Are we Ruined by the Germans? Part 6

With regard to the figures for cotton in the above table, it is only necessary to remark that the British manufacturer, whether for sale abroad, or for sale at home, is clearly working up more stuff than ever before. The figures for wool have already been explained. With regard to coal, the figures necessarily include both domestic and industrial consumption; but whichever be the more important element, the totals are remarkably healthy.

PERSONAL AND DOMESTIC EXPENDITURE.

An even better test of the increased spending power of the nation is furnished by the figures giving the rate of consumption of such articles of everyday use as tea, sugar, and tobacco. It will be seen from the following table how rapidly our national consumption of these staple articles has increased during the past decade-the decade of alleged ruin:-

TEA, SUGAR, AND TOBACCO.

-------------------------+-------------------------- | Lbs. consumed by every | 100 persons.

Year ending March 31st. +-------------------------- | Tea. | Sugar. | Tobacco.

-------------------------+------+--------+---------- 1876 | 451 | 6,078 | 147 1886 | 465 | 7,028 | 144 1896 | 574 | 8,916 | 169 -------------------------+------+--------+----------

It is useless to worry the reader with further figures. Evidences of the prosperity of the country are around us on every side for those to see that have eyes to see-a higher standard of dress in every cla.s.s of the community; better built and better furnished houses for artisan and labourer, as well as for millionaire; new public buildings, new libraries, new hospitals; improved paving, improved water-supply, improved drainage; more newspapers, more theatres, more lavish entertainments; in a word, a higher standard of comfort or of luxury in every domain of life.

CHAPTER VI.

LET WELL ALONE.

The preceding chapters have been mainly statistical. Their object has been to show, by producing the best evidence available, that alarmists like the author of "Made in Germany" have no real ground for their fears, that British trade is not going to the devil, but that, on the contrary, the nation as a whole is in a condition of marvellous and still rapidly-growing prosperity. If that be so, if there be no disease, then obviously is there no need for the remedy which Mr. Williams and other Protectionists are anxious to foist upon the country. But though that conclusion will be sufficiently obvious to most minds, there are among us hypochondriacal persons who never think that they are quite well, and these unfortunates will still hanker after some patent medicine to cure their imaginary ills. It is worth while, therefore, briefly to point out how utterly unsuited to our alleged ailments, even if they existed, is the remedy which the Protectionists propose.

THE CASE FOR PROTECTION.

Personally I am not a fanatical believer in Free Trade, or, for that matter, in anything else except the law of gravitation and the rules of arithmetic. I am quite willing to admit that there are circ.u.mstances under which a Protectionist tariff might be advantageous to a country.

But the practical question is whether, under the present circ.u.mstances of Great Britain, Protection is likely to bring any advantage to her. In dealing with that question I will venture at the outset to deny that Protection has been any real advantage to Germany. The Protectionists are fond of arguing that the heavy import duties which Germany levies on British goods have enabled German manufacturers in the first place to secure their home market, and in the second place to build up an enormous export trade at our expense. The argument is plausible, but it suffers from one fatal defect: it is unsupported by facts. As one reads the writings and listens to the talk of Protectionists, one's mind becomes unconsciously saturated with the notion that British trade is rapidly declining and German trade as rapidly increasing. It is upon this implied proposition that all their arguments are based; this is the primary postulate upon which rests their whole house of cards.

THE ALLEGED EXPANSION OF GERMAN TRADE.

But what are the facts? I have looked carefully through the figures showing the progress of German trade during the last ten or fifteen years, and I can discover no difference in character from the figures which show the progress of British trade. Let the reader look for himself. He will find the figures for fifteen years set out in the following table, and a diagram to ill.u.s.trate them. Let him notice that what is called the _entrepot_ trade, consisting of goods merely pa.s.sing through the one country or the other, is in these figures excluded from the comparison. Thus "British imports" here means the total imports into the United Kingdom, _minus_ those goods which are subsequently re-exported; "British exports" means all articles of British production exported from the United Kingdom. The same interpretation applies to the German figures, all goods in transit through Germany one way or the other being excluded. The comparison is therefore complete. And what does it show? That, so far from Germany's export trade increasing by leaps and bounds, while ours is steadily declining, German trade has followed, though at a lower level, the same general course as British trade. Therefore, whatever else Protection may have done for Germany, it certainly has not improved her export trade as compared with that of the United Kingdom. An even more striking demonstration of the utter hollowness of the Protectionist case can be seen when we turn from exports to imports. If Protection is to do anything for a country it must at least diminish imports from abroad while increasing exports from home. That is the whole object of Protection, the great ambition which every Protectionist statesman sets before him. Has Protection done this for Germany? Once again let the reader look for himself at the figures and the diagram. He will see that while German exports have remained stationary, German imports have very largely increased, and moreover that their increase has been relatively greater than the increase of imports into Free-Trade England.

BRITISH AND GERMAN TRADE COMPARED.

Fifteen Years' Imports and Exports, exclusive of Goods in Transit.

In Millions Sterling.

-------------+----+---+---+---+---+---+---+---+---+---+---+---+---+---+--- |1880|'81|'82|'83|'84|'85|'86|'87|'88|'89|'90|'91|'92|'93|'94 -------------+----+---+---+---+---+---+---+---+---+---+---+---+---+---+--- Brit. Imports| 348|334|348|362|327|313|294|303|324|360|356|373|360|346|350 Brit. Exports| 223|234|242|240|233|213|213|222|234|249|263|247|227|218|216 Ger. Imports| 141|148|156|163|163|147|144|156|165|201|208|208|202|199|198 Ger. Exports| 145|149|160|164|160|143|149|157|160|158|166|159|148|155|148 -------------+----+---+---+---+---+---+---+---+---+---+---+---+---+---+---

These figures may be ill.u.s.trated diagrammatically as follows:-

[Ill.u.s.tration]

WOULD PROTECTION HELP US?

So far, therefore, as Germany is concerned, Protection has been, for the general ends for which it was intended, a complete failure. Is there any reason to believe that it would be more successful in Great Britain?

Every consideration of common sense points the other way. What Germany had to do was to build up comparatively new industries, in face of the overwhelming compet.i.tion of Great Britain. In some instances she has been successful, and in some instances it is possible that Protection may have helped her by giving particular manufacturers an advantage in their home market at the expense of the whole German nation. But in England we have no such task to undertake. Our industries are already established; our wares are already known in every quarter of the globe; it is our compet.i.tion that every other manufacturing country dreads. Nor is that the only difference. In Germany and in France and in the United States it is the home market that Protectionist manufacturers and Protectionist statesmen are anxious to secure. All their efforts are directed towards preventing their own citizens from purchasing British or other foreign goods. But with us the home market is not the primary consideration. Our business is with the whole world: our customers are of every race and colour from the patient Chinaman to the restless New Englander, from the supple Bengalee to the African savage. If we can keep their custom we need have no fear of our power to satisfy the wants of our own countrymen.

ON WHAT SHALL WE LAY A TAX?

It is, indeed, just because the advance of Germany in a few limited directions has scared some people into the belief that we are losing our foreign trade, that such books as Mr. Williams's "Made in Germany" are written. The whole point of their lament is that Germany is ousting us from neutral markets. a.s.sume that it is so-though it is not-what then?

How will Protection help us to maintain the hold we are said to be losing? All that Protection can do is to make more difficult the entry of foreign goods into our own country. But what are the foreign goods that enter our country? Four-fifths at least are food or the raw materials of manufacture. In support of this statement I must refer the reader to the Custom House returns to make his own cla.s.sification. After going through the figures carefully I arrive at the following rough result for 1895:-

----------------------+-------------- | Million 's.

----------------------+-------------- Food and Drink | 177 Raw Materials | 163 Manufactured Goods | 76 +-------------- Total Imports | 416 ----------------------+--------------

Colonel Howard Vincent, I see, puts the total of manufactured goods at 80 millions. His figure will serve as well as mine. Either shows clearly enough the character of the great ma.s.s of our imports. On which of the two main branches, on food or on raw materials, do the Protectionists propose to levy a tax? It is a strange way of helping our manufacturers in their struggle for the markets of the world to impose additional taxation on the food of their workpeople or on the raw materials of their industry.

A NEW ROAD TO FORTUNE.

There remains the comparatively small amount of manufactured goods we import, representing articles which our manufacturers cannot or will not produce at all, or cannot produce so cheaply as the foreigner does.

Supposing we taxed every one of these articles as it entered our ports, where would the advantage be to British manufacturers whose main ambition is to send their goods abroad? There is, it is true, just one possibility of benefit to them. It is possible that the imposition of a tax on some of these foreign manufactured articles would enable the British manufacturer so to raise his prices in the home market that he could afford to forego all profit on his sales abroad and sell to his foreign customers at or below cost price. That is the only conceivable way in which a Protective tariff could help the British manufacturer in his rivalry with his German compet.i.tors for the markets of the world. As for the cost of this topsy-turvy system of trade it is to be borne of course by that patient a.s.s the British public. The British consumer is to be compelled to pay more dearly for certain goods in order that some other people, j.a.ps or Chinamen, may be able to buy those goods below cost price. Here, again, I will not a.s.sert that such an apparent act of folly is not worth committing under given conditions. I can imagine a firm or a country consenting for a time to work for less than no profit in order to get a foothold in a new market. But we already have the foothold, and have already worked it for what it is worth. If now we discover that, for one reason or another, there is no more profit in it, surely our wisest policy is to try something else. Otherwise we might continue for ever to sell at a loss-individual or national-for the sole pleasure of adding to the total figures of our turnover. Even the Protectionists would hardly contend that along such lines lay national prosperity.

INTER-IMPERIAL TRADE.

There is, however, another, though not entirely distinct, proposal for dealing with the alleged mischief of German compet.i.tion. It is this-that we should try and persuade our Colonies and Possessions to give preferential treatment to our goods in return for a similar preference accorded by us to their goods. It would be unfair to call this scheme Protectionist in the ordinary sense of the term, for it is inspired as much by the desire to bring about a closer union of different portions of the empire as by the fear of foreign compet.i.tion; but as it is with the question of foreign compet.i.tion that we are here primarily concerned, we will deal first with the Protectionist side of the proposal. On this side the object aimed at is the destruction or diminution of foreign compet.i.tion in our Colonial markets. Undoubtedly, were the Colonies willing to make the necessary tariff adjustments in our favour, that object could be attained and our German rivals could be excluded in part or in whole from Canada, from Australia, from India, or from the Cape. So far so good. But what would that exclusion be worth to us? In a previous article I referred to figures showing how insignificant as compared with our own is German trade with our Colonies. It is worth while to present these figures in a fuller form.

They will be found in the following table:-

IMPORTS INTO THE FOLLOWING BRITISH POSSESSIONS.

Average of the Three Years-1890, 1891, 1892.

In Millions Sterling.

-------------------------+----------+--------+--------+--------+-------- | Total | Amount | Amount | Amount | Amount | Imports | from | from | from | from | from all | United | United |Germany | France.

|Countries.|Kingdom.| States.| | -------------------------+----------+--------+--------+--------+-------- India | 84 | 589 | 15 | 16 | 12 Australasia | 666 | 284 | 26 | 16 | 3 South Africa | 127 | 103 | 4 | 2 | 04 North America | 246 | 92 | 112 | 8 | 5 West Indies | 64 | 28 | 19 | 05 | 1 Other British Possessions| 314 | 66 | 6 | 4 | 6 +----------+--------+--------+--------+-------- Total | 2257 | 1162 | 182 | 46 | 28 -------------------------+----------+--------+--------+--------+--------

These figures are, unfortunately, two or three years behind date, and probably a later return would show that the proportion of British exports to our princ.i.p.al Colonies had fallen off and the German proportion somewhat increased, but this change has certainly not been sufficiently great to affect the general aspect of the table. That table shows that more than half of the total import trade of our Colonies is in our hands, and that our three princ.i.p.al rivals together have little more than a tenth of the whole trade. Indeed, were it not for the inevitably big trade of the United States with Canada, our three rivals together would only have about one-fifteenth of the trade of our Colonies. As for Germany in particular the table shows that the amount of the trade she has so far been able to secure is absolutely insignificant in comparison with our figures.

THE COST TO THE COLONIES.

"But," argue the preferentialists, "German trade with our Colonies has been growing rapidly, and may continue to grow." Possibly it may, if our manufacturers go to sleep; but what we have here to consider is whether it is worth while to take any political action to stop the possible growth of a competing trade which at present is insignificant in amount.

Remember that if such action is taken by the Colonies to please us, we shall have to pay a price for their complaisance-for their loss by the exclusion of German or any other foreign goods would be twofold. In the first place the Colonial consumer would suffer. He now buys certain German goods because they suit him best, either in quality or in price.

That privilege it is proposed to take from him. His loss is therefore certain. Secondly, there is a considerable danger of injury to the Colonial producer. If the Colonies close their markets to German goods Germany may retaliate by closing her markets to Colonial goods; and Germany is, so far as the trade goes, a fair customer to the British Colonies. Here are the figures:-

TRADE OF BRITISH POSSESSIONS WITH GERMANY.

Average of Three Years (1890, 1891, 1892).-In Thousands Sterling.