m 
 
 — 
 
 
 
THE RIGHT HONOURABLE 
 
 SIR LYON PLAYFAIR, K.C.B., M.P., 
 
 ON 
 
 FAIR TRADE 
 
 AND 
 
 AGRICULTURE. 
 
 Being an Address delivered by Sir Lyon Playfair to his 
 constituents, at Leeds, on the 1 6th December, 1887. 
 
 LONDON : 
 
 PRINTED AND PUBLISHED BY THE “L & R” PUBLISHERS, 
 83, Farringdon Street, ®E.C. 
 
 1 8 8 8 . 
 
SjA'.cb'wv'a.vA 
 
FAIR TRADE 
 
 AND 
 
 AGRICULTURE. 
 
 Sir Lyon Playfair, addressing his constituents in the Mechanics’ 
 Institution, Hunslet, Leeds, said :—To my iniad the most significant 
 political event since the close of the session was the meeting at Oxford 
 of 1,000 delegates of Conservative associations in the last week of 
 November. This gave us the opportunity of knowing the feelings and 
 convictions of the great body of the Tory party. At this meeting very 
 little attention was given to the. state of Ireland. Its main purpose was 
 to pass the following resolution :—“ That the continued depression in 
 trade and agriculture, the increase in the scarcity of employment, and 
 the consequent distress among all classes, render speedy reform in the 
 policy of the United Kingdom as regards foreign imports and the influx 
 of indigent foreigners a matter of vital necessity.” When this resolution 
 was put in a substantive form to the congress of 1,000 Tory delegates 
 only twelve held up their hands against it. The resolution is sweeping 
 in its character, and means that the country must have protection 
 against the imports of foreign commodities and needy foreigners. My 
 object is not to discuss the latter proposal, although the argument to 
 exclude needy foreigners might be turned against needy Englishmen who 
 leave this country by emigration. It is a separate question, and may mean 
 more or less than the bare words seem to imply. But protection against the 
 import of foreign commodities is thrown down as the gauntlet by the great 
 body of the Tories, and we must take it up. It is true that this enun¬ 
 ciated policy has received no direct approval by the leaders of the Tory 
 party, but let us not be too sure of this. The lamp of fair trade is no 
 doubt a flickering light, around which we have seen the Tory leaders 
 buzzing like moths, and some of them have got their wings seriously 
 singed. In the council of the congress which passed the resolution I 
 notice the names of the Irish Secretary (Mr. Balfour), Mr. Chaplin, 
 Lord Randolph Churchill, Baron de Worms, and Mr. Ashmead-Bartlett. 
 Lord Salisbury attended the congress and deprecated the introduction 
 of the question, as being likely to injure the alliance between the Tories 
 and the Liberal Unionists; but he said not one word against the princi¬ 
 ple of the resolution. On former occasions he has expressed himself 
 rather in favour of retaliatory duties. Some years ago Lord Randolph 
 
Churchill, at Oldham, recommended a bold taxation of all manufactures; 
 a»d more recently, when at Cambridge, he reserved his opinion as to- 
 taxing corn, for he doubted whether a tax on flour would raise the price 
 of the loaf. Sir Michael Hicks-Beach uttered an ominous sentence as to 
 increased taxation of tea and other articles of food, but subsequently said 
 that “ it was by way of illustration.” Recollecting those sayings when 
 an election was near, I draw the conclusion that the Tory party are 
 really wedded to a protective policy, and that the flag which the con¬ 
 gress nailed to the mast at Oxford is the real flag of the party. Lord 
 Hartington, in his speech last week at the meeting of Liberal 
 Unionists, seems to be of the same opinion, both as to the party itself 
 and its leaders, for he used these significant words :— 
 
 “ At the same time I fully admit that the possibility of a majority 
 being returned which could force upon the Government a retrograde 
 policy with regard to commercial matters would be a danger so great 
 as would threaten to endanger the strength of the Unionist cause, and I 
 hope the leaders of the Conservative party will weigh well the conse¬ 
 quences before they give to it any countenance or support.” 
 
 I think, therefore, that the Liberals are bound to consider seriously 
 this old, reburnished policy. Lord Derby, a thorough free trader, looks 
 upon the movement with contempt, and sees no use in flogging a dead 
 horse. The Tories, like certain animals, know how to simulate death 
 when it is convenient, so we may find the dead horse giving us an 
 effective kick when we least expect it. Lord Salisbury is right when he 
 asks us to answer arguments by arguments and urges free traders to 
 cease beating their eternal “ tom-tom.” After all, that is a respectable 
 instrument in comparison to the piping of the fair traders’ penny whistle. 
 Even Lord Randolph Churchill refuses to be charmed with this music, 
 for he contemptuously says, “ I am quite ready to be charmed, only at 
 the present moment the music of the fair traders is so discordant and 
 screeching, and so unearthly, that I cannot be charmed.” 
 
 The basis of this new outburst of fair trade (which, after all, is 
 nothing but protection in a domino) is a real anxiety as to the serious 
 depression of our great agricultural industry. We must all admit and 
 deeply sympathise with this depression. It has been terrible in Ireland, 
 where 41 per cent, of the people depend upon agriculture; and it is bad 
 enough in Great Britain, where 14 per cent, are in this position. There 
 is no doubt that the diminution of produce and its lower exchangeable 
 value have largely reduced the spendable income of the agricultural 
 classes, and that this disaster to them has reacted upon the manufacturing 
 classes. Let us try to understand how this state of things has arisen. 
 Agricultural depression was accentuated, but was not produced, by the 
 failure in the corn crops all through Europe in 1879, 1880, and 1881, 
 a failure which, in regard to duration and extent, had no parallel in the 
 last four centuries. There was no failure in the United States, so im¬ 
 ports from that country greatly increased. The exports of wheat from 
 that country—only 40 millions of bushels in 1871—rose to 190 
 millions in 1880. 
 
 There was a deeper cause at work than the temporary failure of our 
 crops. The economical applications of science in the vast improvements 
 of the telegraph, the railroads, and the steamships, have changed the 
 whole system of commerce. The effect of these have been to destroy 
 
5 
 
 local markets, and to consolidate all into one market—the world. If 
 our landlords and farmers want to know the names of the three persons 
 who have knocked out the bottom ol our old agricultural system I can 
 tell them. Their names are Wheatstone, Sir Henry Bessemer, and Dr. 
 Joule. The first, by telegraphy, has changed the whole system by which 
 exchanges are made; the second, by his improvements in steel, has 
 altered profoundly the transportation of commodities by sea and by land; 
 and the third, by his discoveries of the mechanical equivalent of heat, 
 has led to great economy of coal in compound engines. By those 
 changes the United States, Canada, India, and Russia, have their corn 
 crops brought to our doors. The effect of these discoveries upon the 
 transport of corn will be realised when I state that a small cube of coal, 
 which would pass through a ring the size of a shilling, when burned in the 
 compound engine of a modern steamboat,would drive a ton of food and its 
 proportion of the ship two miles on its way from a foreign port. This 
 economy of coal has altered the whole situation. Not long since, a 
 steamer of 3,000 tons, going on along voyage, might require 2,200 tons 
 of coal and carry only a limited cargo of 800 tons. Now a modern 
 steamer will take the same voyage with 800 tons of coal, and carry a 
 freight of 2,200 tons. While coal has thus been economised human 
 labour has been lessened. In 1870 it required 47 hands on board our 
 steamships for every 1,000 tons capacity, now only 28 are necessary. 
 All these changes going on in the economy of fuel and of labour 
 have led to increased production at a small cost. Four men in 
 the United States working for one year in the growth, milling, 
 and transportation of wheat can produce flour for a year’s 
 consumption of 1,000 other men, allowing one barrel of flour 
 to each adult. I need not elaborate this point further, for you 
 will all see how this has acted upon agriculture. It has made the grain 
 market one all over the world. Formerly we looked to the United 
 States alone to supply any deficiency in our crops, but now the trans¬ 
 port of grain from Bombay to England, by the Suez Canal, has been 
 reduced, between 1880 and 1885, from sixteenpence to eightpence a 
 bushel. It is not England alone that suffers in its agriculture from 
 there being a world-market. Italian farmers feel as keenly the com¬ 
 petition of rice from Burmah as English farmers do the imports of 
 wheat from India, America, and Russia. It will be no comfort for 
 them to know that farmers of other nations suffer, but it may show the 
 universality of the change if I tell them that American farmers are as 
 low in their minds as English farmers, for they, too, are looking to a 
 failure in their industry. There are twenty-six millions of people on 
 the other side of the Atlantic dependent on agriculture, who see with 
 alarm that the grain acreage of India is fast approaching that of the 
 United States. The acreage in the latter is now forty millions, and in 
 India it is already thirty millions of acres. And what does the last 
 official report published at Washington say of the feelings of American 
 farmers ? “ The fear that Indian wheat and cotton and Egyptian 
 
 cotton are rapidly taking the place of American wheat and cotton has 
 caused producers to feel that the future has no prosperity for them.” 
 Note, then, that the farmers in Protectionist America feel the pressure 
 of competition as much as those of Free-Trade England. It will 
 gratify the former to know that there is a responsible politician like 
 
6 
 
 Mr. Chaplin actually proposing, in his views of bimetallism, to render 
 Indian products dearer. This will injure India, but it may benefit 
 America. I make a statement which you will find supported by 
 statistics when they appear, that it is the supply of wheat from Russia,, 
 and not from India, that has done much to lower the price of corn 
 this year. Certainly the difference in the value of gold in that country, 
 as compared to the paper rouble, is as formidable a factor as the differ¬ 
 ence in value between gold and silver in India. 
 
 I am not surprised that farmers still look with most apprehension to 
 imports of wheat from the United States, because the cost of both 
 land and ocean transport is now so small. Not many years ago the 
 charge for wheat in bulk between New York and Liverpool was 
 sixpence per bushel, while last year its average was twopence-halfpenny. 
 Live and dead meats are also in competition with our home produce, 
 and that trade is still in its infancy. A given acreage of land which 
 produces six tons of grain will produce only one ton of live stock, so 
 there is much less to carry. Even now the transport of fresh meats 
 from New York to Liverpool, including freight, commission, and 
 insurance, is only one penny per pound weight. Hitherto the English 
 farmers’ natural protection against cheap flour and fresh meat from 
 America has been the great extent of haulage, sometimes 1,400 miles 
 to the port. The railways are now doing this haulage with wonderful 
 economy. Let me illustrate it in this way. If I asked a boy to cross 
 the street and post a letter of an ounce weight he would think the 
 labour ill-requited by a farthing. But the American railways will haul 
 2,000lbs. of grain for a distance of one mile for less than a farthing. 
 English farmers have had a formidable lesson given to them, that they, 
 like other producers, must adjust themselves to changed conditions 
 produced by the advance of science. Some farmers in other countries 
 have had this lesson in a still ruder way. One of the most important 
 crops in Holland, Belgium, France, and Turkey, used to be the dyeing 
 material called madder. The colouring substance of that dye is 
 now made chiefly from coal-tar, and the agricultural industry for its 
 production has been swept away. So will the growth of indigo in 
 India pass away before long. The grower of sugar canes is looking 
 with some apprehension at the substance three hundred times sweeter 
 than sugar that is now made from coal-tar. All industries require to 
 re-adjust themselves to the changed conditions of modern production 
 and competition, so that agriculture is no exception to this pressing 
 need. 
 
 You will now understand my point, that the agriculture of this 
 country has suffered because of the changes which applied science has 
 introduced. It has made the market of the world one. Still our 
 farmers need not despair, as they have certain advantages. Our 
 climate, notwithstanding its fitfulness, is well adapted to a combined 
 pastoral and arable culture, and our soil by good farming produces from 
 twenty-six to twenty-nine bushels per acre, while that of the United 
 States produces less than twelve. Canada is more prolific. The labour 
 on English farms is much cheaper than that on American farms, though 
 dearer than it is in India. With those advantages there should be no 
 despair for the future. The great difference in favour of America is in 
 the cheapness of the land, which in the Far West can be got as a 
 
7 
 
 freehold for less than our farmers pay for a single rent. There are 
 other differences in our land system "which must be altered. The state 
 of the land laws divorces the small tenants and peasantry from the soil, 
 and keeps the latter in a lower condition of agricultural knowledge than 
 in the leading countries of Europe. If all those things be improved it 
 will still take long to adjust British agriculture to the changed and 
 permanent conditions of competition. Hard times are the parents of 
 progress. The intestine w r ar of the United States withdrew one million 
 men from labour on the land, but it stimulated progress in the invention 
 of agricultural machines, and the amount of crops in the country in¬ 
 creased every year during the war. I have shown you that depression is 
 not confined to this country. Yet you cannot be surprised that the 
 suffering classes ask you for sympathy, and appeal for due consideration 
 of their difficulties. The landowners and farmers complain that they 
 pay undue burdens, and, if that be so, they should be lessened. These 
 are not the cause of the depression, for the local rates upon land are 
 upon an average only one-ninth of the usual rent. 
 
 The fair traders, seeing no real help in this direction, turn to their 
 own prescriptions, and desire to restore prosperity by taxing foreign 
 food and taxing foreign manufactures. Their programme is announced 
 in the following words :— 
 
 “ Duties on foreign manufactures, combined with duties on all foreign 
 imports of food, but stipulating for free imports of raw materials needed 
 for home industry.” 
 
 Let us see what this means, beginning with the exempted raw materials. 
 Every one would admit that coal is a raw material, and as it is the 
 source of all machine power, not even a fair trader proposes to tax it. 
 Just as coal is the source of power in the steam-engine, so is food the 
 source of power in a man. Coal is simply the source of mechanical 
 power, as food is of animal and human power, both physical and mental. 
 On what principle, then, is food to be taxed and coal to remain free ? 
 Careful statistics have been collected in the United States as to the 
 annual expenditure of the families of working men living without 
 alcoholic stimulants, and the result is that £40 is spent for food, £13 
 for clothing, and £7 for coal and fuel. The amounts, but not the pro¬ 
 portions, may be a little different in this country. Now, what is the 
 fair trade proposal? It is to tax the £40 for food and the £13 for 
 clothing, but to leave the £7 for coal free. Of course the tax is to be 
 on foreign imports; but I need not tell you that universal experience in 
 protected countries has shown that a commodity produced at home has 
 its price raised to the extent of the tax put upon the same commodity 
 when imported. Thus, if foreign flour be taxed, home flour will rise in 
 price to the amount of the tax. In fact, the only motive of the tax is 
 to enable the English farmer to thrive by an increased price of his 
 produce. What is the tax to be ? Mr. Chaplin and Mr. Lowther point 
 out it could not be less than 10s. per quarter if it is to be of any use. 
 This means that wheat at 30s. is to be sold under fair trade at 40s. 
 Thus for every sixpence which you now pay for flour you must then pay 
 8d. Recollect the tax cannot stop at wheat, but must extend to all 
 food, including meat. Supposing fair traders were to try to stop at 
 wheat, in order to benefit the English farmer, who has thirty-four per 
 cent, of his cultivated area in this crop, what are the Scotch and Irish 
 
8 
 
 farmers going to say about oats, for the former has seventy-eight per 
 cent, and the Irish eighty-four per cent, under that cereal ? You must tax 
 all round if you tax at all. When once the protectionist leech begins to 
 draw blood he becomes like the horse-leech of the Bible, who had two 
 daughters, ever crying, “ Give, give! ” So protectionists have two daughters 
 —selfishness and avarice—shouting this ugly refrain. If you doubt it, 
 look at the case of France and Germany, which have entirely failed to 
 restore agricultural prosperity by duties on food. The French duty on 
 corn was 5s. 3d., and is now 8s. 9d. The German duty of 6s. 6d. did 
 not produce the result expected, and the German Council of Agriculture 
 now asks for 13s. 6d. If you once admit the seed of protection again 
 into the soil of England, you will find it to be a very prolific weed. 
 The cry for protection is as yet the cry of the rank and file of the Tory 
 party, and the leaders are sitting on the fence. At present few of them 
 incline to a tax on food. Lord Salisbury and Mr. Goschen are certainly 
 opposed to that. The others may not be so foolish as to help the 
 farmer in this direct way. But be on your guard that the same result 
 is not proposed and carried by an indirect method. The Duke of 
 Argyll was facetious the other day as to changing politics, which he 
 likened to the chameleon. I wonder whether Lord Randolph Churchill 
 winced when he read the description? He is certainly one of the 
 ablest and boldest of all the Tory leaders, but his colours are variable. 
 Even the chameleon has very few colours, which it jmts on and off to 
 suit the occasion. Do not let us forget the indirect proposal to tax 
 manufactures for the benefit of farmers made by Lord Randolph 
 Churchill at Oldham some years ago. It was thorough :— 
 
 “ Tax foreign iron, foreign machinery, foreign luxuries, foreign calico, 
 foreign wines and beer—in fact, all foreign manufactures. The taxing of 
 these would enormously stimulate the home labour market. Tax all these 
 articles boldly, and without hesitation, for the purpose of increasing the 
 revenue, and apply the large sum you would derive from such a source 
 —from fifteen to twenty millions—to the relief of the burdens on land.” 
 
 That was protection with a vengeance ; because, as our imports of 
 manufactures amount only to fifty millions, he must put on duties of 40 
 per cent, to obtain the revenue which is to relieve the land. His 
 present ally, the Pope of free trade, John Bright, should summon him 
 to Canossa to abjure this heresy before he has further dealings with 
 him. Now the colour of the chameleon is changed, for the speech 
 which Lord Randolph made at Stockton in October, a month before the 
 Oxford Congress, was an admirable exposition, in his most Socratic 
 form, of the absurdities of fair trade. I would accept him as a devout 
 convert to free trade if he had not left a loophole for escape in the 
 following sentence :— 
 
 “ The Tories are not responsible for the repeal of the Corn Laws ; they 
 always protested against their repeal. Therefore, if there were a strong 
 national demand which should involve a duty on food which would have 
 the effect of making food higher in price for the people, I see nothing 
 whatever to prevent them yielding to this demand.” 
 
 M ill the old colour of the chameleon reappear, or will the present one 
 last? That is a politer way of putting the difficulty than the phrase of 
 Mr. Bright in his late letter—“ A Tory is apt to be like a dog, and 
 return to his vomit.” 
 
9 
 
 Having dealt with the causes of agricultural depression and the 
 proposed tax on food, let us now turn to the tax on foreign manufac¬ 
 tures. I wish to deal fairly with the Oxford platform, and to answer 
 argument by argument, but I cannot find a plank in it that has not been 
 kicked away a thousand times. At Oxford much stress was laid on the 
 •old argument that the value of imports into this country is greater than 
 the value of its exports, and this will produce ultimate ruin because the 
 difference must be paid out of the capital of the nation. The ruin is 
 slow in coming, although for the last twenty years the value of our exports 
 has, upon an average, been only about 55 per cent, of that of the imports. 
 England would be a bad trading nation if it were otherwise. Suppose 
 ior instance, that a merchant sends coal to India worth £100, and with 
 that brings home rice valued at our ports at £150, the import is greater 
 than the export because it includes the profit on the two transactions. 
 The very essence of trading is to get back more than we give away. 
 Commodities, not bullion, are the materials, of exchange. If we paid 
 in bullion for all our imports there might be a case for the fears of the 
 fair traders. What is the fact ? Last year the excess of imports ov^r 
 exports amounted to eighty-one millions, but the excess of gold 
 •exported over that imported was only £300,000. That small excess 
 probably represents our foreign investments, as England is a great money- 
 lending nation. The annual returns of these investments chiefly come 
 back to this country in the shape of commodities, and add to the excess 
 of the imports over exports. 
 
 The fair trader tries to captivate us with the idea that his policy will 
 promote the prosperity of our colonies although it may act hardly on 
 foreign countries. This might be worth discussion if most of the 
 colonies did not tax English manufactures in the full spirit of protec¬ 
 tion. By a differential treatment in favour of the colonies it is just 
 possible that you might convert them to views of free trade, but before 
 that conversion is effected three-fourths of the present foreign trade 
 will be endangered or destroyed, and that in its bulk is vastly more 
 important than the colonial trade. The proportion which our colonial 
 trade bears to the foreign trade is about 25 per cent. 
 
 Instead of dwelling longer on this point it will be more useful if I 
 employ the remainder of my time in examining the experience of pro¬ 
 tection in America, from which place I have lately returned. I used my 
 opportunities to obtain the best knowledge from both sides. I spent a 
 week with the chairman of the Protection League, another week with 
 the largest landowner in a wheat-growing district, and I attended various 
 meetings and dinners of commercial clubs and trade societies. In spite 
 of all attempts to convert me I am a free trader still. The United States 
 is at once a country of complete internal free trade and of foreign protec¬ 
 tion. As a free trade country it consists of thirty-eight States and several 
 Territories containing sixty-four million people. Excluding Alaska, the 
 area of this free-trade nation is thirty times as large as that of the 
 United Kingdom, and it has a potentiality of production suited for at 
 least ten times its present population, which you know is rapidly 
 increasing by immigration. All through this vast country unlimited 
 internal free trade exists. No State can put up a customs barrier against 
 another, so this compact group of United States differs very much 
 from the relation which England holds to her sixty-seven colonies 
 
10 
 
 and possessions, for many of them do charge protective duties against 
 English manufactures. The material interests of the thirty-eight States- 
 are far from being identical. Thus the manufacturing interests of the 
 New England States come into sharp rivalry with those of the Southern 
 States, but no protection to either group is allowed on this accounts 
 As a nation the United States offers an admirable example of the 
 benefits of free trade. It has risen to this prosperity chiefly by this 
 internal freedom of trade in a growing country, and it will continue 
 to prosper as long as its manufacturers do not glut the internal market 
 —that is, until their production does not exceed the demands of the 
 population with its important annual increment. 
 
 On the other hand the United States is a land of protection against all 
 foreign nations, and let us see how this works. All trades are not pro¬ 
 tected against the foreigner. Even now r there are only two and a half 
 million "working men in protected industries as against 17i million in 
 unprotected. I admit at once that wages are higher in America than 
 here, and this is an absolute necessity, because owing to protection the 
 purchasing power of money is less. But it is not true that wages are 
 higher in protected industries; on the contrary, they are generally 
 lower. The highest wages in America are given to blacksmiths, 
 carpenters, masons, tailors, shoemakers, and others who have no protec¬ 
 tion. In the cotton factories of New England working under protection 
 the cheap labour of the French Canadians and Irish is driving the 
 American operative out of the mills. As a general rule, subject, of 
 course, to exceptions, high wages rule in free industries and low wages 
 in protected industries. The reason for this "will be readily understood. 
 Manufacturers have shut themselves out from foreign markets and are 
 bound to work for the home market. Any surplus of production becomes 
 a glut on the home market and cannot be relieved by export, for its 
 character is not suited to other countries, even if its high cost allowed 
 competition. When a glut comes upon the home market, as it frequently 
 does in manufactures of cotton and wool, wages are lowered to meet the 
 internal competition. Over-production does not tell so quickly upon 
 wages in England because "we are a great exporting nation, and if there 
 is no market at home we seek it abroad. The United States cannot be 
 so, for her cost of production is raised so high by protection that her 
 exports are of small account in the markets of the world. Compare the 
 two countries—England and the United States—in their intercourse with 
 each other. America has raised against English manufacturers fiscal bar¬ 
 riers which might seem to be insurmountable, the duties imposed on our 
 goods being from thirty to 100 per cent. In spite of this she has to buy 
 from this country goods to the value of twenty-seven millions, "while she 
 exports to us less than three millions. A comparison of the markets of 
 the world is still more striking. Last year England sent out exports to 
 the value of 212 millions, chiefly manufactures, and America only 
 twenty-three millions. Recollect I am now only speaking of manufac¬ 
 tures, not of food. Yet the United States is essentially a great manu¬ 
 facturing nation, with a population honest, industrious, energetic, 
 educated, and, above all, inventive. If she level her hostile tariffs, 
 England will in course of time meet a very dangerous competitor in the 
 markets of the world. As long as there is a rapid increase of popula¬ 
 tion, aided by immigration, American manufacturers are content with 
 
11 
 
 their internal free trade, and, fortunately for us, they will not quickly 
 abandon protection. If they do, the United States will possess an 
 enormous advantage over European nations, because, while they 
 prepare for wasteful war by costly armaments, America only prepares 
 for economical industry by new inventions. 
 
 Still you may naturally think that the fact of a large immigration in 
 America proves that protection produces high wages, and that men go- 
 over there to seek them. That is an argument quite fairly used by fair 
 traders. What is the fact ? The value of immigrants in America is 
 that they become consumers of domestic manufactures and are useful as 
 labourers, not that they become workers in protected industries. I will 
 take the year 1870 by way of illustration, because that year reached the 
 maximum of protection as well as the maximum of immigration. The 
 number of emigrants who landed in America that year was 387,203. 
 Ou analysing their occupations it turned out that only 6,960, or less 
 than two per cent., came over to make manufactures which either could 
 be or were protected. 
 
 I have not time to allude at any length to the absurdities and crudities 
 of the American tariff, but let me give one single illustration in regard 
 to the woollen manufactures of Leeds. The highest quality of such 
 goods is West of England broadcloth. I am not sure of its market 
 price just now, but let us take it. at 14s. 6d. per yard. Now upon that 
 America charges a specific duty of seventeenpence per pound weight and 
 an ad valorem duty of forty per cent., making together a duty of fifty 
 per cent, on the price of the factory at Leeds. Pass down from the 
 highest to the lowest or cheapest kind of woollen goods, called “ cotton- 
 warp reversible cloth,”—a sort of imitation of a better kind which sells 
 at about Is. lOd. per yard at the factory. Upon that low class of goods 
 the same specific duty is charged as upon fine broadcloth, and thirty-five 
 per cent, on the value, so that together the duty amounts to 1 81 per cent, 
 on the price paid at Leeds. That is to say, the rich man in America who 
 buys broadcloth pays an increase of fifty per cent, on its value, while the 
 poor man who might satisfy himself with the cheaper material pays 181 
 per cent, on the price. If duties are justifiable at all, they should be 
 put on the labour’ cost of production, but they are really put haphazard, 
 without any principle, and just as separate and selfish interests obtain 
 ascendency in the Congress. The fair traders never tire of pointing to 
 America, and wish us to inaugurate a similar system in this country. If 
 they are in possession of a secret principle which will prevent inequali¬ 
 ties and absurdities, why do they not make it public ? I quite agree 
 with Mr. Bright when he says:—“ I should like to see a carefully 
 drawn tariff of the fair traders, protectionists, and monojDolists, w r ho are 
 now asking for public support. It would be an amusing exhibition of 
 ignorance and folly and confusion.” 
 
 If you can bear with me a little longer I should like to say a few 
 words about American shipping. Oceans which once separated nations 
 are now their very life-blood, while ships 1 ravelling to and fro are like 
 the little corpuscles found in blood, carrying on their functions to the 
 furthest extremities, and coming back to refresh and invigorate the 
 heart. The telegraph, too, represents the nervous functions in the body, 
 and transmits still more speedily the commands of commerce. America 
 has an extended seaboard, and seems intended by nature to be a great 
 
12 
 
 maritime nation. And so it was as long as ships were built of wood, 
 and propelled by sails. The Americans had (and, as their yachts prove, 
 still have) a genius for shipbuilding. Formerly their fast clippers filled 
 our ports and gave us lessons in shipbuilding. Both countries—England 
 and America—were running a hard race for mercantile supremacy in 
 those days. There is something in the pride of a people which makes 
 commerce fascinating, for it lays the world under contribution, and 
 brings the treasures of other climes to our doors :— 
 
 “ Let India boast her palms; nor envy we 
 The weeping amber, nor the spicy tree, 
 
 While by our oaks these precious loads are borne, 
 
 And realms commanded which those trees adorn.” 
 
 Since Pope wrote those lines the oak has been replaced by iron, 
 and this change caused America to lose her position as a shipbuilding 
 nation. The reason of this is not far to seek. Protection has so raised 
 the price of iron and other materials for shipbuilding, that a steamship 
 costs thirty per cent, more to build in America than it does in England. 
 There is an economy in large ocean steamers as regards the crew. A 
 small steamer of 300 tons requires one sailor for every 20 tons, while a 
 steamer of 1,000 tons needs only one sailor for 41£ tons. The natural 
 tendency, therefore, is to make ocean steamers large, and already they 
 are 4,000 tons and upwards. Suppose a steamship of this size costs 
 £100,000 in England, if built in America its cost would be £130,000. 
 This difference is caused by protection, and it has practically swept 
 the commercial flag of the Stars and Stripes from the ocean. There 
 are numerous passenger and cargo steamers belonging to the United 
 States built of wood, to carry on the coasting trade from which foreign 
 countries are absolutely shut out by navigation laws. Altogether there 
 are only 200 mercantile iron and screw steamers of considerable size 
 under the American flag, used for the coasting and Pacific trade. They 
 have been all built since 1872 chiefly in the Delaware river, and I do not 
 think any of them cross the Atlantic. We build as many steamships in 
 one year as America has taken fifteen years to obtain. Let me quote the 
 manifesto of the League which now cries out for bounties on American 
 shipping :— 
 
 “Thus England’s marine to-day is triumphant on every sea, and ours 
 successful in none except in our coasting trade, wisely covered by 
 protection.” 
 
 And so the daughters of protection, like those of the horse-leech, again 
 shout, “ Give, give!” in the form of bounties. The League met in 
 Boston while I was there in October last. The bounty asked was an 
 annual subsidy of two millions of pounds, and this meeting was held 
 in 1887 in the same Boston which in 1775 threw the tea into the 
 harbour because the English Parliament had put a small duty upon 
 it. But Boston is tolerant of opinion, for it allowed me to deliver a 
 free trade speech at a dinner of the Commercial Club, and gave me a 
 warm welcome. 
 
 Protection, when it finds a large rent in any particular industry, tries 
 to mend it out of the same material. The process is always the same— 
 always mending, always destroying. It is as if a man, having a hole in 
 his coat, cuts a piece out of his vest to repair it, and finding that un¬ 
 sightly takes a piece of his trousers to mend the vest. In process of 
 time, by a round of these operations, the garments become rags, and the 
 
13 
 
 nakedness of protection is seen through them. The fair traders admit 
 these anomalies in American protection, but point to the prosperity and 
 surplus of the national revenue, and boast that there are no trade de¬ 
 pressions like those in our own country. I will show you presently 
 that this surplus is a great evil, and as to American depressions they 
 occur simultaneously with our own, and of late years they have been 
 more severe. There have been twelve series of marked depressions of 
 trade in this century, and America has felt them all, and since 1830 
 synchronally with our own. The depression of 1882, which still 
 partially prevails but shows distinct signs of ending, acted severely in 
 America, for the official record says that in 1885 no less than 1,000,000 
 working people were out of employment. Applied to our own popula¬ 
 tion this would give a proportion of 600,000 unemployed in this 
 country, which would be a ludicrous exaggeration of our troubles in 
 that year. 
 
 Now as to the American surplus revenue, which the fair traders wave 
 as a huge flag in our face. The recent Message of President Cleveland 
 has been expected for years, because the lessening of taxation to diminish 
 the surplus was the main plank of the Democratic platform when he 
 was elected. There is now the wonderful surplus of twenty-two millions 
 sterling, all, except the Excise, got from taxes on foreign goods. 
 Recollect that Americans are doubly taxed, first for the support of then- 
 own State, and secondly for the maintenance of the Union—together, 
 £8 10s. per head. The President naturally objects to the Treasury of the 
 United States being a hoarding place for money needlessly withdrawn from 
 trade and the people’s use. To make this clear let me say a few elementary 
 truths about taxation. Taxes are a tribute paid to a State or Govern¬ 
 ment for protecting all of us against violence, rapine, and other forms 
 of crime. Taxation can never be a productive force; on the contrary, 
 taxes form a deduction from the strength of labour and the fertility of 
 the soil. If this be true the more you tax a people the more you decrease 
 the common wealth of the nation. That is the plain meaning of the 
 President’s vigorous words, “ Heavy taxation has crippled our 
 national energies, suspended the country’s development, prevented in¬ 
 vestments in productive enterprise, threatened financial disturbance, and 
 invited schemes of public plunder.” Let us remember the meaning of 
 the word “ State.” In old times it would have been difficult to define 
 it. A great French King once said, “ 1?Etat c'est moi .” In history we 
 have known the State, if not to consist of, certainly to be managed, in 
 their own interests, by a barber, a fiddler, or a courtesan. There is no 
 difficulty in defining a democratic Republican or a democratic Constitu¬ 
 tional State like the United States or the United Kingdom. The State 
 means all of us, or, at least, selected men to take care of the interests of 
 all of us. When taxes are laid upon the whole people to favour 
 particular classes, such as farmers or manufacturers, then the State is 
 losing its chief function of acting in the interests of all of us, and is 
 specially favouring some of us at the expense of all of us. That is going 
 back to bad and exploded forms of government, when it favoured class 
 legislation. This is what protection must always do, and has so con¬ 
 spicuously done in America. There privileged classes have laid a claim 
 to be upheld by the labour and self-denial of other people. We allow 
 only one class of the people in this country to make such a claim, and 
 
14 
 
 that consists of paupers; and we should be specially jealous to allow 
 any other class to sit on the same plane. Ever since the introduction of 
 free trade, fifty years ago, we have laboured to root out the privileges of 
 class, so that all of us might have equal participation in the protection of 
 social order by the expenditure of taxes. The principle of free trade is 
 that we should use our property and the products of our labour as we 
 like, and exchange them when and where and with whomsoever we will. 
 Protection, on the other hand, hampers exchanges, regulates prices by 
 tariffs, and acts as if commerce meant a war of retaliation on other 
 countries. If protection be universal it raises the prices of all commo¬ 
 dities; if partial it forces the State to depart from its only true function 
 of taking care of all of us in order that it may favour the interests of some 
 of us. Its breakdown in the United States shows conclusively that every 
 unnecessary tax becomes a source of positive injury, for taxation at its 
 best is an evil. If we were all good and virtuous over the world it would 
 not be required; but it is a needful evil because a government is necessary 
 to sustain the weak, to protect property, and to preserve the honour of 
 women—in fact, to maintain social order. Protection denies this limited 
 use of government, and believing in the productive power of taxation 
 is trying to make something out of nothing. It tries to uphold taxation 
 by taxation, itself by itself—as sensible an effort as if you tried to lift 
 yourselves by tugging at the straps of your own boots. The develop¬ 
 ment of commerce, like all evolutions, depends on natural laws, which 
 ought to be left to themselves/ By intermeddling you would be as 
 foolish as the boy who, in his impatience, manipulates a plant with the 
 hope of getting a bud to blossom before its appointed time. The com¬ 
 petition of the world has become so keen, owing to the causes which I 
 have explained, that many industries besides agriculture have been 
 fundamentally changed. Fashions change or new demands arise, and • 
 factories must make a complete alteration in their machinery to meet 
 the new conditions. When steel, for instance, substitutes iron, the 
 whole manufacture has to be adjusted to the new application. But 
 manufacturers do not dream of asking the State to bear the cost of 
 adaptation to new conditions of competition. They bear the loss 
 and ultimately benefit by the gain. It is only because the producers of 
 food constitute a large industry that they persuade themselves they have 
 an exceptional claim to aid from taxation. A State that has enjoyed 
 the blessings and the liberty of free trade for forty years will not consent 
 that all of us should be taxed for the benefit of some of us, or, in other 
 words, that the labour employed in successful industries should be 
 burdened to support another industry which has not yet adjusted itself 
 to the changed conditions of the world. 
 
 Printed and Publishe 1 by the Liberal and Radical Feinting and Publishing Association, 
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