Yo Ve VA WN NE Aaa Vhs W y } FNAL i ff \ i U H | Fa PY AAA J ee! \ \ y ala . ra i 4) es al / Aa s 5 2 i eZ fad som Wie yj Ar VS H f YN Zale 7 DZ en EV a fa cay eS a ee ae if ee Al ue | AIA, ‘ gy “Ay I, ; \ SVAN a F 1/ Ny Pacman ee oa i y Fas (fly ae de 4) lf A) i als ina aaeee rh ae AAA Alaa AAA AAA | 9...) Weegee a + oo c say bs oN ep’ ) EY ys ')) x ) DI Columbia Cniversity inthe Cttpof Rew Pork LIBRARY THE SELIGMAN LIBRARY OF ECONOMICS PURCHASED BY THE UNIVERSITY 1D 29 Pt OM E PeNDUSTRIES. Sir EDWARD SULLIVAN, Bart. LONDON: WILLIAM RIDGWAY, 169 PICCADILLY, W. 1889 HOME INDUSTRIES. Just now there is a distinct gravitation of capital in the direction of Home Industries. Tn all directions Home Industries are being offered to the public for investment ; £80,000,000, we are told, has been in- vested in breweries alone during the last three years. Apparently the press is alarmed at this taste of the public for home investments; but I think that in this matter, as in many others, the press is an exceedingly poor guide. Instead of home investments being disparaged, I think that, in the interest of the public, they ought to be encouraged in every possible way. The severe strictures of the press on unions, amalgamations, trade combinations of all kinds are more remarkable for what they omit than for what they advance. They are rather like the play of Hamlet with the character of Hamlet omitted. They denounce the agencies that promote these trade combinations, and they lecture the public who invest in them; but they entirely ignore the producers in whose interests these combinations are made. But they are rather an important element in the transaction. ‘The fun can’t begin till I come,” said the man who was going to be hanged, and there can be no fun in any combination, or union, till the producers come in. Generally speaking, producers don’t form Trades Unions, or amalgamations, or combinations, or whatever they may be called, because they like them; but because they can’t help them. They would probably prefer working independently if they could, but they can’t; excessive competition, home and foreign, has forced the price at which they can sell below the cost at which they can produce: the only possibility, therefore, of working to a profit, is by regulating competition in some a 1] * 4 way or another. They know they can’t regulate foreign competition, that is sacred; but they can combine to regulate home competition—therefore they combine. Se Oh! but, say the press in solemn tones, ‘ Public Opinion ” is against such combinations, they are immoral! Indeed! I should like to know why? Of course we all know what Public Opinion as interpreted by the Press really is: it is very often, indeed most often, the individual opinion of a professional press writer; it may be quite uninterested, or it may possibly be interested: the writer may know something of the subject he is writing about ; or, as indeed sometimes happens, he may know absolutely nothing at all about it. Public opinion, in nine cases out of ten, is the individual opinion of the writer, nothing else. It is the old story: Public Opinion and Providence are hacks whose riders urge them in any direction they like. One clergyman calls on Providence to send rain to make his congregation’s turnips swell. His neighbour calls on Providence to send dry weather to enable his congregation to get in their hay. One paper says Public Opinion is in favour of Home Rule—another paper says Public Opinion is in favour of the Union. NowI should like to ask those who talk about the immorality of unions, amalgamations, &c., a few simple questions. In nearly every case combination is forced on the producers by over competition : they combine because competition has driven the price of what they produce below the cost of producing it. Now, does the public assume the right to compel any body of producers to continue to sell below cost ? Do they deny the moral right of the producers to combine to raise the price of what they produce to a point at which it will yield a profit? If they do not, what does their indignation mean ? Where does the immorality commence ? Common sense tells us that there is no immorality in pro- ducers combining to raise prices to a point at which they will yield a profit. It is merely an act of self-preservation ; and, if they may combine, what law is there, written or unwritten, that forbids their combining in the way most likely to have the effect they desire? The Public, of course, can decide on what price they will pay; but it is absurd to argue that they 5 can decide at what price the producers shall sell. In‘ order to do this they must know the cost of production, and that. they cannot know, not even approximately. Is it immoral for workmen to combine to demand an advance in wages ? Is it immoral for employers to combine to resist an advance in wages? Why, then, isit immoral for employers to combine to advance prices? and if they may combine to advance prices, who is to dictate to them the way they are to combine ? Unless they are fools, they will combine in the manner most likely to effect their object. The immorality, I suppose, is in the combination: it cannot be in the way in which it is carried out. I don’t for a moment menn to argue that in all cases trade combinations will benefit those who combine. If combination does them good, they are quite right to combine. If it does them harm, they are quite wrong to combine: it is a matter entirely for their own judgment and decision, with which outsiders have absolutely nothing to do. “Combination will raise prices and reduce consumption,” says one wise man: “Combination will bring in the foreigner and lower prices,” says another wise man: but, of course, both wise men can’t be right — combination can’t raise prices and lower them too! The fact is that the public, as I said before, is very selfish. They applaud the unselfishness of producers so long as they see them trying to cut each other’s throats; but they denounce their selfishness the moment they see them shake hands! In nearly every industry foreign competition fixes the price: all that combination can do is to prevent the foreign price being driven still lower by excessive competition at home. Combination is only another term for co-operation : it is the co-operative system as applied to productive industries—that is all. As for its being immoral, it is as immoral as co-operative stores, as railway amalgamations as erecting improved plant, or opening new premises. But it is contrary to the sacred dogma of Free Trade, we are told. This is new tome. Does Free Trade lay down a law that producers are to produce at a loss? and if the only 6 way they can avoid producing at a loss is to combine, does Free Trade say, combination is immoral? What nonsense! No! combination is not immoral; but I think I know what is immoral. It is immoral to encourage foreign competition at home and check British competition abroad. It is immoral to cry peace, peace, when there is no peace. It is immoral to thank God for the blessings of Free Trade when we know as a fact that we have not got Free Trade at all. It is immoral to write down sound investments in England and to write up bogus investments in Laputa. But everything is immoral that is contrary to common sense ; and if there is one thing in the whole world that is more completely contrary to common sense than any other, it is our ridiculous system of one-sided Free Trade. Syndicates or agencies that are invoked to assist the combination of producers are also denounced as immoral. But this appears to me absurd. In many cases combination can only be effected through the medium of a syndicate or agency of some kind. A syndicate, as I understand it, is an unregistered partner- ship in which a certain number of men combine to promote some commercial or financial or benevolent operation. During the last few years they have become factors in almost every commercial undertaking. Very often, generally, in fact, they are simply speculations. Is speculation immoral ? A certain number of clever men, too clever by half, as events have proved, formed a copper syndicate. They foolishly agreed to buy up all the copper in the world for a period of years, at an exorbitant price, calcu- lating on being able to resell it to the public at a still more exorbitant price ; but, curiously enough, they overlooked two very important factors in the operation: they forgot that copper was an unlimited deposit, and that exorbitant prices would certainly develop new sources of supply ; and they forgot that exorbitant prices would check consumption. The consequence was that the speculation was a failure, and the syndicates have been heavy losers. 7 There was nothing immoral in the speculation, for some of the leading financial houses in Europe were engaged in it; only the speculation proved to be a very foolish one. The syndicates for promoting combination amongst Home Industries that so exercise the press at this moment, are of a totally different kind. They are merely agencies for buying and selling industrial properties: they are in no sense whatever holders of properties. They buy in order to sell again at once, and, in fact, they do not buy till they are certain they can sell again, or, indeed, till they actually have sold. The manufacturers are willing to sell at a certain price, and the public are willing to buy at a certain price, and the business of the syndicate is to arrange what this price is to be. The Syndicates are, in fact, the agents who bring the public and the manufacturers within touch of each other. They do for the manufacturers and the public what the manufacturers and the public cannot do for themselves. Of course they make a profit by buying and selling: they would not buy and sell if they did not. The profit may be large or it may be small, that is a question for the buyers and sellers, with which the public have nothing whatever to do. But in this case the profit is necessarily limited by the conditions of the transaction. If the agents name too small. a price to the manufacturers, of course they will not sell. If they name too high a price to the public, of course they will not buy. A reasonable balance must be preserved, or the transaction comes to nothing. The public are unreasonable ; they want to eat their cake and have it too. They have forced one-sided Free Trade on the British producers in order to secure a cheap foreign supply to the British consumer. They say to the foreign producer, ‘“‘Send us everything you can produce raw and manufactured, and we will admit it into our markets duty free. We will do everything we can to ensure your being able to sell in our markets as cheaply or cheaper than our own producers ; we will give you through rates of carriage; preferential rates of carriage. We will allow you to adopt the bonus system. We will in fact help you in both ways. Not only will we take care that you shall sell your produce cheaply 8 in our markets, but we will allow you to exclude all English produce from your markets.”’ Well, having done all this in favour of the foreign pro- ducers, the public is now indignant with the British producer because they combine to do what best they can to save them- selves from ruin. They encourage the foreign producer to attack the English producer by every means in their power, and then they turn round on the English producer and actually deny him the right to defend himself. Now this is immoral if you like it. If not immoral, it is exceedingly stupid, and very selfish, and very ruinous. Now it is a fact beyond any doubt whatever that there is not a single industry in England that can long withstand foreign competition, and home competition combined, without coming to starvation prices. If the public insist on encouraging foreign competition, British industries must sooner or later combine to put a stop to home competition. They cannot stand both—this is a certainty. Owing to lower wages, longer hours of work, less taxation, better technical education, thrift, the bonus system, preferen- tial rates of carriage, &c., &c, there is scarcely a single manufactured article that cannot be sold cheaper, in English markets by foreigners than by Englishmen themselves. Those, therefore, who advocate the doctrine of the ‘survival of the fittest”? in productive industries advocate the “survival” of the foreigner in preference to the survival of the Englishman, because under existing economic laws the foreigner is apparently the fittest! But this means the gradual, and in many cases rapid, destruction of British industries. Paper is one of these manufactured articles. Owing to combined foreign and home competition, the price of British paper has, for some time, been down to cost, or below it. Of course this can’t last. Hither the price of British paper must rise, or British paper makers will cease to pro- duce it. ‘‘ All production that does not pay cost ceases,” says Bastiat ; and this truism British paper makers are beginning to realize. “If foreign competition, and home competition 9 combined, compel us to sell below cost” they say ‘‘ we shall soon cease to produce. But our industry is a very consider- able one. There are many thousands of us, workmen and employers, directly dependent on it; there are many thousands more indirectly dependent on it, and we don’t want to cease to produce. On the contrary, we wish to devise some means by which we can live and thrive. We cannot get rid of foreign competition because our moonstruck legislators have bound us hand and foot on the altar of Free Trade, and watch with absolute indifference our foreign competitors putting their sacrificial knives into us ; but we can, to a certain extent, regulate home competition, and this is what we must try to do.” Professional economists have no mercy whatever. They don’t care twopence about British industries or British workmen ; they will not allow that blood is thicker than water ; not they ! They thank God they are too cosmopolitan to entertain such nonsense. The “survival of the fittest” is their gospel; and whether the fittest is a countryman or a foreigner is a matter of absolute indifference to them. I declare, I believe, that with many of them their sympathies are with the foreigner rather than with the Englishman; they give less trouble. There is nothing so selfish, so absolutely selfish, as the attitude of professional economists towards labour, and towards the producers generally in this country. They have neither sympathy for, nor interest in, labour, in any degree. When do you hear any of them express regret at our land going out of cultivation, our agricultural wages sinking to 9s a week, or our manufacturing industries working without profit? Never. They talk and act as if these things did not concern them at all. The well-doing of those who labour does not influence their theories. The only concern they have is to buy cheap—cheap and nasty very often, but at any rate cheap. We are often told the producers owe a duty to the public; but I cannot see it. The fact is that the producers owe the public nothing whatever—absolutely nothing. And if now they combine to protect their own interests, in any degree, to the disadvantage of the public, the public have only them- 10 selves to blame. The whole spirit of over-competition, of excessive cheapness, is selfishness. Never mind what an article costs to produce ; never mind what blood and sweat, what lives are consumed in producing it, only let us have it cheap! cheap! cheap! That is the silly cry of the public, who, like that mysterious young lady, the horse-leech’s daughter, are never satisfied. But all this is somewhat beside our subject; let us return to our muttons—our muttons in this case being the paper- makers. “Well,” say the paper-makers, ‘‘ we are and have been for some time, selling below cost. What are we to do? We cannot regulate foreign competition; but if we can only agree amongst ourselves we can regulate home competition. Let us do so: half a loaf is better than no bread!” And so they announce their intention to combine, and raise prices to a point at which they can live and thrive. Immediately the newspapers are in arms, words fail to express the intensity of their horror and disgust at such unhallowed conduct. Eyes and hands are piously upraised to heaven, invoking Divine vengeance against such economical immorality! “Good God!” say they, ‘“‘is it to be tolerated that these paper-makers, whose business it has been for years to supply us with paper below cost price, should now venture to ask a profit on it? If such an outrageous demand is conceded to them, where will the mischief end? Everywhere, in all directions, in every industry, we shall have producers demanding a price at which they can live and thrive. What would happen to the country if every producer made a profit on what he produced ? Never! Fiat injustitia ruat celum ! Welcome the deluge ; but death to combination !” “Why!” exclaims one leviathan, whose nett profits are generally stated at £80,000 a year, * of paper, such as the paper-makers us of £3000 a year! actually three th a year taken out of our pockets! Po fee *o spend, we shall only have £77,000! Will vountry volerate such an injustice? Never.” Well, certainly it does look like a case of real distress—of bread why a vise in the price propose, means a loss to ousand golden sovereigns sitively, instead of having 11 and cheese, at the very least. Three thousand a year taken out of Leviathan’s pocket! It is shameful; worse than robbing on the highway. But to the outsider the question may possibly occur— Ought this £3000 ever to have gone into Leviathan’s pocket at all? If this sum represents the profit resulting from a combination to compel the paper-makers to supply them with paper below cost price, have they any right to it? The rob- bery would almost appear to have been on the other side. It is not pro bono publico that the few should be enriched, beyond the dreams of avarice,'at the expense of a large number of those who labour. It is not for the public good that a Leviathan journal should be able to raise its profits from £77,000 to £80,000 a year on the ruin of the paper industry. It is not for the public good that capital and labour should be employed without profit, in order that a few millionaires should make a few more millions. The poor journalist with his £80,000 a year profit appealing for sympathy against the exactions of the paper-maker is rather comical. Poor Levia- than who has not got his paper-maker to devour is as much a subject for real sympathy as the poor lion who had not got his martyr. : As a matter of common sense, have journalists who make enormous profits any right to expect the paper-makers to continue to supply them with their paper at a loss to them- selves? For years the paper-maker’s loss has been the journalist's gain. They have actually been supplying him with paper at cost price, or under; virtually they have been impoverished in order to make his millions. But, of course, that can’t continue, and, indeed, is it right that it should continue? I think every man of common-sense will say “certainly not.” I declare I think that the newspapers have a little overdone it: instead of putting the paper-makers in the wrong, they have put themselves in the wrong. They have in a sense let the cat out of the bag: they have, at one and the same time, drawn attention to the screw they put on the paper-makers, and also to the screw they put on the public. The public see 12 that whilst the paper-makers make no profit, the profits of journalism are enormous; instead of establishing a case against the paper-makers, they have made out a clear case against themselves for sacrificing the fair interests of others to. their own enormous profit. Asa matter of common sense, 18 not £80,000, or £70,000, or £60,000, or even £40,000 rather a large profit for a newspaper to make out of the public? Would not £30,000 a year, or £20,000, or even £10,000 be a very magnificent return for the capital invested in these undertak- ings P For my part I declare Ido not see that journalists are such an exceptional blessing to the world we live in, that a whole industry should be sacrificed to add to their pile. The great newspapers combine to make the paper-makers supply them with printing paper at cost price, or below it; but how would they like to be compelled to supply the public with printed paper at cost price or below it? How long would they do it? How long would it be before their penny papers ran up to twopence or threepence? But, poor fellows, we needn’t harass ourselves about them; it is in vain they appeal ad misericordiam. Whatever these audacious paper-makers may do, they won't suffer. Their £80,000 a year is quite as safe as if it was in the Bank of England. They need not raise the price of their papers to the public; an advance of one-half per cent on their advertisements will amply recoup them for any possible rise that can take place in the price of paper. But of course this is only the fringe of the great question that Free Trade theorists have forced on the community: They have been preaching from the house-tops that the interests of the consumer are distinct from, and often opposed to, the interests of the producer. Is it strange, therefore, that the producer should, at last, maintain that his interests are in many cases opposed to, and distinct from, the interests of the consumer P The consumers combine in every way in their power, by stimulating foreign competition, and by stimulating home competition, to reduce prices. Is it to be wondered at that at last, at the eleventh hour in fact, 13 the producers should combine together to maintain them ? Was it not a certainty? They must do so in fact, or they must cease to produce. The public are like a flock of silly sheep in this matter of excessive competition (as alas! they are indeed in many other matters!) ; they are shocked at the horrors they see increasing around them; needlewomen stitching their own shrouds, poor things ! the sweating dens of the Hast End, the disgrace of pauperism: the horrors of the nail and chain industries, &c., &c., but whilst they piously declaim against the effect, they positively decline to face the cause: and what in every case is the cause ?—over-competition. What sense is there in complaining of the ravages of typhoid fever, if you obstinately decline to have your drains put in order? Hvery- where there is a league amongst consumers to live and thrive, as far as possible, at the cost of the producers. This has gone on long enough. There is a movement, I am thankful to say, amongst the producers to live and thrive at the cost of the consumers. So long as only one or two industries suffered the disease passed unnoticed; but now, when every industry is working at a minimum profit, or at an actual loss, the movement is assuming importance. We read of Corn Law Leagues, Land Leagues, Labour Leagues, Leagues of Patriots, miles of leagues in fact. Well, now, I believe the time is approaching when the Producers’ League will take its place amongst them ; when producers all over the country will combine to support and assist each other in the contest against ruinous and excessive competition. In my opinion it cannot come too soon; we have already waited too long. It does not follow that in every case foreign prices are really below home prices. Very often the threat of foreign com- petition is only held up as a bugbear to frighten English producers to take lower prices. A large consumer invites tenders from a dozen manufacturers, quoting at the same a very low foreign price. Very often this foreign price is entirely a fictitious one, has no real existence whatever: but it answers the purpose of establishing a very low standard below which the home producers must compete. The only way to meet 14 unfair combination of this kind is by counter combination. «“ A corsaire, corsaire et demi.” To combination, combination anda half. The immorality in this case, is not with those who retaliate, but with those who make retaliation unavoidable. The sooner combination puts an end to reckless competition and maintains a price at which the employers and workmen - can live and thrive, the better for everyone: even the con- sumers. Our economists, don’t like combination: it is the last straw they say drowning industries clutch at. On the contrary I look upon it as the lifebuoy on which the drowning producer will be saved from destruction. Combination is the only resource left to them against impossible competition forced on them by unjust economic laws. If the foreigners are carrying on a war of extermination against us, and we at the same time are carrying on a war of extermination amongst ourselves, evidently ruin becomes a certainty. It is a mockery, and a gross deceit on the working classes, to advocate the “survival of the fittest,” unless at the same time it can be proved, beyond all doubt, that in all pomts the industrial advantages of English producers are on a par with the industrial advantages of foreign producers. Now, we all know that under existing economic laws these necessary con- ditions of equality do not exist; but very much the reverse. Economists boast of the extraordinary sagacity that enables them to see through a brick wall, whereas in reality they never quite see the length of their own noses! The “survival of the fittest,” is their cry. ‘ Strong industries will survive,” they say. “If foreign competition and home competition kill weak industries, so much the better; let them die and be !” But this is not common sense. An industrial country, with a superabundant population, cannot afford to part with any industries, even the weakest: it needs them all more industries, not fewer. If an industry can live and thrive without combination, so much the better for that industry; but combination is preferable to starvation, It certainly is preferable to extinction. The wealth of a nation ig the value of what it produces ; if the value of what the nation produces declines, the wealth of the nation declines also. If the value of what the nation 15 produces falls below the cost of producing it, the nation is losing money, and this is actually the condition of many of the great industries of the country—the value has fallen below the cost of production, and they are losing money. The ruinous extent to which this is the case is not realized by the public; it is concealed from them under deceptive returns ; official figures, false deductions, and sounding platitudes. We are doing what, in every other economic transaction of life, would be denounced as madness, giving away our capital with both hands. Coal, iron, slate, and salt are the capital of the country. The quantities of each, whether great or small,are limited. Theycan never be renewed. Once gone, gone for ever. Well, it sounds impossible! It so brands us as a nation of lunatics! But it is nevertheless true, that we have actually been at the expense and labour of getting our coal and iron and slate and salt and have given them—yes, have given them, with both hands to our foreign rivals, actually at a less price than we have paid to get them! And now, because those who own our coal, and iron, and slate, and salt perceive their suicidal error, and declare they will no longer give away these valuable products below the cost of getting them, they are denounced as monopolists, and the powers of Parliament are actually invoked against them, to compel them to continue to sell below cost price ! For several years the salt miners and coal miners have been selling coal and salt below the cost of getting them, and now forsooth, because the former have combined to raise salt to a price at which they and their workpeople can live and thrive, they are threatened with the interference of the law. Was there ever such national stupidity? Could the silly fellow of the fable who pulled down his chimneys and bricked up his fireplaces, because the almanac told him it was June, proclaim his folly in more ridiculous fashion P One great advantage that I hope will result from the increasing popularity of home investments will be that the numbers interested as producers will be very largely increased. Consumers will more directly realize the interests of the pro- ducers when they become producers themselves; producers and consumers will, in fact, have a common interest, and 16 this is of immense importance. At present it is open to the consumer to argue that cheapness is the swmmum bonum of national happiness; that cheapness comes before all things ; but he will not say so when he finds he is in some degree a producer himself. He will then realize that although it is of the utmost importance that he should buy what he consumes cheap; yet that it is also of the utmost importance that he should sell what he produces at a price at which he can live and thrive. At present the consumers do not see this. They are truly selfish. They have no bowels. They neither know nor care anything about wages, or the employment of the people. The “flesh and blood” and “ live and thrive” argument does not concern them in theleast. ‘‘We deal in money,” they say, “We buy: we don’t produce. What we want is to buy cheap, cheap, very cheap ; below cost if we can.” It is of no use saying to them, ‘But if you continue to force the producers to sell below cost you kill the industry.” ‘“ What do we care,” they reply, “we will buy from the foreigner.” Now this, of course, puts them entirely out of court. If they hold foreign competition as a rod over the British pro- ducer’s back, they can, perhaps, drive him, but they cannot expect his willing services. Combination to reduce the output of coal, in order to raise prices, has been a stock argument with the colliers for years. The workmen in many industries have long urged the masters to combine; when the latter have said, ‘‘ We must reduce wages because prices are so low,’ the workmen replied, “why then don’t you combine amongst yourselves to keep prices up; it is entirely your own fault.” ‘The masters are beginning to realize this fact, and, of course, the workmen are very pleased. Combination amongst employers, in fact, is rapidly becoming a workman’s question, and, indeed, the great question for the country is not how this movement will affect the manufacturers, or how it will affect the gentlemen with fixed incomes, but how it will affect the great mass of those who eat their bread in the sweat of their face. It is on them that the pressure of excessive cheapness first begins to tell, and tells with the greatest severity. Combination l? appears to be the bogey of our economists; but it is a bogey of their own creating. Combination amongst producers is the result of artificially stimulated competition, for which our economists are directly responsible. In their alarm lest English producers should find an escape from the dilemma of foreign competition and home competition, they even go the length of proposing that combination should be forbidden by law. But this is absurd. How can the law prevent a man selling his property to anyone he pleases? Or how can the law prevent anyone buying a property if he wishes to do so? Combination does not by any means imply exorbitant prices. It could not effect this, even if that was its object. Foreign competition will always prevent exorbitant prices in any industry in this country. The object of combination is to steady prices, to harden them, to restrict competition to two prices, in fact, the home price and the foreign price. If the process that was carried out in the Salt Union, by which one hundred individuals at least have become interested in the salt industry, for everyone who was interested in it before, is extended to other industries, which appears very probable ; the number of capitalists, great and small, directly interested in the industries of the country will be enormously increased, to the great advantage of the industrial interests of the community. When they find themselves shareholders in the industries of the country, and realize that they are both producers and consumers, they will see that it is as much their interest to sell what they produce at a fair rate, as to buy what they consume below cost price; then they will begin to realize that cheapness is not the whole law and the prophets, that “ Live and let live” is the only possible motto for an industrial community. If these combinations, or more properly distributions of interest, become popular, the same result will influence the manufacturing industries of England that have influenced the agricultural interests of France. In France four million of the population have shares in the land, and consequently the voice of the land can always make itself heard. Before long, if investments in home industries become popular, we shall see four million shareholders in our manufacturing 9 a \ ‘ XY 18 industries, and tliat will give them considerable additional strength. The change that is now, I believe, taking place with regard ’ to our manufactures will, I hope, soon take place with our land—indeed it must. Whilst in France, as I have said, there are four million shareholders in the land, in the United Kingdom, we are told, there are only thirty thousand—one to 133; in other words, for one who is directly interested in land in England 133 are directly interested in land in France. Itis of the utmost importance to the well-being of the State that the great industries of the country, manufacturing and agriculture alike, should be sources of interest and profit to the greatest number. There are rival combinations at work—combinations to secure unreasonable cheapness, and combinations to secure reasonable profits. Now, each of these objects is advan- tageous to the community if kept within bounds; but very injurious to the community if carried to excess. It is quite wrong that the consumers should suffer from the selfishness of the producers ; but it is equally wrong that the producers should suffer from the selfishness of the consumers; and this. is what is actually happening. Consumers are quite as selfish as producers, and quite as unreasonable. Our economic system of unrestricted Free Trade is virtually a combination amongst the consumers to force down the price of the pro- ducers; in the eyes of the consumers this may appear not only reasonable, but praiseworthy ; but it must be evident to everyone that sooner or later such a combination amongst the consumers is sure to create an opposing combination amongst producers ; and, economic laws notwithstanding, producers must live and thrive. If they can’t they will turn and rend somebody! It may appear ridiculous to the Cobden Club to say so, but, nevertheless, it is a fact that good prices and good wages are ten times of more importance to the com- munity than low prices and low wages—and this is always the relation between prices and wages. Low prices, sooner or later, must bring low wages. You want low prices, you say to the economist. “ Certainly,” is the reply, ‘ the lowest prices, below cost if possible.” But low prices mean low 4) " cf 19 wages. Do you wish low wages? ‘God forbid,” is the pious reply. Then why, in God’s name, do you advocate a process that must entail the result you say you abhor? Of course, the most certain means of securing the greatest amount of happiness to the greatest number is the distribution of _ wealth amongst the many; and the most certain means of diminishing the happiness of the greatest number is accumu- lating wealth in the hands of the few. That community cannot be happy in which you see an immense majority miserably poor, and a very small minority inordinately rich. The only sound way of effecting healthy distribution of wealth throughout the masses is by wages, by employ- ment. The greater the amount paid in wages, the more capital gets distributed amongst those who work ; the less the amount paidin wages, the less the capital distributed amongst those who work. High wages, therefore, to a considerable extent assist the distribution of wealth. Low wages diminish the distribution of wealth ; and as the distribution of wealth is the great source of happiness, high wages are the great source of happiness. And so they are. But in considering the influence wages exercise on the well-being of the masses, it would be quite wrong to consider it entirely as a question of amount. Steady wages are in reality of far more importance to fluctuating, occasionally very high, wages. Nothing so stimulates extravagance, and is so fatal ‘to thrift, as fluctu- ating wages—men earning 5s a day for six days’a week for six months, and only earning 2s 6d a day for four days a week for the succeeding six months. One of the greatest advantages that will result from the process of combination that is now going on in so many industries will be a steadying, and probably an increase in, wages. Now I think Iam warranted in assuming that no one in his senses, no one who understands the A Bc of the interests of his country, wishes to see wages diminished; on the contrary, he wishes to see them raised wherever it is possible. Evidently, with starvation prices, a rise is not possible. Good wages mean a contented community, low wages mean a discontented community. In many industries competition is Q * 20 so keen that the present rate of wages cannot be continued. Unless the masters combine the men’s wages must fall. But, it is of no use the men combining to keep up wages unless the masters combine to keep up prices; nothing that the men can do can prevent starvation prices bringing starvation wages. If pressure is put.on the producer to sell very cheap, — the producer is compelled to put pressure on the operative to work very cheap. He cannot help it; he must doit. He cannot reduce the cost of the material he uses beyond a certain point, and when he has reached that point, and the pressure to reduce prices continues, he must reduce wages or stop producing. The operative class know this wellenough. Theseamalgamations that are viewed by the economists with such suspicion are regarded by the operative class with the greatest interest. “It is our only chance,” they very justly argue. “If the public com- bine to knock down prices, and we the workmen combine to keep up wages, the manufacturers must combine to keep up prices, otherwise they must come to the ground between two stools.’ And this argument is quite sound. Unions, amalgamations, combinations are brought about through the agency of syndicates in some form or another. They are merely a variety of the most universal of all human instincts—“ self-preservation.”” They represent the natural efforts of our industrial community to protect themselves against ruinous competition. In the existing condition of trade they mean ‘‘ home” protection—neither more nor less. They originate in a trade, not out of it. Their racson d’étre is very simple. Forty or fifty English manufacturers are cutting against each other at home, and forty or fifty foreign manu- facturers are cutting against them at home also, with the result that prices are eventually driven below cost. This won’t do, say the manufacturers. If this double competition continues, say the producers, we shall be ruined. We must, as an act of self-preservation, take some steps to regulate it. It is our only chance.” First of all they try the old plan of agreement amongst themselves to keep up prices and regulate production ; but in ninety-nine cases ont of a hundred thig attempt breaks down, owing to the necessities of some of the poorer firms, who must get money. When these agreements | : 21 break down they always cause recrimination and mistrust, and generally end in lower prices. To judge by what I read, the public seem to think that combinations to maintain prices and regulate production are novelties. Why, they have ex- isted in every trade and industry, under some form or another, since the days of Tubal Cain ! The manufacturers now realize that these agreements are of no permanent use ; that, in fact, they do more harm than good, and as their wants are more urgent than they ever were, they have been driven to a combination of a different kind. Temporary combinations are proved to be of no good ; and therefore they have now decided to try permanent ones. The scheme most popular is, in some shape or another, to form a union, and combine all their works in one company. It is urged that the public — the consumers—suffer by these combinations. But the public cannot suffer from exor- bitant prices, because they have protected themselves against exorbitant prices, by insisting on absolute Free Trade. The foreigner is certain to step in if prices rise too high. But, on the other hand, the producer will to some extent be pro- _ tected from the ridiculous and ruinous position of being compelled to sell below cost. Of course there is no more certain fact in political economy than this, that any industry that does not pay the cost of production must sooner or later cease. No industry can be continued if it does not pay cost. When any industry ceases to produce, the supply goes entirely to the foreigner; but before this happens, before an industry altogether ceases, it goes through a phase of starvation prices, and starvation - prices are the ruin of labour. _ Capital invested in home industries means, of course, capital employed at home. Capital employed at home means labour employed at home. Capital employed abroad means labour employed abroad. I know our cosmopolitan economists don’t care for this difference. I do. They maintain that labour employed in Belgium or Yokohama is as profitable to England as labour employed in Lancashire. I don’t. As long as I live I shall believe, and shall always maintain, that it must be better for the wage-earning class of the community that 22 the capital of the country should be employed at home than - that it should be employed abroad. It must, of course, be much easier to ascertain the true value of an investment in Lancashire than it is in Laputa! If you have £100 or £1000 invested in any concern in England you can go down and on the spot judge for yourself the value of your security; but if it is in Laputa, how can you know anything ? How can youeven know that it exists ? I see over one hundred foreign mines are quoted daily in the papers. Some of these may be very good—how many I should be sorry to guess—and some are certainly very bad ; but good, bad, or indifferent, what can the English investor know of them of his own knowledge and observation? Nothing— absolutely nothing! For all practical purposes nine-tenths of these might be in Laputa. Hitherto the home investments that have been offered to the public have been offered at a rate of interest that con- siderably exceeds the average rate of foreign investments. I believe I am perfectly justified in saying that every home industry that has been offered to the public by responsible financiers has fulfilled the representations of its sponsors. I , don’t mean to say that they have, in all cases, fulfilled the expectations of the jobbers and speculators, but I mean that they have fulfilled the just expectations of bona fide investors, When the public have been assured, by responsible agents, that such and such home investments will pay 7 or 8 or 10 per cent., | believe they have done so. The small rate of interest that will satisfy investors in home industries in which they have confidence is remarkably illustrated by the present price of Guinness Brewery. The public are actually buying these shares to pay 44 per cent. Now, there are scores, I may say hundreds, of home invest- ments that would pay the investors six or seven per cent., and be quite as safe as Guinness shares. The idea has been circulated that, generally speaking, home industries are only offered to the public when they are shaky and the owners want to get out of them. Now the fact is that for one shaky home investment there are fifty shaky foreign investments put on to the market. ms 23 Tt does not follow from this that the home seller is more honest than the foreign seller. It only follows that false statements can be more easily detected at home, than they can be detected abroad. There are always many sufficient reasons at work to justify a manufacturer in getting rid of his industry, though perfectly sound and profitable. He may have £100,000 invested in plant and machinery and works, but he may be getting old, and may not wish to leave all his eggs in one basket. He may wish to realize for his children : he may feel uneasy about future management, where success depends entirely on management. His business may require more capital, larger plant, newer processes, and he may think it wiser to let others find more capital than find it himself—so he sells his works, plant, &c. to a company for cash, or shares, or debentures, as the case may be. His eggs are then no longer all in one basket. Half is still in the basket perhaps; but the other half is inhis own pocket. He may retain his investment in the industry, or even increase it, or he may sell his shares, and have nothing more to say to it. In every way his position is inproved: he can exercise an option ; he ean realize his capital; which before he could not do. As one of a private firm, or even as one of asmall private company, he has no chance of realizing his capital, not the slightest ; but as a shareholder in a large public company, a price for his shares will be quoted on the Stock Exchange, and he will be able to buy and sell as he pleases. Viewed in this light combinations are merely an extension of the limited liability principle: in fact it very often is the only possible way in which the manufacturer can limit his liability. Now any of these reasons are sufficient to account for a good paying business being disposed of to the public. If a business with a capital of £100,000 is offered to the public that on careful examination can be proved to be able to pay eight or ten per cent., is it not a good thing for the public ? It means that two hundred, or three hundred or more, share- holders will get eight or ten per cent. for their capital, instead of only five or six partners. There are scores of sound industries in the country earning from seven to ten per cent., and whenever these investments are offered to the public 24 under reasonable guarantees, I think the public will be very foolish not to jump at them. I see it is objected in some quarters that these amalgama- tions will put too much power in the hands of the workmen, who are already too powerful, and make strikes more frequent. I think, on the other hand, it will make strikes very much less frequent. The workmen of any particular industry will form one large body, instead of thirty or forty small ones; and as in all cases the greater the number the greater the leaven of common sense, I believe that the opposition of the workmen, when it does take place, will be more reasonable and less suicidal than it often is at present. As far as one can judge, Home Industries offer a safe investment for small capitalists. Suppose a syndicate or agency buys twenty, thirty, or forty works from a hundred or two hundred individuals, and immediately resells them to five thousand or ten thousand other individuals in £10 shares. At once the number of persons interested in those industries is increased a hundred or perhaps two hundred fold. If the investment is a good one this process must be distinctly of advantage to the public. It opens out the industrial investments of the country to small capitalists, and this is the very thing that is wanted. In reality it makes corners and rings impossible. A ring is possible when an industry is entirely in the hands of twenty or thirty individuals, but it becomes impossible when the consent of five thousand or ten thousand shareholders has to be secured. A large number of small capitalists makes monopolies almost impossible. Now, this is very important—the admission of the public. In my opinion the advantage of opening out the industrial investments of the country to a number of small capitalists cannot be exaggerated; it gives a strength and power to an industry that it cannot attain without it. At present the small capitalist says, ‘Such and such a trade is a good one; it pays 6 or 7 per cent. and is secure ; but it is a close trade: cannot share in it, unless I go into it on a very large scale: I cannot invest £10 or £20 or £100 in it.” Under a system of great industrial companies he will be able todo so. There are now four thousand shareholders 25 in the Salt industry, whilst before the union there, were probably not two hundred. . My impression is that these combinations will open the industries of the country to a very large number of small capitalists. That they will steady prices. That they will steady wages. That they will, to a certain extent, relieve our industries from the curse of excessive competition. That they will give the English producer a better chance of standing up against foreign competition. That they will tend to restore the quality of our goods, which starvation prices have ruined. That they will eventually bring back a great deal of British capital, now embarked in bogus invest- ments in “ Laputa,” to sound investments at home. The capital of a country may be compared to the blood of the body; the more blood the more health, the more capital the more vitality. But if the body is to be healthy the blood must circulate throughout the whole body to its very extremities, or the limbs will drop off; and if a country is to be healthy capital must circulate throughout the whole industrial body to the very extremities, or employment will fall off. In the human body the circulation of blood means health; in the in- dustrial body the circulation of capital means employment, and employment means health, and health means happiness; so the circulation of capital means happiness. The greater the circulation of capital the more general the employment, the more general the happiness. I apologize for repeating such platitudes. As the old “‘ Fable of the Bees ” tells us, the great art of making a nation what we call happy, is to give every one the opportunity of being employed. Employment means happiness, and capital means employment; so capital means happiness ; but then, of course, to make this syllogism worth anything capital and labour must be united, capital must be employed in promoting employment; but alas! owing to our ridiculous fiscal policy, capital and labour are no longer united ; they are divorced. Capital is rapidly passing from the hands of those who employ labour into the hands of those who do not employed labour. Forty years ago the capital of the country was. very much less than it is now, but it was 26 chiefly in'the hands of the agriculturists and the *masintac- turers, who employed labour ; now it is immensely increased, but it is chiefly in the hands of the money dealers who do not employ labour. As employment depends on capital, So of course if capital is withdrawn there must be a shrinkage of employment; everybody has a less chance of being em- ployed. The capital in ‘the country is immense ; for every sovereign there was in the country forty years ago, there are three sovereigns now; but this capital is being withdrawn from labour; and this causes stagnation and discontent. Foreign nations who want capital to stimulate their labour borrow it from us. We are actually withdrawing our capital from our own industries in order to lend it to foreign nations to stimulate their industries. English capital is being steadily, rapidly indeed, withdrawn from English labour to be em- ployed on foreign labour. This is very shocking and very alarming, but it is true. We are told our foreign invest- ments amount to £2,000,000,000; but this 2,000,000,000 is not . the surplus accumulations of the country after all its own industries are fully provided for. It is, on the contrary, chiefly money withdrawn from British industries. The reason that English capital is being withdrawn from English indus- tries, is very simple. English industries, agricultural and manufacturing, don’t pay. If English industries paid, English capital would remain to encourage them. But English indus- tries cannot pay without higher prices, and that is what our economist says we shall not have; on the contrary, greater cheapness. At present capital is flowing out of the country very fast, and to my mind it is impossible to conceive a more alarming condition of affairs than when capital is being generally withdrawn from home industries to be employed in foreign industries. It means the ruin of home labour. It is better, of course, that capital should be employed in the country than that it should be employed out of the country. If it can be employed to a greater profit in this country than it can in a foreign country, it will remain. If it can be employed at a greater profit out of the country it will flow out of the country. It isa certainty. It is better that money at home should be dear than it should be cheap. When it is 27 dear it remains in the country; when it is cheap it flows out of it. When money is dear it isa proof that it is wanted, | and is being employed; when it is cheap it is a proof it is not wanted, and is not being employed. When the millionaire represents employmentit is all right, but when, on the contrary, he represents capital withdrawn from employment—then it is all wrong. Of course, there will always be capitalists and workers ; and the workers will always regard the capitalist with more or less jealousy, according as his capital is of more or less use to him. In the eye of the man who lives by labour, the only raison d’étre of the capitalist is to give employment; if he does not do that he is odious. When English capital employs English labour, the English labourer may say, Well, I don’t care much for this capitalist, any how, but as he pro- motes employment, he does us some good. But if English capital employs foreign labour, the labourers may say, This bloated capitalist not only does not give us employment, but he withdraws his capital from English labour and employs it on foreign labour. Just now, owing to want of employment, this feeling is getting intensified. Those who labour see capital withdrawn from English labour, and transferred to foreign labour. Now, to allow a state of things to continue which encourages or perpetuates this feeling of jealousy on the part of labour towards capital, is madness. The more we educate the people the more directly we call their atten- tion to the awful inequality that exists in the distribution of wealth, and if we cannot prove to them by facts, by example, not by words, that capital in the hands of the few means em- _ ployment for the many, they will begin tosee in it an enemy ; and, indeed, it is an enemy if the capital is withdrawn from them to employ their rivals. If they can be made to think that wealth is doing them good they will tolerate it ; but if they see that in any way it is doing them harm, it will make them mad. Of course, the great object to aim at in order to secure the greatest amount of happiness to the greatest number is the distribution of wealth, not the accumulation of it; the general distribution of capital amongst the masses, not the accumulation of the capital into the hands of a few dozen millionaires. But this is exactly what is happening. 28 Of course, the best use of capital is to promote employment, and that capital is best employed that gives most employment. “Of all the ways in which capital can be employed,” says Adam Smith, “agriculture is by far the most advantageous to society; no equal capital puts into motion a greater quantity of productive labour than that of the farmer,” and therefore capital invested in farming is better invested than in any other way. But in England capital is being with- drawn from farming as much as possibie. Now, farming 1s _ our largest industry, and a most remunerative one, and instead of increasing every year, every year it is shrinking. And yet weare told we are prosperous. I don’t believe very much in figures, but still many do. We are told that our foreign investments represent about £2,000,000,000, and our land represents about £2,500,000,000. The £2,500,000,000 in land represents the capital, and income, and employment of many millions of our countrymen at home. The £2,000,000,000 invested abroad represents the capital, lent by us to stimulate theemploymentof many millionsof ourindustrial rivals, abroad, not one single penny of which directly benefits English labour or English industries. I think there cannot be much doubt which most benefits England—the £2,500,000,000 invested in England, or the £2,000,000,000 invested abroad; but the alarming fact is that every year the £2,500,000,000 invested at home are diminishing, and the £2,000,000,000 invested abroad are increasing. Every year capital is being with- drawn from agriculture and invested abroad. Why is the £2,500,000,000 that is invested in the way that Adam Smith tells us is by far the most advantageous to society being withdrawn in order to add to the investment of the £2,000,000,000 that is of no advantage to society at all? For the very simple reason that, owing to the competition of cheaper countries, agricultural produce does not pay the cost of producing. Thisis the situation. The£2,000,000,000 invested abroad in loans, in industries, in undertakings of various kinds, pay; the £2,500,000,000 employed in British agricul- ture do not pay; and, therefore the former is steadily increasing, and the latter is steadily diminishing. There is no way of averting this process except by establishing a, fiscal condition that will make agricultural produce yield a profit 29 The moment it is seen that the £2,500,000,000 is making a shade more profit than the £2,000,000,000, the flow of capital will be reversed, our foreign investments will be diminished, and our home investments increased. Now, it is important the public should realize this alarming fact, that owing to the artificial cheapness produced by Free Trade every year more British capital is being withdrawn from British industries, and every year more British capital is being invested in foreign industries. Hvery year more land is going out of cultivation; every year more land is relapsing from tillage to grazing; every year cultivation is getting worse ; every year the produce of the land is dimin- ishing; every year our population is increasing; and every year there is less employment to be got. Now, is this depleting process to be allowed to continue? How do our theorists, our figure men, our economic fanatics—for they are fanatics, as much as if they maintained the earth was square —propose to treat it? How do they expect these things will end, for continue they cannot ? ical suppose it is beyond a doubt that 30,000,000 at least of our population are, directly or indirectly, dependent on labour of some kind for their daily bread. That is to say, whilst 3,000,000 or 4,000,000 are independent of labour, 30,000,000 are dependent on labour. Labour is the only means of living of nine-tenths of our population, and yet in the face of this tremendous fact, our friends, the superior persons, say that nothing must be done to protect labour, that the question of labour must be left entirely to the natural law of supply and demand. Then in God’s name let us follow the natural law of supply and demand; don’t let us have an artificially stimulated foreign supply and an artificially restricted foreign demand, That is not the great natural law of supply and demand, but the very reverse of it. It does not require to be very sagacious to realize the fact that if 30,000,000 at least of our people are dependent on labour for their daily bread, it must be the first duty of those who rule them to see that their labour is not unfairly filched from them. The first duty of every Government is to do all in its power to give everyone the opportunity of being employed. In an indus- 30 trial community the whole gospel of prosperity is contained in the one word “ Employment.” Tf the rulers do everything in their power to protect and promote employment, all well and good. If they do not, if they allow vain theorists to experiment with the rights of labour, everything will go wrong. And everything is going wrong—going from bad to worse. “We will see that you can buy cheap,” say the rulers to the workers; “but employment must look after itself. In other words, we will see that you can buy cheap, but we decline to take any steps to assist you in earning anything to buy with.” But this is putting the cart before the horse. Cheapness does not secure employment, whereas employment does secure cheapness. Here, as in everything else, the capitalist has the best of it. He has the whole world to invest his capital in; but owing to our one-sided economic system, the English worker has only his own country to invest his labour in. Foreign countries won’t admit it. If the home market for the investment of capital fails, the capitalist sends his money elsewhere ; but if the home market for labour fails the labourer is done, there is nowhere else to send it to. The English worker must find work at home or leave the country; and what I want to know is, by what right do the rulers make or sanction laws that force the people to leave their country ? The object of all government, I have always understood, is to assist the people to live and thrive in their own country, not to drive them out of it. But this is what our one-sided system is doings for us. It is depriving English workers of work, and driving them out of their country. It has made England the cheapest country in the world. It has, indeed! So cheap that its workers cannot earn money enough to live in it. Itisa two-edged sword that cuts labour both ways. I strikes it down equally in its own and in foreign markets. Formerly British capitalists would invest their capital in land, in farming, in manufacturing industries, but they won’t do so now. They know they might just as well throw their money into the sea. They prefer Odessa Waterworks, or Yokohama Gas, or Lisbon Tramways—anything, anything but the industries of their own country. But yet their capital is as dl necessary to the country as our blood is to our body. It is this capital that alone can keep our industries going, that can give employment to the millions who live by work. We talk of the blessings of competition, but it is like parrots who go on repeating a word in the same hard voice, without in the least knowing what it means. The competition we need is the competition of home labour, not the competition of foreign labour, The competition of foreign labour actually threatens to kill English labour; and to permit it to do so is madness. Employers and workers will compete at prices at which they can live and thrive; but how can they compete at prices at which they cannot live? We have competition, it is true; but, alas, it is competition from which English labour is excluded. Foreign workers compete amongst themselves as to who shall supply the English market. But English workers do not compete, the price is to low. An example will illustrate my meaning. A few weeks ago a firm gave an order in Germany for £50,000 worth of labels at a diminution of 20 per cent. on the price hitherto paid in England, a price that was below English cost. The firm saved £10,000, but the working community, the paper makers, type makers, ink makers, printers, and the hundreds of industries connected with them, lost £40,000. If the order had been executed in this country the £50,000 would have remained in the country, giving employment to English labour ; as it is, £40,000 has gone abroad to give employment to foreign labour. What happened on labels happens on everything else. I have now a price list before me from a German firm, established in 1873, with agents in London, Birmingham, and Glasgow, offering 70 articles of hardware at prices far below what they can be made for in this country; and especially inviting a comparison in prices with those of Birmingham and Sheffield. ‘ Oh!” say our superior persons, with their noses high in the air, ‘‘ our workmen ought to take 20 per cent. less wages, ought to be more thrifty, more sober,” &c. I can’t.argue about this. I only see things as they are, not as they ought to be. The fact is enough for me, and the fact is that they will not work for 20 per cent. less wages, and probably cannot. When their rulers tell 32 them they ought to take lower wages, and work longer hours, they may turn upon them and say, “Thank you for nothing ; we don’t want your advice, we want your help. Instead of telling us we ought to take less wages, you ought to have protected us from the unfair competition that compels us to take less wages. You ought to have provided for our necessities before giving scope to your own vain theories. You ought to have assisted us to keep up our wages, instead of assisting the foreigners to force them down. You have been trying experiments at our expense, and now, when it is evident to all the world that your experiments have resulted in ruinous failure, you ask us to allow you to carry them on to the bitter end at our expense.” Cheap paper is of great importance to the public no doubt, but good paper is of much greater importance to them. One London Daily gives much better paper than any of its com- petitors, at an additional cost, we are told, of £6000 a year. Now does not this Daily benefit the public much more by spending an additional £6000 a year in good paper than other journals do by saving additional thousands a year in bad paper? Why in the item of spectacles alone the better paper will save the public many thousands a year ! I have often been surprised to hear clever men assume that the present depression in the labour market is only tem- porary, and will pass away. There is no mystery about the cause of the depression; it is low prices. It is because foreign labour can produce nearly everything at a lower price than English labour can produce it, and, therefore, English labour is standing idle. How can this be called a temporary cause P It can end only in one of two ways—either the cost of foreign labour must rise to the English level, or the cost of English labour must sink to the foreign level. Which is it to be P Which do the economists expect that they venture to call the depression temporary ? Is it not a shame for them to tell the workers that the cause of their sufferings is only temporary, when at the same time they are doing everything in their power to make it permanent? But this is actually the case without any exaggeration, The reason why so 33 many English workérs, agricultural and operative, are standing idle, and no man hires them, is that foreigners can sell nearly every article in our market cheaper than we can produce them. And instead of taking any steps to make them dearer, we are doing everything in our power to make them cheaper still. Cheapness, excessive cheapness, cheap- ness at any cost, is the watchword of the Free-Trader. Cheapness is the cause of our land going out of cultivation ; cheapness is the cause of our operatives only getting four days’ work a week. How, then, can Economists say the effect is temporary, when they are doing all in their power to prolong the cause P The present depression in the labour market is not tem- porary; and it is a shameful deceit for Economists to practice on their poor dupes to tell them it is. The de- pression is chronic; it is increasing every day, and, from the condition of things, must continue to increase; there is no doubt about it. It is said there are signs that the depression is passing away; but how can that be so when every day more land is going out of cultivation, and every day the importation of foreign manufactured goods is increasing? The thing is impossible. The depression can only pass away when articles produced by English labour rise in price. Is there any reason to suppose there is going to be a general rise in price? Is there any prospect, any possibility, in fact, of the cheapness that is the chief boast of the Economists passing away ? There is no such prospect, but on the contrary the reverse. Nothing, nothing, absolutely nothing can give the agricultural labourers more employment; nothing, absolutely nothing, can give the operative more employment, but higher prices. In the face of the competi- tion of the cheap labour of the whole world, are higher prices possible? No; they are not. The only possible chance of a rise in price is a combination amongst English producers not to cut each other’s throats ; and that they are doing; and are being lectured for doing it. Cheapness is the cause of the depression. Are we doing anything to raise prices? No, indeed; we are doing everything we can to lower them still more. And yet we are told the depression is temporary. 3 34 What ashame! Oh! but, say the Economists, production is ahead of consumption, that’s the cause of the depression ; in a short time consumption will overtake production, and then all will be right. Now, they must know as well as I do that in using this argument to the working classes about depression in England, they are practising a deliberate deceit. In America, France, Germany, Belgium, in fact in every country except Hngland and Turkey, for Turkey and England are the only Free Trade countries in the world—what a reflection on Holy Free Trade !—this argument would be true, because they keep out foreign production, and when they find production exceeds consumption they have it in their power to reduce the former till the necessary equilibrium is restored. But Free Trade has deprived England of that power. She cannot reduce production in order to meet con- sumption. The ‘remedy is taken out of her hands entirely. Over-production does not depend on her, neither can she regulate it in the very smallest degree. The over-production that is ruining her is not her own over-production ; it is the over-production of the foreigner, and against that she is helpless. The English market may be glutted with every article, and the price fall below cost; but the English pro- ducer cannot reduce production by working short time till consumption overtakes production. He may cease producing altogether; but the foreign manufacturers may still keep sending into his markets even larger quantities. But the foreign manufacturers would not sell at a loss, say the Kcono- mists ; but the fact is they do sell at a price that is a loss to English producers; and that is quite enough so far as our labour is concerned. But more than this. England is the market for the surplus produce of the whole world. Where- ever there is over-production in any part of the world the surplus comes to England. Foreign manufacturers habitually over-produce—by that I mean produce more than their own markets will consume—because they know they always have the English market open to them. Now, owing to our suicidal policy of one-sided Free Trade—for it is nothing less—we can never relieve ourselves of our own surplus production, because other countries will not admit it. Our 35 position, then, is an absolutely impossible one. We are entirely at the mercy of the foreign producers. We are forced to take their surplus production, and they decline to take ours. In England the working classes are told that foreign competition represents the defence of the poor man against the tyranny of the rich; but in America it is the universal belief of the working man, without exception, that Free Trade is forced on the English workers by the aristocracy ; so evident is it to them that the interest of the worker is protection to labour, that makes what he produces dear; whilst Free Trade is the interest of the rich, that makes what he consumes cheap. We are told to look at the seven- leagued strides in prosperity we have made under Free Trade. I fail to see them. I do not believe that there was ever more squalor or wretchedness in the country than there is now. I do not believe it possible. Ido not believe there were ever more than 7,000,000 of the population toeing the line of pauperism. I do not believe there were ever more than 14,000,000 averaging only 10s a week. Considering that for every sovereign there was in circulation forty years ago there are three in circulation to-day, I say that our working ~ classes have not advanced in prosperity in any degree with the increased capital in circulation. I believe, in fact, that under Free Trade the masses must get poorer, because they must ‘ get less employment. A well-known statistical work gives a = comparison of the material progress of France under Protec- ‘ _ tion and England under Free Trade If there is any truth in figures, it ought to startle us from our Economic dream. The comparison is based on the returns of legacy duty :— Tn 1826, England was 10s a head richer than France. ~ In 1859, England was 19s a head richer than France. a 1877, England was 5sa head poorer than France. - France has 57 per cent. of her land under tillage, and it is * increasing every year. The United Kingdom has 30 per cent. of her land under 3 * 36 The commerce of England has increased 21 per cent. in 10 years. } The commerce of France has increased 39 per cent. in 10 years. The commerce of the United States has increased 68 per cent. in 10 years. ; The commerce of the world has increased 36 per cent. in 10 years. Owing to the low cost of carriage, increased by preferential railway rates, the competition of French, German, Belgian, Austrian, Italian operatives, working in their own countries, for from 20 to 30 per cent. less wages, and for from 20 to 30 per cent. longer hours, is just as fatal to the British operative as if they were working at his own doors. What nonsense it is, therefore, for Trade Unionists to coerce British ‘“‘ knob- sticks”’ for accepting 5 to 10 per cent. lower wages at home whilst they encourage the competition of foreign ‘“ knob- sticks” who are working for from 20 to 30 per cent. lower wages, and for from 20 to 30 per cent. longer hours abroad ! The duty of Trade Unions, as I understand it, is to protect British labour ; to maintain at as high a level as possible the wages of British workers; but they don’t look beyond their nose when they regulate the price of home labour, and then invite the competition of the cheaper labour of millions of foreigners. It is absurd. If the Trade Unions will make it their duty to keep off the invasion of foreign labour, they will not have much difficulty in regulating the interests of British labour. For every workman working at home, there are six or seven workmen working abroad, nearly all of whom can deliver their manufactured goods in the English market cheaper than the Englishman can produce them. What sense is there in coercing the one, and leaving the six free? What happens when British workmen go out on strike or are locked out? Why, foreign workmen do their work! That's all. British operatives and British employers fall out, and foreign operatives and foreign employers supply the market, Is not this cutting off your nose to spite your face P 37 If our country was threatened with an armed invasion we should combine to resist it to the death, whereas we welcome with open arms an industrial invasion that is a hundred times more fatal ! ‘The armed invasion would be temporary and pass away, whereas the industrial invasion means permanent occupation and industrial ruin. Are the people mad? The competition that is being forced on the British market by foreign compe- tition is the competition of cheap labour. Under Free Trade, the cheapest labour will supply the British markets, and British labour is not the cheapest labour (and I hope it never will be), and therefore, under Free Trade, British labour does not supply the British markets, and the markets of Europe and America are closed to it. British operatives have the remedy in their own hands. If they will insist that this question of protection to labour shall no longer be made a party one, and will bind all parlia- mentary candidates, Radical or Tory, to protect British labour, they may be saved, but they have not much time to spare ; in another two or three years there will be no British labour to protect; we shall see British workers competing for work at a reduction of 30 to 40 per cent. wages, and they will not getit. Inagriculture, which is the greatest industry in the country, this is already the case: labourers are competing for work at 8s and 9s a week, and cannot getit. The farmers cannot employ them; there is no work for them todo. The conditions that are killmg down agricultural labour are steadily killing down operative labour. It is inevitable; all the world sees it, and wonders; but British workers will not see it—indeed, they are not allowed to see it. We are asked to reverence the utterances of the fathers of Free Trade as if they were the Sibylline books. But this is nonsense; the Sibylline books were mysteries which nobody could explain. The prophecies of the fathers of Free Trade are mistakes which everyone can perceive. ‘‘ Protec- tion means revolution,” says Lord Salisbury. “ Want of employment means revolution,” replies common sense. Now, which is right; or are both right, or both wrong? We do 38 not know if Lord Salisbury is right, because he does not give us his reasons ; but we do know that common sense is right, because we know that want of employment causes discontent; that discontent causes distrust; that distrust causes a desire for violent change; and that the desire for violent change means revolution. What prophecy may have been in ancient days, of course, we don’t know; what prophecy is in these days I think we do know pretty well. It is merely a bill drawn, at long date, on the credulity of mankind, which is generally dishonoured when it becomes due. ‘The Land Bill will settle the Irish Question,” said the political prophets; ‘ Friar’s Balsam will win the Derby,” say the Turf prophets ; “ These shares will pay 50 per cent.,” say the Stock Exchange prophets. No doubt they all believe in their prophecies; the only thing against them is that, unfortunately, in ninety-nine cases out of a hundred they are not fulfilled. ‘(Under Free Trade wheat will be at 54s a quarter,” said the prophet Peel. ‘Ten years after England has adopted Free Trade every nation in the world will have followed her example,” said the prophet Cobden, adding, by way of a clincher, “ This is as certain as that the sun will rise to-morrow.” Now that wheat is down to 30s, and has been down to 27s, and that we know that since Mr. Cobden uttered his famous prophecy more people have been converted to Mormonism than to Free Trade, it seems childish to refer to these pro- phecies any more, except as an illustration of the general feebleness of modern prophets. But really, is it true that the country is between the devil and the deep sea, and that our only choice lies between the two horns of the dilemma? “Hmployment or Revolution,” says one; ‘Free Trade or Revolution,” replies another. But if Protection means em- ployment, does Protection still mean Revolution? I don’t believe that an increase of employment, however obtained, would cause revolution, It is not common sense. If the disease must cause death, and the remedy must equally cause death, the patient is indeed in a poor way. If protection to labour means revolution in England, why does protection to labour not mean revolution in America, in France, in Germany, 39 in Belgium, in Italy? But it does not. On the contrary, we know as distinctly as we know anything, that in all those countries revolution would instantly follow any tampering with the existing laws for the protection of labour. Why should the interests of British labour require exactly opposite treatment to the interests of labour over the whole world? Every fool, I suppose, allows that if the classes force Protection on the - masses—that is to say, if 4,000,000 attempt to force Protec- tion on 30,000,000 against their will, it would most probably cause revolution. But equally, I suppose, every fool knows that if the masses force Protection upon the classes—that is to say, if 30,000,000 force Protection on the 4,000,000—it would not cause revolution. Now, this is what is happening in America, France, Germany, Austria, Italy, Belgium. In every industrial community out of England the masses have forced Protection on the classes. It may be very foolish of them to do so, but they have done it; and it seems to answer. Hvery American workman believes, absolutely, that the Eng- _ lish aristocracy force Free Trade on the English workers for their own interest and convenience. And really, when we see the House of Lords declining to allow the subjectof Protection to be even discussed, it looks as if the Americans were right. It is an absolute fact that the working classes have only been allowed to see the face of the Free Trade medal—the reverse has been carefully concealed from them; but there is a reverse, even more important to them than the face. The face of the medal is cheapness; the reverse of it is cheap labour. Now, this is very important to the labourer. “Thank God for the cheap loaf,’ say the Cobden Club to the masses ; but they do not add, “ Pray God he may give you the means of buying it.” But, indeed, the prayer is of as much importance as the thanksgiving. There are some of us, indeed, who “could not say Amen when they did say God bless us.’ ‘‘ You cannot grow your loaf as cheaply as you can buy it,” says the Cobden Club, “therefore buy it.” They forget to add, “ You cannot buy your loaf at all unless you earn something to buy it with.’”’ But this, again, is impor- tant. The cheap loaf to the labourer is the loaf he is paid to grow; the cheap loaf to the community is the loaf grown 40 on English soil, with English labour and English capital. There are fanatics who bathe in the Serpentine all through the winter, and break the ice in order to get at the dirty water. We wonder at their folly, and tell them they will kill themselves; but with a ghastly grin, and shaking with intense pleasure, they assure us it is the most delightful thing in the world, the only real enjoyment in life, in fact, and urge us to try it. Actually their folly finds a parallel in our one-sided Free Trade folly. Other nations see us breaking the ice in order to get at the dirty water, and they say, ‘‘ You fools, you are killing yourselves; you are flying in the face of the natural laws of common sense; we can make almost everything cheaper than you can, and we are 7 to 1 more numerous than you are. We must kill you if you don’t protect yourselves.” But with a ghastly grin and a “‘ rigor ” in every limb we reply, “ Oh! it’s all right; it’s quite delicious; do try it; it’s the only way to secure national health. Our lands are going out of cultivation, our industries are all shrinking, our people are out of work; but all this only makes us richer. We have found out the true philosopher's stone, the great secret of national wealth. It is very simple —withdraw your capital from home industries that don’t pay, and invest it in foreign industries that do pay; that is the way to get rich. Look at our income tax. Some years ago it was falling off because British industries did not pay. Then came the happy thought, for which we have to thank the Cobden Club; we withdrew our millions from British industries that didn’t pay and invested them in foreign industries that do pay, and now our income tax is higher than ever. Was not that a stroke of genius? Is not that the way to get rich?” 1871-2-3 were the years of the great industrial boom, when the country, as Mr. Gladstone said, was advancing in wealth by “leaps and bounds,’ when everything was dear, wheat at an average of 68s the quarter ; the excess of our imports over our exports was then only £40,000,000. 1888 is the year of the great industrial depression ; every industry is shrinking ; everything is cheap; wheat is down to 27s a quarter; and our imports so far exceed our exports at the rate of £160,000,000 per 41 annum. Why is this? Because in 1871-2-3 everything in England paid, and English capital was employed at home; while in 1888 nothing pays in Hngland, and English capital is being employed abroad. The interest on our foreign investments is, of course, paid in goods, and it is the amount of these investments that regulate the quantity of the imports, not, as the Cobden Club would have us believe, the quantity of the exports. They have literally nothing to do with each other. If we have £1,000,000,000 invested abroad, we receive as interest, at 5 per cent., £50,000,000 worth of foreign goods. If our investments abroad are £2,000,000,000, we receive £100,000,000 of foreign goods in the way of interest. In 1871-2-3 our money was invested at home, and the amount of foreign goods sent to pay interest was comparatively small. Now our investments abroad are enormous, and the amount of foreign goods sent to pay interest is enormous too. Free-Traders insist that it makes no difference whether British capital is withdrawn from British industries and invested in foreign industries, or whether it remains at home to be invested in British industries, for the very simple reason that in all their arguments, from the definition to the demonstration, they steadily ignore the great question of employment. “The wealth of a country is the value of what it produces,” says common sense. “Gammon,” says the Cobden Club. ‘ The way to make a nation happy is to promote employment,”’ says common sense. ‘‘ Gammon,” says the Cobden Club again. Alas, Gammon is the last word as yet; but the weathercock flies round very quickly in these days. There is still hope: Le jour viendra. ' Those who live by labour are seven or eight times more numerous than those who live on capital, fixed incomes, &c. Supposing the 30,000,000 who live by or are dependent on work can get no work, how long do you suppose they will respect the property of those who live by capital? To do anything, to sanction anything, that in the very smallest degree interferes with, or even threatens to interfere with, or diminish the employment of the 30,000,000 who are dependent 42 on work, imperils at once and directly the very existence of the 4,000,000 who are dependent on capital. There 1s we doubt about this. No doubt protection to labour, that 1s protection to the 30,000,000 who live by labour, will make things dearer to the 4,000,000 who live by capital. Certainly, without any doubt, it will. But which most concerns the prosperity, even the existence, of the whole community of 34,000,000? That the 30,000,000 should be employed and able to live and thrive, or that the 4,000,000 should live in greater luxury? It is only Free Trade enthusiasts who could entertain the question; but they do. What nonsense we talk about wealth; how wilfully we deceive ourselves! We won't allow ourselves to exercise the most rudimentary elements of proportion.