"Fair trade" no remedy for trade depression

"Fair trade" no remedy for trade depressionAuthor(s): Smith, SwireSource: Bristol Selected Pamphlets, (1886)Published by: University of Bristol LibraryStable URL: http://www.jstor.org/stable/60246946 .

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"FAIR TRADE"

NO REMEDY FOR TRADE DEPRESSION.

Speech by Me. SWIRE SMITH, Keighley,

At the Meeting of the Associated Chambers of Commerce of the United Kingdom, held at the Westminster Town Hall, London, on February 2-3rrf, 1 886. C. M. Norwood, Esq in the Chair.

"Resolution", proposed by Mr. C. A. Petebs, on behalf of the Derby Chamber of Commerce; seconded by Mr. "W. B. "Woolf (Hull),

'' That the Association of Chambers of Commerce is of opinion that this country should, without further delay, adopt a policy of retaliation against those countries that do not grant to British goods the terms conceded to the Most Favoured Nation, and that the Council communicate this resolution to the Prime Minister and Foreign Secretary."

The following Amendment was moved by Mr. Sampson S. Lloyd (Birmingham), and seconded by Mr. H. TTawkes (Birmingham) :—

" To omit' the terms conceded to the Most Favoured Nation' and substitute ' fairly reciprocal fiscal treatment.' "

In opposing the resolution of the Derby Chamber of Commerce, Mr. Swire Smith observed, that to him it seemed somewhat remarkable that all the supporters of the resolution were avowed Free-traders, and yet one and all regretted that we had given everything to our rivals and had now scarcely any import duties remaining with which to offer reciprocal ex¬ changes. He would remind them that we had swept away our import duties entirely to please ourselves, so that we could buy our commodities in the cheapest markets ; and for Free-traders to express regret that we had removed these duties would be looked upon by waverers in every country as an evidence that we did not believe in the wisdom of our own actions, and would hardly encourage them to come over to our side. So far as he knew, Spain was the only country which treated our goods

UNIVERSITY OF BRISTOL

USRARY



differentially, and refused to grant to us the " favoured nations' clause." But the proposer of the Derby resolution, while ostensibly aiming at Spain, had suggested the levying of duties which would apply equally to other countries, and while disclaiming all motives of protection or retaliation, but simply for the purpose of "

regain¬ ing our bargaining power," he had also proposed that duties should be levied on such imports as oranges and oil. Did not such suggestions show an absurd inadequacy of dealing with a great question All must admit, however, that Spain was treating this country very ungenerously; but we must not forget that she had a grievance against us. The wine-growers asserted that the tax on their wines gave a distinct advantage to the French wines, and, in order to compel us to lower the wine duties, they and the manu¬ facturers had persuaded the Government to retaliate on British manufactures. Spain was actually buying goods from Prance and Germany at a considerably higher price in some instances than she would have to pay to England for similar goods, in order to spite us, and we were now seriously asked by the supporters of this motion, to give a higher price elsewhere for our goods in order to spite Spain. In other words, because we were not able to sell in the dearest market, we were to refuse to buy in the cheapest. It had been said of old, " If thine enemy smite thee on the one cheek, turn to him the other," but the representatives from Derby and Hull and Birmingham went far beyond this and said, " If thine enemy smite thee on the one cheek, smite thyself on the other." Surely the Associated Chambers would not recommend anything so foolish! In view of this harsh treatment—which had fallen with exceptional severity upon manufacturers and merchants in Bradford —they had better lo ik at our trade with Spain as a whole. Spain imposed differential duties on our goods, and thereby was supposed to be compelling us to paya larger proportionate share of her revenues than other countries. Tet he had seen a statement a while ago, on the authority of Sir Louis Mallet, that in spite of all this wickedness on the part of Spain, our Government raised a higher sum in customs duties from Spanish imports than Spain raised from British imports. A more effective means of retaliation might be adopted than even this one proposed, viz., to abstain from drinking Spanish wine altogether,—to

" Boycott

" it—and such action would probably bring the Spaniards to their senses immediately. It had been stated tlat those foreign tariffs were "killing our export trade," and that Spain, by her differential duties, not only injured

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3

but insulted us.$ Spain with all her efforts could not keep out our products, and in this fact there ought to be some little consolation for the representatives from Hull and other seaports. In recent years we had done more trade with Spain than ever before. Taking the average of the five good years, 1870 to 1874 inclusive, our imports from Spain amounted to £8,300,000 per year; while in the five bad years, 1880 to 1884, our imports amounted to £10,800,000 per year. In the good years our exports averaged £4,200,000 per year ; and in the bad years £4,500,000, with values greatly dimin¬ ished. Thus our total trade with Spain averaged £12,700,000 in each of the above good years ; and £15,000,000, with lower prices, in each of the bad years One result would follow the curtailment of this trade—there would be less employment for British shipping. Our imports of Spanish wine amounted, in 1884, to £1,140,000, a smaller sum than was represented by the import of oranges and lemons ; our food imports amounted to £2,600,000; while minerals for copper, iron, lead, &c, were entered at £4,700,000. All the world looked to England as the leading country in civilisation and enterprise. We were acknowledged to be foremost in inventions, and we were all proud of the example we set to other nations in civil, religious, and industrial freedom; yet we were now asked to retrace our steps and follow the example of the most backward of all the European nations. If the supporters of retaliation wished to be effective in their action, why not make an onslaught on the United States, a much greater Protectionist sinner even than Spain She taxed almost everything she received from England, while excepting tobacco, and some other unimportant articles, we admitted her products free. In 1884 our imports from the United States amounted to £86,000,000, while our exports, including £7,000,000 of foreign and colonial produce, amounted to £32,700,000. Ex¬ cluding food and raw materials which it was not proposed to tax, how was this great Protectionist country to be hit He supposed by taxing our imports of American manufactures, which in 1884 amounted to the insignificant sum of £2,300,000. All the speakers had gone beyond the resolution, and discussed the policy of Pro¬ tection. They had no right as commercial men to ask Parliament to protect one class of the community at the expense of others ; and to recommend an imposition of duties on such imports as injured the manufacturers and which did not give equal protection to the farmers, who for years had been the most suffering class in the community, would be manifestly unfair and unworthy of their



4

consideration. He had no wish to minimise the Evidences of de¬ pression and the difficulties which stood in the way of its removal. Foreigners, and unfortunately our own colonies, taxed our manufac¬ tures, while we admitted theirs free of duty. At the present time we were annually admitting manufactured and semi-manufactured articles of the value of from £45,000,000 to £50,000,000, of which the raw material was, in nearly all instances, as cheap in England as in any country. Of these manufactures, nearly half were textiles (silks, woollens, &c.) ; then followed chemicals, dyes, fancy articles from Paris, bronzes, clocks, watches, china and glass, artificial flowers, gloves, furniture, &e. The above list constituted about three-fourths of the import of manufactures. It would be remembered that a few years ago the question of foreign competi¬ tion was much discussed, and it was said as much then as now that we were losing our trade, and a Royal Commission was appointed to visit the manufacturing countries on the Continent and America in order to ascertain the causes of this competition. Practical men, conversant with our great industries, were appointed:—Sir Bernhard Samuelson, M.P., the President-elect of the Associated Chambers, represented iron; Mr. John Slagg (at that time member for Manchester), cotton; he (Mr. Smith), wool; Mr. Woodall, M.P., pottery and ceramics; Sir Henry Eoseoe, M.P., chemicals; Mr. Magnus (Director of the City and Guilds of London Institute) and Mr. G. B>. Redgrave (Secretary) represented science and art education generally. These gentlemen, assisted by Mr. William Mather, M.P., who reported on the United States and Russia, travelled through Europe, inspecting the important industries and schools in each competing country, and obtaining evidence from

employers, and workmen, and representative men, on all questions relating to education and the progress of Continental industries. The report of the Commission showed that, although great strides had been made during recent years by foreign nations, yet, viewing the rival industries as a whole, our country was still incomparably at the head of the world. The report also showed that in those industries in which we were surpassed, the cause was owing, not so much to the lower wages and longer hours of Continental workmen, nor to hostile tariffs, but rather to the greater attractiveness, to the design, dyeing, and superior workmanship of many of the goods themselves. They needed only to survey the shop windows of every town for

ample evidence on this point. This superiority was due in a great measure to the scientific and artistic training so assiduously im-



parted to manufacturers and artisans in the schools of the leading Continental countries, a training which had been grossly neglected in our own. Was it not deplorable that with so much depression, with so many people out of employment, we should be sending abroad nearly £40,000,000 a year, not to buy food, nor raw material, but the productions of foreign skill and taste, the result of the training of the hands and heads of our French and German rivals, while we had all the time been neglecting the brains and hands of our own people This was not all; we imported foreign designers, chemists, and art workmen, and spent vast sums annually on foreign designs. He had lo hesitation in saying, that had we spent one- tithe of the treasure which we sent abroad for the attractive productions of our rivals, in developing the scientific and artistic faculties of our own people we should have been at the present time making many of these attractive goods at home, and exporting them east and west to foreign markets. Here was a question of the highest importance for all the Chambers of Commerce. We were constantly sighing for new markets, for¬ getting that there is a market in every house in the United Kingdom that can be entered without tariff if we will only put our own people in the way of supplying it. The true remedies for trade depression would have to come from ourselves. Our rivals had been learning from us and copying us for generations ; it was high time that we began to learn from them. Much had been said about the ruin of the English silk industry; they were told that it languished in Derby, Coventry, and Macclesfield, but he would tell them that it had grown and flourished in Switzerland and Germany. When the Technical Commissioners visited the town of Crefeld, in Rhenish Prussia, with a population of about 80,000, they were shown over the silk factories and dyehouses, and they also in¬ spected the weaving and dyeing school, which had been erected from the public funds at a cost of £45,000, and received an annual grant from public sources of £3000. They were told that the expenditure was cheerfully allowed, because they believed that the school brought a good return in imprpving their trade. At that time the silk manufactures of Crefeld were valued at £3,500,000 annually, of which it was said that two-thirds were exported to Eng¬ land, or more than the total export of English silks to the whole world. One of the leading manufacturers of Crefeld being asked if the cost of the textile school and the annual grant for its maintenance were not looked upon by the ratepayers as excessive burdens,



replied That such was not the case, for the ratepayers believed that the English people paid for their school, by buying the superior goods which, through the instrumentality of the school, they had learned to make. Now what had the representatives from Derby, Coventry, and Macclesfield to say to this statement But the same thing applied to most of our industries, and he asked how long were we going to pay for the artistic and scientific training of foreign workmen, while at home we allowed our people to grow up in ignorance and shut them out fromsome of the most lucrative branches of business He quite agreed that the time had come when some national effort for the removal of depression was necessary, but permanent improvement would never come from the bolstering up of our manufacturing interests by import duties, but rather by bringing all our leaders of industry under the influence of a higher scientific and artistic education, and at the same time by putting our own shoulders to the wheel in applying knowledge and enter¬ prise to our manufactures. He was aiming at the same result as the supporters of the resolution, but, as he thought, by better and more rational means, for instead of shutting out the products of foreign excellence and taste by a tax, he would obtain these desirable qualities by increased excellence and taste at home. This question of education, went to the root of the trade depression, and claimed the earnest consideration of all com¬ mercial men. We had done wonders in developing machinery, and manufacturers were ready to pay the highest prices in order that they might obtain theubest that could be made. Let them pay the same attention to the technical instruction of their artisans, and the problem of trade depression would rapidly be solved. He would not take a gloomy view of the future, and all evidence went to show that the statement so often made that foreign tariffs were killing our export trade was altogether in¬ correct. Foreigners tried to kill our trade, but they did not succeed, and it was a remarkable fact in the face of all their hostility that there was no country in the w orld, protected or other wise, that bought so much from any Protectionist country as from Free-trade England. The report of the trade depression com¬ mission had shown that our export trade had never been so large in volume as during the recent years in which Fair-traders said it was being killed. What proof had the supporters of this resolution that the imposition of duties would keep out foreign goods and restore prosperity to our manufacturers Other nations had been



cited as examples for our imitation, but in no European country were the manufacturing operatives so well off as in England, in none had they so much comfort and so much leisure. Our protected rivals were all complaining they were not protected enough. Our great neighbour France had surrounded herself with a stupendous wall of tariffs, and yet she could not keep out our goods. All in¬ dustries were protected, and the State was periodically called upon to supply relief on a gigantic scale. The Standard had stated that France " had become a great State organisation, wherein one half of the population might be said to toil to keep the other half alive." The Legislature yielded in turn to the powerful interests ; it first protected the manufacturers, and then was compelled to protect the farmers, and while bread had been much dearer than in England, the tax on food had been increased at the very time that jseople were starving for the want of it. France protected her manu¬ facturers, and yet in 1884 she imported manufactures of the value of £25,700,000. In every country that he had visited the manu¬ facturers loudly lamented that Protection did not protect them. Look at America, the paradise of the Protectionists No countr y made such efforts to keep out foreign manufactures, and yet no country imported so many. In 1884 the American imports of dutiable goods amounted to £91,000,000, and while the tariff on textiles was intended to be prohibitory, yet £29,000,000 worth were imported. The iron imports in 1885 amounted to £7,000,000. Three months ago, out of 700 blast furnaces, only 225 were in operation, and all this time the duty on pig iron was 75 per cent. On a visit to the United States a little over a year ago, he found that everything was overdone, and the manufacturers in their distress were clamouring for more protection. Their feelings were represented by one of the leading papers, which abused the Govern¬ ment for allowing such large imports of foreign commodities, such action being considered grossly unjust to the unemployed and poorly paid workmen of their own country. The language adopted might have been borrowed from the Fair-traders of England ; it was pitched in the same key as some of the speeches at that meeting, but it showed conclusively that Protection was no remedy for trade depression. "Why should we." said the writer, "import nearly twenty-nine million dollars worth of cotton goods in one year when many of our own cotton factories are idle Why import in one year over forty million dollars worth of woollen goods when many of our woollen factories are idle " And after going over the leading



,8

imports in this strain the writer insisted, with all the fervour of an English Fair-trader, that " a Government that does not protect its working men and working women, and its capital, from unnecessary and injurious foreign competition does not do its duty." With all their protection these American Protectionists were still complain¬ ing, and they demanded that the tariff should'" he'amended in the interests of American industries which are not sufficiently pro¬ tected, and not in the interests of European manufacturers, who already enjoy too favourable facilities for sending their products into American markets.'' It was impossible to find any evidence from Protectionist countries that their example would be beneficial to us, and to begin anew a tariff war would tend to destroy and not build up our suffering industries. We had tried Protection once and it had crippled every industry and brought the masses of the people to the verge of starvation. In such times of trial govern¬ ments could not do much for us; we must look to ourselves. British energy had not been developed by hot-house processes, and we should never increase the demand for our exports, nor cheapen their production, by taxing our imports. No nation had yet been ruined by its food and raw materials being too cheap. He opposed the resolution because it was the first step towards a return to Protection, which benefited the few at the expense of the many. Its aim had always been to make the rich richer, and in the long-run he did not believe ihat it had succeeded; but in one direction it

always succeeded—in making the poor poorer.

The amendment, on being put to the meeting, was supported by eight Chambers and opposed by fifty.

The motion was subsequently rejected.

Wm. Byles & Sons, Printers, Piccadilly, Bradford.

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"Fair trade" no remedy for trade depression