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"^w^p mmmmmmmim 4 ^illl PEOTECTION AND FEEE TRADE. BY JOHN MACLEAN. 4- % MONTREAL: PRINTED BY JOHN LOVBLL, ST. NICHOLAS STREET. 1868. yis^y PKOIECTION AND FREE TKADE. ' ? The present circumstances of the " new nationality," or Dominion of Canada, call for an early practical solution, in our own case, of the great question which, for want of any more accurate and generally accepted designation, is commonly alluded to as that between Protection and Free Trade. To place before the public some portions of the general argument in favour of encouraging Home Industry, also arguments having a special bearing with reference to these Provinces ; and to expose a few prominent Free Trade fallacies, is the object of the present pamphlet. In taking up one of two sides on any question, it is desirable to have before the mind as clear and as authoritative a statement of the other side of that question as can be obtained. Clearness of definition and the narrowmg down to a point of each debated issue, is essential to eflScient discussion, with results. Keeping this requis- ite in view, the writer takes for a principal portion of the text of tiic argument on the Free Trade side a letter written by Mr. John Stuart Mill, and avowedly put forth, by a New York Free Trade paper, with extracts from Mr. Mill's works annexed, as a refutation of certain " fallacies of American Protectionists," alluded to. The similarity of natural, material circumstances, between these Pro- vinces on our side of the line, and some of the States on the other, makes what Mr. Mill says in this letter almost as closely applicable to our own case as to that of our neighbours. This letter is therefore placed in an appendix, supplemented by an article from the Toronto Leader, of Dec. 24, 1866, which article is selected for the following reasons : First, because it is a set newspaper essay — an elaborate attempt to bring Mr. Mill's doctrine to bear against the idea of " protection to native industry " in Canada : and next, because it was evidently intended to rebut the arguments used at two Home Industrial meetings of importance, which had not long before been held— one in Toronto at the end of September, 1866, and the other in Montreal about a month later. It is not assumed that the whole of the case for Free Trade is even epitomized in the letter and article quoted, but merely that they profess to make certain points which the great head of the Free Trade school in England, as also a prominent newspaper writer and disciple of his here, put before the public as specially applicable to the circumstances of the United States and of Canada respectively. It is surprising how much men's opinions of any cause are in- fluenced — aside from the intrinsic merits or demerits of that cause — by considerations as to whether it is a gaining or a losing one — whether it represents an advancing or a receding principle. That men are apt to look towards the rising sun, is a saying which is true in many cases besides those m which personal or political party motives may be detected. There are good reasons for believing that the vast majority of professed supporters of Free Trade, both here and in England, are sustained in their opinion on the question in hand far more by a crude notion or impression that what they call " Protection " is " exploded," and that Free Trade is inevitably the advancing system — the system of the future — than from any real, critical examination of the arguments on both sides. We need not wonder that the general mind should be thus far astray as to the fact, when we find so accurate a writer as Mr Mill referring, in the year 1866, to the United States, as a country " in which " the system of protection is declining, but not yet wholly given " up" — a statement which reads strangely to us on this side of the Atlantic, who know so much better what is the case. Duties on imports of foreign manufactured goods are not declining in the United States,or at all likely to decline much in our time ; though that internal revenue taxes will have to decline considerably or be mostly abolished altogether, is certain — while it is not improbable that Canadian raw material (but not by any means Canadian manufac- tured goods,) may by and by be admitted either reciprocally free »)r at moderate duties. Of all false impressions which are abroad on the subject, the most potent, by all odds, is that which is to the effect that Free Trade is advancing, while Protection is dying out. It is extensively assumed and taken for granted, with great carelessness and disregard of present facts, that the latter is tho policy of the past, while the former is the policy of the future. Protectionists, it is said, are "old fogies," men of worn- out and obsolete ideas, which are being discarded by the advan- cing intelligence of our day. Between sheer intellectual indolence and the actual want of leisure to examine, in our pushing business age, men get into the habit ot taking u|)on trust their opin- ions on many subjects which are either difficult, or have been made to seem so. How many are there in Canada this day who, if men- tal processes could be daguerreotypcd to our view, would bo found deciding in favour of Free Trade for no other reason than because public opinion in England has decided for it ? They will profess to give other reasons, but this is the principal one, could the truth be known. Such men of mark as Mr. Cobden and Sir Robert Peel were Free Traders ; Mr. Gladstone and Mr. John Stuart Mill are the same, while the English periodical press has, by its scathing exposures of the fallacies of the old and absurd system of restrictions on imports of foreign food and raw material, made a belief in Protection in England almost an accre- dited mark of mental imbeciUty. And little wonder either that it is so, for the Protection from which England has lat y been eman- cipated was one of the most stupendous structures of national folly ever reared. It is not that sort of protection, by any means, which we should desire in Canada : but to this point we will come further on. National conviction on the subject has now in England so ma- tured itself, fortified by experience, that Conservative Governments no longer dream of reversing the new policy. Indeed, Lord Derby and Mr. D'Israeli are now probably Free Traders, not merely from motives of policy or expediency, but from actual conviction. It is a hasty taking up of these facts, with a disregard, meanwhile, of certain other facts, which makes so many people jump to the con- clusion that Free Trade is the "policy of the future," without doubt. And it is through a process of this kind, combined with the fear of being classed among the obtuse and thick-headed representatives, of old fogydom,that so many well-informed people amongst us declare- themselves to be Free Traders. Among commercial men, especially,, it is deemed " not the thing" to be a Protectionist. It may do for the class of small country storekeepers and their clerks, but would be ridiculous in any one holding a position in a wholesale house. Th& 6 gentleman who visits Europe annually to purchase for his firm, is supposed to be, as a general thing, above the absurdity of being a Protectionist. He affects iu Canada the opinions of the" Manches- ter men" and commercial magnates at home, whom he is happy to name as his intimate acquaintances. Those hero who are not privileged with such cosmopolitan experiences, catch the tone which they hear from the very beginning of their business apprenticeship. Let those who know the facts look closely into the truth of the matter, and say if the influence here pointed out be not in Canada more potent in upholding Free Trade doctrines amongst us than all the arguments that we are accustomed to see in print. This is the subtle, false impression, the chief of all hostile influences, which the home industrial movement has to encounter in these Provinces. What are called Free Trade arguments, however elaborately set before the eye on the printed page, are of but small eft'ect on the public mind compared with the idea that it is unfashionable in certain quarters, " uncommercial," so to speak, to be a Protectionist. Frequently, too, the man of " common sense" only, who does not profess to understand commercial matters, thinks it highly sensible to be a Free Trader, merely because he sees the majority of com- mercial men taking that side of the question. A superficial, only par- tially informed, and uncritical idea of what IS English opinion on the question of Protection or Free Trade, and a weak deference to so- called commercial authority, are the main supports upon which popu- lar Free Trade public opinion rests in these Provinces. The old story about Charles the Second and the Royal Society, whether true or not, serves well to point a moral. It is related that the " merry monarch" propounded to his wise men the scientific ques- tion why a living fish, swimming about in a tub of water, added nothing to the gross weight of the tub and its contents, while if a dead fish were put in, its weight immediately told on the whole, as so much added. As in the case of the wonderful little glass bubble called Prince Rupert's drop : " Whose least part cracked, the whole does fly," *' And wits are cracked to find out why," the wits of the big wigs of the Royal Society were cracked to no purpose in the endeavour to assign scientific reasons for the extraordinary " fact" which they were challenged to explain. It was only after long puzzling and poring over the matter, that one of them — a little wiser than the rest — suggested the propriety of ac- tually trying the experiment, and seeing for themselves whether the living fish really added nothing to the weight of the tub. The trial being made, it quickly appeared that the fish, alike whether living or dead, increased the former weight cx'actly by its own. It is to be supposed that they drew a good long breath when they saw at last the solution of the puzzle. Now wo have wise men of Gotham in our day, who gravely affirm the fact, as they call it, that what is called " Protection," is dying out in the world, and that civilized nations are rapidly becoming converted to Free Trade. This affirmation is so constantly dinned into our ears, that many people beheve it from the mere force of re- iteration. We are asked to believe inFree Trade, because, say its advocates, if it were not the right doctrine, the eminent statesmen and great political economists of the day, with the nations whose opinions they lead, would not be found adopting it. When you see the civilized nations of Europe coming vound to it, you must concede that it is the only sound and rational policy ; the policy of the future, as distinguished from that of time past, when people knew nothing about political economy and the laws of trade. This is the argument which, more than all others combined, sways the popular mind in favour of Free Trade. Free Trade is the growing, the winning, the advancing side: it is, therefore, folly, to stand up for a " lost cause," such as that of Protection. But it is high time now to call upon the Free Trade men to weigh their fish, tub, water, and all — to show the proofs that their favourite system is advancing in the civilized world, ere they ask us to found our belief in its soundness on the fact of its advance. I venture to take the bull by the horns at once, and to meet the logic of the Free Traders with a fair and square denial of their minor premiss. I maintain that, as a matter of fact. Free Trade is not advancing among civilized nations generally : nay, further, that by an inexorable law of the industrial and economical progress of nations, it must in time to come lose most of the ground over which it unquestionably has advanced during thirty years back. We do not see its advance in the United States, certainly. There is a cry amongst our neighbours for relief from existing burdens, but 8 ! II) the burdens about to be shaken off are not those put upon foreign manufactures by high customs duties, but those of high internal revenue duties on home products. The Cobden-Chevalier French treaty, the boast of English Free Traders these seven years past, is in imminent danger of abrogation when the year 1870 arrives. Lar^e importations of English goods during a few years past have so injured French manufacturers and their workmen, that wide- spread popular discontent has arisen, and the matter already wears a serious aspect. Look elsewhere on the continent, and calculate what England's chances will be of getting Free Trade in manufactured ^ood« from the German Zollverein, now so much more firmly compacted than ever before, under the auspices of Prussia. Two ofthe last German States 10 give in their adhesion to the Northern Confederation recently experienced an instantaneous conversion of view, when informed by Bismarck that they could not be members of the com- mercial union, if they staid outside of the political one. The benefits of the German Customs Union were too real and tangible to be sacrificed for a political idea. Now the fundamental principle of the ZoUverein is free internal trade within Germany, with customs duties against all the world outside. The ZoUverein may not be a symmetrical system, perfect in all details ; but be- yond fear of contradiction there is this much to be said for it — that under its operation imports of raw material, and exports of manufactured goods, have immensely increased, not only absolutely but relatively — while exports of raw material, and imports of manu- factured goods, have correspondingly decreased. In other words, Germany has been making rapid progress in material civilization ; one of the most unfailing signs of which is an increasing import of raw material, with a decreasing import of manufactured goods, while the reverse process is always the concomitant of barbarism, imperfect civilization, and retrogression. It is certain that the greatest efforts of the greatest Free Traders in the world will not persuade Germany to relinquish the wise and patriotic system under which the country has already so well prospered. It would not answer to make this pamphlet a history, or to attempt within its limited compass a resume even, of the various commercial changes of some years past, which are claimed by English economists as showing the progress of Free Trade in the world. A much 9 briefer reference will abundantly answer the present purpose. The countries, besides England, which are already either great manufacturing countries or which are in rapid present progress of becomingso — are France, Belgium, Germany, the United States, and the British North American and Australian colonies. These are the spots — some of them pretty large spots — on the globe, where civilization to-day shows its most forward strides. For the Free Traders to point us to *' liberal" commercial intercourse with the South American States, Greece, Turkey, or even with Italy, Austria, Spain, or Portugal, is beside the mark — utterly fails to prove their case. (To Italy an apology is due for even temporarily mentioning her in the same category as some of the others named, and let the following suffice. Italy, though possessing in a very high degree what may be called the morale of civilization, yet lags far behind in its materialities — in the material, industrial elements of national progress and wealth. Not that the gifts of Nature to the country are lacking, but that the economical and industrial improvement of those gifts, by the Italians themselves, has not yet been attained to. The almost unrivalled agriculture of Lombardy, and the remarkable prosperity of Milan and its neighbourhood, furnishes the single brilhant exception to this general statement. As for Austria, whatever rank she holds as a manufacturing country is due to the German element in her population, which may, for the purpose of the present argument, be fairly enough counted in with the rest of the great Germanic body.) This exception made, the countries last named admit of classification together in this respect, that they have little or no manufactures to speak of. What they have to dispose of consists of the raw products of the soil only, and these they exchange for the manufactured goods of more advanced countries. Now the Free Traders are welcome to all they can make of the admission that their system has undoubtedly advanced a certain stage, when liberal commercial arrangements are made and kept up between England or any or all of the other manufacturing countries on the one hand, and any or all of the non-manufacturing countries on the other. A country which either cannot or will not manufacture for itself doubtless makes an advance in civilization, when it substitutes freedom and facility of trade with nations that do, for a former state of restricted intercourse by reason of high duties or other 10 I 'Hi hindrances. The advocates of the encouragement of home industry hy taxes on imports of foreign manufactures, do not concede an inch of their ground when they admit the triumphs and the progress of English Free Trade, in its large extensions to the non-manufacturing countries on the globe. Where they do take their stand is on the ground that English Free Trade is not extend- ing its triumphs — has scarcely any triumphs to show, in fact — as far as the relations of England with the manufacturing countries are concerned. We may, speaking broadly, call France, Belgium, Germany, and the United States, manufacturing countries ; and the other countries of Europe and America, agricultural countries. (That is, of course, leaving out England and her colonies, and counting foreign nations only.) Now concerning the former, the manufacturing countries, which are in the vanguard of the world's progress, it is safe to assert that ti>ey are not following England in the matter of Free Trade. It is conceded to the Free Traders that their system has been gaining groand in some of the agricultural countries ; but they are challenged to show that it is gaining in those which are farther advanced in the path of progress. Against them the point is to be made, that if their system really harmo- nizes with the " music of the future " as they say it does — then it ought to be showing its greatest strength, making its most forward strides — in the most advanced communities. But this is notoriously not the case : for Free Trade, which is strong in Turkey, Spain, and South America, is weak in France, Germany and the United States. The reason of this it needs no great profundity in politi- cal economy to explain ; the homeliest wits may find the solution in the old proverb that " two of a trade can never agree." It is pre- cisely because the countries last named are following hard after England in the race of material, industrial improvement, that they are disinclined to follow her in a system of indiscriminate Free Trade. They have embarked heavily in manufactures, and being still behind England in cheapness of production generally, they have too much at stake to accept a race on even terms : that is, with reference to the great bulk of manufactures ; though in some branches they have, to be sure, peculiar advantages, and the pre- cedence even of England. To day that England, the most advanced of all the nations, has declared in favour of Free Trade, 11 does not meet the point. The fact that she is the most advanced, furnishes the very reason why the others cannot compete with her. Suppose there existed another nation, as far ahead of England in extent and cheapness of manufacturing production as England is ahead of the United States ; then, perhaps, English economists might see the advantages of a system of Protection. It is the single nation which is ahead of all others that has its advantage in Free Trade, harmonizing on this subject with barbarous, half civilized, and half developed nations generally, but decidedly not harmonizing with those whose development most nearly touches its own. Mr. Cobden's French treaty is avowedly the greatest of all the " modern instances " which Free Traders cite to show that their system is advancing. But there are two remarks to be made con- cerning this treaty, with regard to which the Free Traders have managed to raise a dust that rather obscures the popular view. The trade which has so increased under it is largely of a character such as Protectionists may approve of as heartily as did Mr. Cobden himself. France now imports English coal, a raw ma- terial of unsurpassed value in promoting industrial development ; while England imports wines, the native product of French soil, an article which England cannot produce at all. England has no wine, while France has not enough coal for her requirements, and, there- fore, on the sound principle that cheapness and facility of supply of raw material is part and parcel of a wise home industrial sys'tem, both are benefitted by the exchange. France has, indeed, rather the advantage, for the reason that though cheap and good wine is an agreeable and really beneficial acquisition to England, it cannot — as far as its relations to national industrial development are con- cerned — take rank in the scale with coal. And there is this much more to be said, that whereas France may be expected to continue producing wine until seed-time and harvest cease, the probable ex- haustion of England's coal supply — not totally, perhaps, but to the point of interference with that cheapness and abundance of the ar- ticle upon which so much of England's prosperity is based — is al- ready matter of serious consideration with scientific men. Already there are those who say that England will at no distant day rue the folly of giving away, dirt cheap, her precious " black diamonds," ■I I i;l , i!i Pi : 12 which can never be restored, and which go^to do what ? Why, to enable her manufacturing rivals, France and Belgium, to run considerably closer to her in the race of competition than they would be able to do, but for the convenient supply of this life-sus- taining food of manufactures. It is perhaps not altogether a chi- merical idea to suppose, that when sound political economy — the real wealth and strength of nations — is better understood than it is now, those countries that possess the treasure of coal will keep it to themselves by heavy or prohibitory export duties ; while those who have it not will be only too glad to get it on almost any terms, and will marvel at the folly of a former time, when it was the fashion to levy duties on im'ports of the invaluable commodity. The second remark to be made about the French treaty is, that is not nearly so much of a Free Trade treaty as is generally sup- posed. It would seem, from the frequent allusions made to the " European system," as synonymous almost with " Free Trade," that there must be a great deal of popular misapprehension on the subject. People, vaguely remembering that the reductions made were really considerable, or perhaps that they were very freely Bpoken of as such, forget that the present figures are still a long way from Free Trade. There is reason to believe that the simple publication of the rates mentioned in that treaty, on both sides — also of the former rates, to show what the reductions really amount- ed to— and of the whole customs tariffs of Great Britain, France , and the German Zollverein respectively; would dissipate much of the misap- prehension which seems to prevail — on this side of the Atlantic, at all events — with reference to a supposed " European system" of Free Trade, which exists in imagination more than in reality. Why that should be called a " Free Trade ' system, under which Great Britain collects annually £24,000,000 sterling, or fully one-third of her entire revenue, from customs duties, it might puzzle some people to explain. The French Treaty has been abundantly referred to by Free Trade writers as a set trial or test of their system, Avhich they claim to have proved victorious in the ordeal. For the two reasons just mentioned, however — first, that the mutual exchange of the natural products, coal and wine, is not the same as that Free Trade in manu- factured goods which they invite the world to adopt — and next, be- 13 »> cause French duties on English goods are still pretty ^i^h after all — it cannot be regarded as the experimentum crucis which they profess to see in it. The Free Trade of the English school — as taught to other communities — is, the free importation of raaufac- tured goods. But, however, much as the French treaty lacks of coming up to this ideal, it is already regarded as too much Free Trade by the French people. There have been riots in certain dis- tricts in France, provoked by the sight of food being exported in large quantities from those districts ; and there have been strong re- monstrances addressed to the government, provoked by the sight of English goods brought in. The popular mind reverts irresistibly to the double idea, that the exportation of human food, and the im- portation of foreign manufactures, leads to national ruin. This rude, popular notion, has at its bottom a truth which the most advanced phi- losophy of our day recognises as unimpeachable. In the meantime, the Free Traders may very fairly be requested to " wait a little long- er," ere they have conceded to them the point that a real Free Trade treaty between two nations, both highly civilized nianufac- turing nations, has proved a permanent success. What, it has been asked, is to be said about the seeming absur- dity of French operatives f.nd manufacturers grumbling at English goods coming into France, while in England, French and Belgian manufacturers are taking heavy contracts, underbidding the Eng- glish in their own country — and this to an extent which has caused an inquiry and a report on the subject by an influential commission ? The explanation is as follows. The iron-workers of Britain are the strongest, best organized, and most aggressive of any Trades Union of workmen in the world. They have been able to force in- creased rates of wages, which have told on price, and have caused Belgian-made rails, and French-made locomotives, to be purchased for English railways. But the cotton-workers of England have never been able to force the masters iu this way, and cotton fab- rics are still produced in England cheaper than in France : and the phenomenon is thus easily accounted for. But there is more to be said than merely to deny the assumed fact of the advance of Free Trade, as between two or more highly progressive manufacturing nations, and to affirm that what is called Protectionism makes its greatest advances among those nations that 14 \w aro themselves the most rapidly advancing— England, of course, excepted for the present. Besides the fact that it is so, as here stated, there are large general reasons — deductions a priori from incontrovertible principles, to prove that it must be so. Let us sketch an example. A distant colony, newly settled by hardy adventurers from the parent state, has as its only source of wealth, at first, the rude unmanufactured products of the field, the forest, or the mine. Duties may be collected for revenue, but the idea of duties to encourage home manufactures, the conditions of w hich have not yet come into existence, are unthought of. But with the lapse of time these conditions do come into existence, and murmurs for Protection begin to be heard. Villages becomes cities, population grows denser, and " infant manufactures" spread around. But these " infant manufactures" cannot stand an even competition with those of older communities. They are given a modicum of Protec- tion, not so much perhaps to encourage them, for they are not thought worth encouraging, but merely as an incident in raising the revenue. On this they spread, become strong, and gather around them a number of able business men, members of Parliament too, and a large voting population which can be made to tell in elections. The Protection once carelessly accorded them, for the sake of revenue merely, may not now rashly be taken away. As in the progress of civilization the proportion of village, town, artizan and manufactur- ing population to agricultural population increases, the Protectionist element thus strengthens with the advance, with the progress of the country/. But meantime, two other interests besides have been growing up. One is the importing interest, the other is the forwarding or shipping interest. Both may be classed together as forming the " commercial" interest. This interest, some say, should seek no home manufactures, but only exchange of commo- dities between distant points. Such is a supposable case. And is not this exactly what has happened in Canada ? . In the United States we see on a larger scale the inevitable co- development together, in perfect harmony with each other, of Protec- tion to home manufactures and material civilization. First, manufact- ures spring up near the seaboard, and in the Pennsylvania coal and iron districts. Protectionism rears its head, and calls for their encouragement. They become a power in the State, and keep 16 progressing westward. Only a far greater power in the State, the agricultural South, prevents the permanent establishment of Protec- tionist principles in legislation. A civil war ensues, and the South, not being in the national councils, no longer prevents. Some will say that but for the war debt the existing high duties would not have been imposed. The war hastened the protective tariif by some years, no doubt, but progress was already strongly and inevitably that way, war or no war. What has Buffalo become within twenty years past ? An Eastern manufacturing city, set down on one of the Western lakes. Other cities, more Western in location, but Eastern in manufacturing enterprise, and in feeling on the subject in hand, are growing up. The country on the western margin of Lake Michigan now talks Free Trade, but in twenty yearj more it will have manufactures, and will then talk Pro- tection. Protection travels westward, and spreads over the country, with the progress of what we may call the materialities of civilization. Of course the Tennesseean, the Virginian and the Mis- sourian are now Free Traders. But wait twenty years, or perhaps but half that period, and who lives to see the day will see these States as much Protectionist as Pennsylvania is, in virtue of their mineral manufacturing resources. This last is mere passing reference to what has not yet taken place, but it accords with all experience of what has taken place. As surely as water runs down hill does the development of a rude backwoods community into an advanced and more civilized one bring the inevitable change from Free Trade to Protection. And yet we have wise men amongst us, teachers of wisdom of a certain sort, who think they see in the '* progress of the species" in America, the advance of Free Trade and the decay of Protectionism. These men read the signs backwards, or else shut their eyes and do not see them at all. But while Protectionism is spreading westward, the Free Trade shipping and importing interest has been growing up behind it, to the eastward. Here we have the secret of the Free Trade movement of to-day on the seaboard. Hence the phenomenon of the East now actually divided against itself, making New York and Boston strong- holds of Free Trade, while Philadelphia is more debateable ground. Can this interest keep pace in development with the manufacturing interest ? By no means. It is limited to the large seaboard cities : hi 16 i! • m m and though it must grow with the country generally, has not before it that almost unlimited capability of expansion which the manufactur- ing interest has, all the way to the Mississippi. The importing interest is strong, no doubt, but the development of other Pennsylvanias in Maryland, Virginia, Tennessee, Kentucky and Missouii, and of another and greater New England on the borders of Lakes Erie, Huron, Michigan and Superior, will by and by throw a weight into the scale which will render resistance hopeless. This is the natural, inevitable course and sequence of events, which may, almost for all countries and in the history of all ages, be described as follows : First, agricultural civilization, equal, or generally so, to the demands of subsistence, but without either commerce or manufactures to speak of. A moment's reflection will show that a people so circumstanced, will, when they first experience the desire and the capacity to make use of the products of a more forward state of civilization, be more apt to seek to purchase those products from such communities as have them to sell, than to make them for themselves. It is of the very nature of things that the presup- posed inability to manufacture, of such a people, leads them at first straight to the method of supplying themselves by purchase, rather than by attempts to manufacture at home. If this has been the case in time past, how much more may we look for it to be the case in our own time, when the school of political economists — of those who take that title exclusively to themselves — would almost move heaven and earth to show that exchanging, rather than producing, is the source of national wealth. The natural tendency to procure by exchange at first is certainly strong enough, without being in- tensified by the teachings of those who would keep us always ex- changing, and never manufacturing — that is — in the background of civilization. According to this view, the commercial stage of national .development necessarily precedes the mechanical or man- ufacturing stage, with exceptions, of course, in the cases of origin- ation of particular manufactures, which it is plain must originate somewhere. The Free Traders are unable, with the whole record of history before them, to cite instances to confute the great general principle, that the commercial stage of civilization precedes, and is inferior to, the mechanical or manufacturing stage. Nay, we may carry the idea even into the domain of the fine arts, and say that the 17 people who produce, or who have produced, the world's master- pieces of painting and sculpture, for instance, certainly are or have been the superiors, as respects these arts, of another people, who are able to appreciate and to purchase, but not to produce. (It may not be out of place to observe, in this connection, that with the advancing refinement of modern times— and under the spur of an emulation which seeks to achieve in our own century, if possible, something approaching to the artistic triumphs of former ages — the quality of diffused, popular, artistic aptitude, is yearly becoming more essential to success in the higher and more delicate branches of manufacture. A feeling of the great and growing importance of the artistic element in manufacturing is at the bottom of the intense, almost too business-like eagerness, with which schools of design are now cultivated in England. Manufacturers there keep nerv- ously and jealously looking " over the way ; " i. e., to France and Belgium ; and money is not spared if it can help to win the race.) The logical position that the manufacturing or making stage of national development is superior and comes subsequently to the commercial stage, is perfectly unassailable, regard being had to the presupposed origin of manufactures, which must take place some- where. Now the syllogism presented to the Free Traders, and in which they are challenged to pick a flaw, is that the natural course of progress being /rom the commercial to the mechanical or manu- facturing stage— which latter is the superior or more advanced stage — the tendency must be, as civilization moves onward, to import less and to manufacture more — that is, relatively, though not always absolutely. The Free Trade dream of one or more great " world's workshops," supported by a number of civilized yet non- manufacturing States, has attached to it a supposition of continued inferiority, on the part of the latter, which is at variance with the very idea of progress. The Free Trade theory is in effect based upon the idea of permanent backwardness or of a degree of barbar- ism, even on the part of the greater number of civilized nations, to the aggrandisement of a few countries which happen merely to have had the first start in the race. The Free Traders may here appeal to the modem doctrine of progress, as originated by German philosophy, and elaborated by Mr. Herbert Spencer and others. B That doctrine is, that 18 progress consists essentially in diversification, in change from the homogeneous to the heterogeneous.* It agrees with the older politico-economical doctrine of the benefit of division of labour, which latter was accepted from observation of facts, long before its connection with the great cosmical principle of progress was thought of. It may be — and in fact is — attempted to be shown that the principle of division of labour must keep extending, not only as between different individuals or different sections of the same community, but also as between different countries. Now, without going to ulterior lengths of abstract speculation, which would be beyond the scope of a popular essay, it will be sufficient to touch here the single practical point,that amongst civilized communi- ties, the process of diversification of employment, as between dif- ferent individuals and as between different sections, within the same nation, is advancing at an immensely faster rate than that of diver- sification as between different nations. Within the limits of England, for instance, we see the cotton ma- nufacture selecting one spot for spinning, another for weaving, and another for bleaching ivnd printing. In America, again, we see the iron manufacture centralizing itself at Pittsburg, and the cotton manu- facture at Lowell. But while the division of labour process is thus going on within each nation, similar manufactures in different nations are rapidly similarizing themselves — if the word may be allowed — to each other. Year by year the similarity increases, as between si- milar manufactures in the different countries of England, France, and the United States — as, for instance, between the iron manufac- ture in the " black country," at Creusot, and in Pennsylvania ; or as WF*- ^ _ ■ , ■ „ I „ ^ • The development of the chicken from the egg may be cited as the readiest and most familiar illustration of this doctrine. At first, we see but two divisions, the yolk and the white, each apparently homogeneous, or all alike. But at last there appears, formed out of these, the chicken — with beak, eyes, skin, down or feathers, claws, flesh, bones, and a complicated vital apparatus— many different parts, developed out of apparently two only. This, says the German philosophy! is progress — change from the homogeneous to the heterogeneous — from the state of being all alike to the state of difference between many different parts. Mr. Spencer finds the operation of this law not only in the development of suns and systems from nebulous matter— the " nebular hypothesis "—in geology, physio- logy and the physical sciences generally ; but also in history, morals, politics, sociology, religion — in fact, everything. ■ i 19 id between calico printing in Manchester, Mulhouse, and Paterson. Lowell and Pittsburg, and the workers in these places respectively, become more and more unlike each other, but Lowell becomes more and more like Manchester, while the coal and iron country in Penn- sylvania becomes more and more like the coal and iron country in England. This idea of increasing similarity, in such cases as those cited, is no more at variance with the philosophical doctrine of pro- gress from the homogeneous to the heterogeneous, than it is to say that the same laws which govern the development, from planetary rings, of the satellites of Saturn, also govern the development of the satellites of the Georgium Sidus ; or that those which deter- mine the formation of the delta of the Nile, also determine the formation of tiie delta of the Mississippi. But further, the exis- tence of the element of human agency, in the industrial theorem, entails consequences not paralleled in the physical theorems indi- cated. For what does the boasted free, rapid and extensive inter- communication of ideas and of inventions in our time mean, if not an increased and increasing facility of adoption, by one civil- ized nation, of the improvements of another ? It is plain that the most powerful agencies of the day — the press, steam, the post- office, and the telegraph, for instance, are promoting with immense and ever increasing effect, the transference from one country to another of capital, skilled labour, and valuable inventions. From this unquestionable fact consequences almost startling to contem- plate may be expected, by and by, to result. We ourselves, or our posterity, may yet witness, before the end of the present century, industrial transfers on a scale undreamed of at its beginning, and scarcely yet thought of. The point to be noted is that modem progress more and more favours the practicability of such trans- fers. Turn the matter over, view it on every side, and more and more is there forced upon us the conviction that the English Free Traders, in seeking to perpetuate, within the limits of a highly civilized world, the distinction between manufacturing and non- manufacturing nations, are fighting against the very progress of civilization itself. With them the " situation " may be described as follows : They have attacked and broken down in England the indefensible system of high duties on food and raw material, there- by conferring on the manufacturing population a benefit as real as 20 ^j-t^er wages and an increased price for the goods made would have been. They have also greatly extended their trade with other countries which take British goods in exchange for food, raw material, and commodities that England cannot produce. They have thus induced, on the part of other nations, vast strides from the merely agricultural into the commercial stage of development. So far the law of national progress has been on their side, and victory has perched upon their banners. But, mistaking the nature of the great changes they have themselves brought about, or more probably from perfectly intelligent though selfish reasons, uncon- fessed, they seek now to prevent further changes, which naturally come after those first referred to. Having bent themselves witl; might and main to bring certain other peoples forward from the merely agricultural to the commercial stage of development, they resolutely set themselves against any progress beyond the com- mercial stage, on the part of the latter. But they have no right to suppose, from the fact of their success in this line with the South American States, and some other countries, that a like suc- cess awaits them in Canada or the United States, both countries having a population with a natural aptitude for manufacturing, equal to any European population. These English economists in- vite us onward in the path of progress as a commercial people, but having got ourselves and others to that stage on the road, they take to lecturing us pathetically on the folly of our trying to get beyond it, into the manufacturing stage of national progress. Men and gods were on their side in the first part of their under- taking : but they have all Olympus against them in the second. In other words, having profited by the operation of a great natural law of development, they endeavour to arrest the operation of that law, when a point beyond what they desire to see is likely to be reached. They may of course succeed in Rio or Valparaiso, but not in the latitude of the St. Lawrence. The great Free Trade triumphs which the present generation has witnessed, have undoubtedly had an overpowering efiect on the general mind. Stru*ik by the magnitude and the success of the changes which have been wrought, people resign themselves to the idea that if Free Trade has done so much good in one case, it must do good in all others. The essential distinction between the free 1 I ^ 21 bt and abundant importation of food and raw material, which furnishes well paid work and cheap subsistence to the labourer, and the free importation of manufactured goods, which deprives him of both, is forgotten. It is also forgotten that the Free Trade system, which works with the law of progress when under it nations that formerly repelled commercial intercourse begin to pppreciate and to seek the advantages of exchange, works against that very law when the attempt is made to keep commercial nations of high material civil- ization from manufacturing for themselves. Still another important distinction, which has been already alluded to, but will bear being re-stated, is ignored and lost sight of. When the coal of England . is exchanged for the wine of France, the exchange is profitable on both sides, especially to France, which builds up her manufactures with English coal. (The exchange would bo a more equal one, perhaps, if Frenchmen could bo induced to take English boor for the wine ; which they are not likely to do, however.) But neither England nor Franco produce cotton, both alike having to import it. For England to buy French cottons, or for France to buy English cottons, is therefore absurd, and only tolerable on the supposition of an acknowledged inferiority in the art of manufacturing cotton, on the part of the people purchasing the goods. But the success which has attended the development of the exchange between different countries of the products peculiar to each, is recklessly claimed also for that far different, and most unprofitable trade in articles common to both, or having to be imported by both. Free Trade logic is unassailable when it aflSrms the advantages to the hatter and the shoemaker respectively, of the exchange of a hat for a pair of shoes. But two hatters would scarcely " see the point'* if they were told that it would be to their profit for each of them to make a hat for the other — although a case might be imagined, . rarely to be expected to occur in practice, when such an exchange might have its advantages. The trouble with the Free Traders is that they insist upon applying the perfectly sound argument in favour of exchanges — such as that of West India sugar for New Brunswick timber, for instance— to other exchanges of a very different nature. What an absurdity it was for Canada, during a time now past, to buy from New England millions worth of coarse cottons, which might as well have been made here. u )i !! 22 Cotton is no more a natural production of Massachusetts than of Canada. Free Trade catechisms for little 'loys are luminous on the advantages which the baker, the butcher, the grocer, and the farmer, derive from exchanging commodities: but they fail to show how two bakers, for example, can drive a mutually profitable trade with each other, any more than did the two boys who thought they had made five dollars apiece by many exchanges of jack-knives. The reasoning employed is, in fact, Uttlo else than the confounding of natural, essential distinc- tions ; and the carrying over of arguments, which hold admirably in certain cases, to others in which they do not hold at all. Yet for all that — the large prominent fact of the success of the English experiment of nearly free importations of food and raw material, which is just the half of the true home industrial system, has in the popular mind given a charm to what is called Free Trade that is not easily broken. It is an admitted fact, that the great increase in exports of Bri- tish manufactures, w:+hin twenty or thirty years past, has mainly been made up of exports to South America, Asia, and generally to countries in a backward state of development. Exports to the more advanced countries of Europe, again, on the other hand, show but a trifling general increase, in some instances, a decrease instead. Some years ago the North British Review^ a high Free Trade au- thority, thus described a process which has since been going on at an increasingly rapid rate : — *' We have now many rivals, v-here formerly we had none ; we formerly supplied nations, which now partially or entirely manufac- ture for themselves ; we formerly had the monopoly of many inar- kots where wo are now met and undersold by young competitors. To several quarters we now send only that portion of their whole demand which our rivals are unable to supply. A far larger proportion of oar production now than formerly, is exported to dis- tant and unproducing countries. A far larger proportion now than formerly, is exported to our own colonies, and to our remote pos- sessions. More, relatively, is sent to Asia and America, and less to Europe. Countries which we formerly supplied M'ith the finish- ed article, now take from us only the half-finished article or the raw material. Austria meets us in Italy ; Switzerland and Germany meet us in America ; the United States meet us in Brazil and -€hina. Wo formerly sent yarn to Russia : we now send cotton » I * 28 wool. We fonnerly sent plain and printed calicoes to Germany ; we now send mainly the yarn for making them. All these coun- tries produce more cheaply than we do — but as yet they are not producing enough ; we therefore 8Ut.' forces, as yet unknown, may do for man what wo oajia< iv iii . ».?;y'r:e now. As yet, however, and with the use of etssi 'it* : voc: j,ini ig our latest and best achievement, it is evident that :-i\ich f'u.i.e reduction of cost of heavy freight is out of the ' of he question, and that we are already very near its lowest probable limit. But if the probable or possible cheapening and facilitating of the transfer of bulky commodities is seen to be thus limited, by irremovable physical conditions, no such limitation attaches to the possibility of transfer of labour, skill, capital, and enterprise, from one country to another. The transfer, for instance, within a very few years, of enough British capital and labour to make Canada another country, almost, is perfectly within the limits of physical possibility. Its degree of moral probability, quite another ques- tion, has nothing to do with the point now urged, which is merely that while the facility of transfer of commodities is limited by physical conditions, the facility of transfer of most staple manufac- tures, of the most necessary branches of industry, practically limited by human action mainly, has before it unknown possibilities. We have but to reflect a little on the evident tendency of expanding commercial enterprise ; on the influence of modem improvements in travelling, and communication of ideas ; on the results of social and political movements, to realize something of the vast import- ance of the distinction hero pointed out, and of its probable bearing on the future history of nations. Of course, it is not to be forgotten that there are physical con- ditions which limit the transfer of certain industries. For instance, a New York Free Trade paper, the League, recently made the alarming discovery that the Williamantic Mills, protected by an enormous duty on foreign sewing thread, were working against Nature, trying in vain to make thread equal to that made at Paisley, which positively cannot be done in these latitudes and longitudes, owing to subtle, yet powerfully-operating climatic influences. The League might have gone further, and informed its readers that not even in Manchester, with the same hands, the same machinery, and the same cotton, can a thread be spun of fine- ness equal to what can be spun in Renfrewshire and Lanarkshire. We could not, probably, make thread like the Paisley thread here ; and people are recommended not to try. But what carloads and shiploads of many useful cotton fabrics we might make here, just as well as they do "at home," had we but a good start in the business ! Perhaps the inost remarkable instance on record of the transfer, li; i 80 or — to speak more correctly — of the extension of any branch of in- dustry, is that of the beet-root su^^ar manufacture on the continent of Europe. Fifty years ago, when this manufacture was being com- menced, only from one-and-a-half to two per cent, of sugar could be obtained from the beet, and the cost was nearly thirty cents per pound ! According to Free-Trade doctrine, that was clearly a case of a " sickly exotic," and doubtless the ** consumers" of France and Germany were most unmercifully fleeced for the benefit of a few beet-root sugar manufacturers. But well may the Continent thank Napoleon the First for the results in this case, if for little else. His Berlin and Milan decrees, though they did not prevent the saving of his ovn soldiers, by supplies of English great-coats, from perishing amid the winter severities of the battle of Eylau, yet sufficed to stop almost wholly the importation of cane sugar. Necessity proved itself the mother of invention. To-day the yield of sugar from the beet is given at seven per cent, in France ; eight to nine per cent. in Germany ; and nine to ten per cent, in Russia ; and the actual cost of production is stated at only four cents per pound ! It is fur- ther aflSrmed, that to-day fully one-third of the whole amount of sugar consumed in the world, (in the civilized world, perhaps, is meant, though the writer offers this as a conjecture only,) is made from the beet-root. What makes the success of this manufacture so remarkable in industrial economic history, is the fact that the diflSculties encountered were mostly of the class arising out of physi- cal conditions, and but to a small extent of that other class, more possible for man to meet and overcome, which arise from human agency mainly, such as population, capital, &c. The reader is re- ferred to the essential distinction pointed out, in a former page, between these two classes of difficulties. Does anybody need to en- quire whether, if cane sugar had always been obtainable on the Con- tinent, free, or at a moderate rate of duty, there would have been, to-day, any beet-root sugar manufacture worthy of the name ? To- day, in France, beet-root sugar pays to the Government an internal revenue tax of six cents per pound ; being placed on exactly the same footing as cane sugar from the French colonies. The case cited is indeed a bright and shining example of the rise and establishment of an important home manufacture by a protective import duty : and those who are so fond of patting the familiar 81 jn- Ihe Ise Ind Ive iar " sickly exotic" objection, had be^^ter after this beware where they put it. It may be appropriate here to quote the following graphic sketch, taken from an article in the New York Tribune^ of a date sometime last winter. The consideration that the cultivation of the sugar beet, and the production of sugar therefrom, may not improbably yet become a staple branch of Canadian industry, should not be lightly or too hastily dismissed, and may excuse a somewhat extended reference to the subject. It is said that while the soil needed by the sugar beet is very different from the grape-growing soil, the re- quired climate is identical. Now that we havo the grape-growing climate within Canada is certain, — much as it may astonish our friends in Great Britain and Ireland to be informed of the fact — while that we have, amidst our g.-eat variety of soils, some that will exactly answer for the sugar beet, is at least probable ; probable enough, at all events, to warrant experiment. It is a fact that Germans in Canada, who ought to know something practically of the matter, aflSrm that we have here both the soil and the climate that are required : " That Sugar was essentially a tropical product, and only to be grown along the 60th parallel of north latitude at a price utterly ruinous, was an article of the creed of mankind. All manner of professors and other depositories of useless knowledge stood ready to certify that making Sugar in France was exactly on a par with extracting sunbeams from cucumbers or growing pine-apples in Green- land. The British (who always protected their own infant, or imperilled industries, and discouraged like protection by others) fair- ly exploded with derision of the Little Corporal's last and greatest folly. The art had to be created as well as the industry ; and of course great blunders were made, great errors had to be corrected by experience. Beet Sugar made in France atfirst cost many times the price of Cane Sugar made in the East or West Indies. But every year of resolute perseverance increased the skill and eflSciency of the growers and manufacturers. Each year witnessed the in- vention or adoption of new machines, new processes, auxiliary to the new industry ; so that, when Napoleon fell, public opinion, grounded in the success already achieved, dictated to his Bour- bon successors the continuance of the needed Protection, though France had now restored to her some small but choice tropical isles, wherein Cane Sugar was produced as cheaply and amply as any- where on earth. Uy: ■^' 82 (( Thus n\irturod, the Beet Sugar manufacture grew steadily in extent of efficiency, until it has long since outgrown the need of Protection. Its product now pays the same tax in France as is imposed on the rival Sugar of tropical Martinique, Guadaloupe, and Reunion — all mainly devoted to Cane Sugar — yet the whole- sale or manufacturers' price is but five cents per pound. And the cultivation of Beets, with the manufacture of Sugar therefrom, is largely prosperous and rapidly extending. It has largely increased the value of lands in the Beet growing region ; it has deepened and enriched the soil of whole Departments ; it employs and pays many thousands of skilled as well as unskilled workmen ; it supplies France more abundantly as well as more cheaply with Sugar than she ever was or could be supplied from external sources ; and it has added immensely to the sum of her wealth and power. "■ But France does not monopolize the benefits flowing from Napo- leon's protective policy. The Beet Sugar manufacture which she created has overflowed her boundaries, and Belgium, Italy, Germany, Hungary, and even Russia, have naturalized and are steadily increasing it. Sugar — the luxury of the poor — the onli/ luxury of many of them — is now enjoyed by many millions of people who would rarely have tasted it had it continued to be an exotic. The enjoyments — few enough at best — of the labouring masses of Europe have been signally, permanently increased by the protec- tion accorded by Napoleon to the production of Beet Sugar in France. " These and kindred facts do not find a place in the writings of the presidents and professors who supply our colleges with their Political Economy. They tell you that Protection is a device of manufacturers to increase their profits ; but ask them who and where were the manufacturers whom Alexander Hamilton, Henry Clay, Matthew Carey, Hezekiah Niles, and their compeers, were intent on enriching when they initiated the Protection, whertby American Manufactures were warmed into existence, and they have no answer. But the people are wiser than the professors ; and in their instinctive sagacity is our trust. >» II There is another prop of the Free Trade fabric which particularly demands examination. It would be well, perhaps, if the question could be discussed wholly without reference to politics and parties, but without some such reference it cannot fully or even at all fairly be considered. It is affirmed that the extension of popular influ- ence in government implies the advance of Free Trade as a principle, and that the two must go hand in hand. Men are apt enough to be influenced by sound more than by sense, and the very word 83 id in llarly Istion rties, lairly Influ- jiple, ^h to Iword "free" has for some people an attraction which they do not attempt to withstand. It throws a spell over their judgment, in favour of the system to which it is applied, and correspondingly causes a prejudice in the mind against another system, supposed to be at variance with " freedom." And besides, many persons of Conservative opinions in general politics are apt to look upon the question of Free Trade as the one instance in which they can afford to be what passes for "Liberal." While resolutely holding the brakes against the democratic idea of political progress, they attach to the trade question so much of a non-political character, that they think themselves none the less Conservatives for adopting the commercial opinions of Cobden and Bright. The tendency to regard Free Trade opinion as English opinion, in contradistinction to the prevailing American opinion in favour of Protection, has its influence also, no doubt, with many members of the Conservative party here. While a large majority of the Reform party undoubtedly believe Free I rade to be naturally part and parcel of their political system, many Con- servatives, again, accept it as certainly the least objectionable part of the same. On the minds of men of both parties rests a vague, undefinable impression, that the progress of popular governmental institutions, as also of civilization and popular enlightenment, must favour the extension of Free Trade in the world. This impression is based on the confused idea of " progress" already commented on, which fails to distinguish the essential difference between the for- ward tendency of Free Trade, when it promotes national progress from the agricultural to the commercial stage, and its backward or obstructive tendency, when it hinders and would actually block all further progress from that to the higher and more advanced manu- facturing stage of national development. Free Trade in the first case means progress, and so, it is assumed, it must mean progress all through. Because English Liberals fought the battle of Free Trade, Canadian Liberals think consistency demands that they should be on the same side. In England the Liberal party, the party of progress, is on the side of Free Trade, while the principles of Protection, or what is left of them, are professed by the Conserva- tives. Such is the case even now, but if we want to get at the real basis of popular conviction on this subject, we must refer back to the long and world-renowned struggle initiated by the Manchester 84 k ii' Free Trade League, which culminated in the conversion of Sir Robert Peel, and of the nation. That great contest filled the world with its fame, and its attendant circumstances were indelibly im- pressed upon the world's memory. Prominent among those impres- sions was the well-marked one that Liberalism and progress were on the side of Free Trade, while Conservatism and resistance to improvement were on the side of Protection. So deep and so general has been this impression on the minds of men that nothing short of an event, or series of events, of similar importance, but shewing the other side of the truth, will be sufficient to efface it. The largo scale upon which this grand panoramic struggle was carried on, its being the first of its kind in more than one sense, has given it a place in history and literature, and an influence, such as the great epic of the first of bards has in another way. Already, however, it is beginning to be suspected that the connection batween Liberalism and Free Trade, so long believed in as natural and ne- cessary, is a mere accidental phenomenon, more than an essential truth. Three years ago the London Times drew attention to the fact that, contrary to all home experience, the democratically in- clined colonies of Australia were adopting Protection as a principle. That men of Liberal, of almost revolutionary poUtical sentiments, should be Protectionists, was to be regarded as almost an eighth wonder of the world. " But the leading journal had evidently even then a glimpse of the truth, though it professed, on behalf of the English public, a wonder which perhaps it did not altogether feel. Since then the Times made another discovery more alarming still. It was that if British constituencies of working men were given controlling power in Parliament, they would by and by re-enact Pro- tection, and keep out of the country, by high duties, all foreign manufactures competing with their own work. Of the re-im- position of duties on food or raw material, however, it was intimated that no fear need be entertained. This subject of the natural leaning of the artizan towards the protection of his own sort of work, which means at last the agreement of all trades to sanction protection to every trade, is but sparingly alluded to in the English papers. The phenomenon is contemplated by not a few with a dismay which prompts the giving of reasons other than the true one for action in certain cases, for fear of the effect which might be }ighth given jt Pro- breign re-im- mated latural sort of mction Inglisb with a •ue one [ght be 85 produced. To those who understand the fccHngs and aims of the artizan class in England, it is known that we should hear more of the " progressive" working man's leaning towards Protectionism, if it were deemed prudent to make it a prominent subject of dis- cussion. In the United States we have an example on a large scale, giving the most emphatic contradiction on record, of the untruth thatFree Trade principles do actually advance alongside of and in harmony wit'i Liberalism or Radicalism in politics — with what is not unfre- quently called political " progress" in a general way. There the party of Conservatism, of reaction, are Free Traders, while the Radicals are Protectionists. Observe how, on this continent, relative positions are reversed, as compared with what obtains in England. The agri- cultural and non-manufacturing South and West,what we may call the "country party," is for tree Trade, while New England, New York State, and Pennsylvania, with their populous manufacturing towns, are for Protection. In England,during the long struggle already alluded to, the positions of the town party and the country party were exactly the reverse. Does it not seem as if there must bo, between material and other conditions in England and in America, some es- sential, strongly-marked natural differences, which make Protection and Free Trade, each with its concomitants respectively, very dif- ferent indeed, according to which side of the Atlantic it relates to ? The examples of Australia, Canada, and the United States, all off- shoots of one parent stem, and together exceeding the mother coun- try in population and resources, show that the English connection which has been — but may ere long cease to be — between Liberalism and Free Trade, is not the rule, but the exception. As for other countries, there is scarcely one of them in which there is yet enough of anything like independent popular sentiment to afford a test ; though it is worth remembering that Belgium, with an educated and indus- trious population, which manufactures largely for its numbers, is Protectionist ; while in France the Free Trade doctrines of some of the Emperor's financiering proteges are the especial dread of that class of men who are supposed to constitute the Radical revolution- ary element of the day. The English Free Trade revolution embodied a great truth, but we must be careful not to misapprehend the meaning of that truth. I 1 ]f i ii 36 The truth it taught was the doctrine of the encouragement of home industry by the free admission of raw material. Without raw material to work upon, the workman has nothing to do. With raw material made artificially dear, he has less to do, and is paid less for it, than he would have if it were plentiful and cheap. The first and most necessary of all raw material is food for the workman. Flour, meal and provisions are raw material to Lancashire, just as truly as is the cotton which is there in such quantities manufactured. So likewise, in effect, is sugar, and every other article of large and gen- eral use among the people, which England either does not produce at all, or only in insufficient quantities. The real fundamental principle of the English movement is not Free Trade, simply as such, as is so commonly but erroneously supposed. It is the devel- opment of home industry which is the great guiding principle, while that this is done by Free Trade is almost wholly an accident of England's pecuhar position among the nations. In newer coun- tries, with smaller resources in the way of capital and skilled labor, the same effect has to be produced by the application of two principles, different in expression but perfectly harmonious in effect. One is that of the free importation of raw material ; the other, its twin pillar in the structure of national prosperity, is tbe protection of home manufactures by duties on imported goods. No reasoning can do away with the fact that the manufactures ot England grew up under Protection. And only under Protection t;i11 manufactures now grow up in any new country. They may stana, after full grown, even should it be withdrawn ; but without its initiatory impulse they will never exist at all. England pros- pered in the beginning of the century, when she had high duties on imports of all kinds, both of raw material and manufactured goods. She would have prospered far more had the raw materials, including food for the people, been allowed to come in free, the duties on foreign goods remaining. The great consideration with England now, in extending Free Trade to manufactured goods as well as to raw material, is to induce other nations to enter upon a race with her in which they are sure to be beaten. The position of England is now unique ; it is simply that of no other nation in the world. These Provinces are safe to follow the great guiding principle of England's policy, already pomted out. But r 87 the particular application of that principle, followed in Enjg;land, may not be ad\a8able under our very different conditions. During the first forty or fifty years of this century, England rested almost wholly on one of the twm pillars mentioned ; now she rests almost wholly on the other. Rightly to comprehend the development of her industry, which has been witnessed, we must look up n it as based in effect on both. It is the manufactures of the United States, rather than those of England, against which Protection is required in Canada. The reason of this may be given in few words. The material circum- stances — and, it may be added, the social circumstances, (however much poUtical circumstances may differ) — of these Provinces, re- semble very much those of the neighbouring States, while differing greatly from those of England. These circumstances, all of which determine the particular varieties of industrial pursuits that the people " take to," so to speak, furnish the explanation of the broad general fact before us, namely, that the industrial aptitudes of the Provinces are like those of the States, but unlike those of England. Now it is plain that while manufacturers of similar articles are competitors with each other, manufacturers of different lines of articles are not competitors. Canadian manufacturers can look with perfect complacency upon importations of Sheffield cutlery, most articles of " Brummagem " ware, Spitalfields silks. West of England broadcloths, "Hoyle's"and "Ashton's" prints, Glasgow fine muslin, and Paisley sewing thread. But they cannot so regard the importation, either free or at too low rates of duty, of American mill machinery, leather, boots and shoes, cotton yarn and coarse cottons, '* Lawrence" (Massachusetts,) woollen shawls and woollen goods generally, flax and hempen fabrics, starch, corn-spirit, reap- ing and mowing machines, axes, saws, and other mechanics' and farmers' tools, cigars and manufactured tobacco, brooms, pails, tubs, &c.,and the rest of the list of articles in which we are run- ning the race of competition — not with England, by any means, but with the United States. The moral of the distinction here pointed out is so obvious, that it needs not to be enforced at any great length. It may be profitably studied in connection with the paragraph from the New York Worlds quoted in the Leader's article. r 1 1 I 38 At present the true state of the case, as between American and Canadian manufacturers, is masked by the premium on gold, the derangement of affairs on the other side by the war, and other circumstances. But let the premium on gold fall considerably, and let a different set of circumstances arise in the United States, as is very likely to .be the case ere long, and our manufacturers will quickly have a taste of what sharp American competition amounts to with the tariff of 1806, and its prominent reductions on leading articles that we can and ought to make for ourselves. The hard- ship to our manufacturers is, that our machinery and goods are kept out of the American market by enormous duties, payable in gold, while Americans have the privilege of our market, either free or at low rates of duty. On all hands, Canadian manufac- turers are heard saying : " Give us equal duties on both sides, and "you may make them high or low, just as you please." The present injustice is simply glaring, intolerable. We are of course willing to give the Americans the freedom of our market for manufactured goods, provided they give us the freedom of theirs, for the same. But this is a most unlikely contingency, which no practical man expects to see realized in our time. Were the true nature of the Canadian industrial movement — what are its aims, the points where it does meet obstructions to its expansion as distinguished from those other points where outside competition does not touch it at all — the two moving on different lines, and there- fore not coming into collision — were all this explained to the English public, it is possible that hostility to the proper industrial policy for the Dominion would be disarmed, even in Manchester and Sheffield. Particular interests, those engaged in the coarser and easier manu- factures, might be implacable. But the great English manufacturing interest, as a national body, would not fail to see, in the increasing prosperity and increasing numbers of our people, the promise of largely increased aggregate purchases, with improved ability to pay on our part ; and consequently of benefit to English trade. It would come to be seen that for a small aggregate result, now attempted to be secured in the wrong way, a much greater result might be sub- stituted,8imply by going to work in the right way. It would be but a left-handed compliment to public intelligence, to go into a lengthy disquisition to prove that an import duty is real- ly no protection at all, if neutralized by an excise duty. But the ex- 39 of perience of manufacturers here, and still more of American manu- faicturers, warrants the further remark that, from thepeculiarli^ har- assing nature of the operation of excise duties, (on this side of the Atlantic, at all events,) ten per cent, excise will more than neu- tralize twenty per cent, import duty. It is a gigantic mistake to attribute the present depression in the States to the high import duties on foreign manufactures, instead of to its true cause — (of course coming after the great primary cause, which is simply the existence of a large national debt,) the high internal revenue duties, now about to be greatly reduced, or perhaps almost entirely swept away, with the exception of those on tobacco, beer, and spirits. It is important to observe also that a reduction of duty on raw material, which ought to benefit the home manufacturer, may be wholly or more than neutralized by a reduction of the duty on the finished article. This is a consideration which should never be lost sight of, in framing a tariff. One of the fallacies of the day, repeated unchecked in our most ably-conducted newspapers, and echoed from one to another, is that high duties raise prices, and are necessarily so much of an added burden on the people, more than they would otherwise have to bear. The absurdity is affirmed and re-affirmed, having all the currency that a counterfeit note obtains while yet undetected. Let us be a little mathematical on this point. Fix your annual vote of supply in the House, whatever is necessary, in order that " the Queen's Government may be carried on," and faith kept with the public creditor. That once determined, the aggregate burden on the whole community remains unaffected by the mode adopted of raising it, except in the item of departmental expense to be incurred in the process, which may of course be an element in the calculation. Practically, it is not much of an element in our calculations now, for the reason that Custom house expenses would not be sensibly diminished were the amount collected halved, or much increased, either, were the amount doubled. The question of the distribution of the burden on various classes is undoubtedly of importance, and is found in practice to be the real test of administrative ability in the financial councils of the State. But let this pass for the moment. Say that it is determined to raise the whole amount without Customs duties, and that your tariff of inland revenue is a marvel of statesman- 40 like skill, fair to all classes, unjust to none. All importations are now free ; but has the nation, as such, got rid of its burden ? Certainly not : the burden remains, and has to be borne. The aggregate of prices still remains enhanced by the quantity of the aggregate of taxation. It is extremely bad logic to argue as if duties on imports ifere the cause of the burden upon the community, which burden already exists in the shape of public debt and annual public expendi- ture, independently of the mode in which it maybe taken from the poc- kets of individuals and put in the public purse. Yet this is what " able editors" and their correspondents who write to the papers are doing every day. The people of the United States would not escape the bur- den of their war debt, nor the aggregate enhancement of prices con- sequent on the high taxation which it compels, even were they to re- sort to Free Trade out and out. English and French goods might be cheaper to the consumer, but something else would have to rise in price to make up the balance. And yet is it not a fact that Free Trade writers in the papers constantly argue, as if Customs duties on foreign imports were a real addition to the burden which the country has to bear ; an additional burden being created, as they would wish us to believe, by the duties? What" Protectionist fallacy," more glaring than this one, can be mentioned ? Admit iron, cotton, and woollen goods, duty free, and you must tax something else, or somebody, to make up the balance to the revenue. If you thus lower the price of these articles, you will infallibly raise that of others. The case has all the fixity and clearness of mathematics, conditions ; and there is no escape from the conclusion indicated. This is the reductio ad absurdum of the truly absurd idea that the burden of na- tional taxation, with its consequent enhancement of the aggregate of prices, can be got rid of by shifting it from one shoulder to the other.* That internal revenue taxes, in the shape of excise, stamps, licen- ues, &c, are wholly paid by our own people, seems not to admit of avdoulbt;. Whether import duties are paid by the foreign seller or * Thia ia notone of those /oo symmetrical, mathematical propositions elsewhere -apoken of. In the latter the danger of error arises from the fact that quan titles tn process of being affected by the very uncertain and incalculable element of human ageney are taken into account. But here the quantities are supposed to be already determinedf which makes all the difference in the world. 41 ).. tof to the home purchaser is a much-vexed question, which parties on either side are apt to answer sweepingly, each from their own point of view. The probability is that no answer, to be true for all cases, can be given, but that each case will require a special answer based on its own peculiar circumstances. The standard Free Trade doctrine is, of course, that duties are wholly paid by consumers. It is a remark- able fact, however, that Free Trade practice seldom accords on this point with Free Trade preaching. EngUsh Chambers of Commerce seem always to imply, in their remonstrances against Canadian Protection, that it is the English manufacturer, more than the Cana- dian consumer, who pays the duty. Similarly, the organs of the Free Trade interest in New York have of late been arguing with great vigour, and apparently with success, that the internal revenue tax of three cents per pound on cotton is wholly paid by the Southern cotton-grower, and not at all by the purchaser, whether foreign or domestic. On this very debateable question volumes might be written on either side, without carrying much of conviction to the other. Meanwhile, whatever theory on the subject maybe held, the fact is beyond question that business men daily act and talk on the supposition that duties are paid by sellers as well as by purchasers. Let us make a slight attempt to elucidate. It will probably be conceded that a Canadian duty on tea, anarticle which we do not produce, is wholly paidi)y ourselves. Of barley, however, we have a large surplus, which is every year purchased by foreigners. Were a Milwaukee man, however, for example, to try the experiment of sending Wisconsin barley here to be sold — he, and not the purchaser he might find here, would probably have to pay the whole of the ten cents per bushel duty. These are extreme instances, but they seem to suggest the safe general conclusion that, in the majority of cases, duties are paid partly by the seller, and partly by the purchaser. But this con- clusion carric? with it the further conclusion — rather startling to contemplate when stated in terms, though really tacitly acted upon by business men every day — that i, foreign producer may virtually be taxed by our Government, and the money put into our public treasury : with other nations, of course, the same conditions hold- ing good. Suppose we try a mathematical sort of a statement, which may appear, on close examination, to embody not a little of f 42 the truth of the matter ; and say that the proportion of import duty paid by home consumers varies inversely as the proportion of the whole home production to the whole consumption. That is to say, if we produce one-half and import the other, of any article, we may consider tnat of every dollar of duty collected on tliat article some foreigner has paid fifty cents ; a comfortable reflection for our own taxpayers. If we produce but one-fourth of our own consumption, we pay three-fourths of the duties collected on the remaining three-fourths, and the foreigner but one-fourth of the duties. If, again, we produce three-tourths ourselves, then the foreigner from whom we buy the remaining fourth pays three-fourths of the amount of duties coUecfcec? a it. This view of the case is sub- mitted as affording, in ihs pi lyful task of its examination, an agree- able recreation for political economists of a mathematical turn of mind. It certainly seems to harmonize in a general way with the idea that we, who produce no toa, pay all the duty on tea, while in the case of a foreigner -r.uK , oariey here, of which we have a superabundance for export, h< . . ud pay all the duty, and the purchaser here none. There wiay So mrre in the solution just suggested than to some peop' niiy apjv •'first sight. Itshould not be forgotten, however, that mathi. oJai , .symmetrical solu- tions of problems, into which human agency enters as one of the elements or c> jver Item- nat- 4 ♦• uralizing a foreign industiy, in itself perfectly suitable to the cir- cumstances of the country. The superiority of one country over another in a branch of production often arises only from having begun it sooner. There may be no inherent advantage on one part or disadvantage on the other, but only a present superiority of acquired skill and experience. A country which has this skill and experience yet to acquire may, in other respects, . be better adapted to the production than those which were earlier in the field ; and besides, it is a just remark of Mr. Rr.e, that nothing has a greater tendency to promote improvement in any branch of pro- duction than its trial under a new set of conditions. But it cannot be expected that individuals should, at their own risk, or rather to their own certain loss, introduce a new manufacture, and bear the burden of carrying it on until the producers have been educated up to the level of those with whom the processes are traditional. A protecting duty, continued for a reasonable time, will sometimes be the most convenient mode in which the nation can tax itself for the support of such an experiment. " The only writer of any reputation as a political economist, who now adheres to the Protectionist doctrine, Mr. H. C. Carey, rests its defence, in an economic point of view, principally on two reasons. . One is, the great saving in cost of carriage, consequent on produc- ing commodities at or very near the place where they are to be consumed. The whole of the cost of carriage, both on the commo- dities imported and on those exported in exchange for them, he regards as a great burden on the producers, and not, as is obvious- ly the truth, on the consumers. On whomsoever it falls, it is with- out doubt a burden on the industry of the world. But it is obvious (and that Mr. Carey does not see it is one of the many surprising things in his book) that the burden is only borne for a more than equivalent advantage. If the commodity is bought in a foreign country with domestic produce in spite of the double cost of car- riage, the fact proves that, heavy as that cost may be, the saving in cost of production outweighs it, and the collective labour of the country is on tlie whole better remunerated than if the article were produced at home. Cost of carriage is a natural protecting duty, which Free Trade has no power to abrogate ; and unless America gained more by obtaining her manufactures through the medium of her com and cotton, than she loses in cost of carriage, the capi- tal employed in producing com and cotton in annually increased quantities for the foreign market, would turn to manufactures in- stead. The natural advantage attending a mode of industry in which there is less cost of carriage to pay, can at most be only a justification for a temporory and merely tentative protection. Tlie expenses of production being always greatest at first, it may happen 68 m that the home production, though really the most advantageous, may not become so until after a certain duration of pecuniary loss, which it is not to bo expected that private speculators should incur in order that their successors may be benefited by their ruin. I have therefore conceded that in a new country a temporary pro- tecting duty may sometimes be economically defensible, on condi- tion, however, that it be entirely limited in point of time, and pro- vision be made that during the latter part of its existence it be on a gradually decreasing scale. Such temporary protection is of the same nature as a patent, and should be governed by similar condi- tions. " The remaining argument of Mr. Carey in support of the economic benefits of Protectionism applies only to countries whose exports consist of agricultural products. He argues that by a trade of this description they actually send away their soil — the dis- tant consumers not giving back to the land of the country, as home consumers would do, the fertilizing elements which they extract from it. This argument deserves attention on account of the physical truth on which it is founded — a truth which has only lately come to be understood, but which is henceforth destined to be a permanent element in the thoughts of statesmen, as it must always have been in the destinies of nations. To the question of Protectionism, however, it is irrelevant. That the immense growth of raw produce in America to be consumed in Europe is progress- ively exhausting the soil of the Eastern, and even of the older Western States, and that both are already far less productive than formerly, is credible in itself, even if no one bore witness to it. IJut what I have already said respecting cost of carriage is true also of the cost of manuring. Free Trade does not compel America tc export corn ; she would cease to do so, if it ceased to be to her advantage. As, then, she would not persist in exporting raw pro- duce and importing manufactures any longer than the labour she saved by doing so exceeded what the carriage cost her, so, when it became necessary for her to replace in the soil the elements of fer- tility which she had sent away, if the saving in the cost of produc- tion were more than equivalent to the cost of carriage and of manure together, manure would be imported, and if not, the export of corn would cease. It is evident that one of these two things would already have taken place, if there had no. een near at hand a constant succession of new soils, not yet exhausted of their fer- tility, the cultivation of which enables her, whether judiciously or not, to postpone the question of manure. As soon as it no longer answers better to break up new soils than to manure the old, America will either become a regular importer of manure, or will, without protecting duties, grow com for herself only, and manufan- 69 igs uid fer- or 5er Id, hii, Fao- turing for herself, will make her manure, as Mr. Carey desires, at home. [See Note A.., page 79.] " For these obvious reasons I hold Mr. Carey's economic argu- ment for Protectionism to be totally invalid. The economic, how- ever, is far from being the strongest point of his case. American Protectionists often reason extremely ill, hut it is an injustice to them to suppose that their protection creed rests upon nothing superior to an economic blunder. Many of them have been led to it much more by consideration for the higher interests of humanity than by purely economic reasons. They, and Mr. Carey at their head, deem it a necessary condition of human improvement that towns should abound ; that men should combine their labours, by means of interchange with their neighbours — with people of pur- suits, capacities, and mental cultivation different from their own, sufficiently close at hand for mutual sharpening of wits and enlarging of ideas — rather than with people on the opposite side of the globe. They believe that a nation all engaged in the same or nearly the same pursuit — a nation all agricultural— cannot attain a high state of civilization and culture. And fcr this there is a great foundation of reason. If the difficulty can be overcome, the United States, with their free institutions, their universal schooling, and their own omnipresent press, are the people to do it ; but whether this is pos- sible or not, is still a problem. So far, however, as it is an object to check the excessive dispersion of the population, Mr. Wakefield has pointed out a better way : to modify the existing method of disposing of the unoccupied lands, by raising their price, instead of lowering it, or giving away the land gratuitously, as is largely done since the passing of the Homestead act. To cut the knot in Mr. Carey's fashion, by Protectionism, it would be necessary that Ohio and Michigan should be [)rotectcd against Massachusetts as well as against England, for the manufactories of New England, no more than those of the old country, accomplish his desideratum of bringing a manufacturing population to the doors of the Western farmer. Boston and New-York do not supply the wants of local towns to the Western prairies, any better than Manchester ; and it is as difficult to get back the manure from the one place as from the other." [See Note B., page 79.] PROTECTION TO NATIVE INDUSTRY. From the Toronto Leader, Dec 24, 18GG. There is an analogy between moderate drinking and moderate protection ; both frequently lead to the most extreme and objection- able results. The advantage is in favour of the drinking ; for, whilst many men continue to be moderate bibbers to ti e end of their '■ to ii days, it ia rarely yoii find that where protection to native industry is once commenced it does not increase instead of relaxing its hold. Mr. Mill is sometimes appealed to as an advocate of moderate pro- tection. There is nothing in his writings to justify the assertions of Protectionists on this point, and that they ever appeal to him for an argument only shows the weakness of their cause. This is the pa- ragraph from which these gentlemen take so much comfort : — '* The only case in which, on mere principles of political economy, " protecting duties can be defensible, is when they are imposed tem- " porarily (especially in a young and rising nation) in hopes of natura- • " Using a foreign industry, in itself perfectly suitable to the circum- " stances of the country. The superiority of one country over another " in a branch of production, often arises only from having begun it ** sooner. There may be no inherent advantage on one part, or disad- " vantage on another, but only a present superiority of acquired skill '* and expei ience. A country which has this skill and experience yet to *' acquire, may, in other respects, be better adapted to the production " than those which were earlier in the field ; and besides, it is a just <' remark of Mr. Rae, that norhing has a greater tendency to promote *' improvements in any branch of production, than its trial under a new " sot of conditions. But it cannot be expected that individuals should ** at their own risk, or rather to their certain loss, intr'>duce a certain " manufacture, and bear the burden of carrying it on, until the pro- " ducers have been educated up to the level of those with whom the " processes are habitual. A protecting duty, continued for a reason- ** able time, will sometimes be the least inconvenient mode in which " the nation can tax itself for the support of such an experiment. " But the protection should be confined to cases in which there is good " ground of assurance that the industry which it fosters will after a " time be able to dispense with it ; nor should the domestic producers •* ever be allowed to expect that it will be continued to them beyond ** the time necessary for a fair trial of what they are capable ofper- >> ♦* forming This is very different from the argument of the Protectionist. His idea is not simply to give temporary encouragement to some particular domestic industry for which a country may be peculiarly adapted, but that a country is enriched by excluding foreign manufactures by the imposition of customs duties so liigh that the same articles may be manufactured in the country, no matter what the adaptation of that country to the particular manufacture may bo. The Protect- ionist theory is to exclude everything of foreign manufacture which can by any possibility be made at home. By this means they believe a country is enriched, and they sometimes refer to the paragraph from Mill's Political Economy which we have quoted as bearing out their views. Clearly no such meaning can be taken from these 71 lea ar d, es ay of t- ;h re )h words. Cases may arise in which a temporary protection, such as that here indicated, may be imposed, but they are very rare. The danger is when such teaching is made general in^ead of being limi- ted to the peculiar cases to which it may with safety be applied. That Mr. Mill did not intend to advocate moderate protection as now understood no one can doubt who has ever read his writings on political economy. The paragraph immediately preceding that we have quoted is an argument against even the smallest incidental pro- tection, and a few pages earlier in the same chapter, he says, with much emphasis : — " The importation of foreign commodities, in the common course of " traffic, never takes place, except when it is, economically speaking, " a national good, by causing the same amount of commodities to be " obtained at a smaller cost of labour and capital to the country. To " prohibit, therefore, this importation, or impose duties which prevent " it, is to render the labour and capital of the country less efficient in " production than they otherwise would be ; and compel a waste, of " the difference between the labour and capital necessary for the home " production of the commodity, and that which is required for produ- " cing the things with which it can be purchased from abroad. * * " In the case of manufactured goods the whole difference between the "two prices is absorbed in indemnifying the producers for waste ofla- "bour, or of the capital which supports that labour." The welfare of the many and not of the few should be the first object of a Government. It has the right to take by taxation so much as is necessary for its support. It should do tlus by making the burden of taxes bear equally on all. Jf it affords special encou- ragement to one form of labour, the other forms of labour are neglect- ed, and thus positively discouraged. In the discussion of Protect- tionist doctrines, reference is usually made to the United States. In that country more than three-fourths of the people are engaged in agricultural pursuits ; so that the Government cannot, if it would, by any discriminating tax laws, protect the great majority of those who live by their honest labour. In trying to afford special protection to some of the other forms of labour, it is clear the Government is mak- ing laws for the good of a small minority, and imposing positive and unequal burdens upon the great majority. The Free Trade League of New York, states the case in these words: — " The Southern farmer produces, say, a bale of cotton ; he can " exchange this in the markets of the world, if the government will let " him, for at least two tons of iron. But the government steps in and " imposes a heavy duty on iron, not for the support of the government, " because it would get more revenue by means of a lower duty, but for " the special benefitof thtf iron masters of this country. The resultis : " the Southern farmer gets only one ton of iron for his bale of cotton. 72 " The Northern farmer produces so many bushels of wheat. Left free " to exchange it with the blanket-makers of the world he can get, for " the same quantity of wheat, two blankets where he now gets but " one. So it is with all the clothing of his family." [Note, page 79.] But the Protectionists say, " We want a variety of industry. A ** country which depends upon agriculture can never attain a posi- " tion of greatness." We answer this pretence in the words ot Professor HiNCKS, of Toronto University. They appear in a paper which was read by him before the Canadian Institute in March, 1862 : — " No one denies or doubts that increase in the quantity and va- " riety of the products of industry in a country, is a blessing to its in- " habitants, provided it is not extravagantly paid for ; and it is evident " that an artificial raising by commercial restriction or a heavy import " tax of the price of an article will aflford an opportunity to home pro- ** ducerSjwho before could not compete with the countries already ad- " vantageously engaged in this particular branch of industry. On the " other hand this very statement of the way in which benefit is sought " admits, and it is indeed undeniable, that we pay more for the same *' production than we need do for a similar or better article imported. " We should pay to the importer the natural price, depending only on '' the labour, immediate or capitalized, which has been employed and " on the usual rate of return for it. We pay to the home produc- " er that price with the addition of a quantity expressing the amount " that the duty is raised by the price improved. The whole body " of consumers — probably many thousands — are taxed to this extent " for the sake of having the article produced at home instead of '* abroad." Variety of industry is good where the several manufactures spring up spontaneously ; where there are circumstances favourable to their development. When they have to be protected the cost of the protection comes out of some other interest which receives no protection at all ; and the Government loses as well as a majority of the people. The income of the Government is lessened by very high duties ; for revenue is got on the goods which come into a country, and the aim of protective duties is to keep the goods out. The people pay more that the treasury may receive less. Not only is the farming class, and with it the great body of consumers, including the mechanics of the country, made to suffer by a system of protective duties, but the nation, m its collective capacity, is impoverished. There should be freedom to manufacture and freedom to buy, in so far as the financial necessity of the country will permit. It is a favourite argument with the Protectionists that a practical application of these doctrines has done much for the advancement of the United States. We don't believe it. They reason that if American manufacturers were deprived of the Protectionist go-cart 73 of ires Me of no iTJ a Irs, is )al Int if rt they would immediately fall prostrate ; whereas, in truth, the greater portion of the manufactures need no protection whatever. Listen to the New York World on this point ; and the article is so forcible, going to the very root of the matter, that we quote at some length: — " Calling all productions not created by agricultural industry " manufactures, it will be easy to show that altogether the greater " portion of our manufactures needs no protection. An hour's " observation on any American farm is as good for this purpose as a " month's study of statistical tables. Next to the crops and fences, ** which are the fruit of the farmer's own labour, the most observable ** parts of his property are his buildings. These are certainly the " product of domestic mechanical industry ; and though equal in value " to the whole farm without them ,theywouldjust as certainly have been " built by native industry if no duties on imports had ever been levied. " Now let us see what besides gathered crops and domestic animals " we find within these buildings. We will first enter the barn. " Waggons, ploughs, harrows, cultivators, scythes, rakes, mowing and " reaping machines, winnowing-mills, harness for horses, nearly com- " plete the list. But how many of these things would be produced " out of the country in the absence of protection ? Not one. Now ** let us look into the house. Stoves, tables, chairs, bedstead, " bureaus, a sewing-machine, comprise a great part of the furniture ; " all the work of native mechanics, and would be equally so if a " protective tariff had never been heard of. We will next inspect the " persons of the occupants. Not a shoe, not a shirt, not a hat, not a " working-day garment of male or female, but was produced in this " country, and produced more cheaply than it could be imported in " the absence of all obstructive tariffs. If we look in the crockery " cupboard and the Sunday wardrobe, they will indeed tell a different " tale. But how small a part of a farmer's purchases are the crockery " and cutlery used on his table, and the silk and broadcloth occa- ** sionally worn of a holiday. We dismiss from consideration the tea, ** coffee, and other articles which must be imported if used at all, " since this country cannot produce them. It will be seen from this " cursory inspection that the talk of the Protectionist about the necessi- " tyof a tariff to diversify our industry and create a home market for " the products of ourngriculture, ignores the greater part of the facts. " Every neighborhood abounds in mechanics, and all our towns and " cities are full of manufacturers, employed upon productions with " which the freest foreign competition could not interfere. Moreover, " our industry is further diversified by the variety of our agricultural ^* and mining productions which gives us an advantage like that; *^ possessed by China in the cultivation of tea, or Brazil in coffee. In " cotton, tobacco, petroleum, and the precious metals, we have native '^ products which torce themselves into all markets because no nation 74 " can successfully compete with us. The producers of these, as well '' as the vast army of our mechanics and manufacturers,are consumers " of our ordinary agricultural staples, and form their chief market. ** There is such a manifold diversity in our firmly-rooted and competi- *' tion defying industries, that we need to nurse no sickly exotics " not suited to our country or circumstances. The prices of a ;ricul- *' tural products are, in all reason, high enough, without attempt- " ing by legislation to divert more of our people from agriculture." The reason why some kinds of manufactures possible are not profitable in the United States is that the home market is not ex- tensive enough to support them. To encourage such manufactures by a high tariif is supremely foolish. It the statesmen of the neighbouring republic were wise they would repeal all that part of their tariff designed to be protective, and seek to increase the national wealth by extending the foreign demand for the things they can produce as cheap or perhaps cheaper, than the rest of the world. England sustains her enormous debt and doubles her wealth every two or three decades by the immense profits she makes in selling her products in a wide range of foreign markets. It is not by trad- ing with highly-civilised nations that she acquires her gains, but with peoples whose industry is yet undeveloped. The coarser manufactures adapted to such markets the United States could produce as cheaply as England, in establishments on the same extensive scale. America is nearer than Great Jiritain to beta coasts of South America, yet the South American market is to the latter country a mine of wealth. The true policy of our neighbours is to buy the things which other nations can produce more cheaply than itself, and to compete with them in all foreign markets in such things as they can produce with equal or greater advantages. But it is simple nonsense to think of sending to foreign markets products which cannot stand their ground without protection at home. With its diversified industries, with its great mineral wealth and never-ceasing stream of labour supply, it ought to be able to compete with all the countries in the world for the command of foreign markets. No doubt it could have done so in many articles if a proper system had been adopted at the first. A ruinous na- tional poUcy has, however, been entered upon. In spi.e of a 50 per cent, tariff the people of the United States imported last year over $400,000,000 of foreign manufactures. What was the extent of their exported manufactures ? Comparatively nothing, with plenty of markets open in which they ought to have been successful com- petitors. Had they pursued a proper commercial system they would to-day have been a creditor instead of a debtor nation, and branches of industry, now languishing, for progress in which the country is peculiarly adapted, would be flourishing. Provisions 75 >> and as (t it I nets With and bete [eign licles na- 50 rear [tent mty tom- they laud the ions would be cheap, wages would be lower without any loss to the mechanic or the artizan, and people could buy such articles as thoy desired to import from abroad without having to pay $200,000,000 more than thoy need do to support a rotten system, which goes by the name of Protection. So miserable is that system that the small province of New Brunswick builds twice as many ships a year now as the whole of the United States. It is a favourite argument with the Protectionist that England did not adopt Free Trade until she was in a position to compete with the rest of the world, that Sir Robert Peel did not act from con- viction so much as from policy. Let us on this point hear Sir Morton Peto in this work on Taxation. " In one direction — the direction aimed at by Sir Robert Peel — " great results iiave been achieved. The trade of the country has " been unshackled. Prior to 1842 the commerce of tho nation was " clogged by a thousand different duties, which, with few exceptions, " have now been removed. In 1841 tliere were 1,102 different " articles subject to taxation at our custom houses, of which the " greater portion were loaded with duties which, whilst they brought " little revenue to the public treasury, opposed formidable obstacles " to the extension of trade. In 1862 there were only forty-four " articles chargeable with customs duties. This great result has " been accomplished without any diminution of the revenue of tho " department. In 1841, the customs duties on 1,162 articles amount- *' ed to £21,898,845 ; in 1862, the duties on the comparatively few " articles subjected to duty produced .£29,036,000. \i^ the exten- " sion of commerce which has followed tho remission of duties on *' articles of import and export, employment has been afforded to the " industry of the country, and, conse(piently, the means of the people " has been increased. * * The declared value of exports of British and Irish produce from the United Kmgdom, which, in 1841, was only £5 1,545,1 16, rose, under these commercial reforms, to £134, " 8+2,000 in 1860. A marvellous increase indeed ! An increase, " however, of which it may bo confidently predicted that it is only " the first fruits of a system as yet (juite in its infancy." And the Customs Commissioners hi their First Report (1857) say :— " Under the influence of the simplification of the tariff, tho reduc- " tion of duties, and the facilities afforded to merchants and shippers, " the commerce ofGreat Britain has shown a marvellous increase, and " the revenue a still more marvellous elasticity. The net aggregate ** of the reductions in the tariff amounts to above ten millions. Yet *' the customs revenue scarcely varied for the last twenty years — ranging steadily from twenty-two to twenty-three millions." This is the lesson which Free Trade teaches. And we have thought (( 76 well to produce it in view of the objections taken in other columns to our previous remarks on the decline of shipbuilding and publish- ing in the United States. Mr. Whitney argues that greater things have been done in the latter country under Protection. We have endeavoured to show that Protection is the robbing of the many for the benefit of the few, and that the achievements of Free Trade are far nobler than those of the restricted policy of which he is the advocate. We believe that if the United States had followed out a Free Trade policy, as nearly as was practicable, she woul 1 be in an infinitely better commercial position to-day than she is, and that in time no country could compete with her : and as regards her debt, upon which Mr. Whitney dwells strongly, we would say in the words of the New York Evening Post : — " By the free method the debt will " be paid rapidly, out of the constantly increasing riches of the " people in the shape of taxes intelligently apportioned and cheer- *^ fully paid, because nothing is more agreeable than paying an honest " debt out of growing riches. By the other method, it will be " paid slowly, out of hard-toiling penury, by taxes wrung from every ^^ available resource, grinding the body of people to the earth, and ** transmitting the burden to posterity." There is little hope that " the better policy will be adopted. CUSTOMS Rfc)CEIPTS IN GREAT BRITAIN. Figures quoted by the late Mr. Whitney in replying to THE " Leader." By the foregoing statements, the public were of course expected to see that Great Britain, by throwing oflFall protective duties in 1842, reduced the list that yielded those duties from 1162 to 44 articles, and thereby, through some unexplained process, increased her own revenue. The facts, however, are these : There were in 1841, 1162 diflFerent rate» of duty, (not dutiable arti- cles,) there were 862 articles subject to duty, there were of these 349 which produced less than £100 each per annum, and 147 which produc- ed nothing ; moreover, from so far back as 1 838, 95 per cent, of the customs revenue was derived from 16 articlttonly. Thus long before the period of the tariff reform had the commerce of England, under extreme protection, shaped itself into what we now have it. What subsequent Free Trade enactments had to do with previous changes I will leave with the reader to judge. Table showing the trua position of the British custom-house returns iu the two years quoted by the Leader :— 77 RECEIPTS CUSTOMS DUTIE8. In 1841 under Protection. Coffee £ i-88,6tf3 BreadstuffH 570,407 Curronts 221,197 Spirits 2,41l»,184 Timber 1,4^8,631 Butter .... 2G2,U«7 Cheese » 1315,054 Fruits 290,900 Seeds 107,111 Silks 244.07C Su-ar 5,123,986 Molasses 193,546 Tallow 200,464 Tea 3,978,518 Tobacco 3,580,164 Wines 1,800,128 Miscellaneous 2.098,208 £23,006,124 In 1862 under Free Trade. Coffee : £ 433,360 Breadstuffs 845,037 Currants 245,540 Spirits 2,622,728 Timber 229,224 Cocoa 16,361 Pepper 106,080 R;iisins 97,837 Figs 29,120 Oats 81,174 Sugar, unrefined *. 6,201,243 Do. refined 247,172 Molasses 192,816 Tea 5,582,793 Tobacco.. ., 5,«14 448 lilies 1,123.605 Miscellaneous..., 225.034 £23,993,546 The item " miscellaneous" in the first column, has in it the duty on raw material taken off in 1842. But the similarity pervadini; the remainder is most striking, and bhows that Free Trade made no other difference whatever. In addition to the above, I here give the mean gross receipts for each five years, commencing from 1838 (omitting hundreds,) viz ;— £23, 188,001), from 1843 £22,540,000, from 1848 £22,303,000, from 1853 £22,050,000, and from 1858 £23,900,000. 78 There is no pecuniary Bacrifioo to the principles of Free-Trade hero, when over one third of the gross revenue of the kintrdom is still derived from imposts on foreign trade. The English of It all is, that with the czocp- tion of ruw material, nothing of the slightest importance to the finances wuH placed on the free list, till it had taken itself out of the paying column. PROTECTION, AND THE RISE dF THE BRITISH IRON TRADE. The following is taken from an article in the New York Tribune of Dec. 24th, 1866. As a short and tolling recapitulation of the true story of how perhaps the most important of all branches of Britisli manufacture rose and prospered, it is submitted for the information of those who mny yet remain under the impression that Britain's manu- facturing greatness owes nothing to Protection. Just see what unswerving support the British Govern me"* gave to the British iron manufacture for un unbroken period of 147 years, till it was strong enough to invite the world to Free Trade, ond to touch Free Trade. In 1679 the first luty on foreign iron was imposed by the British Government, of 10 shillirv;s per ton. In 1710 the duty was advanced to £2. Is. 6d. per ton in English vessels, and £2. IDs. lOd. in foreign vesHels. A stiff tariff, which yearly did its intended work for 72 years, undisturbed by any howling of foreign importers, canioed in London or elsewhere, again.st thu folly of manufacturing dear iron at home when cheaper iron could bo bought abroad. This tariff did not make cheap iron — did not ftv^a supply England with the iron sho needed, for she was a consUmt importer of it. But what of that ? She was after cheap iron, and sho was going to get it through Jorsevcring protection. In 1782 the duty was r; ised to £2. 16.". 2d. n 1785 Parliament prohibited the exportation of tools, engine:^, models, or plans of luauhines used in the manufactur*^ of iron, under the penalty of one year's imprisonment of the shipper. £200 fine, confiscation of the articles shipped or intended to be shipped, a fine of £200 on the master of the vessel, and the same on the custom house officers, who were to be dismissed, and be thereafler incapable forever of holding office. Item, for enticinv^iron v'orkmen outof England, Parliament imposed the penalty of one year's imprisonment and £500 fine for every workman so enticed ; the fine to be doubled for the second offence. Blood-earnest legislation — but there was not a man in England to protest against it. For Eng- land, and the English, were after cheap iron. In 1 787 there was nobody to talk about the rigub of buying in the cheapest markets, and foreign importers not having a voice in legislation, Parliament prohibited the importation of iron less than three-fourths of an inch square, except plain bars, and all manufactures of iron and stool. In 1795 that blood-carnost act prohibiting the exportation of tools and 79 tion lag- the ion, Is of lool. maohinerj^ was made perpetual. In 1796 the duty on iron wa^ raised to £3. Is. 9d. per ton. And now Enr;land hud 121 furnaces and made 124,879 tons of iron — and there was still no voice for Free Trade. In 1797, higher ! the duty raised to£:-; 49. 7d. In 1798, unsettled revenue policy, eh ? very bad for manufacturers, eh ? — the duty was ajjain raised to £3. Ibn. 5d. — and not a whinny of Free Trade to disturb the deadly purpose of these wise English to heat the world in making iron. They were dotcrinined to do it, and through the only possible way, Protectiooi In 1802, Engl'jnd hud 168 furnaces and made 170,000 tons of iron. And there Wiisn't a man in the realm to say that the iron manutac- turcrs didn't need more Protection, that they could sustain themselves, that this increase of the tariff was special legislation, and other such bosh. In 1803 — oh, the folly of changing tariffs, which our importers weep over! — up the Government puts the duty again— to £4. 4s. 4^d. In 1804, the duty again raised £4. ITs. Id. In 1805, the duty again raised to £5. Cs. In 1806, up agnin ! — advanced to £5. 7s. 5|d. In 1809 -oh, these constant changes of tariffs (in favour of Protection^ so injurious to manufacturers ! — the market of England for English iron not being yet secured, the CTOvernment again advanced the duty to £5. 9s. lOd. In 1813, the market not yet secured, the duty was again advanced to £6. 9s. lOd. Tinder this Protection in five years the pro- duction of ir> n in Groat Britian ran up to 300,000 tons a year. IJut England could not yet beat the world in making cheap iron, and, inex- orable in he determination, and wisely and faithfully governed, she again, in 181 ., advanced the duty on imported iron to £6. 10s. in liritish ships and £7. 18s. 6d. in foreign ships. Iron slit or hammered into rods, or drawn, or hammered less than three-fourths of an inch square, was charged with a duty of £20. Hoops theretofore charged £11. 8s. id. a ton, were now charged £23. 15s. By 1825, what had this deter- mined, patient, over augmenting protection accomplished ? It accom- plished its work. It enabled England to developc her manuficti a of iron to the degree thac she couid undersell the world, and begin to preach the gospel of Freo Trade among nations. In thjs yk.\ii the PRICE OF IRON PER XoKi IN VARIOUS COUNTRIES WAS AS FOLLOWS : France, £25. lOs.; Swedln, £13. 13s. ; Belgium, £16. 14s.; Rus- sia, £13. 13s.; Germany, £16. 14s.; England, £10. In 1826 the duty on bar iron was reduced to £1. 10s.; on hammered rods from £20. to £5. Hoops remained &t £23. lOs., and pig iron at 10s The British ^overnm.eut thus advafjcel the duties on imported iron fifteen times in a space of 147 years, from $2 50 a ton, to 835 a ton, and made every o'.ieof those duties specific. More th:in this, during all that time her manufootiirers had the advantage of high prices of iron in all the other countries of the world. England did not begin to reduce her duties on foreign iron until she had so established her m:inufacture that ahe fizported nine timea as much as she imported, and of course no longer required Protection. More vet : fhe waited ten years aflter it was demonstrated that she could manufacture iron from 33 to 50 per cent, cheaper than iny other country in the world before she reduced her tariff, and took the first stop toward Free Trade. 80 " That permvering proteoi;ive I^islation, that piling of duty on top of duty, thai constiuotiou block upon t>lock of a wall to shut out competition and retain the home-market, we look upon as one of the proudest monu- niente of British adsninatration, always, in respect to its own interestc, Tiij^orutts and far sij^hted. Wb honour the sauaoious and reboluti MKN WHO rOR A OENTURT AND A HALF SHUT THE DOORS OF TUM BriTIHH OuSTOM-HOUtliE IN THE FACE OF THE WORLD, AND HELD THEU TIGHT, WHILE, WITHIN THE KINGDOM, CAPITALISTS AND WORK- MEN, UNDI8TURBED, NOT ONLY, BUT ENCOURAGED, BUILT UP, BT ENG- LAND'S SUPREMACY IN IRON MAKING, ENGLAND'S SUPREMACY IN COM- MERCE, MACHINERY, AND WEALTH." NoTB A., pftge 68. Mr. Mill lays that the argament Trom exbaoBtioa of the soil, " appliea only td countries whose exports consist of agricultural products." It therefore applies to a great portion of the New Dominion : and it is i-speci.-illjr worthy the attention of farmers, who are told that their interest is in Free Trade. The rise of a manufiicturing population io a country hiis not only the eifuct of keeping grain at home that would otherwise be exported ; it likewise causes the cultivation of more green crops and less grain, in proportion, thereby saving the land, independently of manuring. Query— Have we *' a constant succeMion of " new soils — " that is, of agricultural soils — in Canada? It is believed that the records of the Crown Lands Department tell a different tale. Or can we afford to continue the destructive process uniil \he export of corn ceases by reason of exhaustion— then to begin importing manure ? NoTB B., page 68. Mr. Mill's admission here that " for this there is a great foundation of reason," really concedes the whole cnso. He is constrained to aid, tliat it is still a problem whether the diflSculty can beovercome, of a nation all agricultural atuining to a high state of civilisation and culture. It would better become Mr. Mill to say that it is not so rtuch a problem, as a q'lestion Bettled in the negative. Diversification of empluymeniH, variety in pursuits, amongst a people, is civilization, is progress, and brings culture. Nora C, page 71, Answer: If you have not enou^^h f available) iron and enough wool in your own country, invite the importation of abundaul supplies of both, in the raw state, duty free. Then adopt a permanent policy of such duties on the manufactured article as will promote the transfer to your country of the artisan who makes the goods, instead of the goods themselves, ami you will soon have cheap iron and clt^an blankets — cliea()or thitn yuu had them iM'fore. Natural increase of capital, and gradually acquired individual, local, and t-ven hereditary aptitudes, will supplement the process of transfer, and at last render it uo longer necessary. If these results do not follow, enquire what race or races of people they are who inhabit your countrjr, and whether they have ever else- where shown themselves possessed of manufacturing aptit-ides. Though the caiiacity of natural production may not be transferable, yet the capacity of manufacturing is, (see page 26 :) and the failure to recognize this truvh is the great " Free Trade fallacy." "^