necessities of fiscal taxation-become dear nearly in the same ratio.

But there will be no demand for such high-priced food in foreign countries at all comparable to what it would be were the trade quite free. There will, therefore, be less land cultivated, and the capital employed will not derive that striking advantage over that employed on soils in other countries which should be derivable from the superiority of the one over the other. The natural advantage will be generally, according to the proportion in which 'protective' duties are levied, thrown away in order to encourage the growth of industries which do not possess the same natural advantages, and which, therefore, cannot grow without this hot-house system of protection being kept over them. Such a policy, therefore, is opposed to the best interests of both countries, even though the pernicious effects went no further. But they do not stop here. The manufactures that are thus protected demand for their production some part of the population and some part of the capital that would naturally have been directed to the cultivation of the fields.

If we suppose for a moment that the protection is such that capitalists may depend upon it continuing for an indefinite period, then the profits on the capital of the businesses protected will, though large at first, gradually fall to the general rate of profit, until there is no difference between the profits of the businesses protected and those not so privileged.

Should, on the other hand, the protection be deemed insecure, then the profits will stand at a rate so much. above those of other businesses as to represent the risk which the capital runs, for should the policy of free trade supervene, then serious loss to the capitalist must follow. Class privileges are, therefore, established by the adoption

CH. IX.

GENERAL EFFECTS OF PROTECTION.

335

of the system of protection, and they must be kept up, and the capitalists in the businesses protected must necessarily do everything in their power to influence the Government in continuing and intensifying their special advantages.

But what is the effect of protection on the general community? Probably a mere fraction only of the goods that had been introduced under free trade are now introduced under restriction. The balance must be manufactured at home, and at a serious disadvantage. But the disadvantage means high prices or inferior quality, or both. When the people come to buy, they cannot buy so much as before, and, therefore, there is a reduced consumption; in fact, the people are artificially impoverished. But when placed in this condition, they cannot live so comfortably, nor labour so effectively as otherwise, and, therefore, the general work of the country will be less, and the produce of it will be less, and the division of it to each inhabitant also less.

Such a result will produce occasionally dearth of employment and consequent suffering, that under a policy of freedom would have been avoided. The misery and discontent that must be engendered thereby will tend to produce social disturbances and destruction of capital, which, again, will react perniciously on the general welfare.

Such a sketch in some measure describes the economical conditions existing at the present time in the United States, and with reference to their commerce with Great Britain. The States still cling to protection, although the present unfortunate condition of the industrial population will, it is to be hoped, be sufficient to open the eyes of many to the causes of the evils which have appeared in such magnitude. Of these no doubt one of the most potent is the system of protection, although the whole evil may not proceed from this source.

The rapid course of prosperity which was due to the tremendous energy displayed in the construction of railroads, was the result of an undue expenditure of capital on fixed works, many of which have not been justified by the financial success of the outlay upon them. The relapse in the business of the country which has taken place is attributable, then, in some measure to the loss of capital consequent on such undue expenditure.

The principles of free trade appear to have been misunderstood by the statesmen of many countries; and since Mr. Cobden met Napoleon III. in Paris, on the subject of the first French treaty, a suspicion has been entertained that Great Britain is only greedy to obtain from other nations free access for her manufactures, and that suspicion has probably increased the difficulties which are now being experienced in the renewal of the various European treaties of commerce. If it were understood that the greatest interest of a nation consists in opening her doors as wide as fiscal necessities will allow to the articles that are made most advantageously and, therefore, most economically, wheresoever it be, treaties would be at once abandoned. It would be found that huckstering for favours was unnecessary, since the greatest advantages would be possessed by adopting, without reference to the actions of other States, a defined policy

of one's own.

When one country excludes the produce of another that is made more advantageously and economically in that other, it voluntarily denies itself a benefit-it voluntarily handicaps itself. If we suppose, now, that semibarbaric countries require and must be supplied with produce they cannot themselves supply-whether it be beads, cotton, rum, or any one of those numerous articles which they may be able to purchase the handicapped country cannot engage profitably, if at all, in such

CH. IX.

PROTECTION RESTRICTS TRADE.

337

trade; it is virtually fettered. The same thing happens with its trade to every other country, more or less; for, unless it possess an advantage in the production of some articles so considerable as to more than compensate the evils of restriction, it will be unable to export at all. The first requisite of a profitable export trade consists in a free import trade; for, unless the workmen are supported at the lowest possible rate, their work will be relatively dear, and the articles they produce will be too costly for exportation. If the embargo upon foreign products goes so far as to deny free entry to the great bulk of articles, then those articles must be produced within the country itself, and capital and labour must be taken away from those occupations which are naturally very productive to be employed upon those which are less productive, and this signifies more or less of loss on both. This we may illustrate in the following way. Should Great Britain determine to adopt the system of protection, and forthwith proceed to tax the import of foreign grain, so that the tax will act prohibitively, then capital and labour must be taken from the cotton, woollen, and linen manufactures, the engineering shops and the coal mines, to produce more corn and cattle. The justification for the adoption of such a course would probably be as apparent in this as in any other case, for are not the inhabitants of the country dependent for life's subsistence upon continual importations from foreign countries? Many eventualities may interpose to prevent the continuance of such the countries exporting may, in case of war, have their ports blockaded, or the transportation across the ocean may be interrupted by naval attack.

If any country is vulnerable in these respects, Great Britain may be regarded as thus vulnerable, but yet there could be no adequate justification for such a course. is the interest of the whole corn-producing countries of

It

the world to sell their produce to Great Britain. The interests of sellers and buyers become identical, and are the best and most permanent guarantee of peace. If, however, it could be supposed for a moment that such a policy of protection were adopted, it would produce at one blow an immense impoverishment of the inhabitants of this country, for the production of the necessary amount of food would occupy disadvantageously the energies of the greater part of the country.

But it will be instructive to treat of the actual facts of protection, and let us select the United States as an example. We find that the States tax the products of British manufacture as follows:

On cotton thread or yarn, the tax is about one-half its value; on flax, linen, or jute yarns, the tax is from one-fourth to two-fifths; on silk thread, it is from onethird to two-fifths; on woollen and worsted yarns, it is about five-sixths of their value. Again, the duty levied on cotton manufactures ranges from 3d. to 4d. per square yard for one class of woven goods, and amounts to more than one-third of the value on another class; that on linen, hempen, and jute woven manufactures amounts to an average of full one-third of the value; on silk fabrics generally, it is from one-half to three-fifths of their value; on woollen and worsted carpets, druggets, &c., it is about one-half their value.

Then again, with regard to metals, the United States impose a duty of 258. per ton on pig iron; of 5l. 48. 2d. per ton on boiler plates less than three-sixteenths inch in thickness; of 98. 4d. to 18s. 8d. per cwt. plus 15 per cent. ad valorem on iron wire, and generally from 6s. to 128. per cwt. on the great variety of iron and steel productions; from one-third to one-half on the value of cutlery, the same on firearms and swords, and 140 per cent. on gunpowder.

The rates imposed on carriages, carts, and waggons, is