that are like the shuttle of the
loom that is weaving a web of concord between
the nations."
I am your obedient servant,
A Disciple of Richard Cobden.
A. Ireland and Co., Printers, Manchester.
MR. grant DUFF
ON THE
TEACHINGS OF RICHARD COBDEN.
December 20, 1871.
LONDON:
PRINTED FOR THE COBDEN CLUB,
BY CASSELL, PETTER, AND GALPIN,
LUDGATE HILL, E.C.
MR. GRANT DUFF
ON THE
TEACHINGS OF RICHARD COBDEN.
1871.
♦
On Wednesday night, Dec. 20, Mr. Grant Duff,
M.P., Under Secretary of State for India, met his
constituents in the Corn Market Hall at Elgin,
and delivered his annual address.
Provost Cameron was in the chair.
Mr. Grant Duff, after some remarks on the
illness of the Prince of Wales, said—
Since the general election of 1868, Mr. Glad-
stone's Cabinet has, as in duty bound, taken up
one after another those questions upon which the
Liberal party distinctly expressed its opinion on
that occasion. Most of them it has had the good
fortune to settle, and there can be but little doubt
tjiat early in the ensuing session it will put out
of hand those with which it has tried to deal, but
has not yet dealt successfully. It must be admitted
by all, whether they approve or condemn what has
been done, that vast changes have been made,
changes the like of which have been rarely accom-
4
MR. GRANT DUFF ON THE
Fresh point
of political
departure.
Forecasts
in 1868.
These were
correct.
plished in so short a time without violent political
disturbances, accompanied not seldom by the shed¬
ding of blood.
When an Education Bill for Scotland and a
Ballot Bill for the United Kingdom have been
passed, we shall have arrived at the edge of
a new country, and must take a fresh point of
political departure.
I said to you in 1868—" During the next gene¬
ration I am fully persuaded that all our insti¬
tutions will be asked, so to speak, to re-state
the reasons of their existence, and be judged
according to their capacity for furthering the
common weal. So averse are our countrymen to
all change not manifestly necessary, that such of
those institutions as have historical right upon
their side will not find it difficult to conform to the
exigencies of the new time ; but woe unto those
which are determinedly obstructive ! Woe unto
those whose friends are rash enough to say 'Let
them be as they are, or let them not be at all.'
Such obstinate institutions will soon hear the
ominous words, Too late'—words now sound¬
ing in the ears of that Irish Establishment which
so fondly imagined that its dangers were at
an end with the failure of the Appropriation
clause."
I think the events of the last three years have
proved my anticipations to have been correct.
Institution after institution which used to be con¬
sidered almost as part of the order of nature has
been asked somewhat peremptorily, from the plat-
TEACHINGS OF RICHARD COB DEN.
S
form or through the press, to re-state the reasons Noigtíui-
of its existence, but I am happy to say that not refused all
one of them has, as would have been the case in
the old days, answered the inevitable challenge
with an absolute refusal of any adaptation or
change.
The result of this has been, that against none Results
of the questioned institutions has any strong public
feeling been excited.
This is the case even with the House of Lords, No violent
which has been perhaps more loudly challenged organic
than any other. The popular mind, if I read the
signs of the times aright, is not only prepared,
but anxious to have proposals submitted to it for
such a change in the House of Lords as may House of
make it a more working body, a better helpmate
for the House of Commons in doing the tremen¬
dously heavy and ever-increasing business of the
nation ; but the popular mind is, I think, very
far from having determined that anything like
revolutionary change is required in that ancient
body.
So again with the Established Churches of churchS?^
North and South Britain. A section of the Non¬
conformists, under the able leadership of Mr.
Miail, has not been slow to apply to them the
reasoning which led it so ardently to desire the
.downfall of the Irish Establishment. But although
I cannot doubt, as I have before said to you, that
the set of the current of the time is everywhere
against Church Establishments, yet in the southern
part of the kingdom a thousand circumstances
6
MR. GRANT DUFF ON THE
tend to- make the Church Establishment so strong
that most Liberal politicians, having regard to the
importance of method in politics as in all things
else, and having regard also to possibilities of
transformation, would do, as it seems to me, most
wisely to turn, at least for some, perhaps for many
years to come, to other matters. I do not say all
Liberal politicians. Mr. Miall, for exaniple, could
not do otherwise than he has done without being
untrue to his own principles, and he fulfils a most
important function. It would be against the
nature of things for the feeling of hostility to
Church Establishments felt by large masses of our
countrymen not to be represented, and powerfully
represented, in the House of Commons ; but Mr.
Miall and his friends should give to many who
vote against him as much credit as we do to him.
We have not all the same duties at the same time.
1871 is not 1863, when the Irish Establishment
Still stood like a rock (in that summer one of the
closest and wisest observers of English politics
whom I know told me he thought it would last
twenty years), and when the attack on the unjust
and vexatious tests at the English universities had
only just been begun in Parliament by Mr. Dodson,
Mr. Goschen, and myself.
I need not go on to the other institutions which
have of late received warnings. There is not
one of them which, by making timely, and in some
instances very slight changes, may not secure for
itself peace and quietness. There is not anywhere a
sign of a desire on the part of the country that
TEACHINGS OF RICHARD COB DEN
7
statesmen should for many a day do any lai'ge
piece of destructive work. There is nothing worth
mentioning that must go speedily, root and branch,
like the Irish Establishment and the purchase
system ; but observe, I do not say storms may not
arise. They will arise if reforms are not set about,
and the House of Lords especially has no time to
lose. Proposals for a moderate and serious reform
should be early made, and made from within that
assembly.
Well, but if organic changes are not called for, if organic
' o o ^ ' change not
what is called for ? If, by what is called for, I am called for,
' ^ what called
understood to mean what I personally, speaking as for?
member for Elgin, and not as connected with any
Administration or set of persons whatever, think
would be the best thing for the country, I should
reply the taking up, not by the Government, not Acceptance
of tîic
by isolated members of the Liberal party, but of Mr. cob¬
by the Liberal party as a whole, of the légacy
which was left to the party as a whole by
Mr. Cobden.
By the legacy of Mr. Cobden I mean that policy what wasit?
which was inaugurated by the repeal of the Corn
Laws, the policy of Free Trade or Free Exchange
in its widest sense ; the policy which takes for
granted that the country has made up its mind to
get rid in home matters of all trammels upon
industry, and to get rid in foreign matters of the
old evil ways of national jealousies, huge arma¬
ments, artificial arrangements for securing the
balance of power, and, in short, of the whole
course of conduct which was based on thç idea
8
AŒ. GRANT DUFF ON THE
that nations should act in the spirit of the old
rhyme—
" As I walked by myself, I said to myself,
And the self-same self said to me,
* Look out for yourself, take care of yourself.
For nobody cares for thee.'"—
the policy, in other words, which substitutes inter¬
national co-operation for international hostility.
Mr. Cobden died too early to put his policy
before the nation in a form so clear, so connected,
and so concise as to be at once apprehended by
all. I confess that I, for one, did not, during the
first few years that I sat in Parliament, clearly
understand the way in which his ideas hung to-
Actionofthe gether. Since his death the Cobden Club has
Cobden
Club. done, amongst several good pieces of work, one
pre-eminently good piece of work. It has published
two volumes of Mr. Cobden's writings, two volumes
of his speeches, and a most masterly essay by Sir
Louis Mallet, which contains the veiy expressed
essence of Mr. Cobden's thoughts. I cannot under¬
stand how any member of the Liberal party, after
studying these works with an open mind, can fail
to come to the conclusion—Here we have, traced
most clearly, the chief lines on which should be-
built, for some time to çpme^ the policy of this,
nation.
Other things There are other things to be done, no doubt—
required to ..... , , .
be done. this and that institution to be made more in.
harmony with modern requirements, and so forth—
ve^iigent. but tkese arc the things requiring to be done, which
TEACHINGS OF RICHARD COB DEN.
9
will make most difference to the prosperity of oijr
people as a whole.
Now,, let us see what the acceptance of Mr. vohSdSl
Cobden's policy, as the most important part of the of mKoL
Liberal programme, would involve. den'siegacy.
First, it would involve a further diminution of
indirect taxation. We have had a great deal taxation,
taken off our indirect taxation of late years ; but
still we are raising off our trade, in the midst of
what is called a régime of Free Trade, an enormous
sum of money, some forty-two millions at least. We
cannot hope in our lives to get rid of anything like
all the burdens on our trade, for the extravagance
of the past—an extravagance, alas ! to which, let
flatterers and deceivers say what they will, all
classes, from the lowest to the highest, were parties
—^has mortgaged not only the property, but the
industry of our people ; yet we may still very con¬
siderably diminish it, and I heartily trust we may :
for whether you diminish or whether you abolish
an indirect tax, in one way or other, the doing so
creates a far greater amount of prosperity than the
mere remission of an equal amount of direct taxa¬
tion. Looking to what is passing on the other
side of the Atlantic, we must be prepared to see
America half a generation hence, in spite of all
that unwise fiscal legislation can do to prevent her
prosperity, becoming a more and more formidable
competitor with us in all peaceful ways. Now, it
seems to me that it is vitally essential to England
that she should remain the great workshop of the
world. If we are to keep that position, we must go
lO
MR. GRANT DUFF ON THE
OÇI year by year loosing every band that still hampers
our industry. Of course there are difficulties in the
way of this. It is• not easy to find perfectly just
substitutes for the taxes you take off, if you must
find substitutes at all : but we have really no choice
in the matter ; we must go on freeing our labour,
and making England a better and better place
for the skilled artisan to live in, or we must be
content, as educationi improves, and the facilities
for travelling increase, to see him go elsewhere.
There is a class of politicians which is appre-
objection. hensive that direct taxation would be used as a
means for imposing unfair burdens upon the rich,
and which deprecates for that political reason steps
which it admits to be financially desirable. I do not
share those apprehensions. If there were any dis¬
position on the part of the masses of our country¬
men to rob their more fortunate brethren by unfair
legislation, what is to prevent their doing so now ?
They have the power. If any such apprehension is
well founded, then the policy of the Liberal party
for these many years has been a huge mistake ;
since that policy is based on the assumption that
the majority of the electorate will in all great
matters act wisely, after those great matters have
been subjected to the close and searching examina¬
tion which all great matters receive in this country
from Parliament and the press.
Must But supposing we make up our minds gradually
tutes for all to take ofF all indirect taxes except those on tobacco
indirect .»• •• ii
taxation? and Certain liquors, is it so clear that we must find
substitutes for all or many of them ?
TEACHINGS OF RICHARD COB DEN. ii
Since England was England there never was a of
moment when our position was less assailable. ISfmSmSt.
Of course, we all sympathise veiy deeply with France.
France, but it is idle to deny that France up to
July, 1870, might, if she had pleased, have given us
a great deal of trouble ; and although from i860
onwards the anti-English feeling was steadily on
the decline in that country, the rivalry of the two
nations had continued for so many centuries, and
had been so bitter, that it would have been easy for
any ruler of France to have got up quite as strong
a feeling in favour of war with England as there
was last year, before the reverses began, in favour of
war with Germany : but the danger from France is
gone and passed for many a long year. If any man
tells me that France will soon be again what she
was, I venture to disagree with him. There are great
recuperative forces in that country, but in order to
give those recuperative forces any chance you must
have three things, none of which you will have.
First, abnegation of the policy of revenge. Secondly,
extensive disarmament. Thirdly, free trade.
Now if there is no danger from France, from Germauiy.
what quarter, in the name of common sense, is
there danger.? The bare idea of there being
danger from Germany is so ridiculous that it is
hardly possible to speak of it with patience. If
you heard a man from Bremen or Stettin, or any
place on the German coast, talking with alarm
about a possible hostile descent from England, you
would think him an idiot. But it would be much
easier for us to make a descent on the coast of
12 MR. GRANT DUFF ON THE
Germany than it would be for the Germans to-
make a descent on our coast. Even if the thing^
were possible, I can only say that if the spirit and
skill which defeated the Armada is so dead
amongst us as to let a single hostile boat's crew
be landed on our shore, except for the purpose of
being walked off to the nearest gaol, we don't
deserve to. keep our independence. There was a
certain amount of silly talk in Germany during the
war about punishing England for her supposed de¬
linquencies, but that was all idle chatter. The
German quidnunc is just as great a fool as the
foolishest Briton, just as alarmist, just as un¬
accustomed, perhaps more unaccustomed, to make
allowances for foreign nations. The position of
a neutral is always difficult. He is exposed to
abuse from both sides, and most fortunate is
he when he is not dragged into war ; but, behind
all this superficial irritation, there is, on the part
of all really well-informed and sensible German
politicians, a firm conviction that the most cordial
union and close friendship between Germany and
England is a matter of vital importance to Europe.
Short-sighted, indeed, must he be who does not
discern that days are coming when a perfectly
good understanding between these two countries
will make all the difference as to whether the Con¬
tinent is to be convulsed from end to end or is to
remain at peace. Let momentary irritation be
what it may, England and G ermany must hold to¬
gether. They cannot avoid doing so if they would.
The force of circumstances w ould be too strong for
TEACHINGS OF FICHA FE COBDEN. 13
them. But supposing all this were different, sup¬
posing that the interests of Germany and of Eng¬
land, the interests, in other words, of peace, were
not inextricably bound up together, supposing she
were your enemy, I defy any man to show how it
would be necessary for us to maintain one battalion
that it would not be right for us to maintain for
other reasons.
Well, if the country is convinced, as I hope it
may be in a year or two, that there is no longer
any fear from France, and that there never was nor
will be any fear from Germany, we shall see a
cold fit set in about armaments.
I hope that fit will not go too far. We must
have an adequate army, and by all means let us
take advantage of the present hot fit, as is, indeed,
being excellently done, to make a middling army
into a first-rate one. A bad army is nothing but
a school of demoralisation. A middling army is a
school of very little good. A first-rate army,
whether you ever want it for war or not, may be
made a school for producing, no doubt at enor¬
mous expense, but still for producing, a vast
number of persons extremely available for the
general purposes of the nation. But when we
have once made our army as good in quality as it
can be—the best army of its size in the world—I
trust we shall take care that its numbers in time
of peace are as small as is consistent with the
only purposes for which we want an army — the
garrisoning of certain fortresses like Malta and
Gibraltar—the maintenance of our rule in India—
H
MR. GRANT DUFF ON THE
the support of the civil power in Ireland always,
and now and then for an hour or two at home—
the very improbable contingency of having to send
a small force abroad, and the more improbable
contingency of having to repel some attack on our
shores, if the once glorious, and, as I still believe,
incomparable navy of England turns out to be
worthless.
ductiwi of Before we have done re-organising our army, I
time may arrive for attempting by dip-
forbydipio- ¡omatic action to get other nations to make large
matic means. ® "
reductions in their armaments. Now, as for years
past, the only difficulty in doing so will be with
France. Now, as any time since 1851, the frank
adoption of the policy of moderate disarmament in
France would be followed all through Europe. Of
that there seems no chance at present ; but in the
existing state of France, events are at any time
possible whiçh might make her unwillingness to
disarm less important to other nations than would
be the case now. It was Mr. Cobden's wish to
bring about a limitation of the excessive armaments
of Europe by diplomatic negotiation, and he con¬
tinually pointed to our arrangements with America,
as to the limitation of the number of vessels on the
Canadian lakes, as a specimen of the course of pro¬
ceeding which he desired to see adopted. This
idea has been put forward in various forms within
the last few years. In 1868, negotiations between
members of Parliament in most of the leading
countries of Europe, with a view to simultaneous
motions for partial disarmament being made in
TEACHINGS OF RICHARD COBDEN. 15
their respect legislatures, had gone a long way.
The present is, as I have said, clearly not a very
happy nioment, thanks to the state of feeling in
France ; but, depend upon it, this scheme of Mr.
Cobden's will come up again and again till it is
effected, and the statesman who will get it done on
a great scale will be the statesman of the next thirty
years. To restore to the pursuits of industry if it
were only a million, say one in four, of the Euro¬
pean hands that are now being trained to war—^that
is, to the destruction of the fruits of industry—^to
" mischief," as Bentham called it, " on the greatest
scale"—would be the biggest piece of diplomatic
work which has been done in our time.
Further, the acceptance of Mr. Cobden's legacy Moredis^ct
^ r 0 y statement as
would imply a desire for a more distinct statement
^ *' policy
than has been made for many a long day by any wanted.
English Minister as to what are and what are not
the aims of our foreign policy.
Now, there are some persons who think that it
is part of our business to have our hands every- gasements.
where redressing injuries, and that we should act
the part of a sort of earthly Providence. This is
the view, for example, which is advocated with
great ability and zeal by the Spectator^ a news¬
paper which I assiduously read and greatly admire,
but with that view I entirely disagree. It seems
to me that it is no sort of business of ours to be
man's stout defence from wrong," and that, even
if it were, it is a business of which, in the present
state of the world, we should make very little. I
am far, indeed, from saying that it would be im-
i6
MR. GRANT DUFF ON THE
possible to put a case in which it would be the
duty of this country to interfere by force of arms
in favour of this or that cause, wholly irrespective
of treaty engagements, or our own interests ; but it
would be quite impossible to put such a case
without assuming the occurrence of events which
are so violently improbable that for practical pur¬
poses they may be left out of calculation.
Of course treaty engagements are treaty en-
. 0 gagements, and we cannot leave out of calculation
gagements? 0 0 j
the fact that we have a certain numbei* of treaty
engagements which might oblige us in certain
eventualities to go to war, however little we liked
it ; but let any man who makes a conscientious
study of contemporary events take those treaty
engagements and read them quietly through, and
he will, I think, agree with me that the prospects
of our having to go to war under the provisions
of any one of them are by no means great. Still,
in" thinking out a system of foreign policy, the
chance cannot be disregarded. Common sense, how¬
ever, surely points out that no one is bound to an
impossibility ; the most needy or exacting ally can
only expect us to do the best we can, being what
we are. He cannot expect that we should make
the whole of our national life and policy turn upon
the possibility of our one day having to assist him.
British fleet. For motíves quite unconnected with our alli¬
ances, it suits us to have the finest fleet in the
world. Our ally has then the right to ask that, in
the event of its becoming our duty to assist him
under our treaty engagements, he should have the
But what
are our
treaty en-
TEACHINGS OF FICHA FD COB DEN 17
fullest assistance that our maritime supremacy can
give.
Then we are not absolutely rich, for I cannot British
. - money.
think that a country in which the average income of
all its inhabitants, men, women, and children, is
below rather than above £'^0 per annum deserves
to be called absolutely rich ; but compared to other
nations we are unquestionably rich. I rack my
brain without success to think of any probable
combination of European events in which the
assistance of an English force, even if that force
consisted of men each worth two of any other
army, would be half so useful to our allies as
money.
The national sentiment might require that a British flag,
small British force should actually take part in
some Continental campaign ; but, under the exist¬
ing conditions of Europe, that force, even if it were
composed of paladins, could not produce any great
res'ult. In former wars we did much more by sub¬
sidies than by the actual sending of troops, and
now that the armies of the Continent have become
so enormous and so well appointed, it will be surely
much more than ever wise for us to operate upon
land rather with gold than with steel. If this be
true, then the keeping up of any larger force than
what we require for the defence of our own shores,
and the other purposes to which I have alluded,
might be represented as not only not necessary,
but as a direct injury, to our allies. I say nothing
of the immense indirect importance of having
the countenance of a people like ours, which has
iS
MR, GRANT DUFF ON THE
really now on the continent of Europe no interest
whatever except that nations should remain at
peace, and increase alike in material wealth and
in all the higher forms of well-being. Even now
our moral support counts for much ; and every
foreign statesman worthy of the name knovirs that
moral support is worth, in the long run, many bat¬
talions. When you see the contrary asserted, you
may safely conclude that the assertor, if he does
not speak in mere ignorance, is trying to pique us
into a course of action favourable to his own in¬
terests, or is speaking under the influence of irrita¬
tion caused by our not exerting our moral influence
in the direction in which he wishes to see it exerted.
This is true even now in most cases, but it would
be uniformly true if we took as much care as we
should that our opinions upon the conflicting in¬
terests of foreign nations were always formed on
thoroughly sound information. It is not so, how¬
ever. The duty of keeping the public mind clearly
informed about these niatters is not sufficiently
recognised as a duty by those whose duty it is to
lead the national thought in these matters. There
hangs about this side of our affairs too much of
the last century spirit. That spirit was perfectly
in its place when the relations of nations were
settled not by nations but by courts. I am quite
aware that the influence of courts, or rather of the
two or three persons who are centres of courts, is
still far greater than is often supposed, or than they
will be, perhaps, thirty years hence ; but the power
of public opinion is enormously great too, and
That moral
support
vrould be
stronger if
we were
better in¬
formed.
TEACHINGS OF RICHARD COBDEN. 19
public opinion even in this country, where it is far
more powerful than in most places, is not suf¬
ficiently, I will not say directed, for it will direct
itself—but informed, since what is wanted is in
most cases simply a clear statement of the real
facts ; and far, far more than has been done in this
way by any Government whose proceedings I have
watched might be done, I cannot help thinking,
without the slightest indiscretion. From what I
have said now, and often before, you will under¬
stand that I am as far as possible from repudiating
one jot or one tittle of our national engagements.
I do not deny that we may have to use force, in
quarrels which do not directly concerh us, in obe¬
dience to our solemn promises ; but I firmly believe
that if our diplomatic service were considered a
matter of first-class national concern—were con¬
sidered of at least as much importance as either
the army or the navy, although it costs what in
comparison to the cost of these services is a mere
pittance, and if it were worked in all respects as
the exigencies of 1871, as distinguished from those
of 1771, require, no question in which we are inte¬
rested under any treaty engagement would ever be
allowed to reach the stage when war is inevitable,
while the chances of any difference between Euro¬
pean nations coming to a war would be indefinitely
diminished.
It is often said that the days of diplomacy are
past. If by diplomacy is meant the diplomacy of
endless formalities and trickery, of gold-headed
canes and snuff-boxes—the kind of diplomacy
20
MR. GRANT DUFF ON THE
at which Horace Walpole sneered five quarters of
a century ago—I am quite of that opinion ; but
the day of real 'diplomacy—the art, that is, not
only of preventing misunderstandings between
nations, but of making them mutually helpful—
the art of international co-operation, then I take
leave to say that diplomacy in that sense is only
beginning.
I entirely agree with every word of the follow-
ing passage, which I take from the evidence given
before a committee of the House of Commons by
one of the greatest masters of diplomacy in this
higher sense :—" I am of opinion that diplomacy
will become one of the most powerful engines for
the promotion of peace and good relations. At the
present moment we look to armies to establish
peace and goodwill among Christians; but I am
sure diplomacy will be a better engine when pro¬
perly developed and organised." Not less true
Mr. Odo were IVTr. Odo Russell's observations about having,
J^ussoll
not points for diplomatic action, but centres of
political information dotted about the world. " The
more feelers," he said, "you have all over the
civilised world, the better informed you are, and
the more influence you can exercise ; and I think
that through an organisation of that kind you are
more likely to establish peace and goodwill among
Christians than you are through armies, Arm¬
strong guns, breechloaders. Minié bullets, and
so on."
The real In- We hear much talk nowadays of the new
Society. organisation called the International Society,
TEACHINGS OF RICHARD COB DEN. 21
which is to pull down all that stands upright.
In so far as this International Society represents
anything except anarchy, it represents a vast
amount of perfectly reasonable dissatisfaction at
the present unreasonable state of things in Europe,
where every nation is standing with the sword in
one hand and a protective tariff, like a target, in the
other. The schemes of the so-called International
Society, for regenerating the world, are based on
absolute ignorance or disregard of the economic
laws by which the world is governed. That being
so, we know that the end of them must be to
perish and come to naught, after no doubt causing
more or less bloodshed and destruction of property
in this or that place ; .but if one diplomatist in ten
understood the capabilities of his art as well as
Mr. Russell, you would have the diplomatic body
throughout the world a ready-made old Inter¬
national Society, whose action would gradually
sweep away all 'those anomalies and absurdities
against which the doings of the new International
Society are a sort of blundering protest.
I think our Foreign Office should be a vast The Foreign
engine for collecting political information through¬
out the world ; for communicating such parts of
that information as it is right to communicate,
through Parliament and in other ways, to the
country, in order that public opinion may be
always ready intelligently to back up your Foreign
Minister in promoting always and everywhere
peace and goodwill, and mutual helpfulness
amongst nations, and in limiting the area of dis-
22
MR. GRANT DÜRR ON THE
turbance where tendencies so hostile to each other
are in presence that their differences can only be
settled by war.
To have thus acted on public opinion in this
country twenty years ago would have been ex¬
tremely difficult, because in almost every country
in Europe you had struggles going on about
principles with regard to which public opinion in
this country was divided. It is not so now. The
party of the reaction, which was supreme in 1851,
1851. has been defeated along the whole line. The
great questions which are open now are not
questions of principle. There is no question of
principle, about which our people care, open be¬
tween Germany and France. There is no question
of principle, about which our people care, open in
Italy. There is none open in Austria. There is
none open in Turkey. All the questions that are
coming up in European politics, and, I am sure,
there are enough of them, with the exception of
the question between France and Germany, which
is a mere question of revenge, are composite
questions, which require much study even to com¬
prehend them. They are not questions on which
public opinion will ever be so strongly and
suddenly moved as to make it call for wrong
action, if only the true facts are set before it suf¬
ficiently early in the day.
Recapitula- I Say, then, take every honourable opportunity
forei^ to diminish the number of those engagements
which may force you to go to war. Contract no
new ones if it is possible to avoid it. Let your
TEACHINGS OF RICHARD COB DEN 23
allies know distinctly what your support meàns, so
that they may not be led into danger by imagining
that your goodwill to them has no limits. Mul¬
tiply your points of information. Help public
opinion by communicating whatever can with ad¬
vantage be communicated to it, and proclaim to
all mankind that your Foreign Office wishes for no
influence in the Councils of Europe, except what it
must derive from being absolutely disinterested and
supremely well informed.
Had Mr. Cobden lived, his voice would doubt- Cobden
' and commer-
less have been heard in the recent discussions about treaties,
the proposed modifications of his own great Treaty
—the French Commercial Treaty of i860. The
policy which he then inaugurated has been so suc¬
cessful that, as has been said, " all the great nations
of Europe—England, France, Holland, Belgium,
Italy, Austria, and the Zollverein—form, for trading
purposes, a compact International body, from which
the principle of monopoly and exclusive privilege
has been almost entirely eliminated." I do not know
how far the negotiations now going on under the
unhappy initiative of M. Thiers may alter this state
of things, but till the French madness of 1870
nothing could be fairer than the prospect ; and one's
only wish was to see some of the countries that
lagged behind, such as Spain and Portugal, in¬
cluded in the same commercial state system.
There are few things which Mr. Cobden had Sobden
r • ...
more at heart than a reform in our existing land wiaws.
laws. Some of you may remember the very strong
language which he used on this subject in the last
24
MR. GRANT DUFF ON THE
Speech which he ever delivered, and it is strange
that it has never occurred to any one to follow up
the hint which he then gave, and to have a League
for the reform of the land laws, like the Anti-Corn-
Law League. Proposals have indeed been put
forward for dealing in strange ways with the land
—proposals which Sir John Lubbock, one of our
best financial authorities, very clearly showed, the
other day, would result in saddling the State with a
déficit of some fifty millions per annum ; but I
need hardly say that Mr. Cobden would have had
no sympathy with foolish dreams like this—dreams
which are excusable enough in persons who know
nothing of the land except what they read in
books, but would have been inexcusable in a man
who, born and bred in Sussex, understood the
agricultural phase of English life just as well as its
manufacturing and commercial phases. I wish,
by the way, some of our literary would-be land-
reformers would set about informing themselves
about the land in the same spirit in which our dis¬
tinguished countryman Mr. Finlay, the historian of
modern Greece, set to work informing himself
about Greek taxation. He farmed the taxes of a
district, exposing himself to all the annoyances and
all the losses which must inevitably fall upon a
foreigner who attempts such a thing in such a
country, solely and simply that he might see how
the present dreadful system works in practice,- and
what could be substituted for it. But to return to
Mr. Cobden. All he proposed was to sweep away,
as quickly as they could without injustice be swept
TEACHINGS OF RICHARD COB DEN. 2S
away, all those artificial fetters on the transfer of
land which hinder its passing from hand to hand
according to the natural laws of trade. Of course
you can't make an estate as easily transferable as a
diamond or an ingot of gold, but the object of our
land legislation shoùld be to approach that ideal as
nearly as possible. Not until the ordinary economic
forces are allowed to work with regard to land as
freely as the nature of things permits, will the land
do as much for our national well-being as it ought
to do. But there we must stop. No attempt, as in
France, to impose another set of artificial restric¬
tions which work quite as badly as our artificial
restrictions. Free trade applied to land—nothing
more, nothing less. Once let us have this, and our
unwise land customs, which are even more mis¬
chievous than our unreformed land legislation, will
gradually pass away.
There is one thing more which Mr. Cobden BeUîgerent
nghts at seat
greatly desired, about which he wrote largely, and
which he considered a corollary to our free trade
policy, I mean the re-consideration of the whole
subject of belligerent rights at sea. Mr. Cobden
thought that our commerce had now grown to
such an enormous size that, let us make our navy
as powerful as we would, it was idle to suppose
that we could give anything like effective pro¬
tection to that commerce in time of war. He
thought that any loss we might suffer in warlike
efficiency, from not being able to prey upon the
commerce of an enemy, would be as nothing
compared to the advantage which we should gain
26
MR. GRANT DUFF ON THE
by not having our own commerce preyed upon. I
spoke to you at considerable length on this subject
in 1862, and I re-published in the spring of this
year what I then said.* What I thought then I
think now. To adopt the policy advocated by Mr.
Cobden would be to take a most momentous step,
a step about which responsible statesi;nen may well
pause and think—as Mr. Gladstone said the other
day about another matter—"once, twice, and even
thrice " before taking it. It may be that there is
some answer to Mr. Cobden, but if there be, all I
can say is that I have not yet had the good fortune
to meet with it.
PoUcyofthe It will not have escaped you that many steps
Gowmment. taken by the present Government have been in the
direction in which I have been saying that I
should like to see the Liberal party desking to be
led. I need only point to the reduction of the
sugar duties by Mr. Lowe,, to the diminished naval
and military estimates of 1870, to the withdrawal
of the troops from the colonies, where they were
not wanted, by Mr. Cardwell, to Lord Clarendon's
pacific policy in China, to Lord Ripon's nego¬
tiations in America, to Mr. Baxter's application
of modern commercial practice to the purchases of
the Admiralty, to Mr. Childers' reforms, and so
forth.
What I am anxious to see, and do not see,
is, not any particular action on the part of the
Government, but a desire in the party to make the
Government lead it in a particular direction.
* Elgin Speeches. Edmonston & Douglas, 1871.
TEACHINGS OF FICHA EH COB DEN. 27
That, I say, is what I personaíly think would
be the best thing for the country ; and just before
the election of 1868, at the time of Mr. Bright's
"free breakfast-table" speech in Edinburgh, I
was sanguine enough to think that things might
take that direction.
I am looking to the nearest future, not so But not
ö ' sanguine as
sanguine now. Illness soon withdrew Mr. Bright,
not only from the Government, but even from the
councils of the nation. A great war, which states¬
men had for four years been doing their utmost to
stave off, in the hope—the just and legitimate hope
—that something might turn up, in the chapter oi
accidents, to prevent it, at last broke out. When it
had broken out, it was clear enough that even¬
tualities connected with our treaty engagements
might oblige us to take part in the contest. That
necessitated some expenses being incurred, and
some attention, which mighthave been directed more
profitably, being transferred to military matters.
But that was not all. A large section of our Unhappy"
, . , . , . excitement
population went mad with excitement. The caused by
whole thrice-hateful brood of panic-mongers yelled German war.
through the press. Publications like " The Battle
of Dorking," and others which had not even the
recommendation of being, like it, skilfully written,
were sold by tens of thousands ; and unhappily it
was just on the most vocal section of the public—
on a portion of the literary class in the metropolis,
and on "society"—that these publications had
most effect. After the middle of November, it was
28
Yet some
good came
out of this
excitement.
Fall of the
purchase
system.
But all this
threw us
back.
difficult for any one living in London not to believe
that the country really wanted to go to war with
somebody or other, with a view to showing that
the British Lion was as fierce and strong as of old.
The Government, of course, never shared that illu¬
sion, and large numbers of Members of Parliament,
on both sides, never shared it ; but, at the same
time, I am afraid the Government quite rightly
interpreted the wish of the majority of the country
in bringing in far larger estimates for the services
than it was agreeable to some of its best friends
to vote for.
Happily, the same wave of opinion which swept
it in the direction of increased expenditure was
also strong enough to hurl it against the evil
system which had äo long diminished the efficiency
of our army, and made far-reaching reforms im¬
possible. After a resistance to which the future
historian will point as showing how deeply the
mercenary taint had dyed the very souls of a
certain portion of our society, down went the
purchase system with its attendant abominations.
It, I fear, could not have been got rid of except at
the price we paid—six months of panic-mongering,
and several months more of military, or rather of a
much Worse thing, half-military chatter.
But all this threw us back—a long way back—
and it was clearly shown when the budget of this
year was brought forward, that large divisions of
the Liberal party, so far from being willing to
take for their programme anything like what Mr.
TEACfflNGS OF RICHARD COB DEN. 29
Cobden would have approved, were entirely
opposed to it—were all, for example, even for
indirect as against direct taxation.
I am sorry for it, but the business of a poli-
tician in a popular Government is to use as best he ^ir-
may the existing gales and currents of public ^umstances.
thought to carry him in the direction in which he
would go. As Bolingbroke said long ago, "The
ocean which environs us is an emblem of our
Government, and the pilot and th^ minister are in
similar circumstances. It seldom happens that
either of them can steer a direct course, and they
both arrive at their port by means which frequently
seem to carry them from it."
People are often unjustly called doctrinaires, St™«
because they have distinct ideas about politics, and «loctnnaires?
have systems of policy in their heads to which from
time to time they give expression ; but those are
only justly called doctrinaires who insist on acting
in sea.son and out of season upon the doctrines
which they profess.
If the nation wishes for the present rather to ^^reform
make itself, so to say, more comfortable where it is
than go through the exertion of driving a^ stage for¬
ward even on the road of prosperity, the servants
of the nation have nothing to do but to obey its be¬
hests. By all means let us have one or more ses¬
sions given to diminishing drunkenness, to preventing
accidents in, and otherwise regulating mines, to
passing an improved Merchant Shipping Code, to
enabling the authprities to deal better with disease
or the causes of disease, and so forth. These ques-
30
MR. GRAN7 DUFR ON THE
tions, taken each by itself, are of immense import¬
ance, but they can hardly be grouped into a
•connected whole in a way to seize the imagi¬
nation, or form the basis of action for a party.
They might, of course, be rhetorically repre¬
sented as measures of which the common object
was to turn the new force acquired by the
vast addition lately made to the constituencies
to the improvement of the general condition of the
people. In fact, such a presentment of them by a
practised orator might, if that orator were a
leading Cabinet Minister, be an immense political
service, for he might doubtless, so dispose and
colo'ur his materials as to give to perfectly sane
views and reasonable aims something of that at¬
tractive appearance which seems to attach to the
fantastic schemes of world-bettering about which
we heard so much this autumn. To do that,-how¬
ever, would, as I have said, require the power of a
great orator full of the enthusiasm of humanity.
One is looking, perhaps, only at the other side of
the shield ; but for my part, I cannot help thinking
that the first condition of world-bettering, even in
this country, which is comparatively rich, is to
increase material prosperity^ while the second con¬
dition must be to diffuse sound instruction. Let
us do all the other things that various sections of
philanthropists propose. Above all, let us regulate
the Liquor Traffic, supply efficient direction, and
give adequate powers to the various sanitary
agencies through the country, and improve, as
far as we can, the dwellings of the town popu-
TEACHINGS OF RICHARD COB DEN. 31
lation. But the first and great political com¬
mandment of the hour is—Make the people rich ;
and the second, make them intelligent. There are
periods in all our lives when we think rather of
setting our houses in order than of entering upon
any decided course of action ; but these periods
do not last so very long with individuals, and
the period on which we are now entering won't
last so very long with the British people. Well, ®ome^^er°
what next.? I really do not see any choice be- be¬
tween the programme I have been sketching and a
programme of organic change. I do not think we
shall have organic changes, because I believe that
the various institutions, in which some change is
required, will pretty readily agii^e to as much
change as the nation will care to have for some
time to come. As at present advised, then, I am JiSc^^ucy,
inclined to think that the policy I have been trying jjj® day^afteí
to sketch is the policy, not, indeed, of to-morrow, to-morrow,
but of the day after.
A friend said to me the other day, " But why
is it necessary to be doing anything Why cannot
the Liberal party be satisfied with merely admin¬
istering the country?" To such a question, the
reply that our parliamentary system of Govern¬
ment practically necessitates changes is not a
sufficient answer ; but this, I think, is a sufficient
answer. Our present position is an illogical one ; Our present
^ ^ ® ' position an
we have broken with an old set of ideas, and we »iiogicai one.
have not yet fully accommodated our policy to the
new ideas which we hold.
32 MR. GRANT DUFF AT ELGIN.
After some questions had been asked and an¬
swered, Bailie Taylor proposed, and Mr. John
Allan, corn merchant, seconded, a vote of thanks
and confidence ; which being put by the Chairman,
was declared duly carried.
COBDEN
CLUB
t
REPORT
OF THE PROCEEDINGS
AT THE
ANNUAL DINNER
OF THE
COBDEN CEUB,
June 24th, 1871.
THE RIGHT HON. EARL GRANVILLE, K.G.,
IN THE CHAIR.
WITH LIST OF MEMBERS.
LONDON :
PRINTED BY CASSELL, FETTER, AND GALPIN,
LUDGATE HILL, E.G.
1871.
N.B.—All communications for the Hon. Sec., Thomas Bayley
Potter, M.P., should be addressed to him at the Reform Club, Pall
Mall, London.
The Bankers of the Club are the London and Westminster Bank,
Westminster Branch, I, St. famed s Square, London, S. W., where
subscriptions should be paid on the \st offanuary in each year.
It is suggested, for the convetiience of Members, that they should
leave with the Secretary their usual address, and also an order on their
Bankers to pay their subscription on the ist of fanuary in each year to
the Bankers of the Club, to whom all cheques should be made paycd}le.
Blank forms may be had on application to the Secretary.
GEORGE W. EVANS,
Secretary.
23, Chalcot Crescent,
Regent's Park Road, N,W.
THE COBDEN CLUB.
The annual dinner of the Cobden Club was held at
the Ship Hotel, Greenwich, on the 24th June. It may
be to some a necessary reminder that the Club is not
an institution with a local habitation, but a society for
spreading and developing the principles of Mr. Cob¬
den, by publications and other means, of which this
annual celebration is one. A large party, including
several foreign guests, went by special steamer from
the House of Commons' stairs to Greenwich, and a
considerable proportion of them returned by the boat
at night. One hundred and ninety-five sat down to
dinner ; Lord Granville presided, and among those
by whom he was supported were the Right Hon. the
Marquis of Ripon, K.G., Lord Acton, Baron Mackay
(Holland), Sir Louis Mallet, C.B., Capt. S. Osborn,
R.N., C.B., M. Arlès-Dufour (France), Cyrus W. Field
(United States), M. Corr-Vander Maeren (Belgium),
a 2
4
COB DEN CLUB.
Dr. Julius Faucher (Germany), M. Auguste Couvreur
(Belgium), Herr Otto Michaelis (Germany), Montague
Bernard, M. Gustave d'Eichthal (France), T. Michell,
Herr George Bunsen (Germany), Hugh McCulloch
(United States), Odo Russell, Herr Max Schlesinger,
Mahlon Sands (United States), C. H. Marshall (United
States), Dr. Spinsio (Austro-Hungarian Vice-Consul),
T. Willerding (Swedish and Norwegian Consul-
General), Right Hon. James A. Lawson, W. E. Baxter,
M.R, Sir C. W. Dilke, Bart, M.P, Sir Joseph Whit-
worth, Bart, Sir Charles Wingfield, K.C.S.I, C.B,
M.P, W. P. Adam, M.P., W. C. Cartwright, M.P.,
Serjeant Dowse, M.P., J. T. Hibbert, M.P., Sabbas
Viikovics (Austro-Hungarian Empire), General Wood-
hall (United States Legation), E. S. Nadal (United
States Legation). The general company included,
besides a large number of members of Parliament,
many of the political and personal friends of the
late Mr. Cobden, from Manchester. The vice-chair
was occupied by Mr. Thomas Bay ley Potter, M.P.
Grace was said by the Rev. Edwin Hatch, and the
Rev. Alton Hatchard returned thanks.
The noble PRESIDENT of the evening, who on
rising, received a most cordial welcome, in proposing
the first toast, said: MM. les Étrangers, my Lords and
ANNUAL DINNER.
5
Gentlemen—I beg to thank you for the kind recep¬
tion with which you have greeted me. Our excellent
vice-chairman (Mr. Thomas Bayley Potter), whom you
have already cheered at the unorthodox hour of
duck and green peas, has just placed in my hands
an address of welcome from the Advanced Liberal
Association of Greenwich, which I have no doubt
will be agreeable to the members of this club. (Hear,
hear.) I have now to propose a health which, accord¬
ing to routine, is proposed not only every year, but
every month, and almost every week and every day
in this country. It is proposed to you to drink the
health of the illustrious lady on the throne of this
country. (Cheers.) It has become almost common¬
place to say that we have never had a more constitu¬
tional monarch than her Majesty, and I cannot help
thinking that, looking back into the history either of
our own or other countries, it is a remarkable fact
that the only complaint I have ever heard raised
against her Majesty, as a Sovereign, is that in the
hour of her bereavement and affliction, she has not
been as much among her people as their affection and
their loyalty would make them desire. (Cheers.) The
late Prince Consort knew and appreciated Mr.
Cobden, not only as a public man, for he had a great
6
COBDEN CLUB.
opportunity of observing his work and his ability as
a colleague at the time of the Great Exhibition of
1851. (Cheers.) I have regretted, for great national
reasons, that Mr. Cobden always resisted the accept-^
ance of official life ; and I regret it in connection with
this toast, because I believe it would have given the
Queen an opportunity of knowing him and liking him
in the way she has done his illustrious friend and
fellow-labourer, John Bright. (Cheers.) I don't know
whether it is out of place for me to say that, having
been in attendance recently on her Majesty at Bal'
moral, I had the immense pleasure of receiving from
him a communication written with his usual spirit,,
and talking of his recovery as being very near.
(Cheers.) I communicated the fact to her Majesty,-
who desired me at once to telegraph to Mr. Bright
that, if he thought it prudent in regard to his health,-
she hoped he would come and spend two or three days
in retirement at Balmoral. (Loud cheers.) I think it
is not necessary for me to speak more to induce you
to drink, with the usual enthusiasm, "The Health of
her Majesty." (Loud cheers.)
Earl Granville then rose to propose the prin¬
cipal toast of the evening. He said : My Lords and
Gentlemen—In obedience to the despotic orders of
ANNUAL DINNER.
7
Mr. Potter, I rise to propose the toast of " Prosperity
to the Cobden Club." (Hear.) I own that, flattered
as I was by your invitation to preside on this occasion,
I felt some doubt as to my right to assume that re¬
sponsibility. If there is one thing which gives me
courage in doing it, it is this painful reminiscence,
that I entered Parliament thirty-five years ago, and
that except for a short interval I have sat in one or
other of the Houses of Parliament ever since that
time (cheers) and that during that period one of
the things that I look back to with the greatest pride
and satisfaction is, that even before Mr. Cobden was
in the House of Commons, I gave constant votes in
favour of free trade. (Cheers.) I have never yet
given one contrary to those principles which were so
much abused at one time, but which are so absolutely
consecrated in the minds of Englishmen at the pre¬
sent moment. (Cheers.) Mr. Cobden had one great
advantage, which does not always happen to men who
create for themselves an historical name. Before his
death he had extorted the respect and the admiration,
not only of his political and personal friends, but of
those who had been previously most strongly op¬
posed to him. (Hear.) It is not necessary for me
to repeat to the Cobden Club what Sir Robert Peel
8
COB DEN CLUB.
thought and said of Richard Cobden. (Hear, hear.)
I think there are many of you that must have remem¬
bered that-striking scene in the House of Commons,
so numerously represented this evening, when three
men as different as possible—Lord Palmerston, Mr.
Disraeli, and Mr. Bright—paid a tribute to his memory
almost immediately after his death. (Hear.) You
will remember how Lord Palmerston spoke of his
noble and Demosthenic eloquence ; how Mr. Disraeli
said he had hardly an equal in debate ; and how both
concurred in giving full testimony to the moderation
of his character and to the statesmanlike quality of
his mind (cheers) ; and how Mr. Bright, unable to
do more from emotion than just to falter out what I
believe was one of the truest compliments ever paid
to a departed friend, said that no manlier or gentler
spirit had ever tenanted or quitted the human frame.
(Cheers.) Since that time there have been some most
magnificent—I may almost call them funeral—ora¬
tions pronounced with regard to the memory of Mr.
Cobden, and in the presence of the members of this
club. I believe it is not your wish I should repeat
the panegyric, for it would have been contrary to the
simplicity of his character if he had thought this was
to be an annual custom, however proud he might
ANNUAL DINNER.
9
have been that a club which bore his name, increasing
in numbers every year, should meet to celebrate the
great principles which he advocated, and which he
had so much advanced. (Cheers.) Those principles,
I believe, were liberty in things political, liberty in
things religious, and liberty in things material. (Loud
cheers.) I believe almost every subject which he
raised, whether of over-taxation for purposes not re¬
quired, whether for removing legal restrictions upon
the sale of land, whether it was for maintaining
peaceful relations with other countries, all might be
brought back to the feeling which he entertained for
liberty unrestricted, but without license, in everything.
(Cheers.) We feel great pleasure in being surrounded
by the representatives of seven or eight different
nations this evening (cheers) ; and I may say that I
have received a letter from M. Wolowski, in which
he expressses his regret that as he is standing
for the city of Paris he is not able to meet us here
to-night. I have a longer letter from M. Chevalier,
that name so well known to you. (Cheers.) He
eloquently dwells upon the circumstances of the
present time, and particularly upon the pain which
would have been excited in Cobden's mind, both by
the great war which is now happily closed, and by the
lO
COB DEN CLUB.
threat that that treaty in which he took such interest
is likely to suffer in some degree. Now, with regard
to Mr. Cobdefi, I quite admit that in respect of the
events of the last year there is much that would have
pained him deeply. But I do not believe there is a
single thing which has occurred, or is likely to occur,
which can weaken in us the conviction how right and
how wise he was. (Cheers.) It is not for me to speak
of the events of the war which has just closed, or to
try to describe the causes which led to it ; but I can
say that it is to me a feeling of indescribable relief
that I am now standing between two gentlemen, one
representing that great nation France, the other that
great nation Germany, and that they are at peace
instead of their being at strife, as they were a short
time ago. (Cheers.) Perhaps I may, however, be
allowed to say something with regard to ourselves,
and certain morals which I think we can draw from
recent events. (Hear, hear.) I think it was Cobden
who stated that upon the whole he thought we were
the most combative race in existence. (Hear, hear,
and a laugh.) I entirely share that opinion. I think
we show it in almost every way. There is something
in our nature which requires the stimulus of obstacles.
Whether it is competition in commerce or in any
ANNUAL DINNER.
II
other good thing, we require that stimulus before we
put out one-half of our power. (Hear, hear.) I could
instance in another respect the marvellous power of
grumbling • which we possess. (A laugh.) By our
knowledge of that art, and by our continuous practice
of it, we have obtained nearly all the good things
which belong to the nation. (Hear, hear, and cheers.)
I am happy to say I think we have profited immensely
by the labour of Cobden and others in their appeals
to our good sense to consider what our duty is in
great events, such as wars. (Hear, hear.) There is
always a concurrent feeling that war in itself is cer¬
tainly a great calamity and a great crime. (Cries of
" Hear, hear.") I think we observed those two feel¬
ings a little in competition during the last few melan¬
choly months. I am not now speaking of the Cobden
Club or of those who profess its principles ; but I be¬
lieve there was hardly a man in England who did not
deeply regret the beginning of that war, and who did
not wish that it might be prevented. (Hear, hear.)
Some sympathised with one combatant, some with the
other. Some felt an interest in Germany working out
its great destiny and uniting itself ; others felt them¬
selves bound to France by ties of all sorts in peace,
and I must also add in war. (Cheers.) But the
12
COB DEN CLUB.
general feeling of Englishmen was that the course of
her Majesty's Government ought to be that of a strict
and honourable neutrality. I am aware that being a
member of that Government, and belonging to the
Foreign Office, it is possibly presumptuous in me to
say so, but even after the events, coming in very rapid
succession as they did, with many surprises, I am not
aware of her Majesty's Government having departed
in one single iota from the strictness and from the
honour of the neutrality which they believed the
nation desired them to maintain. (Cheers.) And yet
at times, as we read the accounts of those marvellous
feats, and as we heard all sorts of stories of military
prowess and of military calamities, there was a sort of
undefined feeling that we ought to be doing some¬
thing, though we did not know exactly what that
particular thing was. Dignitaries of the Church wrote
little tales for school children (laughter), sold not by
tens or hundreds, but by tens of thousands, which,
however amusing they might be, appeared to me to
contain only one moral, and that was, that it was
disgraceful and humiliating for this country to conduct
itself industriously and peacefully while any other two
nations were fighting, and while one, as generally
must happen, was not so successful as the other.
ANNUAL DINNER.
13
(Loud cheers and laughter.) I am bound to say that
in some of the speeches and writings there seems to
be a feeling that war was in itself such a desirable
thing that there was almost a want of ingenuity and
skill in her Majesty's Government in not managing to
involve us in a contest, which I believe in my con¬
science would have been of no use to either.one party
or the other, but which would infallibly have involved
the whole of Europe in that dreadful calamity, and
would have prolonged the miseries and sacrifices of
the two great and, to us, friendly nations which were
concerned. (Cheers.) I rejoice to think that I be¬
lieve all those feelings have passed away ; but, at the
time, I did sometimes feel regret that some man of
the independent position and thought of Richard
Cobden (cheers) was not alive to put before the
country, in the manner which he knew so well how to
do, the common sense and the reason of the matter.
(Renewed cheers.) Another question which certainly
would have grieved Mr. Cobden was that one conse¬
quence of the war is the probability that the treaty of
commerce, which he took such pride in negotiating,
is likely, in some way, to be affected. Now, I believe,
in this country, even at the present time, there has
been some misapprehension as to the views of Mr.
H
COB DEN CLUB.
Cobden in negotiating that treaty. I believe Mr.
Cobden was the last man to think that free trade was
to be promoted by reciprocity treaties, or by haggling
for light advantages from one country to another.
Whatever Mr. Cobden was, he was not a mere theorist.
He was a practical man. He saw how useful the ab¬
sence of protection had been, yet he was aware, after
our example had not been taken up on the continent
of Europe, that there generally prevailed on that con¬
tinent an opinion that England had resisted the bad
.effects of protection merely from some exceptional
circumstances, such as her great seaboard, her accu¬
mulated capital, or her mineral wealth, perhaps not
recollecting that Switzerland had for years succeeded
in the same course, certainly without much access to
the sea (hear), I am afraid without great accumula¬
tion of capital, and I have yet to learn whether she
has any large production of coal and iron. (Hear,
hear.) Mr. Cobden believed the opportunity was
presented by which not free trade, but a mitigation
of protection, a withdrawal from prohibitive duties,
might be started in France, and the germ of real free
trade might be planted there ; and, from the vast in¬
fluence which that country exercised over the rest of
Europe, he was perfectly convinced, as facts have
ANNUAL DINNER,
15
proved, that if France lowered her tariff, other countries
would follow an example which they would be un¬
willing to take from us in the first instance. (Cheers.)
I stated that this treaty appears to be threatened. M.
Thiers has rendered during the last month very
great services to his country. (Hear, hear.) He
has restored peace and order, and I believe in his
patriotic wish to maintain liberty, to encourage in¬
dustry, and to build up the finances of France.
(Hear, hear.) It is not for me to read a lesson to
so eminent a man dealing with the home affairs of
his country, or to say whether the views which on
past occasions he has expressed are the best calculated
to forward those objects which I believe he has truly
at heart ; but, on the other hand, I am not prepared
to argue against some two hundred members of the
Cobden Club whether anything resembling protec¬
tion is the most likely way to encourage industry or
to increase the revenue at a time when it is absolutely
necessary to be increased. (Cheers.) I believe there
never was better advice given than that which I saw
in a blue book by chance the other day, extracted
from a letter from Mr. Cobden to Sir Emerson
Tennent, in respect to the action of the Chambers
of Commerce of this country, in pressing the Foreign
i6
CO BD EN CLUB.
Office to obtain reductions of tariffs and duties abroad.
He believed it was injurious to the interests of the
Foreign Office, and that all that could be done by
a well-informed Minister abroad was to take judicious
occasions to point out exactly what had been the
success of the revision of duties, and the abolition
of protection, not only with regard to the industry
of this country, but with regard to establishing a
rapid increase of its revenue. He said he believed
the way to help protection in foreign countries was
for protectionists there to be able to say, " See how
your rivals in trade are anxious to get concessions
from us," and to say in an attractive form to those
who are unenlightened,"Do you think it is patriotism
alone and regard for your interests, in comparison
with, that of a stranger, which makes them clamour
so loud for us to do that which we tell you is un¬
wise?" (Hear, hear.) I need hardly say that if
any definite proposal on the subject of the French
Treaty is made to us it will be received with the
most friendly consideration on the part of her
Majesty's Government. We are really anxious to-
be of use to France in her present—I hope temporary
state of depression, and there are several alternative
proposals which my colleagues may think it right
ANNUAL DINNER.
17
for me to make ; but one thing, I am sure, if they
wished me to do it, would be contrary to the wishes
of Mr. Cobden, and that is, to renew negotiations
for a fresh treaty of commerce based upon a retro¬
grade principle. (Cheers.) I have trespassed upon
you too long—(no, no)—upon points on which Mr.
Cobden would have felt acutely connected with the
state of Europe ; but I am bound to add that there
are also circumstances of the present time which I
believe would have given the most hearty satisfaction
to that distinguished statesman. There is a country,
a very interesting and a very great country—(cheers)
—separated by an immense expanse of water from
us. It is one which Mr. Cobden was not ignorant
of, for he took in it the deepest interest for itself,
and it was one which he earnestly desired might
be warmly and nearly connected with this country
in every way. (Hear, hear.) I think it was not
long before his death that Mr. Cobden made a speech
in the House of Commons, stating—and he kept
his word—that he would not say anything from the
American point of view, but would speak only in
the sense of our British interests, when he urged upon
this country what he considered to be the true state
of the case as to what it was desirable that we
B
i8
COBDEN CLUB,
should do. I believe that speech had a great effect
—I know it had a very great effect upon the mind
of one of the most distinguished statesmen of the
time—both in England and America—in gradually
bringing both countries to wish to remove all causes
of difference and offence which might exist. I be¬
lieve it enabled Government after Government pro¬
gressively to advance to measures of a conciliatory
nature, and to reach that stage of understanding
with America which has made possible what it has
been the singular good fortune of Lord Ripon—
(cheers)—and Mr. Montague Bernard—(cheers)—^here
present, and of their absent colleagues, to effect, and
which I believe to have been a great and good
work. (Loud cheers.) I do not only speak of their
having put into a fair train of settlement questions
of an irritating character, which were festering be¬
tween the two countries, but I speak also of what
they have done for the future, greatly, I believe, in
the . interest of America, and I believe still more
greatly in the interest of this country, with regard
to the settlement of questions which might have
arisen I and, ábové all, I think they have done a
good work in setting an example of the way in
which dissensions, which might be the commencement
ANNUAL DINNER.
19
of quarrels between great nations, should be settled
by initiating the principle—(cheers)—that instead of
nations being absolute judge in their own cause—a
thing, as Mr. Cobden said, which is unknown in
private life—they should endeavour as much as pos¬
sible, first by peaceable negotiation, and secondly
by arbitration when possible—(hear, hear)—to settle
differences in a way which leaves nothing behind
it but feelings of friendship, peace, and goodwill.
(Cheers.) One single word which I wish to say—
and perhaps some of you may not agree with me—
is, that I do not profess to be a peace-at-any-price
man—(hear, hear)—and I have a right to say that
Mr. Cobden himself was opposed to any notion of
our disarmament, for he stated so himself in the
House of Commons ; and I say more, with regard
to other .men like Mr. Cobden, or the most peaceable
members of the Cobden Club, that if real insult or
real injury were offered to this country, I should be
extremely sorry to stand bail for their peaceable
behaviour—(cheers and laughter)—although in other
times when they thought the insult was not sufficiènt
and the interest was not great, they had had the
moral courage, so much more rare than physical
courage, to state their opinions and to endeavour
B 2
20
COB DEN CLUB.
to calm public opinion. (Loud cheers.) I was
accused the other day in the House of Lords of
being too complimentary, of showering too many
compliments upon everybody concerned in this nego¬
tiation, so I am glad in the presence of some of my
American friends to state that if there is a flaw in
the American character, it possibly is a rather strik¬
ing adherence to Protectionist opinions—(laughter)—
in one of the greatest and freest countries in the
world. But if I may venture to offer an excuse,
which I am afraid some Americans will not do on
this occasion, I would say there are reasons which
have engendered those feelings, and there are reasons
to hope a different course of things will be pursued.
For many years before the civil war, the men of
America were absorbed with one of the most painful
and difficult questions that ever oppressed a great
nation : I mean that of slavery. I believe—(hear,
hear)—that prevented the examination which would
otherwise have been given to politico-economical
truths, which in our leisure we very recently, and
with not so much reason to justify the course pur¬
sued in previous years, have honestly and sincerely
advocated. Then came that great struggle, and
that struggle creating an enormous debt — the
ANNUAL DINNER.
21
Americans with praiseworthy earnestness are trying
to abolish that debt. It is not for me to say whether
their protective duties are the best way of raising
revenue ; but what I do say is, that under no
pressure from foreign countries, but from calm and
deliberate reasoning among themselves, and from
that perfect and astute knowledge which, above all
races, they possess, they are rapidly coming to the
conclusion that it is not in their own interest to
continue tariffs of such an enormous amount. (Hear,
hear.) I believe that now that undoubted seeds of
friendship and good feeling have been planted firmly
between the two nations—if such a consummation
is produced—there will be nothing to prevent the
two nations, having so much in common both in
the present and in the past, being politically, inter¬
nationally, and socially more closely united in the
future for their own advantage and benefit, and I
will say for the advantage and benefit of the whole
world. (Loud cheers.) I really have to apologise
to you for trespassing so long ; but I must beg you
to drink with three times three and real enthusiasm.
Prosperity to the Cobden Club," coupling with
the toast the name of Sir Louis Mallet.
Sir Louis Mallet, in responding, said : I have
22
COB DEN CLUB.
been requested by the committee to respond to the
toast which has just been drunk, to the " Prosperity
of the Cobden Club." The eloquent speech of the
noble lord who has done us the honour of presiding
over our meeting to-night, and the cordial tribute
which he has paid to the character and objects of this
association, are not the less graceful, because they
were not needed, to assure us of his enlightened
appreciation of the great principles which the name
of Cobden represents, and which it is our aim to
uphold and promote. And when I look around me,
and see the numerous distinguished men of other
countries and of our own who have come to our
annual celebration to-day, animated by the same
thoughts and inspired by the same hopes, and have
heard the cordial response to the invitation of our
chairman, I feel more than ever that the cause which
unites us is a living force, which is destined to prevail
over national prejudices and class jealousies, and to
command the consent of mankind. This is a time
when it is especially needful for Freetraders to renew
their efforts and reassert their principles, opposed
irreconcilably, as they must always be, to the econo¬
mical doctrines which find their natural expression
in war and revolution, and which—whether in the
ANNUAL DINNER.
23
name of Protection, which is the spoliation of the
many by the few, or of Communism, which is the
spoliation of the few by the many—are alike de¬
structive to the common interests of all, and to the
foundations of society itself. This association con¬
stitutes, my lords and gentlemen, a standing protest
against those subversive and reactionary doctrines ; it
believes that in the beneficent operation of the laws
of free exchange—of which Cobden was the great
practical teacher — will be found the gradual buti
sure solution of some of the gravest social and,
political problems which beset the course of modern
progress, in the reconciliation of class to class, and
of nation to nation. I thank you, my lords and
gentlemen, for the toast which you have drunk, and
accept it as a pledge of our union, and as a happy
augury that our society will become more and more
worthy of the honoured name it bears.
Lord Acton rose to propose "The Foreign
Guests." He said there were present men from France
and Germany, from America and other countries,
who represented that school of practical and states¬
manlike economists who were striving to convey
ideas into facts for the benefit of mankind, the school
of which the name of Mr. Cobden was the symbol in
24
CO BD EN CLUB.
England. To whatever school they belonged, and
from whatever land they came, they met here on
neutral and congenial ground, because the principles
of social, political, and economic science which they
were united to uphold were superior to national con¬
flicts, and were destined to be raised above the contro¬
versies of party. A famous German writer, after
paying us the compliment of saying that no country
and no branch of literature had a more illustrious
series of names to show than the four great masters
of political economy in England, went on to say that
there was a flavour of insularity in their writings, and
that they were not very well informed of the ideas
and conditions of the Continent. If there was any
answer to this reproach it might be found in the exer¬
tions of this Club, and in those researches into the
land laws of different countries which had been con¬
ducted and published under its auspices, and to which
several foreigners had contributed, one of whom was
present. And if there was any remedy for this im¬
puted defect, it would be supplied by the frequent
presence among us of so many distinguished men
from abroad. The time was opportune and propitious
for such a meeting. When the Club met here last
year that great war was just beginning, whose bit-
ANNUAL DINNER.
25
terest effects political economy was powerless to avert,
but powerful to assuage (hear, hear), and which had
ended in restoring and consolidating a people too long
divided ; so that the gentleman who would speak in
behalf of Germany would speak as the citizen of a
united, mighty, and enlightened Empire. (Hear,
hear.) More recently, France had passed through
the most terrible convulsion that was ever caused by
the conflict of economic errors ; and the memory of
her misfortunes would insure to her spokesman here a
reception at least as respectful and sympathising as
he could have found in prouder and more prosperous
times. (Cheers.) America would be represented by
one who knew by experience, better perhaps than any
public man, how a great people, tried by war and by
the sudden creation of a vast national debt, can re¬
store its finances, reduce its burdens, and resume its
lofty place among the nations. He proposed "The
Health of the Foreign Guests," and associated the
toast with three distinguished names—M. Arlès-
Dufour, Mr. George von Bunsen, and Mr. Hugh
McCulloch. (Cheers.)
M. ARLES-DUFOURjWho was very warmly cheered,
said in reply : Gentlemen, in answering the kind
and noble toast which the noble lord proposes, I
26
COB DEN CLUB.
am quite at a loss to express what we all feel. In the
present unhappy circumstances of my country I should,
perhaps, confine myself to thanking you, and all our
English friends, for the evidences of deep sympathy
which have been so freely offered to France ; but the
revered memory of our illustrious and regretted Cob-
den, which we celebrate to-day, demands something
more, especially at a moment in which what he him¬
self considered, and what we all consider, as the
crowning act of his life is more than threatened by
men who, in spite of a long career, appear to have
forgotten and learned nothing. In his eternal life
how our friend must suffer in seeing the misfortunes
of that France towards which he felt so warmly !
Above all, how he must suffer in seeing her about to
return to those barbarous principles of Protection
from which he thought he had largely contributed to
deliver her for ever ! He was well aware, indeed, both
of the strength and the weakness of a people who,
under the influence of an idea, are capable of
advancing with giant strides, but also at times of re¬
trograding with almost equal rapidity. Still I doubt
whether his logical mind could have conceived so
sudden a change. Cobden was the very type of
common sense, and in this respect he really was the
ANNUAL DINNER.
27
Franklin of England, her bonhomme Richard. In the
course of an intimacy, long, and yet too short, I con¬
tinually recognised and admired in him this gift of
Heaven, common sense, the most rare of all. Allow
me to quote, in connection with this, an extract from
one of his letters—letters at once so simple, so naive,
and so profound. In 1861, after the dissolution of the
Corn Law League and the conclusion of the Treaty of
Commerce, I urged him strongly to join his old friends
in forming an International Peace League. He wrote
in answer : " My dear friend—I am much obliged by
your letters. To confess the truth, I don't see how
an international league is to promote peace in any
other way than by commercial intercourse. That is
the way alone in which the peoples can carry out
the designs of the Creator, as evident in the laws of
the creation. This process will go on rapidly under
the new Treaty. It would have gone on from the
beginning of time, as in our day, and left no dis¬
tinction between Englishmen and Frenchmen, had it
not been for perverse human legislation." I continue,
and say that the men who are now at the head of
affairs in France have learned little, and the proof of
it is the unheard-of precipitation with which they
seek to overturn, in a few days, economical results
2S
COB DEN CLUB.
obtained after nearly a century of study and expe¬
rience by such men as, in England, Adam Smith,
Bentham, Ricardo, Bright, John Stuart Mill, Bow-
ring, George Villiers, Granville ; in France, Quesné,
Turgot, Jean Baptiste Say, Bastiat, Michel Chevalier,
Jean Dolphus ; in Russia and in Germany, Storch.
They excuse also their precipitation by pleading the
absolute necessity of augmenting the public revenue
rapidly—ignorant, or feigning to be ignorant, that an
increase of revenue derived from heavy duties on raw
materials and manufactured articles is at best ficti¬
tious, since it paralyses labour, production, and con¬
sumption. They ought to have looked elsewhere for the
necessary resources, and they would have found them,
particularly in establishing the income-tax, which
they pretend to be impossible in France, when it is
established, not only in England, but also in Ger¬
many, and even in Switzerland. But our narrow-
minded statesmen rather prefer taxing labour than
fortune ; it is logic—with their reactionary ideas.
They also justify those measures by the example
of the United States, where, in a position analogous
to ours, the Government had recourse to heavy
duties ; but if they had seriously studied the result
of this policy, they would have seen that it has
ANNUAL DINNER.
29
partly ruined the maritime commerce of the United
States to the advantage of that of England. But
let us not despair, let us take courage ; these men
will pass away, France will soon perceive that their
influence is fatal, and she will find the resources
she requires by more natural means which will not
paralyse her progress. Those who in France fear
that England, like herself, should make a backward
step by adopting measures of reprisal, do not know
her wise and persevering character. I believe, on
the contrary, that the statesmen who laboured with
Cobden to establish commercial freedom, and of
whom some are now sitting at this table, will endea¬
vour rather to extend than to restrain or check it.
They understand too well the true interests of their
country, to follow our leaders in their ignorance of the
interests of France. I conclude, gentlemen, by pro¬
posing a toast to the men who, in whatever situation
or country, labour for the complete and unreserved
triumph of the liberty of commerce, sister of all
other liberties, and to the memory of Cobden, its
most illustrious champion.
Mr. George von Bunsen followed, and com¬
pared these yearly gatherings to the Olympiads in
this respect, that they were festive occasions when the
30
COB DEN CLUB.
new and characteristic science of modern days, Inter¬
national Economy, cast up her accounts to see what
progress had been made. He then said that allusion
had been made to the fact that the new Empire of
Germany was intent upon economic progress, and that
nations were never safe from economic backslidings.
The history of that powerful State which now formed
the nucleus of the German Empire, furnished both a
promise and a warning. Prussia was the first State to
introduce practically and consciously the doctrines of
Adam Smith—(cheers)—when she introduced in 1818
a tariff resting upon the principle of a maximum 10
per cent, ad valorem duty, and that after the most
prolonged and devastating war of modern days. Pite-
ously impoverished as she then was, her example
might now with propriety be followed by the rulers
of France. (Hear, hear.) He grieved to say Prussia
receded from this high and proud station of free
trade, and obeyed, during a whole generation and
more, the dictates of other German States, whom she
strove to collect into a commercial and Customs*
union, called the Zollverein. Although the sympathies
of her rulers, who had sat at the feet of those much-
abused professors—(hear, hear)—followers and disci¬
ples of Adam Smith, were all in favour of free trade,
ANNUAL DINNER.
31
although the entire German press, with scarcely one
exception, was loudly proclaiming its principles,
Prussia submitted to the protectionist tendencies of
her peers under institutions closely resembling those
of Poland under the régime of the liberum veto. From
this retrograde movement into protection who saved
her ? England and the Anglo-French Treaty of i860.
(Loud cheers.) He offered a passing tribute of ac¬
knowledgment and thanks to M. Arlès-Dufour, M.
Chevalier, and other enlightened Frenchmen for the
benefit they bestowed, while preparing and carrying
that measure, upon their own country and upon his as
well ; for that treaty was the mother of similar treaties
between France and Italy, France and Austria, France
and Germany. And hero was a case to prove, against
the detractors of international Treaties, if such detrac¬
tors there be, that a country was actually saved at times
from a cul-de-sac position in internal questions of great
moment, through the peaceful workings of diplomacy.
(Hear, hear.) At home he was a member of the
Liberal Opposition (cheers), and, therefore, a simple
word of acknowledgment to those who conducted the
economic affairs of Germany since 1867 will be kindly
accepted by them as genuine and unbiassed. (Cheers.)
One of those whom the committee had done the
32
COBDEN CLUB.
honour of inviting to this feast, Herr Michaelis, was
the man under whose advice and, if he were well in¬
formed, from whose pen emanated in rapid succession
those Bills on economic matters of which it was not
too much to say that they had changed the entire
social and economic fabric of Germany, at the same
time welding it indissolubly together. To his chief,
Herr Delbrück, the head of the Federal Administra¬
tion, was due the initiative to all those trenchant
reforms, one of which was the lowering of the duty
on raw iron by two-thirds at one blow. And as for
the illustrious Chancellor, Prince Bismarck, into whose
hands Providence has laid power so incalculably great,
he could but express his honest conviction that every
principle of economic progress, every social teaching
requiring width of mind and soul to comprehend, ever
met with a ready response in his powerful brain, and
found his iron arm ready to carry it through. (Cheers.)
In conclusion, he said, may the day soon come—and
come eventually it must—when America and Europe
(that vast Empire of Russia, I hope, included), on
their triumphal march towards no tariff at all, shall
take a firm stand on the first great step towards it—
viz., an equal world-tariff! As I look round to discover
an intermediary fit and willing to bring about, under
ANNUAL DINNER.
33
God's blessing, such happy results, it presents itself
before my mind's eye in that association which repre¬
sents and collects the most refined intellect and the
most progressive views in this island, and which has
called us across the Channel to share its hospitality.
(Cheers.)
Mr. McCulloch, who was received with cheers,
responded as follows :—
My Lord, my Lords and Gentlemen,—Until I
came to England last autumn, I had lived in a Repub¬
lican country, under Republican institutions,—for a
considerable period on a frontier, where every man
was a law unto himself ; where law-makers and law-
executors—the necessary agents or adjuncts of what
is called a " higher civilisation "—were practically, if
not altogether unknown. For the last seven months
I have been living in London, and I had about come
to the conclusion that I had sacrificed very little of
personal freedom in coming to a country under a
monarchical form of government—that I was about
as free here as I had been at home. Indeed, I had
availed myself of every proper opportunity to say
to my friends on the other side of the Atlantic that
England was, in fact, a free country (cheers and
laughter) ; that it seemed to me that the English
C
34
COB DEN CLUB.
people were in the enjoyment of as much liberty as
my own countrymen. Being in this happy frame of
mind in regard to the mother country, you may
judge of my surprise and dismay when I received,
yesterday morning, the following note :—
Langham^ June 21st.
Dear Mr. M'Culloch,
You will have to respond as an American for
the foreigners on the 24th.
Yours, truly,
T. B. Potter.
(Great laughter.) Could anything be more laconic
or mandatory ? Not " Will you be so good as to
respond?" or "You will oblige us by responding;"
but " You will have to respond "—not only as an
American for Americans, but as an American for
foreigners—as if an American in England were a
foreigner ! (Laughter.) Here, in what I had fondly
supposed was a free country, I am called upon, in the
most arbitrary manner, to do not only what under
any circumstances I might be unwilling to do, but
what, in the present circumstances, I am quite unpre¬
pared to do. (Cries of " No, no.") Bear in mind, also,
that this note was not written by the Queen, nor by
ANNUAL DINNER.
35
a prince, nor a lord, but by a member of the House
of Commons—the popular branch of the English
Government—by the secretary of a club organised in
commemoration of a great popular leader. " If
such things can be done in the green tree, what may
not be done in the dry 1 " (Laughter.) If such
liberties can be taken, or, rather, if a man can thus
be deprived of his liberty by a Liberal, what, in
the name of human rights, may not be apprehended
from a Conservative} (Great laughter.) I am in
difficulty—I am in a strait. It may be dangerous
for me to disobey absolutely the mandate of one
who speaks as if clothed with authority, backed, as
to my surprise he is, by the distinguished Lord
Acton ; and yet I am clear that I ought not to
inflict a poor speech upon so agreeable and intelligent
an audience. There is one thing, however, I can do,
or rather there is one thing I can stop doing—I
can stop calling this a free country, and that I am
resolved upon. No one shall ever hear me say one
word more in praise of English liberty. With this
note in my pocket, and I shall carefully preserve it,
I shall bear with me the most conclusive evidence that
personal liberty in England is a myth and a delusion.
(Great laughter.)
C 2
36
COB DEN CLUB.
My Lord,your great poet—but why should I call him
your great poet ? a great poet is the world's property—
öi/r great poet, the world's great poet, has said that "the
evil which men do lives after them, while the good is oft
interred with their bones." If the immortal dramatist
meant by this remark, which he puts into the mouth
of Mark Antony, that the evil which men do is more
lasting than the good, he was undoubtedly mistaken.
If he were not, the world would be retrograding in
goodness, which I apprehend is not the fact. Bad
as the world may be, full of suffering as it unques¬
tionably is, it is nevertheless improving. The world
to-day is better than it ever was before. There is, at
the present time, more of kindness and fraternity—
more of active humanity — more of what may be
denominated Christian civilisation, than there has been
at any previous period of the world's history. (Hear,
hear.) The good which men do lives after them—
like good seed sown upon good ground, it fails not,
in due time, to bring forth its legitimate fruit. Of
few men can it be said more truthfully, that the good
which they have done lives after them, than of
Richard Cobden. (Cheers.) His acute intellect, his
sound judgment and accurate observation, enabled
him to discover what was true in the science of
ANNUAL DINNER.
37
political economy, of which he was both student and
teacher; and having discovered it, there was no power
on earth that could prevent him from advocating it.
A lover of peace, he was the earnest, unflinching, and,
in his own country, the triumphant advocate of the
system of free trade, or free exchanges between
nations, which tends to bind them together by the
strong ties of mutual interests. (Cheers.) A sincere
lover of his kind, irrespective of nationalities or con¬
ditions, he was ever the champion of human rights,
in the most comprehensive meaning of the term.
(Cheers.) Loving England more than any other
country, and the English people more than any other
people, as it was proper for him to do, his sympathies
for his fellow-men were too broad and too generous
to be limited by national boundaries. (Cheers.) He
was, in fact, a citizen of the world, and the world
claims a heritage in his fame, and in the results of
his labours. I am sure I do but express the sen¬
timents of all the foreigners present, when I say
that they heartily endorse the eloquent eulogium
which the noble Chairman has pronounced upon his
character. (Cheers.) The good which he did lives
after him ; the first-fruits of his labours are now
being enjoyed, and I am greatly mistaken in my
38
COB DEN CLUB.
expectations if a richer harvest is not yet to be
realised by the nations, (Hear, hear, and cheers.)
In regard to the recent treaty which has been
made between Great Britain and the United States, it
may be proper for me to say, that although I have
believed that there was less danger than many had
apprehended of war between the two nations; although
I have had faith that there was a feeling of friendship
at the bottom, which, in spite of our jealousies and
controversies, would prevent actual hostilities, I have
nevertheless regarded it as very important for the
welfare of both nations, that all irritating and uncom¬
fortable questions which were preventing good fellow¬
ship between them should be settled. While there
may be—and it would be strange if there were not—
some honest differences of opinion on both sides, in
regard to the merits of this treaty, I am satisfied that
among right-feeling men there is a sentiment of sin¬
cere gratification that all causes of difference between
nations so closely related to each other are removed ;
and I have no doubt that I am expressing the opinion
of an overwhelming majority of my own people as well
as of the people of Great Britain, when I say that the
treaty is entirely honourable to both nations, and in
the highest degree creditable to the very distinguished
ANNUAL DINNER.
39
gentlemen whose names are connected with it. (Great
cheering.) In conclusion, permit me, therefore, to
propose the health of the Marquis of Ripon, with
the single remark that no honour which her Majesty-
has conferred or may confer upon him can equal
the reputation so fairly won, by the obligation under
which he has laid the people of both nations, by his
agency in binding them together in amity which can
hardly fail to be perpetual. (Great cheering.)
The Marquis of RiPON, who was very warmly re¬
ceived, in responding said : On behalf of myself and
my colleagues on the late High Commission, I beg
to return you my sincere thanks for the manner in
which you have been pleased to receive this toast. I
can truly say that we shall ever esteem it a high
honour if it has been in our power to conduce, by our
labours on the other side of the Atlantic, to the estab¬
lishment upon a firm and lasting basis of friendly
relations between this country and the United States.
I do not doubt that Mr. McCulloch is right when he
says that there may have been in reality but little
danger that so great and monstrous an evil as war
between two countries so nearly related could actually
have arisen ; but there are evils, short indeed of the
last extremity of war, which are yet of very great
40
COB DEN CLUB.
magnitude (hear, hear) ; and it was an evil for England
and for America that there should have been, and that
there should continue to exist between them, feelings
and relations the reverse of friendly and intimate ;
that the disputes and differences, springing perhaps
almost unavoidably from the difficult circumstances
of the Civil War in America, should have continued
for one day or for one hour after it was possible to
bring them to a peaceful solution. Though I am the
colleague of your noble chairman, you will pardon me
for saying that to him above all men belongs the
great honour—the great and signal credit of having
taken the propitious moment (cheers), of having
launched his bark, however feebly manned by those
whom he chose to put on board, upon the crest of the
wave. (No, no.) Taking advantage of the state
of feeling in both countries, we were sent out to
America, and we were there met, as we soon found,
by a warm and earnest desire among men of all
political parties for a peaceful solution of existing
difficulties. I do not say that the task was simple ;
I should misrepresent the facts if I were to lead you
to believe that there were not difficulties, that there
were not complications, that there were not moments
of great and pressing anxiety during the course of the
41
prolonged negotiations ; but I believe there was on
both sides an equal desire that the settlement at
which we attempted to arrive should be honourable to
both countries, just to both alike, and it is difficult to
suppose, where those sentiments prevail between two
great and honourable nations, the difficulties of any
negotiations should be insuperable. It scarcely be¬
longs to me to say it, but still it seems to me that
the Treaty to which we had the honour to append our
names is one which, as Mr. McCulloch described it, is
fair and just to both parties. (Hear, hear.) It is not
a triumph for either side, still less is it a humiliation.
It is an equal contract between two friendly people.
(Cheers.) But if that be true of its character for the
past, it has a character and value of far greater im¬
portance in its relations to the future. (Hear, hear.)
In those new expositions, if new they be, of inter¬
national law that the Treaty contains, and which are
new at least in their solemn consecration by a diplo¬
matic instrument, there lies embodied the sure foun¬
dation of a system which, though I believe it to be
equally advantageous to the United States and to
this country, is undoubtedly most advantageous to
that country which runs the greatest risk of being
most frequently belligerent, and which therefore, if
42
COB DEN CLUB.
we are to judge of the future by the past, are likely
to be more advantageous to us than they are to the
other party. But it is not upon the ground of interest
alone that I would, before this assembly, rest the
claims of that instrument. It seems to me that far
above all other considerations which lead me to
believe we were fully justified in appending our names
to that Treaty on behalf of England was this, that it
contains an embodiment of a principle of the highest
value to the world at large. Doubtless we have heard
on other occasions of arbitrations about small and
almost unknown islands, and other insignificant mat¬
ters ; but, if I mistake not, this is the first occasion
upon which two great and proud nations, equally
tenacious of their honour and their interests, have
been found to agree upon questions so closely touch¬
ing those interests and that honour, to lay them all,
one by one, before impartial and freely chosen arbi¬
trators. (Cheers.) It seems to me that there is in
that Treaty the embodiment of a great principle, the
adoption of which would have been hailed with the
utmost satisfaction by the illustrious man whose name
this Club bears. (Cheers.) There are few things
that would have given higher satisfaction to Mr.
Cobden than to have found the two countries he so
ANNUAL DINNER.
43
deeply loved, his own and that of the English race on
the other side of the Atlantic, with their common
history and their common interests, combining to
establish, for the first time in the history of the world,
that great principle for which he contended, that in
international questions, as much as in private disputes,
men are not the best judges of their own quarrels. It
is, then, because this Treaty has embodied that
principle that I, for one, shall ever esteem it to have
been a great happiness and a great honour that I
was permitted to place my name to that document.
We must regard this Treaty as a Treaty between two
nations. I have said truly what I think was the
share of my noble friend your chairman respecting it ;
but neither in this country nor yet in America can
this Treaty fairly be called the Treaty of any party.
It was supported on the other side of the Atlantic by
the press and by the politicians of both the great
parties in the United States ; and we had the great
advantage—and a signal advantage it was to us in our
negotiations—of having by our side, as our trusted and
most valued colleague, an eminent member of the
great Conservative party in England. (Cheers.) I
trust that this Treaty will never be regarded in a
narrow or party view. I trust it will be ever looked
44
COB DE IST CLUB.
Upon as the first step in the restoration of those close
and intimate relations which ought to exist between
this country and the United States—between that
which Mr. McCulloch has called the mother country,
and that which I may therefore venture, without pre¬
sumption, to designate her illustrious and mighty
daughter on the other side of the Atlantic. (Loud
cheers.)
Mr. Thomas Bayley Potter proposed the
chairman's health. He thanked the company for the
warm reception accorded to him on this and other
occasions, and assured them that, with regard to the
Cobden Club, his whole heart was in the matter.
That a society professing the principles of Richard
Cobden should make way, and gain adherents year
by year, was not to be wondered at, but the pro¬
gress of the Club was of the most marked character.
Cobden was not merely a kind and affectionate
friend, whose example they might all do well to try
to follow even at a humble distance ; but he was
the promoter of a cause that appealed to the in¬
terests of the whole human kind. His was the
cause of honourable and constitutional progress, and
it claimed peace and commercial enterprise as its
grand basis. At the last anniversary they had a
ANNUAL DINNER.
45
magnificent speech from the Premier, who, above all
others, had carried into effect the views of Richard
Cobden ; and the right hon. gentleman, it would be
remembered, spoke in grief of the impending war, at
the same time expressing the hope that the clouds
would pass away. The clouds did not pass away, but
gathered gloomily, and burst with a fury the like of
which the civilised world had never seen. But might
we not say now that the air was once more clearing }
that the conduct of the noble lord who had had the
direction of our foreign affairs had been such during
the last ten months, that the result deserved to be
characterised as a triumph of Cobden's principles}
(Cheers.) This was an occasion when they had a right
to rejoice at the negotiations just concluded between
England and America, because it was the dearest
wish of Richard Cobden that the two families of the
English race so nearly allied by blood should be alto¬
gether allied by friendship in all their relations.
Might not this Treaty which had been carried out by
the Marquis of Ripon—whose title was well earned
indeed—and his colleagues be also claimed as the
fruit of the seed Cobden sowed } (Cheers.) To Lord
Granville's judicious management of foreign affairs we
owed the preservation of peace not only in Europe,
46
COB DEN CLUB.
but with America. He proposed, therefore, all the
honours which English Liberals could pay in drinking
the health of so honourable and consistent a Liberal
and so wise a statesman as Lord Granville. (Loud
cheers.)
Earl Granville, in reply, said : My lords and
gentlemen—If it be ever my unfortunate fate to live
under a despotism, I should like Mr. Potter to be
the despot, and I should like that despotism to be
tempered by the opposition of Mr. McCulloch.
(Laughter and cheers.) One thing has struck me
very much this evening, and it has reminded me
of something which Lord Cowley told me about
Mr. Cobden. He talked to me of not having known
Mr. Cobden before the time of the negotiation of
the French treaty, and of the wonderful effect his
simple-mindedness, his honesty, and his earnestness
produced upon him, and of the friendship which he
felt entitled to claim afterwards. He spoke to me
of the wonderful reverence with which Mr. Cobden
was heard—how his word was taken as truth, and
how he believed that no other man could have
obtained that which Mr. Cobden did ; but he added
one other remark, that it was quite extraordinary
how Mr. Cobden, not being a master of the French
ANNUAL DINNER.
47
language, conveyed his thoughts in a foreign lan¬
guage to those who were listening to him. We
have had the opportunity of enjoying this evening
a similar pleasure in listening to the interesting
speeches of our friends, M. Arlès-Dufour and Herr
Bunsen. (Cheers.) I do not include in the compli¬
ment the admirable speech of Mr. McCulloch, because,
thank God, there is no question of a foreign language
between him and me. I began this evening with
an apology, and I am afraid I' must end with an
apology. Mr. Potter, with that blind confidence in
anybody whom he believes to be a sincere friend of
Mr. Cobden, laid his orders upon me, quite as peremp¬
torily as he did upon Mr. McCulloch, to order the
bill of fare for to-day. I declined the responsibility,
but I ventured to suggest that the number of dishes
might be diminished. I am happy to say that my
wishes were so far carried out, that we had only ten
dishes of fish before we began our regular dinner.
(Cheers and laughter.) George Canning, the great
statesman and orator, had a friend who was very ill,
and applied to his physician. The physician asked
him what were his symptoms. He said his principal
symptom was that he felt very empty before dinner
and very full afterwards. (Laughter.) Now, if the
48
COBDEN CLUB.
converse has happened, and any here has felt very
full before dinner and very empty now, I beg that
I may be allowed to bear the whole blame, and that
it may not be laid upon our excellent host, who has
catered so well for our comfort. (Cheers.) I beg
now most sincerely and most seriously to thank you
for your kindness and for your forbearance to me
this evening. (Loud cheers.)
The party then broke up, and returned to West¬
minster by the special steamer.
CoBDEN Club.
LIST OF MEMBERS
CORRECTED TO JULY, 1871.
The Club now consists of 450 ordinary members, as well as 103
honorary members, most of whom are foreigners of distinction. The
list comprises 194 members of the Legislature.
Names in Italics are those of Honorary Members.
* Present at the Annual Dinner.
A.
1871 *Acton, Lord.
1870 *Adam, W. P., M.P.
1868 Adams, C. F., U.S. America.
1869 Adams, J. Qumcy, U.S. America.
1869 Agnew, J. Henry.
1869 Agnew, William.
1867 Airlie, Earl of, K.T.
1870 Akroyd, Lieut.-Col. Edward, M.P.
1866 Allen, W. Shepherd, M.P.
1871 * Allhusen, Christian.
1866 Amberley, Viscount.
D
5°
COB DEN CLUB.
1867 Andrew, Charles.
1871 Annesley, Hon. Algernon Sydney.
1870 *Anning, James.
1867 Anstey, T. Chisholm.
1869 Anstruther, Sir Robert, Bart., M.P.
1866 Argyll, Duke of, K.T.
1867 *Arl^s-Dufour, M., France.
1866 *Armitage, Benjamin.
1868 Armitage, Sir Elkanah.
1867 *Armitstead, George, M.P.
1871 * Armstrong, David B.
1868 Ashton, Philip James.
1868 Ashton, Robert.
1866 Ashton, Thomas.
1867 *Ashurst, Wm. Henry.
1866 Ashworth, G. L.
1869 Atkinson, Edward, U.S. America.
1868 Avison, Thomas.
1870 Ayrton, Right Hon. A. S., M.P.
B.
1869 Backhouse, Edmund, M.P.
1871 Baines, Talbot.
1870 Bancroft, George, U.S. America.
1867 Barry, Right Hon. Charles R., Q.C.
LIST OF MEMBERS.
51
1866 Bass, M. Arthur, M.P.
1866 Bass, M. T., M.P.
1867 Bastard, Thomas Horlock.
1869 *Batchelor, T. B.
1866 *Baxter, Richard.
1866 *Baxter, W. E., M.P.
1866 *Bazley, Sir Thomas, Bart., M.P.
1867 *Beal, James.
1866 *Beales, Edmond.
1867 Beaumont, Henry F., M.P.
1869 Beaumont, Somerset A., M.P.
1868 Beaumont, W. B., M.P.
1869 Beecher, Rev. Henry Ward, U.S. America.
1871 Behr, Baron, Germany.
1871 Behrens, Jacob.
1870 Benson, Robert.
1869 Bentall, E. H., M.P.
1870 *Benzon, E. L.
1870 Besobrasoff, M. W., Russia.
1866 Bigelow, John, U.S. America.
1870 Blewitt, William.
1869 Bolckow, H. W. F., M.P.
1867 Bowen, Charles.
1868 Brady, Dr. John, M.P.
1869 *Brand, Henry R., M.P.
D 2
COB DEN CLUB.
1867 Brand, Right Hon. H. B. W., M.P.
1871 Brandis^ Dr.^ Germany.
1869 Brassey, Henry A., M.P.
1866 Brassey, Thomas, M.P.
1871 Braun, Dr. Carl, Germany.
1866 *Bright, Jacob, M.P.
1866 Bright, Right Hon. John, M.P.
1867 Bright, Sir Charles T.
1871 Bristowe, S. B., M.P.
1867 *Broadwater, Robert.
1870 *Brocklehurst, W. C., M.P.
1866 *Brodrick, Hon. G. C.
1869 Brogden, Alexander, M.P.
1869 *Brown, Alexander Hargreaves, M.P.
1871 Brown, George.
1871 Browne, Henry Doughty.
1870 Browning, Oscar.
1866 Bruce, Right Hon. H. Austin, M.P.
1871 *Bryant, Jesse.
1869 Bryant, W. €., U.S. America.
1871 *Buckley, Abel.
1866 *Buckley, Nathaniel, M.P.
1870 *Bullock, William Henry.
1870 * Bunsen, George, Germany.
1870 Burchardt, Otto..
LIST OF MEMBERS.
53
c.
1866 *Caird, James, C.B.
1867 *Caldicott, Rev. J. W.
1870 Campbell, Henry, M.P.
1871 Camperdown, Earl.
1866 Candlish, John, M.P.
1871 *Carr, David Richardson.
1870 *Carr, Jonathan T.
1870 Carter, R. M., M.P.
1868 Carter, Samuel.
1869 *Cartwright, W. C., M.P.
1870 Castelar, Signor Emilio, Spain.
1866 Cavendish, Lord Frederick, M.P.
1869 Chadwick, David, M.P.
1871 Challemel-Lacour, M, Paul, France.
1871 Charlemont, Earl.
1871 Charles, Robert. .
1866 Cheetham, John.
1866 Cheetham, J. F.
1866 Chevalier, M. Michel, France.
1866 Childers, Right Hon. Hugh C. E., M.P.
1871 Clarendon, Earl.
1870 Clay den, P. W.
1870 Coats, Sir Peter.
1870 Cobb, Rhodes.
54
COB DEN CLUB.
1871 Cobb, T. R.
1866 Coleridge, Sir J. D., Q.C., M.P.
1866 Collier, Sir R. R, Q.C., M.R
1867 *Colman, J. J., M.P.
1871 Colman, Jeremiah.
1867 Colvile, Charles Robert.
1869 Coote, Thomas.
1871 *Corrie, William.
1870 Corsi, Sigîîor Tommaso, Italy.
1869 '^Couvreur, M. Auguste^ Belgium.
1866 Cowen, Joseph, M.P.
1869 *Cracroft, Bernard.
1867 *Crompton, Charles.
1867 Crooke, John.
1866 Crossley, Sir Francis, Bart., M.P.
D.
1871 Dale, David.
1870 Dalhousie, Earl, G.C.B., K.T.
1871 Dalling and Bulwer, Lord, G.C.B.
1871 Dalrymple, Donald, M.P.
1869 *Dashwood, Captain Fred. L.
1871 *Davies, Richard, M.P.
1870 *Day, Edward.
1870 Deheselle, M. Victor^ Belgium.
LIST OF MEMBERS.
55
1870 *Delahunty, James, M.P.
1869 Delitschj M. Schultze^ Germany.
1870 De Molinari, M. G., France.
1871 Devonshire, Duke of, K.G.
1870 Dickson^ J ames y Sweden.
1867 *Dilke, Sir C. W., Bart, M.P.
1868 Dixon, George, M.P.
1869 Dodds, Joseph, M.P.
1866 Dodson, J. G., M.P.
1867 DolfuSy M. Jeaiiy France.
1870 Dowse, Richard, M.P.
1870 Draper, John.
1870 Ducie, Earl.
1866 Duff, M. E. Grant, M.P.
1870 Dufferin, Lord.
1869 Dürckhehny County Attstro-Hungarian Empire.
1870 Dymes, D. D.
E.
1867 *Eastwick, Captain W. J.
1868 Edwards, Charles.
1868 *Edwards, Henry, M.P.
1869 Emersony R. W.y U.S. America.
1866 Evans, Francis Henry.
1866 *Evans, William.
56
COB DEN CLUB.
1866 Ewing, H. E. Crum, M.P.
1868 *Eykyn, Roger, M.P.
F.
1869 Faucher y Dr. JuliuSy Germany.
1867 Fenton, William.
1870 Fenwick, E. M.
1868 Field y Cyrus y U.S. America.
1869 Fieldy David D.y U.S. America.
1869 Figuerolay Signer y Spain.
1866 Fildes, John.
1869 Finnie, William, M.P.
1867 *Fisher, Richard C.
1870 Fletcher, Isaac, M.P.
1868 Flower, E. F.
1867 Forbade de la Roquettey M.y France.
1870 Fordyce, W. Dingwall, M.P.
1866 Forster, Charles, M.P.
1866 Forster, Right Hon. W- E., M.P.
1866 Fortescue, Right Hon. C. S., M.P.
1871 Foster, J. P.
1869 Fothergill, Richard, M.P.
1866' *Fowler, Robert.
1869 Fowler, William, M.P.
1869 Freeman, Henry W.
LIST OF MEMBERS.
57
G.
1869 Garfieldy General J. U.S. America»
1868 Garibaldi^ General^ Italy.
1869 Garrison^ W. Lloyd^ U.S. America.
1870 *Gaskell, Charles Milnes.
1869 Gibbs, Frederick W., C.B.
1870 *Gillibrand, Philip.
1866 *Gilpin, Charles, M.P.
1866 Gladstone^ Right Hon. W. E.y M.P.
1866 Gladstone, Robertson.
1870 Glyn, Hon. G. Grenfell, M.P.
1866 Goldsmid, Julian, M.P.
1866 Goldsmid, Sir Francis H., Bart., M.P.
1866 Göschen, Right Hon. G. J., M.P.
1869 *Gourley, E. T., M.P.
1868 *Gow, Daniel.
1867 Graham, John.
1867 *Graham, Peter.
1866 Graham, William, M.P.'
1866 *Granville, Earl,,K.G.
1867 Gray, Sir John, M.P.
1870 Greg, Louis.
1870 Greig, Lieut.'Generaly S. Russia.
1869 Greville, Lord.
1871 Greville Nugent, Hon. G. F. N., M.P.
58
COBDEN CLUB.
1870 Guest, Montague J., M.P.
1871 Gurney, Samuel.
H.
1866 Hadfield, George, M.P.
1871 *Hall, Walter.
1867 Hammond, J. Lemprière.
1871 Hanmer, Sir John, Bart., M.P.
1869 Harcourt, W. Vernon, Q.C., M.P.
1866 Hardcastle, Henry.
1866 Hardcastle, J. A., M.P.
1870 Hargreaves, William.
1867 Harris, John Dove, M.P.
1870 Harris, William Bedford.
1871 *Harriss-Gastrell, James P.
1870 Hartington, Right Hon. Marquis of, M.P.
1869 Harwood, Samuel.
1871 Hassan^ His Highness Prince^ Egypt.
1870 *Hatch, Rev. Edwin.
1867 *Hatchard, Rev. J. Alton.
1870 Hatherley, Lord.
1869 *Haviland-Burke, E., M.P.
1871 *Hayter, William Goodenough.
1867 Heape, Benjamin.
1867 *Heape, Robert Taylor.
LIST OF MEMBERS.
59
1866 Henderson, J., M.P.
1871 *Henry Mitchell, M.P.
1871 Herbert, Hon. Auberon, M.P.
1866 *Heywood, James.
1866 *Hibbert, J. T., M.P.
1871 *Hill, Frank Harrison.
1866 Hoare, Sir Henry, Bart., M.P.
1870 Hobart, Lord.
1866 Hodgkinson, G., M.P.
1871 Hodgson, Kirkman D., M.P.
1870 Holden, Angus.
1866 Holden, Isaac.
1870 *Holland, Samuel, M.P.
1869 * Holms, John, M.P.
1870 *Hopwood, Charles Henry.
1869 Hoskyns, Chandos Wren, M.P.
1866 Houghton, Lord.
1869 Hovell-Thurlow, Hon. T. J.
1869 Howard, James, M.P.
1870 Hoyle, William.
1869 Hudsofiy Sir James, G.C.B.
1867 Humphreys, A. C.
1870 Hunting, Richard.
1.
1869 Illingworth, Alfred, M.P,
6o
COB DEN CLUB.
J.
1866 Jackson, Henry Mather.
1866 Jackson, Sir William, Bart.
1870 James, Henry, Q.C., M.P.
1868 Jenkins, Edward.
1871 Jenour^ Charles, Victoria.
1870 Jerroldf Blanchard.
1869 Jessel, George, Q.C., M.P.
1870 * Johns, Captain J. W.
1871 Johnson, Reverdy, U.S. America.
1869 * Johnston, Andrew, M.P.
1871 *Johnstone, Sir Harcourt, Bart., M.P.
1871 *Jones, C. H.
K.
1868 Kay-Shuttleworth, U. J., M.P.
1870 Kimberley, Earl.
1870 King, Charles Allen.
1866 King, Hon. P. J. Locke, M.P.
1869 Kinsky, Count Eugè7te, Austro - Hungarian
Empire.
1866 Knatchbull-Hugessen, E. H., M.P.
1869 Kübeck, Baron Max Von, Austro-Hungarian
Empire.
LIST OF MEMBERS.
6i
L.
1868 Labouchere, Henry.
1869 Lacaita^ Sir James.
1869 *Lack, Henry Reader.
1867 *Lambert, John, C.B..
1870 Lamport, Charles.
1867 Lancaster, John, M.P.
1871 *Langley, J. Baxter.
1871 Lansdowne, Marquis of.
1868 *Lanyon, C. Mortimer.
1871 Lascelles, Francis H.
1871 Latham, George W.
1869 Laveleye, M. Emile de^ Belgium.
1869 Lavergne, M. de, France.
1867 *Lawson, Right Hon. J. A.
1866 *Lawson, Sir Wilfrid, Bart., M.P.
1871 Lea, Thomas, M.P.
1871 *Leaf, William.
1869 *Leake, Robert.
1867 *Lean, Vincent Stuckey.
1866 *Leatham, E. A., M.P.
1869 Leavitt, Joshua, D.D., U.S. America.
1871 Leech, Robert.
1866 *Leeman, George, M.P.
1869 Leese, J. F.
62
COBDEN CLUB.
1866 Lefevre, Geo. Shaw, M.P.
1870 Lehardy de Beaulieu, Adolphe, Belgium.
1870 Lehardy de Beaulieu, Professor Ch., Belgium.
1870 ^Lehmann, F.
1867 Leslie, T. E. Cliffe.
1870 Lesseps, Vicomte de, Fraiice.
1869 Levy, Edward.
1870 Lewis, J. Delaware, M.P.
1871 Lewis, Harvey, M.P.
1870 Lieber, Francis, U.S. America.
1869 Liebert, Bernhard.
1869 Loch, George, M.P.
1870 Longfellow, H. W., U.S. America.
1870 Lubbock, Sir John, Bart, M.P.
1870 *Lycett, Sir Francis.
M.
1869 McArthur, Alexander.
1869 McArthur, William, M.P.
1870 *McCarthy, Justin.
1870 McClean, J. Robinson, M.P.
1866 *McClelland, James.
1869 *McClure, Thomas, M.P.
1871 McConnell, J. E.
1871 *McCulloch, Hugh, U.S. America.
LIST OF MEMBERS.
63
1871 *Macdonell, James.
1869 *Macfie, Robert Andrew, M.P.
1870 Macintosh, Alexander.
1869 *Mackay, Baron^ Holland.
1868 Mackie, Ivie.
1871 *McLeod, Sir Donald,. K.C.S.I., C.B.
1869 Macmillan, Alexander.
1870 *Maeren^ M. Corr- Vander^ Belgium.
1871 Mahony, W. Sturt.
1866 *Mallet, Sir Louis, C.B.
1870 Marcoartu, Signor Arturo de.
1870 Marling, Samuel S., M.P.
1867 Marriott, Wm. Thackeray.
1867 *Marsden, Mark Eagles.
1871 * Marshall, C. H., U.S. America.
1866 Mason, Hugh.
1870 tMather, William.
1871 *Mellor, Wright.
1867 Melly, George, M.P.
1866 Menzies, Graham.
1870 Meredith, George F-
1867 Merry, James, M.P.
1871 '^Michaelis, Otto, Germany.
1870 *Michell, T., Russia.
1866 Mill, John Stuart.
64
COB DEN CLUB.
1866 Milner-Gibson, Right Hon. T.
1867 Milton, Viscount, M.P.
1870 Mhîghettiy Signar M arco ^ Italy.
1871 Minturn, Robert U.S. America.
1866 Moffatt, George.
1866 Monk, C. J., M.P.
1868 Moore, George.
1871 Moorhead, W. C.
1871 More, R. Jasper.
1868 Moran, Benjamin, U.S. America.
1870 Morao, F. F. de Figanière, Portugal.
1870 *Morgan, G. Osborne, Q.C., M.P.
1866 Morier, R. B. D., C.B.
1866 *Morley, Samuel, M.P.
1871 Müller, Gustav, Germany.
1869 *Mundella, A. J., M.P.
1871 Murén, Peter, Sweden.
1867 Murphy, Nicholas D., M.P.
1869 Muspratt, E. K.
N.
1869 Napoleon, H.I.H. Prince Jerome, France.
1871 Nasse, Erwin, Germany.
1871 *Neal, John Dodd.
1868 Neill, Robert.
LIST OF MEMBERS.
65
1874 Neumanfiy Dr. Francis^ Austro - Hungarian
Empire.
1870 Northbrook, Lord,
1868 Novelli, A. H.
O.
1869 Ollivier^ M. Émile^ France.
1866 •O'Loghlen, Rt. Hon. Sir Colman, Bart, M.P.
1866 Onslow, Guildford, M.P.
1869 O'Reilly-Dease, Mathew, M.P.
1868 *Osborn, Captain S., R.N., C.B.
1869 O shorn, Wm. H., U.S. America.
1866 Otway, Arthur J., M.P.
1870 Overbeck, M. Gustavus von, Austro-Hungarian
Empire.
1871 Guvry, Colonel Henry Aimé, C.B.
1871 Oppenheimer, Charles.
P.
1867 *Pagan, John Thomson.
1870 Paris, H.R.H. Comte de, France.
1870 *Paterson, John.
1866 Paulton, A. W.
1867 *Payne, F. T.
1867 Pease, Joseph W., M.P.
E
66
COB DEN CLUB.
1869 Peel, Arthur W., M.P.
1871 Peel, John, M.P.
1871 Pell^ Alfredy y un., U.S. America.
1871 Pender, John.
1866 Pennington, F.
1866 Peto, Sir S. Morton, Bart.
1868 *Phillips, Charles.
1866 *Phillips, R. N., M.P.
1871 Pierson, N. G., Holland.
1866 Pilkington, James.
1866 *Platt, John, M.P.
1869 Plimsoll, Samuel, M.P.
1869 Pochin, Henry Davis.
1870 *Pocock, William.
1866 Pope, Samuel.
1871 Potter, Arthur Bayley.
1866 Potter, Edmund, M.P.
1868 Potter, Edmund Crompton.
1866 Potter, J. Gerald.
1870 Potter, John Henry.
1871 *Potter, Rupert.
1866 *Potter, Thomas Bayley, M.P.
1866 *Potter, Thomas Ashton.
1869 Price, William Edwin, M.P.
1866 Price, W. P., M.P.
LIST OF MEMBERS.
67
1866 Probyn, J. W.
1871 Pulley, Joseph.
1871 *Purdy, William.
R.
1870 Rae, W. Fraser.
1870 Ranees y Villanueva, His Excellency Don
Manuel, Spain.
1871 Ransome, R.C.
1867 Rathbone, Samuel Greg.
1867 Rathbone, William, M.P.
1866 Rawson, Henry.
1869 Redpath, James, U.S. America.
1871 *Renton, James Hall.
1867 •Reynolds, James.
1870 Reyntiens, M., Belgium.
1866 Rich, Anthony.
1869 Richard, Henry, M.P.
1869 Richards, E. M., M.P.
1869 Richter, O., Norway.
1871 *Ridgway, W. H.
1867 *Ripon, Marquis of, K.G.
1870 *Robarts, C. H.
1868 Robertson, David, M.P.
1867 Robinson, John.
68
1869 *Roden, W. S., M.P.
1866 *Rogers, Professor J. E. T.
1870 Rollo, Lord.
1871 *Rose, Hon. Sir John.
1871 Rosebery, Earl.
1871 Rothschild, Baron Lionel N. de, M. P.
1871 Rothschild, Nathaniel M. de, M.P.
1867 RouheVy M.f France.
1867 *Roundell, Charles Savile.
1870 Ruggles^ Samuel B.J U.S. America.
1871 *Rusden, R. D.
1866 Russellj Earlj K, G.
1871 *Russell, Odo.
1866 Rutson, Albert.
1869 *Rylands, Peter, M.P.
1867 Ryley, Thomas C.
S.
1870 St. Albans, Duke of.
1869 Salomons, Sir David, Bart., M.P.
1866 Salwey, Colonel Henry.
1868 Samuda, J. D'Aguilar, M.P.
1870 Samuelson, Henry B., M.P.
1870 * Sands J Mahlonj U.S America.
1866 Sandwith, Humphrey, C.B.
LIST OI MEMBERS.
69
1869 SapiehUy Prince^ Austro-Hungarian Empire.
1871 Sargeannt, J. P.
1870 *Sargeannt, William C.
1870 *Saxton, N.
1869 Schaeffer. Chevalier de, Austro-Hungarian
Empire.
1870 Schuster, Francis J.
1866 Scrivens, William.
1869 Seely, Charles, Jun., M.P.
1870 Seisal, Vicomte de, Portugal.
1868 *Seligman, Isaac.
1870 Sellar, A.C.
1870 Seymour, Alfred, M.P.
1871 *Seymour, Henry.
1867 *Shaen, W^illiam.
1869 *Sharpe, Charles.
1868 Sheriff, Alexander Clunes, M.P.
1867 Sidgwick, Rev. W. C.
1869 *Simon, Sergeant, Q.C., M.P.
1870 Simon, M. Jules, France.
1869 Smith, Herr Prince, Germany.
1866 Smith, B. L.
1871 *Smith, George.
1866 Smith, Professor Goldwin.
1867 *Smith, Professor Henry J. Stephen.
70
COB DEN CLUB.
1866 Smith, Thomas Eustace, M.P.
1870 Spencer, His Excellency Earl, K.G.
1866 Stansfeld, Right Hon. J., M.P.
1871 Stauffenberg, Baron von^ Germany.
1871 Steinthal, H. M.
1868 Steinthal, Rev. Samuel Alfred.
1868 *Stepney, W. F. Cowell.
1868 Stern, Sigismund J.
1869 Stevenson, J. C., M.P.
1871 *Stone, William Henry, M.P.
1870 Strahan, Alexander.
1871 Strutt, Hon. Henry, M.P.
1867 Sullivan, Right Hon. E.
1868 Sumner^ Charles^ U.S. America.
1866 *Sykes, Colonel, M.P.
1869 Szechenyi^ Count Bela^ A ustro-Hungarian Em¬
pire.
T.
1870 Talabot^ M. Pauliuy France.
1866 *Taylor, Francis.
1866 *Taylor, P. A., M.P.
1871 *Taylor, Thomas.
1871 Thœrnery Theodore de y Russia.
1870 *Thomas, Christopher J.
1866 Thomasson, Thomas.
LIST OF MEMBERS.
1867 Thompson, George.
1866 Thompson, H. Yates.
1869 Tite, Sir William, K.C.B., M.P.
1870 Tourgueneff, M. Nicolas^ France.
1866 Trelawny, Sir J. S., Bart., M.P.
1866 Trevelyan, G. O., M.P.
1867 Trimble, Robert.
1868 *Turner, J. Fox.
1868 * Turner, Wright.
1868 * Tweedale, John.
V.
1870 *Valpy, Richard.
1871 VasconcelloSy His Excellency Zacharias de Goes,
Brazil.
1870 *Vickers, James.
1871 Vigor, A. H. S., Stonehouse.
1866 Villiers, Right Hon. C.P., M.P.
1871 Visschers, M. Auguste, Belgium.
1871 Vivian, Captain Hon. John, C. W., M.P.
1870 *Vivian, William.
1870 *Vivian, William, Jun.
W,
1870 Walker, Amasa, U.S. America.
1869 Walker, George, U.S. America.
72
COB DEN CLUB.
1866 *Walters, Edward.
1870 *Warren, Edward.
1871 *Warren, T. P.
1871 *Watkin, Sir E. W.
1867 Watts, Sir James.'
1867 Watts, Samuel.
1870 *Watson, T. Clemens.
1870 Wells, David A., U.S. Americcr.
1866 Westhead, J. P. Brown.
1869 Whipple, E. P., U.S. America.
1870 Whitbread, Samuel, M.P.
1866 * White, J., M.P.
1870 White, Wm. Thompson.
1867 *Whiteley, G. Crispe.
1869 Whitwell, John, M.P.
1866 Whitworth, Benjamin.
1867 *Whitworth, Sir Joseph, Bart.
1870 Whitworth, Robert.
1869 Whitworth, Thomas, M.P.
1870 Wilke, Hermann C., Germany.
1869 Willans, Thomas Benjamin.
1869 *Williams, W. H.
1870 * Willerding, Theodor, Sweden.
1867 Willett, Henry.
1866 *Williams, John.
LIST OF MEMBERS.
73
1869 Williams, Watkin, M.P.
1869 Willmott, Henry.
1870 Wills, George.
1871 *Wingfield, Sir Charles J., K.C.S.I., C.B., M.P.
1869 Wolowski, M.y Frailee.
1870 Woods, Henry, M.P.
1868 Worthington, James.
Y.
1870 Young, Right Hon. George, M.P.
1866 *Young, Richard.
Guests present at the Dinner :
Dr. Spinsio, Montague Bernard, MM. Gustave and
Eugène d'Eichthal, Max Schlesinger, W. Hale White,
Capt. Gösset, Deputy Sergeant-at-Arms, Adolphe Beau,
Arthur Arnold, Wm. Bradford, General Woodhall,
E. S. Nadal, Lieut.-Col. W. Holms, Sabbas Vukovics,
T. H. Sooby, Jno. Heyworth, Charles Gilpin, Jun.
CASSELL, I'ETTER, AND GALPIN, PELLE SAHVAGE WORKS, LONDON, E.G.
F
THE
"MISSION"
OF
Richard Cobden.
By BORD HOBART.
Reprinted, by permission, from Macmiilan^s Magazine^''
for January, 1867.
LONDON:
PRINTED FOR THE COBDEN CLUB,
BY CASSELL, FETTER, & GALPIN,
LUDGATE HILL, E.G.
the
"MISSION" OF RICHARD CORDEN.
BY LORD HOBART.
It is long since there left the world any one who
deserved so well of it as Richard Cobden. To say
this is indeed, in one sense, to say but Httle. For
the acts of those who have had it in their power to
influence the destinies of mankind, mankind has in
general small reason to be grateful. In account with
humanity, the public characters have been few indeed
who could point with satisfaction to the credit side.
But of Cobden's career there are results which none
can gainsay. Vast, signal, and comprehensive, they
disarm alike both competition and criticism. The
two great triumphs of his life were the Repeal of the
Com Laws and the Commercial Treaty with France.
Of these, the fi^^st gave food to starving millions,
redressed a gigantic and intolerable abuse of political
4 THE "MISSION*' OF RICHARD COBDEN.
power, saved an empire from revolutionary convid-
sion, and imparted new and irresistible impulse to
material prog^ress throughout the world; the second
carried still further the work which the first had
begun, insured, sooner or later, its full consum¬
mation, and fixed, amidst the waves of conflicting
passions and jarring interests, deep in the tenacious
ground of commercial sympathy, a rock for the foot
of Peace.
But, though Cobden's public life iè admired by
most Englishmen, its real scope and nature are im-
derstood by very few. The prophet was not without
honour, but he was almost entirely without com¬
prehension, in his own country. Being asked on
one occasion to take part in some project of interest
or pleasure, he declined, on the ground that he had
a "mission.'' What, then, was the "mission" of
which he spoke ? What was his distinctive' character
as a public man ? The prevalent notion entertained
respecting him among weU-educated Englishmen is
that he was the apostle of Free Trade, with a
strong and rather dangerous tendency towards de¬
mocracy and cheap government, and a disposition to
peace at any price, on account of the costliness of war.
It was reserved for foreigners to appreciate the
greatest Englishman of his time, and for a foreig^ner
to describe him justly. He repealed the Com Laws ;
TRE "MISSION'' OF RICHARD CQBDEN,
he fought and triumphed for Free Trade ; he advocated
peace; he deprecated national extravagance; and
broke a lance, when occasion occurred, for political
liberty. But these acts of his were but means to an
end, illustrative of and subservient to the great object
and idea in the service of which his energies were
employed and his life sacrificed ;—for the true defini¬
tion of Cobden is that which the foreigner supplied
—an international man.
It is strange, but it is true, that there had been no
international men of any note before his time. For
what is internationalism ? Suppose a community
which, from whatever cause, was without laws or
government of any kind. In such a community
every man would be the guardian of his own rights
and .interests, and compelled to bear arms, offensive
and defensive, to maintain them. Bloodshed and
every kind of misery, the hideous brood of anarchy,
would abound. The state of affairs, even among
savages, would be intolerable, and it would not be
long before some one would propose the natural and
obvious remedy— political institutions. Suppose
further (the case is conceivable) that the proposal
was received with contempt on account of its alleged
impracticability. Suppose that it appeared, or was
asserted, that there was such an utter dissimilarity
of views and feelings, such an intense individuality.
6
TBE " MISSION." OF RICEARD CORDEN,
in the different members of the community, that the
attempt to unite them under any form of government
or any regular system of law was hopeless. Suppose,
nevertheless, the author of the proposal to persevere.
Suppose him to contend that the alleged objection to
it had no foundation in reality, but was the offspring,
rightly considered, of mere prejudice and error ;—^that
if men were, as they affirmed, thus self-centred,
dissimilar, and antagonistic, they ought not to he so ;
and that, if the evil was real, the remedy rested with
themselves. Suppose him to represent that if they
were sensible men they would mitigate for the
common good the intensity of their individualism ;
that if they were Christians political intercourse with
each other should be a pleasure and not a pain.
Imagine him to urge that for the sake of a mere senti¬
ment, puerile, barbarous, and eminently pagan, they
were deliberately impoverishing themselves, and lead¬
ing a life proper to wild beasts rather than to men ;
that for the sake of a prejudice against each other,
the result of deep-rooted habit, they were content to
live in a condition of constant anxiety and suffering,
diversified with occasional outbreaks of violence and
bloodshed; and that, while they bitterly complained
of the cost," physical and mental, of such a state of
existence, they were ready to endure it rather than
abandon the precious possession of individuality.
THE " M1&&10N" OF RICHARD CORDEN.
7
«elf-concentration, and self-dependence, handed down
to them by their ancestors, with all its train of
selfishness, jealousy, reciprocal animosity, and mutual
misunderstanding, and which, by some strange hallu-
•cinatipn, they were accustomed to look upon as a
^ood rather than as an evil. Suppose all this, and
you have supposed a case which actually exists. For
the community of nations is a community precisely
such as has been described; internationalism, in its
ultimate scope and full development, is the doctrine
supposed to be taught and rejected ; and the teacher
of that doctrine is the international man. Is it not
strange, then, that Cobden should have been the first
to teach it ? still more strange that he should have
been treated by the influential classes in his own
country as a man who—^well-meaning, no doubt, and
eminently successful in his line—^was yet hovering on
the verge of lunacy?
Time out of mind the individuals of which the
community of nations is composed have been willing
to live as no other community could live—without a
polity and without laws.* Of the terrible evils
which result, one, though possibly not the greatest, is
* It need liardly be said that " International Law,'* which
there are no established tribunals to administer and no
means which can be relied on to enforce, is not law in the
ordinary sense of the word.
5 THE " MISSION " OF RICHARD COBDEN.
war. This evil is so vast and conspicuous that it
shocks and sickens humane men; and nothing is
more common than to hear discussions on the ques¬
tion whether or no war is lawful. But if war is
imlawful, then, in the case just supposed of a
community consisting of individual persons, it is
unlawful for each of them to protect his own rights
in the absence of any government to protect them ;
a doctrine which no one possessed of common sense
will be found to maintain. The natural and neces¬
sary result of international anarchy is war, just as the
natural and necessary result of national anarchy is
personal violence. But war is not, because in¬
ternational anarchy is not,*, an inevitable condition
of human affairs. War is, because international
anarchy is, excusable enough as between barbarous
communities. But among civilised and eplightened
nations war is, because anarchy is, a scandal and a
shame. It is this evil—^this anarchy of nations—
which has wrought more misery and prevented more
happiness than perhaps any other of the self-inflicted
torments of humanity. It is an evil which is as
grave in its negative as in its positive aspect ; which
has cursed the world, not only by drenching it with
* To civil war, whioli is happily rare, and implies no main¬
tenance of standing armies, tMs and the following statements:
are, of course, inapplicable
THE "MISSION'' OF RICHARD COBDSN. 9
blood and letting loose upon it the foulest and fiercest
passions^ but by placing between the human mind
and the intellectual and moral improvement resulting
from the political and social intercourse of human
beings an impassable barrier. But instead of being
treated as a calamity of this hideous complexion, it is
habitually looked upon with complacency and self-
gratulation. In the opinion of the generality of men,
this absence of political intercourse between nations is
a happy disposition of Providence, which it would be
impious in human creatures to disturb. The class of
persons in this countiy who sing Rule, Britannia,^^
experience in doing so a thrill of conscious virtue and
a comforting sense of duty done which confirms them
in the practice. The Frenchman with his gloire and
his grande nation feels elevated in the moral scale
when he sings their praise. That which the world
has wept in tears of blood, and but for which it would
have worn an aspect, compared with that which it
now wears, of perfect felicity, is treated as a subject
for honest rejoicing to good citizens—^for British
jollification or French fanfaronade. If these men
were heathens, there would be more to be said for
them ; though one might have thought that improved
means of education and advancing intelligence would
have taught even to paganism that the self-isolation
of nations—^the self-imposed and obstinately main-
10 THE MISSION" OF RICHARD CORDEN,
tained^ severance of man from man, because they
happen to be of a different race, or to have a different
political history—was not an evil to be danced and
sung about, but a calamity to be deplored. Being
Christians, it is difficult to understand their error.
Christianity cut the knot which intellectual advance¬
ment would sooner or later have untied, and if taught
anything, taught this, that simply because they be¬
long to a different race, or are geographically divided
from them, men have no right to treat other men
as socially and politically distinct from themselves;
that the mutual estrangement, social and political, of
members of the great human family is an evil of the
same nature as the mutual estrangement of children
born of the same parent; and that the exclusive regard
of men for those with whom they are classed by the
accidents of origin or of soil is a moral delinquency
of the gravest kind. Be it remembered by those who
meet, as they imagine triumphantly, consideratiofis
such as these with the words ''Utopian^' and
visionary (words by which it may be remarked
that every innovation in any important degree con¬
ducive to the general welfare has in its turn been
stigmatised), that what is here contended for is not
the possibility of immediate or proximate remedy,
but simply the proposition that the acquiescence in
an approval of a state of things so contrary to good
THE ''MISSION'' OF RIQHARD COB DEN. 11
sense, to right feeling, and to the most vital interests
•of the world, is unworthy of intelligent and well-
intentioned human beings.
The virtuous self-satisfaction which has just been
noticed as attending upon the assertion and display
of nationalism, and which opposes so fatal a bar to
international concord and union, is based upon con-
feised notions of patriotism, which is of two kinds—
patriotism the virtue and patriotism the vice.
Patriotism the virtue is that feeling which, where
it exists in a high degree, inclines a man to prefer
t
to his own interests the interests of the country to
which he belongs, and which, in however small a
degree it exists, leads him to consider himself not as
an isolated being with no concern but his own welfare,
hut as a member of a society whose welfare is his own.
Patriotism the virtue makes the general well-being,
as distinct from that of the individual in whom it
resides, its study and its care. If either the existence
or the well-founded claims of his own country as a
member of the community of nations is threatened,
it devotes itself, at whatever sacrifice, to their defence,
just as it would devote itself to ward off any internal
calamity of equal magnitude. It admits that, so long
as nations remain politically isolated from each other,
«0 long as they are unable by common agreement to
terminate the anarchy which afilicts them, force is
12 THE "MISSION'' OF RICHARD CORDEN.
the sole and legitimate protector of the rights of each
and that to compel a people against its wiU to submit
to a foreign dominion is an injustice which must be
resisted to the last. But the very essence of patriot¬
ism the virtue is self-sacrifice for the general good..
It implies no approval or toleration of the anarchy of
nations, or any idea that the interests of the par¬
ticular country in which the patriot happens to live
are paramount to those of the rest of the world. It
is ready to sacrifice itself for the community to which
it belongs, hut it claims no right to decide as to the
limits of that community. The boast of nationality
is no part of the business of such patriotism. Indeed,,
the mental disposition in which it is generated is
such as would rather incline a man, so far as is
possible, to enlarge the bounds of his country, not by
military conquest, but by peaceful amalgamation; for
the temper and habit of mind which characterise the
true patriot as the citizen of a state would find a
fidler development and gratification when he became
a citizen of the world.
Patriotism the vice is the moral opposite of the-
former. It is that feeling among citizens which
imparts to the nation, considered as one of the
component parts of a great community, that very
selfishness which is repudiated by patriotism the
virtue. It is that feeling which causes a nation
THE "MISSION" OF RICHARD CORDEN. 18
iiabitually to prefer its own to the general in¬
terest. The essence of virtuous patriotism is seK-
■sacrifice ; the essence of vicious patriotism is self-
regard. One is the desire felt by a citizen for his
oountry^s advantage^ even at the cost of his own;
the other is the desire for his country's advantage
because that country is his, at the cost of other
nations. Patriotism the vice looks upon the life of
nations as one long struggle for success at the
•expense of each other ; holds that a state should de¬
precate, and if it has the power prevent, any increase
in the wealth and prosperity of other states ; that
the ''balance of power" should be disturbed; and
appears to consider the fact that tho world was not
made exclusively for the benefit of one nation as a
•disposition of affairs to which nothing short of abso¬
lute compulsion should induce it to bow.
It is, then, by confounding these two kinds of
patriotism that men are led to tolerate and approve
the anarchy of nations. With true patriotism that
anarchy has nothing in common, but, on the contrary,
is essentially at issue. If illustration be required of
this, it is to be found in the fact that the most
•devoted and disinterested patriot of our time—^the
Liberator of Italy—^is also one of the very few dis¬
tinguished men who have felt and avowed inter¬
national aspirations. At the close of a campaign
14
THE " MIS&ION" 0>F RICHARD COBDEN.
unusually arduous and triumpTiant, he gave vent, ia
a letter which appeared in the public journals of the
day, and was sneered* out of court in the usual
manner, to; the trouble of his grand and benignant
soul. Was war, he said, never to cease from the-
earth? Were nations to remain for ever disunited,
with no thought hut their own aggrandisement, and
occupied in preparing themselves, at an enormous
cost, to spring on the shortest notice at each other's
throats? Was there no chance of a hbaring for
common sense and humanity, so that men, whether
they were Italian, French, English, Austrian, Russian,
or Prussian, should at length, after centuries of
unwisdom, admit themselves to he members of a
common family, whose interests should he considered
as a whole, and there might he an end once for all
to the long reign of anarchy and blood? How fool¬
ish ! how inconsistent!" exclaimed the whole chorus-
of Philistines and '^Rule, Britannia" politicians.
The folly and inconsistency were their own. The
patriotism of Garibaldi is of that true kind which, a&
We have seen, is altogeth^ distinct from nationalism.
\
He fought to deliver his coimtry, not from Austrians,
hut from Austrian despotism, as he would fight
against any evil, internal or external, which afflicted
her. But if (to suppose a case) Austrians and
Italians, availing themselves of increased means of
THE " MISSION*' OF HICHARD COBDEN.
15
intercourse with each other, and overcoming the
prejudices of race and the difficulties of language,
should after a time have agreed upon some federal
alliance or some common form of government accept¬
able to the people of both countries, Cobden In'nngplf
would not have been more overjoyed. Garibaldi
would have fought and bled for freedom in America
as freely as he fought and bled for her in Italy. For
real patriotism is that which is free from any taint
of egotism ; sees in loss or injury to the country of
other men loss or injury to its own ; and would blush
to accept benefits for a nation at the cost of the
world at large.
It was the peculiar merit and the privilege of
Cobden that he apprehended the truth here indicated,
and made it the lodestar of his political career. But
inasmuch as the time was not ripe for that full
development of internationalism which consists in
some form of political union, he saw that the work
cut out for him in life was to prepare the way for it
by habituating so far as might be possible the public
mind to the idea, by removing obstacles to its pro¬
gress, and by advocating and pushing forward every
measure of legislation or policy which could tend to
its realisation. Foremost among such measures was
the liberation of commerce j and the first and most
formidable monster to be assailed by the champions
16
THE *'MISSI01^'' OF RICHARD COBDEN.
of commercial liberty was the infamous English Com
Law. The attack upon a law which starved one
country and impoverished the rest for the benefit of a
few landlords was a task after Cobden^s own heart ;
and he was supported and encouraged during the
tremendous conflict by the feeling, little known to
most of his coadjutors, that he was fighting, not for
his own country only, but for all others; and that
victory in the fight would be the first step towards
the attainment of the grandest object of which a
politician had ever dreamed—^to break down the
barriers of a narrow nationalism, and blend into
one great community the nations of the world. For
he knew that free trade in com was but the prelude
to the freedom, at no very distant time, of commerce
generally.; he knew also that freedom of commerce
generally meant a community of interests which
would grapple nations to each other with hooks of
steel, and an increase of personal intercourse between
their citizens—the sovereign remedy for that self-
complacent nationalism which is the greatest obstacle
to political association. It is certain that, of all
expedients calculated to promote the objects in view,
there is none so efficacious as this last. A new rail¬
way, or an improved steamboat service on a dividing
sea, or the abolition of adventitious official impedi¬
ments to travellers, may be of more avail than all the
THE "MISSION" OF RICHARD COBDEN, 17
speeches and writings o£ the most devoted philan¬
thropist. For it miist be obvious that there is a
conceivable degree of social intercourse between
nations of which some kind or degree of political
association is the natural and necessary result. If,
for instance, the communication between English¬
men and Frenchmen, instead of being limited, as it
now is, to the yearly arrival of a hundred or two of
the latter, sea-sick and miserable, in a grim and
squalid locality, presided over by a hideously muti¬
lated statue, and which they imagine to be London,
and 'to the yearly influx into Paris of a stream of
British tourists, contemptuous, ill-mannered, and
unintelligent,—^that communication was in every
respect as constant and easy as the intercourse be¬
tween adjacent counties of England, it is impossible
that the two countries could remain long disunited.
Manners, language, ciirrency, laws, would gradually
assimilate ; and the result, sooner or later, would be
political union. Every step in this direction is a
step of which the importance cannot be overrated.
In proportion as the intercourse of the citizens of one
state with those of another became more familiar,
nationalism would decline ; war, though it would at
times be inevitable so long as nations are under per¬
fectly distinct governments, would be more and more
reluctantly entered upon; until at length the work
18 TEE "MISSION" OF RICHARD COBDEN.
would find its completion in political association,
and all war, except civil war, be thenceforth at an
end.
The blow which shattered the English Com Law
shook to its foundation the whole ingenious system
by which, under the pleasant name of " protection to-
native industry,^' men had contrived to counteract a
singularly beneficent provision of nature, having for
its object their own material and social welfare ; and
the advantage thus gained was promptly followed up
by the great soldier of peace and good-wiU. The war
of tariffs is responsible for the war of bullets and
cold steel. Men think twice before they cut the
throats of those who are perpetually engaged in
filling their coffers. If the trade of this country
with Russia had been as great as her trade with the
United States, what chance would the " war-at-any-
price party have had in the dispute about the
Russian War? If her trade with the United States
had been as small as her trade with Russia, what
would have been the probability that peace would
have been preserved during half a century between
the jealous and irascible parent and the undutiful
and now gigantic son? But protection not only
generates war, by removing the inducement to peace-
which is afforded by identity of interest ; it fosters
and encourages that deeper and wider evil of which
THE MISSION" OF EICHARD GOBDEN. 1»
(as we have se^) war is one of the many calamitoüs-
results—the sharp division of mankind into distinct
societies, resolutely set against any approach to
political commimion. Protection, besides keeping,
nations poor, keeps them apart in sullen rivalry, and
hostility worse, because more widespread and en«
during, than that of the battle-field. The very fact
that nations are habituated to consider it a duty to
enrich themselves at the expense of other countries,
tends to exclude from their minds the idea' of associa¬
tion, and to encourage that of self-seclusion ; and the-
case is not altered by the circumstance that instead of
enriching they are impoverishing themselves. Men
will never look upon each other as members of one-
family, or yearn after that political association for-
want of which they suffer so bitterly, as long as they
are taught to consider the gain of other countries to^
be the loss of their own, and are deprived of that
inducement to communication with each other which
commetcial unity both directly and indirectly pro«
vides. The Commercial Treaty with France, forced
as it were upon both coimtries by the strong will and
earnest faith of one extraordinary man, was therefore*
(and he knew it) a magnificent stroke of work in the
cause which he had at heart. It was, moreover, a
success, in its very nature prolific of further successes..
Already an arrangement similar in principle—mainly
20 THB "MISSION*" OF RICHARD COBDEN.
through the unremitting exertions of one Who, during
the arduous struggle of which the prize was the
Treaty with France, stood at Cohden^s right hand,
•caught his spirit, and realised the grandeur of his
aims—has been made between this country and
Austria; foreign nations among themselves have
l^egun to imitate the example ; and one of the most
•obstinately defended strongholds of international
exclusiveness and discord is in a fair way of being
levelled with the ground.
Next to commercial monopoly, the most &ital
enemy to internationalism was the pseudo-patriotic
sentiment already noticed, and which Cobden ac-
eordingly attacked with uncompromising vigour and
pertinacity. That one Englishman was equal to
three Frenchmen, and that in addressing himself to
»the task of proving it he was doing that which was
pleasing rather than otherwise to the supernal powers,
was the form which for a long time was taken by this
•sentiment in the illiterate British mind. With the
secession of the French Revolutionary War into the
background, this impression has become less actively
prevalent; but there is still a lurking conviction in
the minds of a large number of persons in this
'Country that to fight Frenchmen, and probably also
Russians and Americans, is in itself a highly moral
and laudable act. War is generally felt to be a
THE "MISSION'' OF RICHARD CORDEN 21
calamity, but a calamity qualified by the consideration,
first, that there is a natural antagonism between
Britons and foreigners which is, as it were, part of
the scheme of creation ; and secondly, that it is more
in accordance with the eternal fitness of things that
British interests, British fleets and armies, and
British ideas should prevail, than those of any other
nation. Thus it is very commonly, though most
untruly, asserted by very well-meaning and in other
respects reasonable men, in defence of the war waged
for twenty years by this country without a shadow
of justification with France, that but for that War¬
the power and influence of Great Britain among
European states would have been very much less
than they now are ; from which argument it is to be
inferred that, in the opinion of those who use it, any
amount of injustice, slaughter, and suffering would
kick the beam if the interests of their own country
were in the other scale. Until ideas such as these
are totally and irrevocably eradicated, there is little
hope for internationalism.
Another and most mischievous institution of the
same class was the Civis Romanus. This personage,
and the intolerable national arrogance on which he
depends for existence, was the object of Cobden's
most determined hostility. In China he took the
form of an adventurous skipper mistaken, apparently
^2
THE "MISSION" OF RICH AMD COBDEN.
not without some reason^ by Chinese officials for a
pirate; in fCrreece, that of a Spanish Jew, whose
miserable squabble with the Government was settled
Tjy the conclusive if not logical argument of a British
fleet ; in Brazil he was alternately a drunken midship-
iman incarcerated for inebriety, and the owner or
insurer of a British ship which the winds and waves,
regardless of Boman citizenship, had cast upon an
outlandish coast, and which was pounced upon by the
nomad and semi-savage wreckers of the place, for
whose misdeeds the Brazilian Government, finding
itself powerless to punish them, was magnanimously
chastised, and threatened with further chastisement
for not having done so, by the Government of a country
twenty times as powerful as its own. Against this
calamitous individual the great Internationalist
waged incessant war; nor were his efforts entirely
unattended with success, iî we are to judge by the
fact that this particular enemy has of late considerably
moderated his pretensions. The monstrous doctrine
that a state has the right to require for any of its
own subjects, who choose to visit or reside in a
foreign country, treatment which is not in accordance
with the laws or customs of that country, or an
.amount of legal protection which no native of that
^country ever dreams of obtaining, has recently shown
■somewhat less readiness to parade itself before the
THE "MISSION" OF RICHARD CORDEN. 23
public view. The mental condition, however, in
which it was generated unhappily survives, and
should be resolutely opposed by all right-minded
men.
Closely allied to [nationalism and Roman civism,
fighting by their side the battle of selfishness and
barbarism against civilisation and humanity, and as
such assailed by Cobden with singular power though
with but too little success, was the policy of " bloated
armaments.^' That policy has been the fashion in
this country ever since the war with Russia, which,
finding its support in hobgoblin arguments and panic
the most anile, appears to have bequeathed them as
a lasting legacy to the nation. Scarcely had that
useless and disastrous conflict ended, and the pocket
of the British taxpayer begun to feel the better for
the change, when the bugbear of French invasion for
about the hundredth time cast its shadow over the
land. It was promptly-turned to account by that
large class of persons who, actuated soiùe by national
vanity, called by themselves patriotic pride, others by
less excusable motives, are the steady advocates of
plethoric budgets; and the consequence is that the
national expenditure is at the present moment greater
than it was before the Russian War by some fifteen
millions, almost the whole of which goes to the account
of the army, navy, and coast defences. The triumph
24 THE "MISSION" OF RICHARD COBDEN.
of the old women has been complete. The prepara¬
tion for war has been in the inverse ratio to the proba¬
bility of it ; for if there is one feature more indelibly
stamped on contemporary history than another, it
is the deep anxiety shown by the present ruler of
France, throughout his long and prosperous reign, to
he on amicable terms with this country. In responso
to his advances, its taxation was at once placed and
has ever since continued on a war footing, and a
volunteer army was created, respecting which kind of
force, however, there is this to be said, that so far a&
it is a defence at all, it is (like chivalry) a cheap de¬
fence of nations. But for the enormous and steadily
maintained annual expenditure on the regular forcea
there is literally no excuse whatever. From the point
of view of the narrowest expediency, it is a blunder
of the grossest kind. For, unquestionably, to a
country whose position, moral and physical, is that
of Great Britain, the road to success in war lies in
the maintenance during peace of an inexpensive
nucleus of force, to be developed, when the necessity
occurs, as only a free and energetic people, whose
progress to commercial wealth has sustained little
hindrance from the tax-gatherer, can develop it. But
it was not on the ground of expediency that Cobden
fought the battle of retrenchment. He fought it,
while deeply feeling its importance in a national^
THE "MISSION'' OF RICHARD COBDEN, 25
chiefly from an international point of view. The
curse of great standing armies is laid, not upon this
or that nation only, but upon the whole civilised
world ; and it is the interest of humanity in general
that demands its removal. " Si vis pacem, para
bellum'^ is the comfort which the authors of this
calamity—^presuming on the general incapacity to
perceive that '^si vis bellum, para bellum'^ is much less
questionably true—are in the habit of offering, with
considerable success, to their deluded victims. The
argument, however, which is most directly responsible
for the vast preparations for war which nations in
their ardent attachment to peace have thought fit to
make, is the argument that other nations are doing
the same thing. Nation A arms itself to the teeth,
and groans under a crushing burden of tàxation,.
solely because nation B has done the same. Nation
B, whose large armaments have very probably been
raised for the repression of liberty among its o^vti
subjects, perceiving this step on the part of A, accuses
it of hostile designs, and increases its own armaments
accordingly, which leads to] a further increase in the
same direction on the part of A. This arrangement,
considered as an elaborate contrivance for maintaining^
peace, and the political dialectics of which it is the
result, is extremely curious. If any one suggests,
as Cobden suggested, that there is something inex-
26 THE "Mission" OF RICHARD COEDEN.
pressibly foolish and puerile in all this; that^ if
reason has not deserted the world, some agreement
ought to be come to for reciprocal disarmament; or
that, in the event of this being found impracticable,
then if there be a nation free, and therefore requiring
no standing armies to . prevent its being so,—^insular,
and therefore having, on the one hand, Kttle direct
interest in Continental quarrels, and, on the other,
provided by Nature herself with a peculiar and still
formidable defence against hostile aggression — if
there be a nation superior to all others in com¬
mercial wealth, and therefore able, in case of emer¬
gency, to develop a strength which would far more
than counterbalance any insufficiency of prepara¬
tion; that nation ought to be the first (for one
of them must be the first) to, quit the pith of
folly, and set the example of a return to conduct in
some degree rational and dignified:—if any one
ventures to make this suggestion, he is forthwitii
consigned to the limbo of political enthusiasts, and
no longer looked upon as a sane man in this coimtry.
Nor, indeed, if the recent foreign policy of this
•country be considered, is it wonderful that such
suggestions should appear to be madness by its side.
To reject with a sneer every proposal for the prevention
of war by mitigating, in however imperfect a degree,
the.anarchy of nations—^to meet with a curt and
THE "MISSION"' OF RICHARD CORDEN. 27
insolent negative any suggestion for the adjustment,
by general agreement, of difficulties which threaten
universal war; to refuse to refer to arbitration an
important question, admitted on all hands to be one
-of difficulty, in dispute with a great and kindred
people, on the turgid and irrelevant plea that "Britaiix
is the guardian of her own honour,^^ is a course of
•conduct of which those who approve are consistent
•enough in treating common sense and right feeling
as insane. To decline all interference in the affairs
»
-of foreign states, not for the sake of humanity, but
of self-interest, and maintain at the same time an
;attitude of hostile expectation against the world ; to
incur a vast expenditure, on the grmmd that it is re-
•quired for the protection of the national existence and
interests, which nobody threatens, and with the result
of providing an excuse for the adoption by foreign
powers of a similar course, and so to endanger the
general peace and add to the general misery, is a
policy to whose advocates internationalism may well
appear to be the product of a disordered mind. But
^n insanity whose result is the direct opposite of such
a policy, is an insanity to be coveted by all reasonable
men.
Bepresentative reform was another subject \Ndiich
iay near to Cobden's heart ; but this, too, he valued
4iot only for itself, but for its connection with inter-
28 THE "MISSION" OF RICHARD COBDEN.
nationalism. Nationalistic egotism is a malady
proper to despotic and oligarchic institutions. The-
moral code which makes selfishness and jealousy, if
not dislike, of foreigners a part of the whole duly of
nations, is peculiar to the class which in most states
monopolises political power; the great majority of
citizens are guiltless of its existence. John BuUism
is not a democratic vice. The British Lion has a
roar which is terrible chiefly among the upper classes,
and aggravates his voice when he mixes in society
less refined. The wars of civilisation have been for
the most part wars, not of nations, but of govern¬
ments ; for war is not only a game which kings would
not play at if their subjects were wise, but a game at
which they would very seldom play if their subjects'
were free. Into the causes of this phenomenon it is
not necessary to inquire. It is probably due partly
to the fact that large standing armies are a necessity
of life to despotic institutions, and that large stand¬
ing armies must be employed, partly to the natural
and jealous exclusivism of governing classes, and
partly to the affinity and sympathy of all liberal
ideas. What is certain is, that for the complete-
realisation of internationalism in its ultimate result,
political association, it is requisite that nations in
general should possess a very large measure of real
political liberty ; and that, according to the d^ree i»
THE "MISSION" OF RICHARD COBDEN. 29
which they possess it, they will be capable of appre¬
ciating the advantages of such association, and of
•comprehending and avoiding the evils incidental to
its absence. Complete political liberty once esta¬
blished in the world, some form of international fede¬
ration would be the natural result. Nationalism, the
offspring of class interests and monopolised power,
would gradually disappear; armaments maintained
for the repression of freedom would no longer afford
incessant provocation and occasion for war ; and men
would begin to ask themselves, in wonder, on what
possible ground of reason or self-interest they had
been for centuries the enemies and rivals of their
fellow-men.
It is the duty of those to whom the memory of
Hichard Cobden is the memory of a greatness, not
only beyond question and almost beyond rivalry, but
of a wholly original kind—a greatness which, while
it filled a vast chasm in political philosophy, was rich
in a new promise and possibilities hitherto un-
imagined for the happiness of mankind, and which,
at the same time, neither was nor is generally appre¬
ciated or understood—^to see that his name appears
in history, not under the light of a fictitious and
commonplace distinction, but in its own peculiar
and enduring lustre, and takes its appropriate place
in the hearts and in the minds of men. It is well
30
THE MISSION" OF RICHARD COBDEN,
that political societies shohld be founded in his name;
it is better that they should accurately represent his
character^ and carry forward with faithfulness and
discrimination the work which he began. There is«
fear lest the most precious political truth that has-
been taught in the world should be lost to it for
ever—^buried once for all in the grave át Midhurst^
It is not the advocacy of liberal principles more or
less advanced'^ which entitles a man to be con-
sidered a disciple of Cobden. " Peace, retrenchment,
and reformis, it is true (or rather was), the motto
of the Liberal party, and commercial freedom is in¬
scribed on its banners, but those who claim to follow
such a leader must not be content to rest in these-
things as final—must see beyond, and in part result¬
ing from these things, a new policy and a happier
age—must believe as he believed, that it is no idle-
dream, no vain chimera of the poet or the enthusiast,?
but a rational and a practical proposition, that meni
may be brought no longer to look upon difference of
race, creed, and climate as a necessary obstacle to-
political unity. Whoever among them can write a»
line of telling English, or speak one sentence worth
listening to upon a platform, should take this for his«
theme. On the one hand, to familiarise the idea in
thé minds of men ; on the other, by every expedient
of scientific enterprisey legislative improvement, or
THE MISSION" OF EICUARB COBOEN.
private effort, to promote identity of interest and
facilitate personal intercourse between the citizens of
different states, are the two great objects to be kept
in view. Above all, let the lovers of freedom remem¬
ber that there is a tyranny more fatal than any
which they oppose—^the despotism of words. Calling
names is the weapon of ignorance and folly, wielded
with deadly effect, in the battle against truth. Assail
a really humane and sensible project, however start¬
ling to prejudice, with the most subtle argument,
enforced by the most consummate eloquence, and it
will resist; call it "humanitarian,^^ and it will
succumb. Reason ever so long against a scheme
fraught with advantage to the world, and you may
reason in vain ; call it " visionary,'^ and (if only it
has novelty sufficient to give colour to the charge)
the most thoughtful men will desert its cause. In
the present case there is the same danger. It may
be " visionary to imagine that a change which is
opposed to inveterate prejudice and time-encrusted
tradition wiU be other than gradual and remote. It
is not visionary to suppose that, in spite of prejudicé
and tradition, the way may be prepared for the advent
of reason and humanity; it is not visionary to believe
that separation into distinct and isolated communities,
with no objects but those of self-interest, and no
relations but those of rivalry and hostility, is not the
-32 THE " MISSION OF RICHARD CORDEN.
normal condition of the civilised world ; and that in
the crusade which Cohden preached, not to rescue
holy sepulchres from sceptical custody, hut the hearts
of men from the dominion of selfishness, envy, hatred,
•and cruelty, there is real hope for the human race.
Commercial Policy
of France,
AND
The Treaty with Rngland
OF
i860.
LONDON :
PRINTED FOR THE COBDEN CLUB,
BY CASSELL, FETTER, AND GALPIN,
LUDGATE HILL, E.G.
1871.
Commercial Policy of France,
AND
The Treaty with England of i860.
The effects of the Treaty of Commerce of 1860,
between England and France, upon the intercourse
of the two countries, and of the commercial policy
of which that treaty was the beginning, upon the
progress and prosperity of France, are well known
to all who have had the opportunity of investigating
the facts. But at a time when the financial exi¬
gencies of France have led to a discussion of measures
which would profoundly modify the conditions of her
foreign trade, and check her material development,
it is essential that a knowledge of those facts should
be brought home to the minds of the people of both
•countries, and be diffused as widely as possible.
It is for this reason that the Cobden Club has
caused the following brief statistical summary to be
4
compiled from the official documents published by
the English and French Governments, in the con¬
viction that the results which they exhibit require
little commentary.
In France the Free Trade policy was introduced,
not as in England, by independent tariff reforms,
but by successive Treaties of Commerce with foreign
powers, whereby reciprocal simultaneous reductions
Avere effectedy thus securing in each case a double
advantage, by opening the markets of France to
foreign competition, and at the same time obtaining
for French produce increased facilities of access to
the markets of other countries. As these arrange¬
ments were necessarily, however, a work of time,
and are even still incomplete, the effect of the new
policy upon the industry and trade of France has
been less rapid and powerful than it would have been
if her commercial reforms had been concentrated in
one general measure.
This consideration gives to the following statement,
which is taken from the "Annals of Foreign Trade,"
published by the French Ministry of Commerce,
greatly increased significance :—
Comparative Statement of the Foreign
Trade of France in the Years 1859 and 1868.
General Commerce*—The general commerce of
* The term "General Commerce," includes all importa^
5
France fon 868 represents a total value of 8,114,000,000
francs, or ;^324,560,000, of which 4,258,000,000
francs, or 170,320,000, consisted of imports, and
3,856,000,000 francs, or 154,240,000, of exports.
This is an increase of 2,702,000,000 francs, or
^ 108,000,000 over the total value of the general
commerce of France for 1859, year which pre¬
ceded the reforms commenced in i860.
Special Commerce,*—The special commerce of
France, which is an exact representation of her
direct exchanges, amounted in 1868 to 6,229,000,000
francs, or 249,160,000, of which 3,304,000,000 francs,
<or^ 132,160,000, consisted of imports, and 2,925,000,000
francs, or 117,000,000, of exports.
This is an increase of 2,322,000,000 francs, or
;^92,88o,000 over 1859, which 1,663,000,000 francs,
or ;^66,5 20,000 consisted of imports, and 659,000,000
francs, or ;^26,360,000, of exports.
The distribution between the different quarters of
"the globe, and the principal countries, of the aggregate
amount of this "special commerce," in each of the years
1859 and 1868, viz., 3,907,000,000 francs in 1859,
^nd 6,229,000,000 francs in 1868, was as follows :—
tions, whatever their origin or destination, whether for con-
.siimption in France or for re-export ; and all exportations,
-whether of French or foreign origin.
* The term "Special Commerce," includes importations for
-consumption only, and exportations of French produce and
jnanufacture only.
6
1.—Eurôpe.
Imports. Exports.
Milliard frs. Milliard frs.
1859 ... 1,036 ... 1,469 ...
;^4i,44o ... ^58,760 ...
1868 ... 2,355 ••• 2,232 ...
;^94,2oo ... ;^89,28O ...
There has thus been an increase in 1868 over 1859^
of 2,082,000,000 francs, or ^^83,280,000, in the Euro¬
pean trade of France.
2.—Africa.
Total.
Erancs.
2,505,ooo,cxx>
100,200,000
4,587,000,000
¿183,480,000
Imports.
Millions francs.
Exports.
Millions francs.
1859 ... 55 ••• 37
/2,20o ... /1,48o
1868 ... 88 ... 60
^3,520 ... /2,40o
In this branch of trade there has been an increase
in 1868 over 1859 of 56,000,000 francs, or /■2,240,00o.
Total.
Francs.
92,000,000
¿3,680,000
148,000,000
/5,920,00o
1859
1868
3.—Asia and Pacific.
Imports.
Millions francs.
76
Exports.
Millions francs.
17
.. /680
32
.. /1,28o
/3,04o
204
/8,i6o
Here the increase in 1868 over
143,000,000 francs, or/5,720,00o.
4.—A merica.
Imports. Exports.
Millions francs. Millions francs.
1859 ... 334 "• 521 , ...
/13,36o .../20,84o
1868 ... 479 ... 420
/19,16o .../i6,8oo
Total.
Francs.
93,000,000
¿3,720,000
236,000,000
/9,44o,ooo
1859 ^3-3 been:
Total.
Francs.
855,000,000
/34,2oo,ooo
899,000,000
/35,960,00o
7
In the American trade generally there has been
an increase of 44,cxx),ooo francs, or £ i,76o,ocx), con¬
sisting exclusively of imports. The decline in the
export trade is due to the falling off in the trade
with the United States, owing to the civil war, and
the exorbitant tariff maintained in the American
Union.
5.—French Colonies^ Réunion^ Martinique^ Guadaloupe^
Guinea,
Imports. Exports. Total-
Millions francs. Millions francs. Francs.
1859 75 ... 58 ... i33,cxx),ooo
£Zpoo ... £i,zio ... ;^5,32o,ooo
1868 ... 63 ... 43 ... 106,000,000
£2,^2.0 ... ^1,720 ... ^4,240,000
The decrease in the trade with these possessions
has arisen in the trade with Réunion. With the
other colonies the trade has slightly increased.
6.—Other French Possessions out of Europe, including
Algeria.
Imports. Exports. Total.
Millions francs. Millions francs. Francs.
1859 ... 64 ... 165 ... 229,000,00c
;^2,560 ... fßfyoo ... ;é9,160,000
1868 ... 114 ... 138 ... 253,000,000
;^4,56O ... ;é5>56o ... .¿10,120,000
The following table shows the imports and ex¬
ports in the principal articles of French commerce, in
each of the years 1859 and 1868 respectively :—
8
Imports (in Millions of Francs).
Difference.
1859.
1868.
Increase. Decrease.
Silk ... ... ...
... 211 ...
438
22^
Cotton
... 154 ...
271
... 117 ... —
Wool
... 126 ...
238
... 1X2 ... —
Wood, common
... 106 ...
179
••• 73 •••
Animals
... 51 ...
158
... 107 • • • """"
O'Oal ... ... ...
95 •••
132
... 37 •••
Skins and furs
... 76 ...
108
... 3^ • " •
Flax
... 28 ...
85
57 •••
Coffee .... ... ...
... 44 ...
74
... 3^ • • •
Sugar, foreign
... 45 -
67
... 22 ... —
„ colonial
... 59 ...
53
... ' ... ^5
Grain, oleaginous
... 33 ...
58
... 2^ ...
Copper
33 ...
40
... 7 • • ■ '
Exports (in Millions of
1859.
Silk Tissues 500 ...
Woollen ditto 181 ...
Cotton ditto 67 ...
Linen ditto 15 ...
Wine ... ... ... ... 232 ...
... ... ... ... 43 ...
Skins and Leather 130 ...
Cereals 152 ...
Cheese and Butter 24 ...
Chemicals 33 •••
Paper, &c. 32 ...
Pottery (verres et cristaux) ... 31 ...
ool ... ... ••• ...
Horses, &c ... ... 17 ...
Instruments and Metal Work 44 ...
E^^s *.• ••• *** ^3 ***
Wood, common 17 ...
Cotton and woollen yarn ... 7 ...
Grain for sowing 13 ...
I^air ... ... ... ... 3 ...
Francs).
Difference.
1868. Increase. Decrease.
523 ... 23
251 ... 70 ... —
64 ... — ... 3
27 ... 12 ... —
234 ... 2 ... —
146 ... ICI ... —
123 ... ... 7
67 ... — ... 85
70 ... 4^ ^
54 ••• 21 ... "
38 ... 6 ...
37 ... 6 ... —
37 ... 28 ... —
35 ... 18 ... —
35 ••• ••• 9
35 ••• 22 •••
35 ... 18 ... —
31 ••• 24
23 ... 10 ... —
10 ... 5 ...
9
It is to be observed that as regards the two prin¬
cipal articles of the French export trade, silks and
wine, the increased value of the exports has not cor¬
responded with the general progress of the trade of
France in the periods under comparison ; and an
inference may be hastily drawn from this fact, adverse
to the policy which has been pursued. It is therefore
necessary to state that in consequence of the civil war
in the United States, and the exorbitant tariff which
has been in force during recent years, the export
trade of France to the United States in silks and
wine has been reduced to an extent which would have
'been disastrous to these two great industries, had not
the expansion of the trade between France and Eng¬
land compensated them for the loss sustained in the
American trade. These are the figures :—
Exports of Silks and Wine from France to the
United States in each of the Years 1859, 1868.
1859.
Silks .
Wine.
Silks
Wine..
Quantities.
938,761 kilos.
22,299,552 litres.
1868.
Quantities.
351,283 kilos.
14,364,789 litres.
Value.
138,246,607 francs.
32,007,998 francs.
Value.
43í975d63 francs.
13,827,528 francs.
It is a matter of wonder that in the face of such a
sudden and severe check to French trade in these
branches it has been able to maintain its present
lO
amount ; and this is solely due to the policy adopted
in i860, which is alleged to have been injurious to>
France.
These official statements conclusively prove the
marked impulse given to the foreign trade of France,,
and to many important branches of her industry by
the commercial reforms which have been effected by
means of treaties with other countries.
The general results may be thus summed up :—In
1859 the special commerce of France, imports and
exports combined, amounted to 3,907,000,000 francs,,
or 156,280,000, to which aggregate amount the
following countries, with which treaties have since
that time been concluded — viz., England, Belgium,
^Germany, Switzerland, Austria, and Holland—con¬
tributed 1,697,000,000 francs, or ;667,88o,ooo.
In 1868 the special commerce of France amounted
to a value of 6,229,000,000 francs, or ;é^249,160,000,
to which the above-mentioned countries contributed
3,175,000,000 francs, or ;^i 27,000,000, against
1,697,000,000 francs, or ;^67,88o,ooo, as before stated,
in 1859; showing an increase of 1,478,000,000 francs,
or ;^59,I20,OQO.
Italy has been expressly excluded, owing to the
difficulty of making an accurate comparison between
the trade of that country, when it was composed of
several distinct states, and when it forms, as it now
does, an independent commercial unit.
The following is a statement of the trade witli
II
«ach of the six above-mentioned countries in
1868
Special Commerce (in Millions of Francs).
Imports. Exports. Total.
England 580 921 1,501
Belgium 354 288 639
Zollverein 266 226 492
Austria 47 8 55
Switzerland 141 276 417
Holland 40 31 7i
Total, 3,175,000,000 francs, or £127,000,000.
In examining this table, it must be observed that
the treaty with Austria was only concluded in 1866,
and those with the Zollverein and Switzerland in
1865.
Shipping.—The development of the foreign trade
of France under the policy of recent years has been
attended necessarily by a large increase in the tonnage
engaged in it ; and although the principal part of this
increase consists of foreign shipping, there has been a
very marked progress in the employment of French
V
tonnage also in the foreign trade of France, as well as
in her colonial trade ; the national tonnage engaged
in the coasting trade—a trade, be it observed, which,
with some unimportant exceptions, is exclusively
reserved to French navigation—Shaving, on the con¬
trary, declined.
The important changes made in the French
navigation system in 1866, by which the indirect
foreign trade of France was opened on equal terms
12
to the shipping of foreign countries on condition oF
reciprocity, and the remaining protective and dif¬
ferential restrictions on such shipping at once par¬
tially abolished, and prospectively removed altogether,
have not been in operation yet for a period long
enough to bear their full fruits; but the following
tables show that there is no reason to believe that
they have been attended with injury to the French
shipping interests :—
1858. 1868.
Tons. Tons.
French Shipping in foreign trade 2,218,199 ... 3,095,544
„ „ colonial ditto 625,140 ... 992,576
„ „ coasting ditto.... 6,234,610 ... 5,498,248
Total (exclusive of fisheries) 9,077,949 ... 9,586,368
It is remarkable that the only branch of French,
navigation still protected from foreign competition
should be the only one which has declined in im¬
portance since the new policy has been in operation.
The total tonnage engaged in French trade in each
of the years 1858 and 1868 was as follows :—
1858. 1868.
Foreign trade 5,924,506 ... 9,513,514
Colonial ditto 625,252 ... 1,011,211
Coasting ditto 6,234,610 ... 5,498,248
Total 12,784,368 16,022,973
During the last ten years there has been but little
addition to the total tonnage of the mercantile marine
13
of France ; but of steam tonnage France possessed^
in 1868, 135,259 tons, against 66,587 tons in 1858.
In the trade with England, the employment of
French steam tonnage has advanced from 24,371 tons
in 1859 to 251,985 tons in 1869.
Further evidence of the material progress of
France since the introduction of the economic reforms
of i860 is afforded by the following official state¬
ments :—
Production of Wine and other Spirituous Drinks.
Wine.
The average production of Wine of all kinds in France
in the six years preceding and in the six years subsequent
to i860.
Hectolitres.
Average of years from 1854 to 1859, inclusive ... 27,752,000
Do. do. from 1861 to 1866, inclusive ... 50,276,000
Increase in latter period 22,524,000
Taxed—77tade with Brandy, &^c.
Hectolitres.
Average of two years—1858-59 37,614,000
Do. of six years after i860 39,224,000
Increase 1,610,000
Other Spirituous Liquors subjected to Taxes.
—1858-59 J
verage of six years"»
after i860 J
Increase...
Spirits.
cidbr.
Beer.
Hectol.
Hectol.
Hectol.
832,810 ...
4,586,031 ...
6,751,716-
878,053 ...
5,666,066 ...
7,298,070
54,757 -
1,080,035 ...
546,354
14
Account of Coal extracted from Mines and
CONSUMED IN FRANCE.
Extracted. Consumed.
Quintaux Métriques. Quint. Métriques
Average in six years before)
i860 ... ; 74,905,000 ... 125,586,000
Average in six years after)
i860 ... I 109,211,000 ... 173,768,000
" ••• ' '
Increase ... ... 34,306,000 ... 48,182,000
Statement of the Production in France of the
following Metals
Pig Iron. Steel. Copper.
of all kinds.
Tonn. Mét. Tonn. Mét. Quint. Mét. Quint. Mét.
Increase ... 269,926 ... 211,769 ... 183,582 ... 78,695
Statement of the Sale of Tobacco by the State.
Tobacco-leaf Manufactured
and Cigars. Tobacco.
Kilog. Kilog.
Average of six years before i860 ... 33,626,000 ... 26,283,000
Do. do. after i860 ... 32,145,000 ... 24,479,000
Decrease 1,481,000 ... 1,804,000
Account of the Steam Power used in Private
Industries.
No. Steam power.
Average of six years before i860 ... 10,703 ... 133,679
Do. do. after i860 ... 19,015 ... 231,971
Increase •k« ••• ••• t«« 8,312 ... 98,292
15
Account of the Steam Power used in certain
Industries in
1852 and
1867.
1852.
1867.
Increase.
Chemical manufactures
313 •••
2,006
... 1,693
Glass works
ó2o •••
2,387
... 1,767
Pottery works "
1,048
... 752^
Weaving manufactures
1,738 ...
9,796
8,05s
Spinning manufactures
16,495 —
49,996
... 33,501
Cloth manufactures
1,194 ...
3,847
... 2,653
Circulation of Letters by Post-office.
No.
Average of six years before 1860 ... 243,750,830
Do. do. after i860 297,295,948
Increase
53,545,118
Account of the Progress of Savings Banks in Franck
from 1854 to 1868 inclusive.
Number OF Relation of the
Knoif.; Depositors to
I300KS. Population.
Average of six years7
before i860 J 972,98.
Average of six years) , „
afteii86o J
Increase ... 543,32?
No.
i to 37
I to 24
Amount of
Deposits.
Fr.
126,101,407
177,496,516'
51,395,109-
But to return to the effects upon the foreign trade
of France, and of the commercial policy -which has^
been pursued during the last ten years. The fore¬
going statement has exhibited those effects upon the
general trade of the country, but in order to form an
adequate conception of its operation it is necessary
also to examine the course of the special trade be¬
tween France and England ; both for the reason givea
i6
above, viz., that it was to this particular branch of
French trade that the" new tariff was first applied,
and, secondly, because the trade with England con¬
stitutes so important an element in the whole foreign
commerce of France.
This latter consideration is too often forgotten in
thé question so often and so uselessly asked, viz.,
whether France or England has benefited the most
from the Treaty.
It is therefore necessary to recall the fact that
French trade with England forms about one-fourth of
the whole foreign trade of France, while English trade
with France forms only about one-tenth of the whole
foreign trade of England.
A comparison of the total value of the trade
between England and France, including imports,
exports, and re-exports, as shown by the English
trade accounts in the two quinquennial periods 1855-9
and 1865-9, gives the following results :—
i8sS-S9- 1865-69. Increase. Per cent.
^^FranceT} 33,960,099 ... 21,631,880 ... 175
^France - 24,353,26s ... 14,148,477 ... 139
Total ... 22,533,007 ... 53,313,364 — 35,780,357 ... 159
The following table shows the progress made
in the same period in the total foreign trade of the
United Kingdom :—
17
Total Foreign Trade of the United Kingdom.
1855-59. 1865-69. Increase. Per cent.
Imports ^ £> £
from all ^169,539,526... 286,339,903 ... 116,800,377 ... 69
countries. J
Exports 'v
to all (.139,512,257 ... 229,666,659 ... 90,154,402 ... 65
countries. J
Total 309>o5Ij783 516,006,562 ... 206,954,779 ... 67
Total Trade of the United Kingdom with Countries
with which Commercial Treaties have been Con¬
cluded since i860—viz., France, Belgium, Sweden
and Norway, Italy, Austria, Zollverein (Hanse
Towns and Holland).*
1855-59. 1865-69. Increase. Per cent.
£ £ £
Imports 40,158,369 ... 81,881,672 ... 41,723,303 ... 104
Exports 45,518,909 ... 87,165,799 ... 41,646,890 ... 91
Total 85,677,278 ... 169,047,471 ... 83,370,193 ... 97
The next tables, which have been compiled
from the English trade accounts, show the imports
and exports of the principal articles in the trade
between England and France, in the years 1859
1869 respectively :—
* The exports to the Hanse Towns and Holland include a
large part of the trade to Germany and Austria.
i8
Imforts from France into the United Kingdom
in each of the years 1859 and 1869.
1
1859.
1869.
1
Quantities.
Value.
Quantities.
Value.
Butter -
cwts.
36,854
£
152,480
407,432
2,231,450
Corks -
- lbs.
481,866
30,116
1,323,466
71,687
Cotton manufactrd. in-|
eluding yarn
value
1
375,352
Gt.Hundreds.
612,474
Eggs - - cubic feet
649,863
293,588
3,215,442
974,895
Fe ithers, ornamtl., lbs. '
31,476
73,262
81,187
111,744
Fish -
value '
—
26,695
133,594
Artificial flowers
■ " 1
—
97,273
358,376
Fruit -
5?
18,343
105,287
253,047
Garancine -
cwts.
131,504
17,960
119,332:
Glass of all kinds ,,
6,324
28,227
9,699
208,625
Hair -
"
1,949
34,889
211,661
Hats of felt
numb.
53,619
16,084
214,033
64,210
Jute yarn -
- lbs.
not dis
tinguished.
3,302,566
80,474
Hides -
J5
1,963,850
145,930
5,747,265
298,724
Hops -
cwts.
—
6,916
30,572
69,383
Iron and steel
5,114
101,248
Lace -
value
—
22,364
179,374
Leather gloves
pairs 4,500,049
487,775
9,440,928
1,022,766
Leather boots
695,445
111,002
296,328
61,421
Madder
cwts.
65,699
165,353
24,806
58,915
Musical instru.
numb.
3,790
37,900
177,541
Oil, rape seed
- tons
4,158
161,178
4,065
153,856
Oilseed cake
11,981
92,233
59)115
416,95s
Opera glasses
value
—
35,198
56,330
73,419
Paper of all kinds cwts.
7,353
25,883
122,039
Potatoes
443,927
69,674
833,640
190,977
Poultry & game
value
—
13,280
—
67,074
Rosin -
cwts.
4,258
1,676
159,429
63,521
Seeds -
value
667,404
254,296
—
357,274
Raw silk
- lbs.
1,064,806
950,561
1,448,513
Silk, thrown
155,872
298,427
240,917
569,653
Silk manufactures val.
—
1,732,928
—
9,004,291
Spirits
galls. 3,955,736
I,377,5II'3,84I,644
1,233,711
Sugar
cwts.
, 199,492
247,952
908,590
1,294,364
Watches
numb.
99,894
210,738
122,985
183,057
Wine -
galls.
1,010,888
;i,312,776
559,3044,255,483
1,585,858
Wool -
- lbs.
128,392 2,224,947
142,636
Woollen manuf.
value
1
607,609
—
1,586,639
Total -
-
i
!
16,870,859
j —
'33,527,377
N.B.—These importations are exclusively for consuirption in the United Kng-
dorn, French exports to the United Kingdom m transit to ether countries being shown
in a separate account of the " Transit Trade.**
í9
Produce and Mannfactures of the United Kingdom.-
Exports from the United Kingdom to France in
each of the years 1859 and 1869.
1859. j 1869.
Quantities.
Value.
Quantities.
Value,
Alkali -
cwts.
29,079
16,023
157,000
£
.62,731
Apparel
value
—
39,695
—
123,079.
Caoutchouc
—
21,366
—
135,665-
Coals -
- tons
1,391,009
615,232
1,999,920
869,137-
Copper
cwts.
90,320
493,083
80,086
331,226
Cotton yarn
- lbs.
360,319
33,319
1,914,731
242,018
Cotton, manufac.
value
—
222,383
—
1,195,077
Chemicals -
»
—
18,386
—
120,197
Fish -
—
10,530
—
131,378
Hardware -
cwts.
9,964
95,479
26,671
127,389
Iron -
- tons
82,713
395,135
134,151
704,440
Leather
value
:—
3,600
—
93,943
Linen yarn -
- lbs.
766,963
89,371
3,484,833
230,505
Linen manufac.
value
68,743
—
193,912
Machinery -
199,402
—
317,124--
Oil, linseed -
galls.
1,362,625
163,698
1,544,950
184,617
Silk yarn
- lbs.
231,574
113,464
116,760
72,49g-
Silk, thrown
289,456
308,568
242,191
346,442
Silk manufactures val.
44,039
—
113,630
Telegraph wire
—
28,349
—
534,432
Tin plates -
23,680
—
43,038
Wool -
- lbs.
6,170,228
428,942
4,986,664
380,292
Woollen yarn
832,384
176,118
3,993,381
705,57s
Woollen manuf.
value
243,286
—
2,183,674
Total -
-
4,754,354
—
11,438,330.
Re-exports from the United Kingdom to France.
1859.
1869.
Quantities.
Value.
Quantities.
r-
Value.
Coffee
- lbs.
480,739
£
14,232
17,882,486
£
528,006^
Copper
cwts.
12,006
64,392
139,500
492,743
Cotton, raw
,,
66,324
185,693
269,709
1,227,331
Hemp and flax
" ,,
28,071
46,581
377,303
398,087
Indigo
,,
1,747
53,284
2,982
109,850
Rice -
,,
153,048
85,452
152,476
81,320
Seeds
- qrs.
123,818
279,065
106,785
303,275
Silk, raw -
- lbs.
1,569,045
1,588,658
2,767,861
3,263,769
Wool
„
12,214,600
914,160
65,190,828
3,860,729.
Total -
« ^
—
4,807,602
—
11,838,892;
20
The effect of the recent policy of France on her
financial resources is a question at the present time
of the greatest interest.
It is generally assumed that the commercial ad¬
vantages which have incontestably been gained by
the economic reforms of the last ten years, have
been attained at the expense of fiscal resources.
This is the reverse of the truth. The falling off in the
custom-house receipts is in France a most imperfect
test of the effects of commercial policy upon revenue ;
for there, as is well known, some of the largest
branches of indirect taxation—viz., the taxes on the
greater part of the spirits, salt, and sugar consumed
in the country, and the proceeds of the sale of
tobacco—are all included under other divisions of the
revenue, and must be added to the custom-house
receipts, in order to establish a real comparison with
former periods. In other words, the proceeds of the
service of the " indirect contributions " must be
added to those of the ''service" of the customs. If
this course is taken, the result is found to be as
follows :—
Total Receipts of Both Services in 1859 and 1868.
1859. 1868.
Million francs. Million francs.
Customs
Indirect taxes
228,455,000 ... 144,564,000
485,676,000 ... 620,225,000
Total
714,131,000 764,789,000
From this comparison, it appears that the French
21
revenue from these combined sources has been in¬
creased by 50,000,000 francs, or 2,000,000, since
i860.
The policy of attempting to increase revenue by
the imposition of new charges on the raw materials of
industry, and upon manufactures, is condemned by
the experience of every country under economical
conditions similar to those of France. So far as
such changes are of a protective nature, they can of
necessity only succeed in their object by checking or
destroying the trade from which revenue is derived.
No tax can be at once protective and fiscal ; it can
only succeed in one direction in proportion as it fails
in the other. And even if, by a careful equalisation
of the taxes upon raw materials and upon their
manufactured products, the protective element were
to be removed, all such charges would constitute a
direct burden upon French industry, which would
have the double effect of restricting competition at
home, by keeping small capitalists out of the field,
and crippling the French export trade, thus cutting
at the root of the industrial life of the country, and
drying up one of the most important sources of
national wealth and financial prosperity.
The example of the United States of America is
sometimes adduced in evidence of the financial
success which may attend such a policy. Such
an appeal can only be made by those who are
profoundly ignorant of the effects of that policy
22
Upon the industrial economy and well-being of the
American Union. That a large revenue has been
raised by a system of taxation weighing upon every
branch of trade and industry, and by a most op¬
pressive tariff of customs' duties, is incontestably
true ; but this result has only been attained by a
process which has partially annihilated American
manufactures, and inflicted an amount of privation
'On the people which nothing but the vast territorial
resources of the country could have enabled them to
support, and which, if attempted in the older countries
of Europe, would lead to crushing national disaster.*
* The following statement is taken from a recent article in the
North American Review by Mr. David A. Wells, late Revenue
Commissioner of the United States :—
Since i860 the population of the Union has increased
nearly 8,oooyooo ; there are 25,000 miles more of railways ;
the debt is only about one half that of Great Britain ; and,
exclusive of this charge, Government expenditure infinitely
less ; and there is no natural reason which would render the
United States less able to compete in the.world's markets now
than in i860; but it is nevertheless a fact that the people of
the United States now use less sugar and coffee, and fewer
boots, shoes, hats, and other articles of universal consumption,
per head, than they did in 1859. The consumption of cotton
•cloth was less in 1870, measured in pounds, with a population
of 39,000,000, than in 1860, wi^h 30,000,000 ; and they not only
buy less at home, but sell less abroad, and send what they sell
in foreign ships.
The following account of the value of various exports in
.i860 and 1869 respectively, affords conclusive testimony of this
23
^decline in prosperity ; and as the value in the former year is
•calculated in gold, and that in the latter in paper currency,
which is now depreciated 13 per cent., the decrease, great as
it is shown to be, is really greater than it appears ;—
Value
1860.
In Gold.
$
Animals 1,855,091
Beer, ale, and porter 53j573
Boots and shoes 782,525
Candles 760,528
Carriages 816,973
Garden and other seeds 596,910
Gunpowder 467,972
Hides and skins 1,036,260
India rubber manufactures 240,844
Marble and stone manufactures ... 176,239
Paints and varnish 223,809.
Paper and books 564,066
Pot and pearl ashes 882,820
Soap 494,405
Tobacco (manufactured) 3,337,083
Trunks and valises 37,748
Wool and woollens 389,512
of Exports.
1869.
In Currency.
$
689,508
9,755
356,290
324,995
299,487
44,816
122,562
219,918
128,216
65,515
91,452
290,098
187,004
384,950
2,101,335
24,800
237,325
There has also been a great decline in shipping, not only as
regards foreign trade, but also in the coasting trade, of which
the Americans have the monopoly, and in fishing tonnage. In
the trade with Great Britain the entries were, in i860, 924
American and 613 foreign vessels ; in 1869, 365 American and
1,394 foreign. Mr. Wells states that in i860 15,000 men were
employed, in New York city alone, in building and repairing
marine steam engines ; and that in 1870, fewer than 700 found
employment in this, which was one of the best paid and paying
branches of American industry, and in which American artisans
formerly excelled. This has happened, he says, in the face of a
rise of wages in the same branch of English industry since
24
1863-4» by about 15 per cent., notwithstanding which, owing
to improved machinery and better knowledge, the cost of
construction has declined. From this Mr. Wells draws the
inferences that within the last ten years the result of Pro¬
tection in the United States has been to decrease the pur¬
chasing power of wages, diminish consumption, prevent exports,
and increase the cost of the manufactured product ; whilst in
Great Britain wages have been increased, cost decreased, con¬
sumption increased, and exports largely augmented.
CASSELL, FETTER AND GALFIN, BELLE SAUVAGE WORKS, LUECATE HILL, B.C.