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Commercial Future. 
 
 — BY— 
 
 Prof. ROBERT ELLIS THOMPSON, A.M ., 
 
 OB THE UNIVERSITY OF PENNSYLVANIA. 
 
 Reprinted, from the Penn Monthly (with additions), 
 
 —BY THE — 
 
 INDUSTRIAL LEAGUE. 
 
 Philadelphia : 
 
 ED WARD STERN " 2 ? CO., PUBLISHERS. 
 l8?8. 
 
THE COMMERCIAL FUTURE. 
 
 E suspect that people are slowly coming to the conviction 
 
 VV that the present hard times are not an event in financial 
 and business history like the panics of 1837 and 1857. Their du¬ 
 ration is great beyond precedent; the wide extent to which their 
 severity has been felt is without example. And they are not to 
 come to an end without effecting vast and permanent changes in 
 the relations of the chief industrial communities. Previous panics 
 effected no such change. England, the chief monopolist of the 
 world’s commerce, came out of them a little better established in 
 her preeminence than she went in. She had used the period of 
 prostration chiefly to crush native rivals in her foreign markets, 
 and she had the field clearer for her own operations. No nation 
 “ had so strong a back,” and could hold out so long as she; and 
 after every panic, the weaker fell a little more under her power in 
 that industrial warfare in which her great capital was her chief 
 
 weapon. 
 
 But the present period of depression is no ordinary battle of 
 that warfare ; it is rather a Salamis, a Zama, a Chalons or a Water¬ 
 loo, from which the world’s history is to take a new departure, be¬ 
 cause the power of commercial supremacy is to pass out of the 
 hands which have held it. A great revolt against that supremacy 
 as exercised by England, has been approaching its culmination for 
 decades past, and the result is not likely to be transient. But ex¬ 
 actly what that result will be is not to be predicted without looking 
 a little below the surface of the situation. 
 
 For almost a century, England has been sacrificing nearly every 
 other interest to the ambition of becoming and remaining the 
 great manufacturing and trading nation of the world. This ambi¬ 
 tion has not been thrust upon her by circumstances, for, as we shall 
 show, other paths to national welfare are open to her. Neither has 
 it been adopted from a wise and circumspect consideration of her 
 own material interests, for many, of these have been overlooked in 
 the course of her policy. A dominant idea, taking its start from 
 
 
3 
 
 the great mechanical inventions which occupied the last quarter of 
 the eighteenth century, seemed to take possession of the minds of 
 nearly all classes, and especially of the middle classes. Whatever 
 stood-in the way had to give way, in order that she might fulfil 
 her destiny as the maker and seller of the cheapest cottons, wool¬ 
 lens and iron wares that the world had to show. It is hard to re¬ 
 alize how little in the previous history of the people pointed to 
 such a destiny. The England of the sixteenth century was hardly 
 abreast of her continental neighbors in any branch of manufacture, 
 and she seemed little likely to do better. It was of her that the 
 Dutch said sneeringly that she sold the hide for six pence and 
 bought back the tail for a shilling, being a country which exported 
 raw materials and took manufactured goods in exchange. From 
 the time of the expulsion of the Huguenots from France, there 
 came a change, but the new manufactures were in the hands of 
 these immigrants chiefly, and they formed but a small fraction of 
 the nation. The readers of The Tatlcr and its sprightly rivals, will 
 recall the passion for French fabrics of all sorts which still ruled in 
 London society, and the general dependence upon Paris for fine 
 goods of every kind. Meanwhile, the North of England lay inert, 
 not yet awake to the impulses of industrial life which now thrill 
 through the old kingdom of Northumbria. Its people, now the 
 advanced Liberals of the kingdom, were among the pronounced 
 Tories of that day. Whereas Dissent now holds large sections of the 
 wealthy classes, the attachment to the Roman Catholic creed still 
 lingered in nearly all the county families; and Jacobitism was a 
 good deal more common than in any other part of the Island south 
 of Stirling. 
 
 Watts, Crompton, Arkwright and Wedgewood were the names 
 of conjury with which the new era was opened, and a new ambi¬ 
 tion awakened in the minds of the English people. That ambition 
 did not express itself in appropriate legislation only, although there 
 was quite enough of that. It took shape in the determined effort 
 to develop manufactures and commerce to the utmost. Capital 
 tended only in that direction for investment; ambition sought in 
 this field alone for its reward. And the end aimed at was accom¬ 
 plished. Where a great, practical people, like the English, have 
 set their heart on a thing, they are not likely to come short of it. 
 They did actually succeed in underselling half the world in the 
 
4 
 
 chief staples of manufacture. They crushed out native manufac¬ 
 tures in India, in Turkey, in Ireland, and for a time in Russia, 
 Germany, Belgium, and the Cantabrian peninsula. What gains 
 could be secured by their grasp on the world’s markets they made 
 in abundance. Their agriculture was neglected ; their people were 
 drawn away from the land to the factory; millions of acres were 
 left lying waste, and are still waste; they became more and more 
 dependent upon foreign producers for food; their political position 
 was hampered by the necessity of keeping peace with everybody 
 in Europe and some people in America. 1 But, with all these unfore¬ 
 seen drawbacks, they did succeed in what they had set their heart 
 on doing. They reached the goal of their ambition, but they do 
 not profess to have found paradise there. “ England is like a vast 
 city, to which the less peopled parts of the civilized world are an 
 agricultural country which is glad to send its overplus of provi¬ 
 sions in exchange for the luxuries and conveniences of a manufac¬ 
 turing region,” Professor Thorold Rogers says. 
 
 But, the position they have acquired is, in very truth, the siege 
 perilous; it is full of dangers on every hand. A general European 
 war, and, still more, a war with America, might inflict such suffer¬ 
 ings as the proletariat of Rome groaned under when the corn fleet 
 from Alexandria was detained by stress of weather or political 
 disorder. And, worse still, the commercial supremacy, to which so 
 much has been sacrificed, is far from being secured to England. It 
 
 1 Note here three important facts:—Mr. Seebohm, in the Protestant Revolution , 
 estimates the agricultural population of England in 1500 at 500,000 families, chiefly 
 yeoman farmers, while not half so many lived by trade or manufactures, and most of 
 these latter owned their shops and looms. There are now but 1,000,000 families em¬ 
 ployed in agriculture, while three millions are engaged in trade and manufactures, 
 and of both the greater part are working for wages. This represents a six-fold change. 
 
 A committee, appointed by the English House of Lords in 1873, reported that 
 England alone, to say nothing of Scotland and Wales, had seven-and-a-half million 
 acres of waste lands, which were not even used for game preserves, and that this waste 
 constituted nearly a fifth of the whole in the most fertile parts of the island. They 
 declared that the improvement of this land is, “ as an investment, not sufficiently lucra¬ 
 tive to offer much attraction to capital.” 
 
 Out of an area of nearly.fifty-seven million acres in the whole island, not much 
 over thirty-one millions are under any cultivation. But even were this amount farmed 
 as is the wretched soil of the Flanders provinces of Belgium, under the small farm 
 system, then England and Wales alone could furnish food for forty-seven millions of 
 people, or a little more than twice their actual population, without reclaiming an acre 
 of waste land or importing a grain of wheat. 
 
5 
 
 is destroyed, in so far as any other nation makes up its mind to 
 manufacture for itself. It will be wrested away so soon as any 
 rival arises to compete successfully for the markets of the world. 
 And they are fully aware of the danger which thus threatens them. 
 “ England’s position,” says Hon. Dudley Baxter, in his work on 
 National Income, “ is not that of a great landed proprietor, with an 
 assured revenue, and only subject to occasional losses of crops or 
 hostile depredations. It is that of a great merchant, who, by im¬ 
 mense skill and capital, has gained the front rank and developed an 
 enormous commerce, but has to support an ever increasing host of 
 dependents. He has to encounter the risk of trade and to face jealous 
 
 rivals.England is more favorably situated than any other 
 
 country, except the United States, for manufactures and com¬ 
 merce.The future rise of the United States into a great 
 
 manufacturing and naval power appears the most probable and 
 certain cause which will place a limit to our natural increased 
 prosperity.” 
 
 Her position among the nations is, therefore, a thoroughly arti¬ 
 ficial one. It can only be retained through her interfering with 
 the natural development of industry in other communities upon 
 whom she depends for customers. If these were to enter upon that 
 process of growth traced by Adam Smith, by which the artisan and 
 the manufacturer take their place, naturally, in the vicinity of the 
 farmer, and as the consumer of his surplus, then the “ nation of 
 shopkeepers” would be losing valuable customers with every week 
 of every year. England, therefore, has been forced to seek reme¬ 
 dies to prevent this, and she has had recourse to three. 
 
 The first is military force, by which she overawes dependencies 
 and weaker allies. Ireland and India illustrate her treatment of 
 the former class, as did our own States in their colonial period; 
 Turkey and Japan the latter. Japan was entrapped into a system 
 of treaties, by which a merely nominal duty of five per cent, is im¬ 
 posed on foreign goods, and the development of native manufactures 
 is effectually checked. To prevent any retreat from this false posi¬ 
 tion, these treaties have been made open to revision only when both 
 parties are agreed that revision is necessary,—a virtual cession of 
 Japanese autonomy, without precedent in the history of international 
 politics. And it was by the display of overwhelming force that 
 Japan was thus made a dependency of the British Empire. We 
 
6 
 
 say of the British Empire, for, although other powers are nominally 
 secured the same advantage, yet it is only the great trading power 
 which was expected and intended to derive benefit from this 
 iniquity, and it is only she who has done so. Other powers, notably 
 the United States, 2 have given Japan encouragement in their efforts 
 to put an end to this state of things, and the embassy now in Eu¬ 
 rope has this for its main purpose. But there is every reason to 
 anticipate the resistance of England to its just demands. An 
 English writer in the Fortnightly Review , says: 
 
 “ We have everywhere obtained that our goods shall be im¬ 
 ported into all these [Eastern] countries at duties of either three 
 or five per cent. We are continuing to apply to Eastern na¬ 
 tions this double system of tariffs, and jurisdiction of goods and 
 judges. To attain those ends we use all sorts of means, from cour¬ 
 teous invitation to bombardments. We prefer to employ mere 
 eloquence, because it is cheap and easy; but if talking fails, we 
 follow it up by gunboats, and, in that convincing way, we induce 
 hesitating ‘ barbarians ’ not only to accept our two unvarying con¬ 
 ditions, but also to pay the cost of the expedition by which their 
 consent to these conditions was extorted from them. We tried 
 patience and polite proposals with Tunis, Tripoli and Morocco. 
 China was so unwilling to listen to our advice, so blind to the 
 striking merits of our opium and our consuls, that we were obliged, 
 with great regret, to resort to gentle force with her. Japan pre¬ 
 sents the most curious example of the series; it is made up of ig¬ 
 norance circumvented, and of indignation frightened. Indeed, the 
 story of the Japan treaties would be worth telling, because it is a 
 very special one, because it is the new triumph of our justice abroad, 
 and because it may be taken as indicative of our present ‘ manner,’ 
 as painters say.” 
 
 For it is not merely the bad provisions of the treaties from 
 which Japan is suffering. Under the system of extra-territorial 
 jurisdiction, exercised by foreign consuls and ambassadors, it is 
 altogether impossible to enforce any revenue laws against British 
 
 2 We are sorry to be obliged to make an exception as regards Secretary Fish. 
 Japan made a most urgent appeal to him for aid in regaining her autonomy, while he 
 was Secretary of State, and even offered valuable concessions in return, but he turned 
 away these proposals with the remark that he saw no reason to be dissatisfied with 
 things as they are. The treaty which did the mischief was negotiated by Sir Rufus Al- 
 cock, in 1866, in the absence of our ambassador, and it was signed on behalf of the 
 American embassy, by a Hollander, who was an attache. The Tokio Tunes , an Ameri¬ 
 can paper published at the capital, has done excellent service in exposing this and 
 other iniquities. 
 
subjects. The British ambassador, on his own authority, has dis¬ 
 pensed British steamships from paying the export duty on coal, 
 and their consuls have taken such steps in regard to the smuggling 
 of opium as bids fair to secure the Indian government a new mar- 
 • ket for that poison. A clause in the treaty forbade its importation, 
 absolutely and without qualification, but the English court at Yo- 
 kahama has ruled that “ medicinal opium ” may be imported to any 
 extent under the five per cent, duty, and, of course,, can then be 
 converted into “ smoking opium ” very easily and cheaply, as was 
 shown during the trial. 
 
 The second weapon employed is the power of the purse. 
 Rivals are to be crushed out by unfair competition of every sort, 
 and then, when the market is cleared of native competition, the 
 trader recoups himself for his temporary sacrifices by higher prices. 3 
 This has been not merely shown, but conceded to be true. Official 
 reports to the English Parliament describe the process with great 
 candor and circumstantial detail, but without a trace of any sense 
 of wrong done. 4 Samuel Taylor Coleridge is the only English 
 writer in whom we have been able to find any reprobation of these 
 practices. The English like fair play, but they find it very hard 
 
 3 We had a taste of this in 1847-54. In the former year native iron sold for sixty 
 dollars a ton. Through the folly of the Dallas, or Horizontal Tariff, the English pro¬ 
 ducers got a chance to shut up our furnaces by wholesale underselling. When our native 
 producers were out of the way, the price was put up to eighty dollars and was kept at 
 that for years. 
 
 * The following extract from the Parliamentary Report on Strikes made in 1864, 
 by Mr. Hugh Seymour Tremenheere, will bear quoting once more :— 
 
 “The laboring classes generally in the manufacturing districts of this country, and 
 especially in the iron and coal districts, are very little aware of the extent to which 
 they are often indebted for being employed at all to the immense losses which their 
 employers voluntarily incur in bad times in order to destroy foreign competition, and 
 to gain and keep possession of foreign markets. Authentic instances are well known of 
 employers having, in such times, carried on their works at a loss amounting in the ag¬ 
 gregate to ^300,000 or ,£400,000 in the course of three or four years. 
 
 “ If the efforts of those who encourage the combinations to restrict the amount of 
 labor and to produce strikes were to be successful for any leng^ of time, the great ac¬ 
 cumulations of capital could no longer be made which enable a few of the most wealthy 
 capitalists to overwhelm all foreign competition in times of great depression, and thus 
 to clear the way for the whole trade to step in when prices revive, and to carry on a 
 great business before foreign capital can again accumulate to such an extent as to be 
 able to establish a competition in prices with any chance of success. 
 
 “ The great capitals of this country are the great instruments of warfare against the 
 competing capital of foreign countries, and are the most essential instruments now re¬ 
 maining by which our manufacturing supremacy can be maintained; the other ele¬ 
 ments—cheap labor, abundance of raw materials, means of communication, and skilled 
 labor—being rapidly in process of being equalized.” 
 
8 
 
 to see foul play in anything which suits British interests. They are 
 the most innocent of Machiavellians! As De Tocqueville, one of 
 their most lenient judges, says: “In the eyes of the English, 
 the cause whose success is useful to England is always the cause 
 of justice. The government which serves English interests has all • 
 sorts of good qualities, but that which hurts her, all sorts of de¬ 
 fects ; so much so, that it appears that the criterion of honesty and 
 justice must be sought for in whatever favors or whatever is ad¬ 
 verse to the interests of England.” 
 
 The last weapon was the Free Trade propaganda. A system of 
 specious doctrines was presented to the world, whose whole pur¬ 
 port was to deter other countries from revolting against the com¬ 
 mercial supremacy of England. Present cheapness of money price 
 was maintained to be the one test of the claim which a manufactu¬ 
 rer had upon anybody’s attention. The notion of a nation’s making 
 present financial sacrifices for an ultimate benefit was discredited. 
 Every rival of British wares was held up to scorn as “ hot-house 
 manufactures,” “ baby industriesand protective tariffs were 
 likened to the Chinese Wall. The nations were warned against 
 “ the delusive policy of protection to native industries,” pursued by 
 England herself for five hundred years, and only abandoned when 
 it seemed no longer likely to be needed. “ Do not do as I did,” 
 said John Bull, in his grand, paternal manner, “ but do as I say.” 
 
 These doctrines took hold of men’s minds, just in so far as they 
 had not made themselves masters of the actual situation of affairs. 
 The Free Trade ideal is true enough for an ideal set of circum¬ 
 stances, but altogether false for this unideal world of ours. Given 
 a condition of things in which all nations make an equal start in 
 the race of industrial development, and in that state of things any 
 sort of handicapping would be unfair. But that was not the con¬ 
 dition of the industrial world. Nor was it merely true that one 
 nation had attained a natural and balanced development beyond 
 the rest, for, even in that case, the interference with others would 
 not be excessive or permanent. It was the case of a nation, rich 
 beyond parallel or precedent, able to command vast capital at a 
 cheap rate, and bent on giving up everything else to the promotion 
 of her manufactures and commerce;—a nation which had sacrificed 
 its agriculture, driven its people into its cities and its factories, 
 and bent all the energies of the most powerful and practical of races 
 
9 
 
 to the task of keeping the world in a position of commercial de¬ 
 pendence. Protection offends certain classes of minds by its ap¬ 
 pearance of artificiality, of contrivance, of resistance to natural laws. 
 But it is, in truth, a very natural resistance to the most unnatural 
 and artificial situation of things that can be conceived. To others 
 it seems but another name for national selfishness, when it is in 
 truth organized resistance to a vast system of national selfishness. 
 
 With the theorists about Free Trade all was sincerity and 
 enthusiasm. But as much cannot be said for the statesmen who 
 had to carry out the theory. A single fact convicts them of insin¬ 
 cerity. While all the rest of their chief manufactures were supposed 
 to be on a footing to stand any foreign competition to which they 
 were likely to be exposed, this could not be said of the silk manu¬ 
 facture. Their next neighbors in France and Switzerland would 
 certainly exterminate that manufacture if it were exposed to their 
 competition. A protective duty of twenty per cent, on silks was 
 maintained for fifteen years after the nominal adoption of Free 
 Trade, and while the government, as well as the people, was 
 urging on the world the Free Trade policy, and was informing 
 its colonies that English “ experience has fully proved the inju¬ 
 rious effect of the protective system, and the advantages of low 
 duties on manufactures.” 5 Not till i860 was the protection of silk 
 abandoned, as the price to be paid for the French Treaty; and the 
 grass that grows to-day in the streets of Macclesfield and Coventry 
 testifies with what result. 
 
 Equally inconsistent with England’s Free Trade professions, 
 though less palpably so, are the measures she has pursued to se¬ 
 cure the control of distant markets to her merchants and manufac¬ 
 turers. If Free Trade be right, then the duty of government is to 
 let commerce alone, to expend no government money to foster it, 
 as well as to avoid legislation which favors home producers at the 
 expense of foreigners. But the English do not so interpret their 
 doctrine in practice, however direct and natural may be this infer¬ 
 ence. By a vast system of subsidies they have secured the 
 existence of steamship lines which bring the English producers 
 home to everybody’s door. Some English economists, notably 
 Professor Thorold Rogers, allege that distance and the costs of 
 
 5 The language of a Government Minute, published in 1859, and directed against 
 colonial tariffs, whose rates were nearly, if not quite, always less than twenty per cent. 
 
10 
 
 transportation furnish to the new and weak manufactures of other 
 countries the natural advantage of protection which is claimed as 
 their due. So it might, were it not that the English Treasury 
 steps in to relieve the English manufacturer from a large part of 
 this cost, enabling him to reach the most distant climes with his 
 wares, and to sell them at a cost which, without government assist¬ 
 ance, would be impossible. 
 
 Similar, in purpose and in effect, are the large sums of govern¬ 
 ment money which have been expended on the industrial education 
 of the people of England since the Exhibition of 1851 laid bare 
 the defects of English manufactures, as regarded from an artistic 
 point of view. Genuine Free Traders, like Herbert Spencer and 
 Gerrit Smith, very consistently denounce any outlay of government 
 money for any educational purpose. They say that the law of 
 demand and supply should be paramount in this sphere also; and 
 that private and voluntary effort alone should be depended upon 
 for the supply of education, as for that of horse-shoes, or of striped 
 calicoes. To tax a man for purposes of education, is for the State 
 to set aside his judgment as to whether education is a good thing, 
 and, if so, what sort of education, and in what quantity ? To tax 
 all citizens for these purposes, is to take money from those who 
 have no children, and to lay it out on objects which do not espe¬ 
 cially conduce to their benefit. The business of the state being 
 merely to exercise a proper police, and to prevent any one from 
 hurting his neighbor, the government must not assume that they 
 are called upon “ to promote the general welfare,” in this or any 
 similar way. To concede that the state is so far entrusted with 
 “ the general welfare,” as that it may make provisions for such ob¬ 
 jects because individuals are not likely to provide sufficiently, would 
 be to give up the first principle of Free Trade doctrine. And if a 
 national provision for education is open to Free Trade objections, 
 every specialized form of that education is especially objectionable. 
 It is enabling the manufacturer “ to put his hand into the pocket 
 of the nation,” and to abstract therefrom the moneys needed to 
 make his own business more successful in its competition with 
 foreign rivals. Such was the purpose and such has been the effect 
 in England. The production of articles of art-manufacture in 
 England has advanced so much that while the export of the great 
 staples has diminished, that of articles of this class has vastly in- 
 
creased from Great Britain, and diminished in a corresponding 
 degree from France, as the French themselves confess. 
 
 Let us not be understood as objecting to the principle involved 
 in any of the three cases. It was right to keep protective duties 
 on silk,—right to subsidize English steamship lines,—right to 
 create the South Kensington Museum and the net-work of art 
 schools of which it is the centre. But the last two are no more 
 capable of vindication on Free Trade principles than was the former. 
 It was excellent policy, because it was not Free Trade. 
 
 The edifice of English prosperity, being a thoroughly artificial 
 one, has never escaped the dangers of its position. All the great 
 natural forces which cooperate in the advance of civilization are in 
 deadly hostility to it. The stars in their courses fight against 
 Sisera. However solid her commercial supremacy may have 
 seemed at times, it was no more secure than one of those vast 
 temple walls which the traveller sees in India,—walls constructed 
 centuries ago, to resist the violence of earthquakes as well as the 
 
 more ordinary forces of destruction, but now toppling to their fall 
 because a banyan seed has germinated in a neglected crevice, and 
 the huge roots are gradually hurling the stones from the places 
 where they seemed fixed for ever. 
 
 The force which has everywhere been counteracting Free Trade 
 doctrine has been the sentiment of nationality, which is itself 
 coming into recognition as the most powerful of political forces. 
 Not that national sentiment has always been extended to the 
 economic sphere; not that those who have been zealous for national 
 independence and unity have always realized the relation of those 
 great blessings to national industry. But, in great multitudes of 
 cases, this relation has been more or less clearly felt and acknowl 
 edged, together with the necessity of a varied industry to the 
 completeness of the national life and to the welfare of the people 
 And at the same time, there has been awakened the conviction that 
 England is everywhere and at all times the common enemy of 
 national industries. There is indeed much in the English character 
 which fosters international dislike of her people and her policy but 
 she never was so cordially detested as since she began to pose as 
 the cosmopolitan “friend of man” and patroness of civilization in 
 the advocacy of Free Trade. The ruthless use of her money power 
 
12 
 
 to check the natural development of other nations, and to keep 
 them in a position of dependence upon herself, has earned her an 
 amount of dislike which will certainly be a source of disaster to her 
 in the long run. 
 
 As we have seen in Mr. Baxter’s statement, it is to the United 
 States, rather than to any of her older rivals or any of her colonies, 
 that England looks for the possible destruction of her commercial 
 supremacy. Fifty years ago the very notion of such a thing would 
 have seemed to her ridiculous, and even twenty years ago the pos¬ 
 sibility of it had not yet dawned upon her. The attitude of her 
 policy towards us through all the earlier decades of our indepen¬ 
 dence had an insolence of contempt in it which showed the estimate 
 she put upon our power. Our flag was insulted, our pretensions 
 ridiculed, our claims to an equal footing, in commerce and on the 
 sea, were met with a bland hauteur which made the American 
 blood boil. America was described in the English Parliament as 
 existing chiefly to consume English wares. “ The United States of 
 America were always considered our especial market,” Lord 
 Lyndhurst said. “ It was well worth while to incur a loss upon the 
 first exportation” after the peace of 1815, Brougham said, “in 
 order, by the glut, to stifle in the cradle those rising manufactures 
 in the United States which the war has forced into existence, con¬ 
 trary to the natural course of things.” Such was the attitude of 
 British statesmanship toward us, while English travellers blended 
 their contemptuous caricatures of our national manners with 
 exultations at the fact that every house they entered was crammed 
 with the products of English manufactures. 
 
 Since the suppression of the Southern Rebellion the tone of 
 English writers has changed very materially. Something about 
 the country and its people had always been known, but, as soon as 
 it became the centre of interest for the world, vague impressions 
 gave place to a more exact knowledge of it. Scores of European 
 correspondents and visitors came to “ spy out the nakedness of the 
 land,” and to report their impressions in such sort as would secure 
 attention in Europe. And this more careful study of us coincided 
 with the opening of a new era of national energy and hopefulness. 
 The incubus of slavery and of its disgrace had been removed, and 
 Americans had begun to feel as if, at last, they owned their own 
 souls. The national unity, hitherto always uncertain in its capacity 
 
13 
 
 to stand a strain, had been subjected to the severest and had not 
 given way. The consciousness of nationality had been awakened 
 as never before in our history; and, in the words of our own best 
 
 Singer : Earth’s biggest country’s got her soul, 
 
 An’s risen up earth’s greatest nation. 
 
 The elements of our national character and those of our national 
 environment, which promise us a great industrial future, are too 
 many and various to be here passed in complete review. But 
 among them we might specify our happy immunity from many of 
 the mischievous traditions of Europe. The relations of capital to 
 labor, for instance, have been far less embittered by the perpetua¬ 
 tion of bad laws for the oppression of the working classes, and of 
 bad social distinctions which keep different classes in unwholesome 
 separation from each other. We are not quite free from either 
 mischief, and perhaps as regards each we owe more to our circum¬ 
 stances than to our own merits. But the readiness with which the 
 ablest workingmen make their way into the class of employers, and 
 the choice given to all of becoming their own masters, by taking to 
 farming, shop-keeping or some other occupation, furnish a more 
 abundant safety-valve than Europe enjoys. And, as a matter of fact, 
 our workmen surpass those of Europe in promptness to do their 
 duty, and in willingness to oblige. They have not spent half a cen¬ 
 tury in devising methods by which to evade work. They do not 
 vote to close the shop or mine and have a holiday, whenever the 
 boss offends them. Their trades unions have never enacted such 
 meddlesome regulations as those which in England forbid a man 
 to put his hand to any work which does not properly belong to his 
 branch, however great the emergency. 6 Their lines of action are 
 
 6 Perhaps we owe much of this to the absence of aristocratic privileges. For no¬ 
 tions of social caste permeate the lowest as well as the higher classes in England and 
 in Europe generally. The inane etiquette of the drawing-room is rehearsed or travestied 
 in the servants’ hall. The butler would lose caste if be were to bring up a scuttle of 
 coal, even though his mistress requested it as a special favor. The artisan who grinds 
 cutlery must never lift the annealing hammer, and so on. The system is seen in its logical 
 perfection in India, where you must employ one servant to fetch water, another to 
 make the beds, another to attend you to the bazaar, and so on through the score or two 
 of half-idle blacks needed for even a moderate establishment. Whatever advantages 
 accrue to aristocratic government, we can never afford to sacrifice to them our freedom 
 from everything like caste distinctions, and our national willingness to take a man for 
 his weight and worth, apart from the stamp he bears. It is to this readiness that we 
 owe the steady public opinion in favor of what is right and just, which fills the work¬ 
 shop because it is felt in the counting-room. 
 
14 
 
 less rigid and more adaptable, and they bear evidence of a better 
 temper and a juster disposition in those who devised them. 
 
 Another element of promise is our ambition for the national re¬ 
 nown. Seen on its reverse or kchrseitc , this is that thin-skinned 
 vanity which frets over foreigners’ opinions of us, circulates every 
 bit of abuse from the Saturday Review and the like organs, and is 
 always on the watch for some petty Englishman’s praise. We are 
 happily outgrowing that, just as an over-anxious preacher outgrows 
 his anxiety as to the way in which his sermons are taken. He be¬ 
 gins, as he reaches a saner state of mind, not to care about mere 
 good opinions, to think more of his work and of the dignity of his 
 position, and to feel that what he preaches is good enough for them 
 who hear, and if they do not like it, so much the worse for them. 
 So also it is to be hoped the American people are working them¬ 
 selves out of this raw anxiety of inexperience, into the feeling that 
 their country and its works are good enough for the critics, and 
 that it does not greatly matter whether they are appreciated or 
 not. 
 
 At the same time, ambition for the real greatness and glory of 
 the country is just as warm a passion as ever. We enjoy seeing 
 our intellectual princes owned as equals by their peers in Europe ; 
 and finding Hawthorne, Lowell, Longfellow, Whittier, Emerson, 
 Prescott, Motley, James, Whitney, and their like, placed by all 
 competent critics on the same shelf as the British classics. We 
 ha.ve even room for a smile to see the way in which some of our 
 geese pass for swans in Europe, where Joaquin Miller and Walt 
 Whitman are hailed as great poets by men who ought to know— 
 better. These represent one side of a nation’s life; we are not 
 contented to come short in any. We shall have musicians, singers, 
 athletes, marksmen, artists, worshippers of culture, men of science, 
 philologists, libraries, picture galleries, museums, fashionable mono¬ 
 manias, red-hatted cardinals, and everything else equal to the best 
 that is to be seen anywhere. We may not always know how to 
 go about getting them. At times we may be as laughable as the 
 noveaux riches , ordering books for their libraries by the yard. We 
 may care more for the having than the understanding. But a full 
 national life, rounded and complete on every side, is our national 
 purpose, even though we may make mistakes as to the way to get 
 at it, just as we made a mistake in thinking that equality before 
 
i5 
 
 the law would secure us immunity from all the social and political 
 perplexities of Europe. 
 
 And one part of this ambition is the purpose to become a great 
 industrial community,—to produce on our own soil and for our 
 own use all the great staples of manufacture, from the coarsest up 
 to the finest, and in as much abundance and of as good quality as 
 anywhere in the world. We will yield to none, in either the 
 variety or the vastness of our home productions. It is this pur¬ 
 pose which formulates itself in our protective tariffs. Protection 
 would not maintain itself for an hour if it had to depend on the 
 support of those who are directly and to themselves evidently 
 interested in its maintenance. It is not the contrivance of the men 
 whose money is in our manufacturing establishments. It has its 
 friends everywhere and in all classes, because of the feeling that 
 American manufactures have a claim on all American citizens, a 
 fact observed by several of our recent visitors from Europe. 
 
 A Free Trade paper once proposed, in jest, to stop the further 
 production and “raising” of human beings on this continent. It 
 showed that no other article was so expensive as a child, that none 
 had so many protective laws enacted in its behalf, and none called 
 for so large sacrifices of present advantages to future results, on the 
 part both of society and of individuals. On the other hand, grown 
 men could be had from Europe, at that moment, for fifteen dollars 
 a piece. We are very far from ignoring the difference between this 
 case and that of lifeless commodities, with no personal claim on 
 our affections. But we desire to emphasize the resemblance 
 between the cases, which is too commonly overlooked. There is, 
 in the minds of our people, a sort of natural affection for the indus¬ 
 tries which furnish employment for so many thousands, and give 
 variety to our national life. We watch the story of their triumphs 
 in Paris with no less interest than we watched the exploits of our 
 own young collegians on the Thames last summer. We feel, in 
 either case, that their triumph is our triumph. 
 
 It may be said that we have not counted the cost,—that popu¬ 
 lation is crowding into our cities at an unexampled rate, that times 
 of distress affect larger masses of our people than ever before, 
 and that the old-fashioned, wholesome life of the nation is sadly 
 deteriorated. We admit the fact of the increase of city life, but 
 we deny the inferences. City life has its own evils, but it is not 
 
i6 
 
 less intellectually sane and morally wholesome than that of the 
 country. Nay, it is more so. And no one who has looked into 
 the story of the years 1837 to 1842 will maintain that a larger 
 portion of our population are suffering severely than in those 
 years. The aggregate is indeed larger, and therefore more impres¬ 
 sive ; but the proportion is less, and especially so in communities 
 like Philadelphia, where there is a great variety of industry. And 
 yet no one will deny that city life does present difficult problems 
 which Americans had not faced before, and to which they have 
 hardly, even as yet, addressed themselves. 
 
 A third element of promise, upon which we need not dwell here, 
 is the inventive genius of the American people, a peculiarity by no 
 means specially possessed by the New Englanders, but diffused 
 through all classes, wherever manufactures have been established, 
 or some special necessity has created a demand. The inventive 
 gift is so weir recognized as abundantly bestowed upon Americans 
 that “ any American who announces a discovery attracts attention 
 in England, where Yankee babies are believed to pass their time 
 mainly in inventing new rockers ” ( Spectator ). “ It is notorious,” 
 says Mr. W. R. Greg, in his Rocks Ahead, “ that in nearly every 
 branch of manufacture and machine-making, the most successful 
 and serviceable inventions have for many years been of American 
 origin.” It might seem as if this conferred no permanent advan¬ 
 tage, since our inventors are always at liberty to dispose of patent 
 rights to Europeans; but it is not so. In the first place, the tide 
 of improvement is steady in America. It advances by what has 
 happily been styled “ molecular changes,” with which the foreigner 
 cannot keep up. The brand new invention he buys to-day will be 
 out of date by next Christmas. The hind legs may get on to 
 where the fore legs were, but the fore legs have not stayed for 
 them. 
 
 Besides this, the American inventor has in mind a different 
 class of workmen from those of Europe,—men of greater alertness 
 and nervous promptness, as well as a larger intelligence. There 
 have been cases where our machinery has been sent over to 
 England, accompanied by the fullest instructions as to the arrange¬ 
 ment of its parts, and it has been found impossible to have it 
 properly put together, through the incapacity of the workmen to 
 follow instructions. And, in other cases, where it has been set up 
 
17 
 
 by American workmen, it had to be abandoned, because of some 
 want in the discipline or the diligence of the European laborer. 
 Our watch-making machinery, for instance, has been discarded in 
 Switzerland, as altogether useless in connection with the best 
 human material they have at command. The machinery is for 
 sale ; the building it filled is let out in lodgings. In another case, 
 a machine constructed on the principle of a steam die-stamper was 
 sold to an English firm, but the workman employed to attend it, 
 although furnished with two boys to assist him in getting the ma¬ 
 terial ready, lost, on an average, forty out of every hundred strokes 
 of the stamp. An American workman, with no assistant, can 
 attend the same machine and never lose a stroke. As Dr. 
 Leonard Bacon says, “ the main point of the superiority of Ameri¬ 
 can manufactories is the personal superiority of the American 
 workman.” The genius shown by our inventors is merely the 
 summit peak of a widely-diffused, high intelligence and adapta¬ 
 bility. 
 
 A fourth advantage is found in the ruling ideas which prevail in 
 our principal branches of manufacture, and especially the growing 
 preference for excellence rather than cheapness. The Free Trade 
 ideal necessarily fixes the attention of the producer upon cheapness 
 alone. England’s victories in competition have nearly all been won 
 by that weapon. It crushed out the manufacture of really good car¬ 
 pets in Turkey by Kidderminster imitations. It destroyed the 
 marvellous cotton tissues of India by its Manchester “ cheap and 
 nasties.” It has exterminated branch after branch of artistic 
 manufacture among the peasants of Europe and the people of Asia, 
 by Brummagem imitations, modelled after selected specimens, and 
 offered at a trifling cost. Cheapness is the supreme ideal of Free 
 Trade policy, the idol to which England sacrifices, not the manu¬ 
 factures of other countries only, but its own as well. The deteri¬ 
 oration of English wares, in all but the newly established branches 
 of art-manufacture, but especially in hardwares and textiles, is a 
 subject of unceasing confession at home and complaint abroad. 7 
 
 i Sir Edward Thornton recently transmitted to England the report of Mr. Victor 
 Drummond, in regard to the competition which America is going to offer for the mar¬ 
 kets of the world. Mr. Drummond says, that “ if the lower classes at home will only 
 listen to reason, and accept the lower wage, which must be, ... . and the manufac¬ 
 turers .... will take pains to have their work of as superior quality as the Ameri- 
 
 5 
 
Some of the Sheffield exhibitors sent to Paris this year the very 
 articles they prepared for the first exhibition of 1851, simply 
 because they could not now produce anything as good in the same 
 lines. English cottons have become a proverb for utter worthless¬ 
 ness. The methods by which they may be filled with adulterations 
 to the utmost are no longer the dark secrets of fraudulent estab¬ 
 lishments. They are openly discussed, as a scientific problem, in 
 the pages of the transactions of their scientific societies. American 
 brands have been systematically counterfeited to secure their sale 
 to those foreigners, who have made up their minds that they have 
 had enough of Lancashire. And Mr. John Bright publicly advo¬ 
 cates the repeal of all laws against adulterations, even of food, on 
 the ground that they are contrary to the principles of Free Trade, 
 whose last word on this subject is Caveat emptor! 
 
 The importance of such ruling ideas we have already pointed 
 out in tracing the rise of England’s commercial supremacy. It is 
 a matter of congratulation that the predominant aim of our own 
 manufacturers seems to be to make the best article possible. Mr. 
 Morrell, when asked how the Johnstown works had attained such 
 perfection in making Bessemer steel rails, replied that it was 
 because they had made up their minds to make each new batch 
 better than any which went before it. The same might be said, 
 with truth, by our manufacturers of watches, hardware, 8 cutlery, 
 
 cans, and not, as in some cases has happened, of cotton manufacturers using starch, 
 clay, Epsom salts, and antiseptics, instead of the least possible amount of starch, and 
 remember that people will have the best and cheapest article, then we need not fear 
 the race of competition which is surely coming.” 
 
 8 The New York correspondent of the English Ironmonger says:—“Importers 
 complain that the lines are drawing around them so tightly that they scarcely dare to 
 make any ventures. Certain it is that very few goods come to this market ip the hard¬ 
 ware line which can compare favorably, either in shape, finish, quality, or price, with 
 American goods; and if it were not that there still remains some trace of original pre¬ 
 judice in favor of English steel in some parts of the country, I imagine there would be 
 no encouragement for any further effort to continue the business. There is a capacity 
 for over-production in every line of manufacture, competition is very sharp, prices are 
 very close to net cost, and the progress of improvement is constant. Probably more 
 ' novelties have been brought out during the past two years than in the previous five, and 
 such novelties have been the life of trade.” In an appendix to this pamphlet will be 
 found the same correspondent's sketch of the history of our manufacture of the fine 
 grades of steel. 
 
 Mr. Lowthian Bell pronounces the American iron market permanently lost to 
 England. 
 
19 
 
 saws, axes, and other goods of that class. And any person who 
 has followed the development of our cotton, woolen, silk and leather 
 manufactures will have found the same laudable ambition pre¬ 
 vailing in each. As his Letters show, Professor Reuleaux was 
 struck by this American ambition for quality, in contrast to that 
 for cheapness, which Germany had learnt from England. We 
 have not been captivated by that Free Trade notion, that the sale¬ 
 able qualities of an article are more important to the producer than 
 its capacity to stand wear. Our best, our leading producers are 
 working for the results which come in the long run. They have 
 not believed what Carlyle calls “ those ultimate evangels, unlimited 
 competition, fair start and perfervid race by all the world,— 
 towards 4 Cheap and Nasty ’ as the likeliest winning-post for all the 
 world,—which have been vouchsafed to” the English. 
 
 The last element of promise is found in our natural resources. 
 In the first place, we have inexhaustible supplies of the materials 
 of every great manufacture. Not only have we all that England 
 has, and in still greater abundance, but we have others of which 
 she is destitute. Her cotton manufacture is one of the most artifi¬ 
 cial of industries,—the product of prohibitions and high protective 
 duties imposed for a century, without any reference to the special 
 capacities of the country. But ours is the adopted home of the 
 cotton-plant; while England was naturalizing its manufacture by 
 protection and prohibitions, we were naturalizing its growth by 
 protective duties. And, when once the virus of slavery is elimi- 
 
 Dr. Leonard Bacon says, that when the report of Mr. Favre Perret, (Swiss Cen¬ 
 tennial Commissioner,) “ on American watch-making was read to crowded meetings of 
 watch-makers, at Neuchatel and Geneva, the general expression was that of abject de¬ 
 spair. Work was suspended for months on the costly building of the School of Watch¬ 
 making, founded by the Genevan government. A commission was appointed by the 
 cantonal legislature to inquire what new industry could be introduced in place of that 
 which must henceforth be abandoned to American competitors.” So with Switzer¬ 
 land’s other three manufactures. The export of ribbons to the United States is one- 
 sixth of what it was four years ago. American cheese is supplanting that of the Swiss 
 mountaineers in all the markets of Europe ; and Swiss leather is no longer exported to 
 America, while “ every little tannery feels the influence of importations from America.” 
 
 Mr. Thorp, the correspondent of the Macclesfield Courier , says that the “ English 
 silk manufacturers acted wisely in abstaining from exhibiting their goods at the Cen¬ 
 tennial Exhibition at Philadelphia, as they would only have exposed their inferiority in 
 price and quality.” He says the reason is found as much in “ the greater intelligence 
 of the work people,” and he predicts an English protective duty on American silks. 
 
20 
 
 nated from the veins of the South, Georgia and the Carolinas will 
 be the third great centre of the manufacture. The whole land 
 seems to have been fitted for an industrial people,—“ a land where 
 thou shalt eat bread without scarceness, thou shalt not lack any¬ 
 thing in it; a land whose stones are iron, and out of whose hills 
 thou mayest dig copper.” (Deut. viii. 9. Sharpe’s translation). 
 Stores of coal and ore, and quarries of building stone beneath the 
 soil, prairies of wheat land and corn land on the surface, and water¬ 
 power beyond example, are among the finger-posts by which 
 Providence points us to our destiny. An inhospitable coast limits 
 our outlet to foreign lands, while vast interior rivers and lakes in¬ 
 vite to domestic commerce, and already float a greater tonnage 
 than the Atlantic itself. 
 
 The present situation is in part the result of recent history, as 
 distinguished from the natural and predictable course of things. 
 The conflict for our industrial independence and, by consequence, 
 for the markets of the non-industrial nations, must have come 
 sooner or later. VVe have reached the collision more rapidly, and 
 perhaps more violently, through mismanagement. It has come 
 all the sooner, and has inflicted all the more suffering on both sides 
 of the ocean, because of the period of inflation which followed the 
 war. Home enterprise was stimulated to a feverish energy. 
 Railroad building was overdone. The demand for iron rose to a 
 point without precedent, followed by an excessive demand for 
 textiles and the like, on the part of the working classes. Then, ip 
 1873, Panic came, and the mischiefs sown for years past were 
 reaped in a day. 
 
 The Panic found us with our manufactures over-developed, as 
 regards several of the chief staples of the world’s trade. We were 
 able to produce more iron and more cotton than our people were 
 likely to consume, and are obliged to find a foreign market for it, 
 and that quickly. A temporary suspension or diminution of pro¬ 
 duction even was a necessity in some quarters, and all interests 
 have felt the severity of distress. 
 
 In the market for manufactures, as matters now stand, it is 
 simply a question of holding out. The capacity to supply iron, 
 steel, machinery, tin-plate, hardware, paper, cottons and woolens is 
 
21 
 
 much larger than the world’s legitimate demand. Since men no 
 longer consume in abnormally large quantities as before 1873, 
 there are two producers besieging every consumer, and in the long 
 run one of the two must succumb. Will it be the English, or will 
 it be the American producer ? 
 
 That it will be the former, we are convinced. In the first place, 
 the American, with control of the home market and a moderate 
 export, will be very well off. The former he already has; the 
 latter he is fast getting. England is so overloaded, so top-heavy 
 with industry of this sort, that she cannot afford to lose even her 
 American market. But ours is already shut on her, and her colo¬ 
 nies, and even India, are rapidly shutting theirs. And in Europe, 
 where her Free Trade propaganda seemed likely to bear such 
 abundant fruit, the outlook is far from promising. Italy, France, 
 Spain, Portugal, Germany, Austria, Hungary, Denmark, Sweden, 
 Russia, are certainly not advancing in the Free Trade direction. 
 Those who had it are adopting Tariffs; those whose Tariffs were 
 weak are strengthening them. It is impossible to renew even 
 the treaty of i860, to get which, English liberalism, in the person 
 of Richard Cobden, fawned at the feet of Napoleon III., and agreed 
 to a compact secured by the Emperor’s overriding the votes of his 
 own legislature. In the course of a few years, Norway, Holland, 
 Switzerland and Turkey, will be the only nations left to follow her 
 lead. Nothing but an enormous foreign trade, a trade out of all 
 proportion to her population and her agriculture, will keep her 
 from wholesale losses. And that enormous trade she can no longer 
 secure. 9 
 
 9 A Commission appointed by the French Senate to consider the Commercial 
 Distresses of that country, has just reported. Its statements coincide in general with 
 the views presented in this paper. After describing the rise of American compe¬ 
 tition the Report says:— 
 
 “ It was thus at the very moment when Europe was pushing to excess her means 
 of production, that a country of consumption was not only closed to her, but was con¬ 
 verted into a redoubtable competitor, which will henceforward dispute with her a part 
 of her markets. Under such circumstances a crisis was inevitable in Europe, even if 
 political complications had not increased its intensity. Deprived of some of her 
 markets and meeting with competition everywhere, England, which was organized to 
 supply the whole world, threw herself with all the more ardor upon her rivals on the 
 continent. Condemned to produce incessantly—for the closing of her works would be 
 more disastrous to her than working at a loss—she has reduced her prices to the most 
 extreme limits in order not to be stopped by the customs tari ft's of her neighbors. The 
 result has been a general depreciation of manufactured articles, a depreciation which 
 must become more pronounced on account of the existence of enormous stocks of 
 merchandise which will not find their normal outlet even in the pacific solution of the 
 
22 
 
 England’s “ reserve fund” vve might call the savings she has 
 invested in the industries, the corporations and the government 
 bonds of other countries. In 1873 this international wealth was 
 about 940 millions of pounds sterling. Three years later, it has 
 been reduced to 790 millions by the defaultings of a few govern¬ 
 ments, to say nothing of the vast quantities of foreign stocks, 
 bonds and shares which had ceased to pay interests or dividends. 10 
 Some estimate the loss at one-half, or at lowest ^400,000,000. In¬ 
 deed, so worthless has this class of securities become, that the 
 London Times has recently spoken of our own bonds as the only 
 species of foreign securities which hold their place in the market. 
 And of these bonds they are now obliged to return us very large 
 quantities. An English paper says that this “ steady export of 
 United States securities to New York ” cannot be “ looked upon as 
 satisfactory, and the loss of the interest on the bonds is in particu¬ 
 lar a direct and permanent impoverishment of a very serious kind.” 
 The commercial importance of this reserve fund is its power to 
 redress practically the balance of trade wherever this is against 
 England, but not excessively so. In that case, a large part of the 
 commodities imported from any given country are really paid by 
 bills of exchange drawn upon governments and corporations in¬ 
 debted to England, and require no transfer of specie. But at the 
 present moment the balance of trade is excessively against England, 
 being estimated at £90,000,000 for the current year. In the three 
 
 Eastern question. Consumption no longer keeps pace with production, and it is diffi¬ 
 cult to believe that the equilibrium will be reestablished, because in future we shall 
 have to reckon upon the industry of the United States, upon the industry of India, upon 
 that which is being created in China and Japan, besides that of all those couirtries 
 which take measures to preserve their home trade for themselves and export in their 
 turn.” 
 
 10 Should Mr. Edison’s electric light be as successful as is predicted, or should any 
 other prove so, this international wealth would suffer another great shrinkage. English 
 investors, we learn from the Spectator , “ own not only all the gas works in the United 
 Kingdom, but an immense proportion, probably much more than half of those in for¬ 
 eign cities, and they have hitherto looked upon these works as among their most solid 
 
 and valuable properties. From Boulogne to Calcutta, the cities have been 
 
 lighted with English capital, and in almost all cases the profit secured has been unusu¬ 
 ally large, regular and solid, until trustees with gas-shares in their hands, have felt it 
 useless to dispose of them, ‘ and a lot of gas-shares’ has been considered a prize to be 
 competed for at auction.” Mr. Kdison’s announcement to his agent, that he had solved 
 the problem of indefinitely dividing the electric light, brought shares down from three 
 to seventeen pounds a share. “ The possibility of a tremendous blow was patent, and 
 our only wonder is that the shock was not more severe.” 
 
23 
 
 previous years it was £4,000,000, £34,000,000 and £57,000,000, 
 while in 1874 it was still in her favor, as it had been since before 
 the century began. 
 
 On the other hand, the tendency of things during these years 
 of depression has been generally in favor of the United States. 11 
 Even the terrible blunder of passing our debt into foreign hands, 
 for the sake of reducing the interest, has been largely retrieved, 
 and it is believed that not more than an eighth is now held abroad. 
 We have gone forward in the improvement of the methods of 
 manufacture, and in securing a market for our wares in the coun¬ 
 tries on our own continent. Our progress is indeed retarded by 
 the refusal to follow English example in granting subventions to 
 steamship lines; but it has escaped a worse blow in the failure of 
 the attack upon our Tariff. Upon the success of that attempt the 
 English staked a multitude of hopes, and predicted its success with 
 great confidence. But the measure could not be carried through 
 even a Democratic house, and its author has announced that the 
 attempt will not be renewed during the present Congress. In 
 1880, whatever Congress may think, it will hardly venture on such 
 a step on the eve of a presidential election, which insures another 
 year’s delay, at the least. And with every year, nay, with every 
 month of protection, the possibility that England may regain her 
 hold on our markets becomes still more remote. 
 
 The present distresses in her money market are not, as the Eng¬ 
 lish papers would have us believe, the result of mere mismanage- 
 
 11 In the last three years the balance of trade has been in our favor to the aggregate 
 amount of £488,582,539; our exports having risen to £680,683,798 in this year, 
 whereas they were little more than a third so much in 1869. And while our whole 
 export has increased 153 per cent, since that year, that of agricultural products has 
 only advanced 86 per cent., showing that our manufacturers are laying hold of the 
 foreign markets. 
 
 The one sad feature of this change is the perplexity in which it involves those sage 
 economists who hold that all international trade is of the nature of barter, and that 
 we can only sell in proportion as we buy. This perplexity, strangely enough, was 
 never felt while the balance of trade stood against us, and our neighbors sold us more 
 than they bought of us. Nor did it seem to be felt as regards England, which 
 managed in those days to sell more than she bought in her trade with nearly every 
 other power. But now we see wise heads slowly shaken, and we are told that this 
 thing cannot go on; that nations trade with their customers; that foreigners cannot 
 continue to buy of us, unless we buy of them. The fact is, that each country sells all it 
 can, and buys only what it must, and that nothing but the exhaustion of coin and 
 credit can stop the process. 
 
M 
 
 ment on the part of the Glasgow Bank’s directors. That mis¬ 
 management was rather an effect than a cause of the bad state of 
 business. It was the desperate acts of men who had invested the 
 money intrusted to them in what everybody thought sound and 
 legitimate enterprise, but had seen solid houses carried headlong 
 to ruin, and had “ thrown good money after bad ” in the effort to 
 save them. The recent management of the bank’s affairs is not 
 capable of vindication; but it seems very clear that the managers 
 lost their heads, and preferred to risk further loss rather than ac¬ 
 cept the ruin which was threatened. They pursued exactly the 
 policy which the whole commercial world of England is now 
 avowedly adopting, and especially the banks toward each other,— 
 the policy of extending help even to unsafe concerns, for fear of 
 the consequences of permitting them to go down. But that policy 
 can only maintain itself for a time. The number of unsafe con¬ 
 cerns, and the degree of their danger, cannot but increase so long 
 as the present status of business lasts. And no one can indicate 
 the quarter from which any improvement is to be expected. 
 
 While the people of other countries cannot but feel some satis¬ 
 faction in seeing the end of a commercial supremacy which has 
 been so insolently and tyrannically exercised, there are but few 
 who would rejoice to see England’s greatness and her influence over¬ 
 thrown. Least of all could America afford to witness that humilia¬ 
 tion. The ancestor of our fuller liberty, the chief champion of re¬ 
 ligious toleration in Europe, the old homestead of the Anglo-Saxon 
 race, has claims upon our regard beyond any other foreign power. 
 Our worst wishes for her are to see her compelled to do justice to 
 the English and Scotch peasant, and to the Irish and the Indian peo¬ 
 ples,—to see her abandon that dream that she is to be the work¬ 
 shop of the world, and can keep all other nations in industrial 
 subjugation,—to see her slowly developing her agriculture and 
 reclaiming her waste lands, until her fields support the millions who 
 have been driven into the cities, and feed the whole population of 
 her soil,—to see her better self regaining the upper hand in foreign 
 policy, and the jingoes and their leader driven into the back¬ 
 ground. So mote it be. 
 
APPENDIX. 
 
 The following history of the American manufacture of the finer 
 grades of steel, is from the New York correspondence of the Lon¬ 
 don Ironmonger. We reprint it just because there is nothing 
 special or peculiar in the story, as it is merely the usual record 
 of an American industry, told by an exceptionally candid out¬ 
 sider. He writes:— 
 
 “ Steel-making has become one of the great industries of the 
 United States, and a majority of American consumers find it fully 
 and completely satisfactory for all purposes. Seventeen years ago 
 Sheffield steel held this market without any competition which 
 was worth considering. The trifling importation of to-day sup¬ 
 plies all the demand for English steel which remains. 
 
 The popular impression in Great Britain seems to be that 
 American consumers want Sheffield steel but are prevented from 
 using it by the high duties. I doubt this very much, and am sat¬ 
 isfied that if any Sheffield steel-maker should come to this coun¬ 
 try and travel about for a few weeks among the large consumers, 
 he will conclude that his hopes of regaining an American trade 
 under a low tariff rest upon a very slender foundation. In this 
 case, protection has had the somewhat unusual [?] effect of stimulat¬ 
 ing manufacturers to the greatest enterprise and developing their 
 technical skill in the highest degree. 
 
 The imposition of a high duty on steel was at first vigorously 
 opposed by nearly all classes of consumers. The argument was 
 that steel was a raw material, that its manufacture was not suffi¬ 
 ciently important as a domestic industry to merit protection, and 
 that we had neither the materials, the skill, nor the experience to 
 make fine steel in this country in quantities proportionate to the 
 needs of the trades using it. The answer of the steel-makers was 
 that their industry was one of great promise, that there was no 
 reason why, with moderate protection for a few years, they should 
 not meet all the requirements of the home market, and that their 
 only present difficulty was a prejudice against American steel, 
 which was not warranted by the superior quality of the imported 
 metal. They carried their point, and got the protection they wanted, 
 but they did not enjoy in peace and quietness the advantages 
 it gave them. The consumers were not satisfied. Many had 
 always used Sheffield steel, and were not willing to try any exper¬ 
 iments which might imperil their reputations. They besieged 
 Congress year after year with petitions praying for a material mod¬ 
 eration of the duty on steel; they denounced the American steel¬ 
 makers as empirics in metallurgical science, and formed associations 
 
26 
 
 to work at Washington in influencing congressmen to oppose the 
 unreasonable demands of Pittsburgh steel men. 
 
 In the meantime the steel men felt that they were enjoying the 
 benefits of protection only on probation. They must meet argu¬ 
 ments by facts, and for years they worked manfully and intelli¬ 
 gently to remove every objection to American steel which had 
 been suggested by consumers. Their product was offered at prices 
 which tempted consumers to try it; one by one the manufacturers 
 using steel were won over to a confidence in, and preference for, 
 American steel; and within two years they were able to rally at 
 Washington as many consumers who favored the duty as came 
 there to secure its repeal. Now, those who still demand a lower 
 rate of duty on English steel, because they prefer it as a material, 
 can scarcely recruit enough of a following to make a meeting, and 
 I doubt if one per cent, of the large consumers could be induced to 
 give up American steel and use the English if it were offered them 
 at a shade lower than they are now paying for the former. 
 
 The reason for this is not difficult to find. The Pittsburgh 
 makers have learned to exactly adapt their product to the wants of 
 the consumers they supply. Their product is very uniform, and 
 they can furnish any grade which may be wanted at very short 
 notice. If a consumer is not perfectly satisfied, he can communi¬ 
 cate with the maker in a few hours, and can exchange what he has 
 for what he wants, without loss of time. 
 
 As regards quality, the American product represents all varie¬ 
 ties. Those who want good steel can get as good as is made in 
 any part of the world, and the average quality of American edge- 
 tools shows that our manufacturers know how to use it to the best 
 advantage. In such matters comparisons are necessarily invidious. 
 It is idle to say that American steel is better than English, or vice 
 versa. It would be difficult to convince many consumers of Ameri¬ 
 can steel that better could be had abroad, and while their choice 
 between good steels adapted to their use would be influenced by 
 considerations of price to some extent, they would now incline to 
 give preference to American steel, because they can, if necessary, 
 maintain daily communication with the makers. 
 
 However this may be, I can say, from personal knowledge, that 
 but few, comparatively, of American consumers w'ould now use 
 Sheffield steel if they could get it at the same price as the Ameri¬ 
 can. There is no probability that its importation will ever fall 
 much below present figures, but it is scarcely probable that it will 
 much increase. Were the duty removed or materially modified, 
 considerable importations might be expected at first, but I am 
 quite unable to discover any reason why American manufacturers 
 should not be able to hold their market now that they have it. In 
 the meantime they are turning their attention to foreign trade, and 
 
27 
 
 are meeting with some success. Some of the Pittsburgh makers 
 are doing a considerable business in horse-rake teeth on English 
 and continental orders, and in other small specialties. This, I be¬ 
 lieve, is a plain and unprejudiced statement of the facts of the case 
 with regard to American steel.”