Blackwood's Edinburgh Magazine, Vol. 70, No. 434, December, 1851

Neither is it necessary at present to advert to the gross inconsistencies of the system – to the restrictions which it still continues upon that very branch of industry which it has laid bare to foreign competition. Let us take the system as it is, of which you have had now nearly three years' experience, dating from the time when the ports were opened.

Three years constitute a long period for the endurance of a commercial experiment. During that time you have had ample opportunity of observing how the system has worked. Are you richer or poorer than you were before the experiment began? If the former, Free Trade has worked well; if the latter, it is a mischievous delusion.

This is a question which you alone can answer – or rather, every man must answer it for himself. But this much we may be allowed to say, that, from what information we can gather regarding the state of general trade – from the sentiments which we have heard expressed by many of the most respectable of your own body – the experiences of the last year have not been such as to give you much encouragement for the future. If it is so, then you will do well to consider whether or not you ought to lend that great political influence which you undoubtedly possess, in support of a system which has not only failed to realise the anticipations of its founders, but has actually diminished in a great degree the power of purchase of the community.

This is no trivial matter to any of us, least of all is it trivial to you. The next general election will be, in its results, by far the most important of any which has taken place for centuries. If, in the new Parliament, all idea of a return to the Protective System is abandoned, we may prepare ourselves for that most dismal conflict which can convulse a country – a war against taxation, and ultimately against property. For – rely upon this – heavy taxation and cheap produce are things which never can be reconciled. You may, if you please, hand over the home market of Britain to the foreigner, and allow him, without toll or custom, to supply our wants with produce of his own rearing; but, if you do so, what is to become of our own population, and their labour? – and how are you to levy those taxes which labour alone can supply? That manufacturing interest, for which such desperate sacrifices have been made, is daily losing ground in the markets of the world. The fact will brook no denial, and it is admitted even by its own members. America has refused the bait offered to her by the Free-Traders, and is engaged heart and soul in the cotton manufacture, for which she possesses within herself the command of the raw material. To those countries which supply us with corn, our exports of manufactures have alarmingly decreased. We may continue to glut (for that is what we are doing at present) the markets of India and China, and our export tables may exhibit a cheering increase in the amount of yards of calico sent out; but, unless the trade circulars are utterly mendacious, the speculation has been, and will continue to be for a long tract of time, unprofitable. The fact is, that the extent and value of our foreign trade in manufactures is little understood by most of us, and grossly exaggerated by others. It constitutes, after all, a mere fraction of the national production. The consumption of manufactures at home is, or was, before the late changes were made, twice as great as the whole amount of our annual exports. The prosperity of this country does not depend upon the amount of wares which it sends or forces abroad, though that is the doctrine which is constantly clamoured in our ears by the political economists – a generation of ridiculous pretenders, of whom it is only necessary to know one, in order to form an accurate estimate of the mental capabilities of his tribe. It depends on our own labour, on our own internal arrangements, and on that reciprocity between man and man, and between class and class of our fellow-subjects, which is the only real security for the peace and tranquillity of a kingdom. Those exporting manufacturers, who rummage foreign markets, are no better than so many buccaneers. Their object is to evade the burden of taxation at home, and, wherever they can with advantage to themselves, to bring in foreign labour, untaxed and untolled, to supersede that of the British workman.

You cannot have failed to remark that the arguments which are now put forward by the Free-Traders, in support of their system, are totally different from those which they advanced while recommending it for the adoption of the country. How often were we told, during the struggle which preceded the repeal of the Corn Laws, that all the apprehensions expressed of a permanent fall in the value of produce, and of overwhelming importations from abroad, were purely visionary! Learned statists undertook to prove by figures that the whole quantity of grain which could be brought into this country was absolutely insignificant, and that it could not disturb prices. Mr James Wilson of the Economist, in his valuable tractate entitled Influences of the Corn Laws, which was published eleven years ago, thus favoured the public with his anticipations for the future, in the event of the repeal of the Corn Laws: —

"Our belief is," says the sage of Westbury, "that the whole of these generally received opinions are erroneous; that if we had had a free trade in corn since 1815, the average price of the whole period, actually received by the British grower, would have been higher than it has been; that little or no more foreign grain would have been imported; and that if, for the next twenty years, the whole protective system shall be abandoned, the average price of wheat will be higher than it has been for the last seven years, (52s. 2d.,) or than it would be in the future with a continuance of the present system; – but with this great difference, that prices would be nearly uniform and unaltering from year to year; that the disastrous fluctuations would be greatly avoided, which we have shown, in the first proposition, to be so ruinous under the present system."

For this very notable sentiment, Mr Wilson was clapped on the back by the Manchester men, and commended thus in the seventh circular of the League: – "We are much indebted to Mr Ibbotson of Sheffield, Mr James Wilson, and our esteemed correspondent, for labouring to prove to the landlords that they may safely do justice to others, without endangering their own interests. And we think very much has been done towards justifying their opinions, that the money price of grain would not be lowered even by the total repeal of the Corn Laws!" Sir Robert Peel, in the memorable debates of 1846, attempted to justify his experiment on the ground that previous commercial relaxations had been found beneficial to the parties who were directly engaged in the trade, his inference being, that the same result would follow in the case of the agriculturists. Unfortunately the data upon which he proceeded were altogether fallacious; for, notwithstanding his dexterity in selecting figures, and bringing out balances which were apparently favourable, it was clearly demonstrated by Lord George Bentinck, that in no one instance whatever had those relaxations proved favourable to the British producer, and that many of them had moreover occasioned a large loss to the public revenue. But the language held by Sir Robert Peel, upon that occasion, cannot be construed otherwise than as the expression of an opinion that, by the repeal of the Corn Laws, prices would not be materially disturbed – at all events, that they would not be lowered so as to fall below the remunerative point.

The immense influx of foreign grain which followed the opening of the ports in 1849, and the immediate fall of price, were calculated to alarm not only the farmers, but even that section of the Free-Traders who believed conscientiously that the productive powers of Europe and America were unequal to the supply of so very considerable a surplus. It is no wonder that the farmers were frightened, when they saw grain coming in at the rate of a million of quarters per month! They were, however, told by the highest Free-trading authorities in both Houses of Parliament, and the same view was violently maintained by the Liberal press, that their fears were altogether groundless; that such importations could not possibly be maintained; and that the first inundation was simply caused by an accumulation of corn at the foreign ports, stored up in readiness for the opening of the English market – a contingency which could not happen again. The utmost pains were taken, by those who had consented to the repeal of the Corn Laws, to persuade the farmers that the low prices of 1849 were attributable principally to the superabundance of the harvest at home; and they were exhorted to wait patiently, but hopefully, for the advent of better times. In short, every means were taken to persuade the agriculturists that they were labouring under a temporary but not a permanent difficulty, and that a very short time would suffice to restore them to their former condition. But no one attempted to maintain, in 1849, that, if wheat continued to sell at or about 40s. per quarter, its cultivation could be profitable in Britain; and when, at a later period, one or two rash theorists attempted to broach that doctrine, they were instantly put to silence by the overwhelming nature of the proof which was brought against them – not the least instructive part of it being the admissions of the leading Free-Traders as to what really was, on an average of years, the remunerative price of wheat to the British grower.

It is now clearly established, that, under Free Trade, 40s. per quarter is a price which the British farmer cannot calculate on receiving. The averages of England are now about 36s. per quarter, being 20s. lower than the sum which Sir Robert Peel considered as the lowest which could remunerate the grower. Therefore, taking the average yield of good wheat-land at four quarters per acre, it appears that, by continuing to grow that kind of grain which is convertible into ordinary bread, the farmer must be a positive loser to the extent of four pounds per acre! In other words, even suppose no rent at all were taken for the land, wheat cannot continue to be grown at a profit in Great Britain, so long as the averages remain below 40s.; and we leave a large margin to the credit of improved husbandry and strict economy, exercised, as it must be, at the expense of the labourer's wages. That such is the present condition of the British farmers – a hopeless one, unless a legislative remedy is applied – will brook no denial. Last year we were told of farms letting at an increase of rent, and of other symptoms of agricultural prosperity, whereof nothing now is heard. The fact of the depression – if we may use so mild a term in respect to a branch of industry which is now merely existing upon capital, not by income – is beyond all possibility of doubt or cavil. The causes of it are obvious; and it now only remains to be seen whether we can afford to allow agriculture to be extinguished from among us, or at best raised to that point which will afford a bare subsistence to the grower, without the risk of involving the rest of us in a like calamity.

You may have heard it said – for it has been often written – that it signifies little to the people of this country from what source they receive their bread. It is worth your while to examine into this. That a loaf baked of American flour, grown in the valley of the Mississippi, may taste quite as well in the mouth of the consumer as a loaf of English material is a circumstance which we can readily believe; but is this all that is to be considered? Does the American bear any part of our national taxation? Does he contribute, directly or indirectly, to the burdens which are common to the British producer? Does he deal with any of you, and can you call him a customer? These are the questions which you ought to ask yourselves, in making up your minds on this matter; and if you will only examine the subject patiently and dispassionately, your own common sense will lead you to a just conclusion. Let us suppose that all the food which you purchase and consume was grown on a foreign soil, and admitted free of duty. You might then have cheap bread, but, as a necessary consequence, you would lose more than half your customers. Unless people have money they cannot buy; and if agricultural production were to be abandoned in the British islands, all those who derive their incomes – not only directly, but indirectly – from the soil, would necessarily be stripped of their means. Are you aware of the fact that, on a minute analysis of the census of 1841, it appeared that the relative numbers of the population of Great Britain and Ireland, supported and maintained by the two great sources of production, agriculture and manufactures, were as 18,734,468, dependent on the first, to 8,091,621, dependent on the second? Do you believe that the country can remain prosperous, if you strike a deathblow at the produce which maintains more than two-thirds of its inhabitants?

Let us go a little farther, and suppose – what may hereafter be the case – that other countries could undersell us in the home market in the article of manufactures – that America, France, or Germany could send us cotton and woollen stuffs, and other ware, cheaper than we could make them at home. In that case, where would be the sources of our income? All industry would be prostrated – for you know very well that a losing trade will not and cannot be carried on long, and that the time will soon arrive when, through the failure of capital, it must be abandoned. In such an event, what would become of our population, with their labour entirely destroyed? How could the taxes be levied, and the expenses of government paid, to say nothing of the interest of the National Debt? Great cheapness you would have, no doubt, but nobody would be able to buy.

If cheapness is a blessing in food, it is a blessing in clothing and in everything else. The rule admits of no exception. It is as advantageous for any of us to save a pound on the price of his coat as a penny on the price of his loaf. Bread is, no doubt, the most important article of the workingman's consumption, but at the same time it is no less a fact that the raising of food is the most important part of the production of the labouring-classes. Without home labour, all capital in this country would be annihilated, or at least would depart from it. Labour depends entirely upon wages, and wages upon the market price of the article produced. If from the introduction of foreign labour, in the shape of products, the price of any article is forced down below the cost of production, then wages begin to fall, and in the end production is extinguished. Why is it that foreign countries have imposed heavy duties upon our exported articles of manufacture? Simply for this object – that their own manufacturers, who give employment to large numbers of their population, may not be undersold by ours, nor those means of employment annihilated. In acting thus, these governments perform a paternal duty to the people – shielding them against the competition of an older manufacturing power, and preparing them hereafter, when skill and capital are acquired, to enter neutral markets, with a fair chance of ultimately overcoming the other.

It stands to reason that, with an equal degree of energy on the part of its inhabitants, the country which is the least heavily burdened must distance others in all branches of industry, where nature does not oppose a barrier, or place it at a disadvantage. The mineral wealth of England, and our priority in manufacturing invention, gave us for a long time an advantage over all other nations. America was not advanced enough to enter into the lists of manufacturing competition; the distracted state of the Continent, and the perpetual presence or apprehension of war, effectually prevented the European states from attempting to rival Britain. But since that time vast changes have taken place. The mineral resources of other countries have been developed. Some idea of the manufacturing power which America now possesses may be formed from the enormous increase of her domestic production of iron and coal. In 1829, the amount of iron manufactured in the United States was 90,000 tons; in 1848, it had risen to 800,000 tons. The coal raised in 1829 was 37,000 tons; in 1849 it was 3,200,000 tons. In the article of cotton, which is our great manufacturing staple, America has the inestimable advantage of growing the raw material – an advantage which never can be counterbalanced, as, even if we were to obtain our supplies from some other quarter, the expenses of freightage must still continue to be great. In fact, to all appearance, our supremacy in the conversion of cotton is already doomed. That branch of industry rests upon no substantial basis. It rose like an exhalation, and so it will disappear. These are not merely our opinions, but those of the most shrewd and calculating of the Free-Traders. Hear Mr Greg of Manchester on this subject, previous to the repeal of the Corn Laws: —

"At present we are undersold by foreigners in neutral markets in all the staple articles of English manufacture. In the articles of cotton, hosiery, and cutlery, which amount altogether to three-fourths of our exports, this is notoriously the case. In cotton fabrics the Swiss undersell us in several markets. In cutlery Sheffeld is immensely undersold by the Alsace, and our exports are yearly decreasing. In hosiery, the case is still worse. Saxon hosiery, after paying a duty of 20 per cent, is sold in London 25 to 30 per cent cheaper than the produce of the Leicester and Nottingham looms. In Leicester the stocking frames have diminished from 16,000 in 1815 to 14,000 in 1840; whilst in Saxony, in the same time, they have increased from 4590 to 25,000. The English manufacturer pays 2s. 6d. for the same work that the French manufacturer gets done for 2½d. The American cutlery market (the most important of all) has been wrested from us, and our exports of that article to all the world have fallen from £1,620,000 in 1831 to £1,325,000 in 1841. How far with cheaper food, no taxes on the raw material, and no duties but for the sake of revenue, we might yet recover our lost superiority, is a matter for grave consideration. I do not believe we could either in woollens or hosiery; and even in the cutlery or cotton trade I think it very doubtful. Now, under a free commercial system, the raw material would be nearly the same in all countries, and the advantage, where there was one, would be generally on the side of foreigners. France and Italy would have an advantage in silk, and America in cotton; the current expenses would also be nearly equal. The machinery of foreign nations even now is not very inferior to our own, and is daily and rapidly improving; their capital is fast accumulating, and the yearly interest of it approximating to our own rate."

Here, you see, is a confession of opinion by a leading Free-Trader, that even the cheapening of food, by which he means the reduction of the wages of labour, will not suffice ultimately to secure us the supremacy of the foreign markets. He is perfectly right. In this insane, and we believe almost entirely unprofitable competition with the rest of the world, we must infallibly be overcome. No cheapness of food can countervail the pressure of our heavy taxation. The cotton-lords, if they could, would fain bring down the price of labour to the Continental level, which doubtless would enable them, for a long time, to prolong the contest; but this they cannot do, if our national engagements are to be fulfilled, and our most valuable institutions maintained. So long as the revenue duties exist, labour cannot be forced down to that point. But, in the mean time, agriculture may be ruined, and the home trade, by which alone you subsist, be palsied. In fact, the present struggle lies between the home trade and the foreign trade. One or other of these must ultimately succumb. The effect of our present commercial system is to paralyse the home trade, by decreasing the value of all kinds of domestic produce; by lowering all incomes, and consequently reducing the amount of the internal business of the country. It has enabled our manufacturers, for the time, to make a show of larger exports than before; but it has not, according to their own acknowledgement, at all enhanced their profits. It may have enabled them to lower their prices, but it has not increased their returns.

And no wonder that it should be so. Except in the most miserable and unimportant quarters, our relaxations have been met by augmented tariffs instead of eager reciprocity. The nations of the world have refused to sacrifice their advantages, to renounce their prospects, and to become Free-Traders at the call of Britain. Their statesmen thoroughly understood the motive of the ingenuous offer: they were not to be cozened even by the plausibility of Sir Robert Peel. It is almost melancholy now, when we remember what has actually taken place, to revert to the peroration of that statesman's speech delivered on 16th February 1846. A more lamentable instance of delusion, as to the true feeling and position of other countries, was never perhaps exhibited. Mark his words: —

"Many countries are watching with anxiety the selection you may make. Determine for 'Advance,' and it will be the watchword which will animate and encourage in every state the friends of liberal commercial policy. Sardinia has taken the lead. Naples is relaxing her protective duties, and favouring British produce. Prussia is shaken in her adherence to restriction. The government of France will be strengthened; and, backed by the intelligence of the reflecting, and by conviction of the real welfare of the great body of the community, will perhaps ultimately prevail over the self-interest of the commercial and manufacturing aristocracy which now predominates in her Chambers. Can you doubt that the United States will soon relax her hostile tariff, and that the friends of a freer commercial intercourse – the friends of peace between the two countries – will hail with satisfaction the example of England?"

How strangely did this remarkable man, whose career in all time coming will be a warning to the aspiring statesman, misunderstand the true nature of his country's position! In order to tempt reciprocity he opened the British ports – that is, he conceded gratuitously the only condition by which we ever could have hoped to insure it! At the expense of the British agriculturist he opened the British market to the foreigner, in the expectation, as he expressly declared, that the boon would be repaid by measures which would prevent the rise of manufactures abroad, and restrain other nations from employing capital profitably, from entering into rivalry with Britain, and from using those natural advantages which were ready to their hand; and which, if used, could not fail to add to their wealth, and to furnish employment for millions of their increasing population! Most egregious was the blunder, and terrible is the penalty which we are certain to pay for it, if we do not retrace our steps.

It is always useful to know what intelligent men of other countries think of our system. They survey and examine it without those prejudices which are apt to beset all of us, and are better able than ourselves to determine with what degree of favour it will be received, or is received, by those who are removed beyond the scope of our immediate observation. Certainly, of all others, from their affinity to ourselves, and their proverbially shrewd acuteness in all matters of commercial detail, the Americans are most likely to form an accurate estimate both of our position and our prospects in regard to foreign trade. It is well worth our while to read and consider the following opinion of Mr Carey, the most distinguished Transatlantic writer on points of political economy. It occurs in his work entitled The Harmony of Interests, published in America so late as December 1849.

"Men are everywhere flying from British commerce, which everywhere pursues them. Having exhausted the people of the lower lands of India, it follows them as they retreat towards the fastnesses of the Himalaya. Affghanistan is attempted, while Scinde and the Punjaub are subjugated. Siamese provinces are added to the empire of Free Trade, and war and desolation are carried into China, in order that the Chinese may be compelled to pay for the use of ships, instead of making looms. The Irishman flies to Canada; but there the system follows him, and he feels himself insecure until within the Union. The Englishman and the Scotchman try Southern Africa, and thence they fly to the more distant New Holland, Van Diemen's Land, or New Zealand. The farther they fly, the more they use ships and other perishable machinery, the less steadily can their efforts be applied, the less must be the power of production, and the fewer must be the equivalents to be exchanged; and yet in the growth of ships caused by such circumstances, we are told to look for evidence of prosperous commerce!