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INTERNATIONAL FREETRADER

Mr. Rußsell Rea has published a book entitled "International Freetrade," which has won the warm, appreciation of tho Westminster Gazette. The author, it says, has in no small measure the equipment which made Cobden so powerful an exponent of freetrade. - He understands tho economic theory thoroughly; ho is familiar from prac' ical experience with the mechanism of foreign exchange ; and he grasps exactly what the ordinary man who ia neither a. merchant nor -an economist wants to know. His little book combines from all these strains of knowledge, and reviews the whole case, from the point of view both of theory and fact, in an admirable, straightforward exposition which the least scientific among us can understand. Mr. Rea does wisely to treat tho protectionist economists with respect. Tho German economist List and his school entertained none of the illusions and popular fallacies which form so large a part of electioneering protectionism. They knew that exports were paid for .by imports ; they did not believe that wealth could bo created by taxing commodities ; they 'did not regard protection aa a panacea for unemployment. They regarded it as a stag© in national development, a stage, more or less primitive, on the road to universal ' froetrade.

Mr. Rea (the Gazette goes on to say) carefully summarises the doctrine of Freidrich L)6t, that to build up a manufacturing productive power, it is worth, while to tax an agricultural population, or, reversing the argument, to build up an agricultural "productive power" it is worth while to tax an industrial population. ' •

List wrote sixty years ago, when Germany was still to an overwhelming extent an agricultural country, and it is extremely doubtful whether if he were living now he would not consider .that tha industrialisation of Germany had pro--ceeded to the point at which the policy should be reversed. -At all eventß, hi|. ideal of a sfelf -contained .nation supplying its own wants breaks down when so large a part of the population iB engaged in irt- . dustries other than agriculture that tho * - importation of food on a large scale becomes a necessity. The_ question for us, however, is who- N ther, in comparison with our neighbour*, wo havo suffered by advancing to tho stage of freetrade, even though other countries held back. Mr. Rea. takes the two theories and examines them in the light of our commercial experience. Have we, he asked, suffered the evils and drawbacks which we ought to have suffered if tho German policy is our true policy? Aro we threatened with the misfortunes which Mr. JJalfour predicted in the famous pamphlet in which he considered the "dynamics" of the position? We cannot follow Mr. Russell Rea into the detailed answer which he gives to these questions, but tho reader will find in it a masterly Biirvey of the whole sweep and trend of our trade. Briefly, the conclusion is threefold: — Any competent examination of tho general production of the various manufacturing countries and their export's •of > . manufactures will show three things: (a) We are keeping the first call on the trade of the world ; (b) we are keeping the best »f the trade ; (c) we are keeping as much as we can do in good times. And this position_ we maintain with a higher level of nominal wages, a still, higher level of " real wages, and shorter hours of labour than any of our Continental neighbours. Tf we go to experience, then, the cttSb.for changing our policy falls to the ground; and, even if we were to change, there, i» one insurmountable obstacle to applying the German theory to the British Empire;, —"The British Empire is a- great fad, but, unfortunately, it is not an economio • unit in the sense required for a. 'National' coonomio policy. We have India practically a freetrade country, with wljich w» do as much trade as with Australia, Canada, and the South African colonies put together, and we have • these self-govern-ing colonies, oach determined to Work out' its own national economical development in its own area, on the lines of strictly national — that is, colonial — protection. To speak quite frankly, I have *at '&ri6,mo- . ment more hopo that Germany' will Ifind1 find ' her now tariff insupportable, and relax it —I have far more hope, even an expectation, that 1 the United States will extensively reform her tariff in the freetrado direction than I have of a similar movement in any of our self-governing colonies. We have to acknowledge the candour of our colonial brothers. Throughout this controversy they have made it clear that, preference or no preference, their ideal is the self-contained nation — their national eeonomio unit is the colony, not tho Empire ; and the means they take, and mean to continue to take, to secure this end, is protection, effective protection, of their manufactures." The self-sufficing State of , List's ideal remains completely unrealised . even in Germany, and it is wholly > incapable of realisation either in the United Kingdom v or in the British Empire. Thero are, in fact, no political compensations for the economic sacrifice which the protectionist invites "us to make. ' Two other points ip Mr. Rea's argumont may be briefly touched upon. Firgt, &• shows that the higher percentage of increase in German trade, on which Protectionists have laid so much stress, is it necessary incident of the early stages pf industrialism. In 1870, the date at which the comparison usually start?, twa-third« of the German population were agricultural, whereas only 17 per cent, of our people were engaged on the soil. Manifestly the rate of expansion must be higher in a country which has two-thirds of it« population to draw on than in a country which has only one-sixth. It will slacitea in the former, as in the latter, as the population becomes absorbed into tho non-agricultural industries. The second' point we would call attention to is Mr. Roa's acute analysis of the unemployment question in its relation to tariffs. Let us quoto one passage:— "The problem is almost entirely that of mitigating and tiding over bad times. It must be remembered that under these alterations every trade produces its .own employment, and! as a consequence its own unemployment m bad times, and it is quite obvious that as the substitution of fostered and pro-. tected industries for healthy and natural industries cannot add to the sum of employment in good times in a nation already fully employed, so it cannot diminish the sum of employment in the bad times which follow. For, I repeat, it i»' fact too often overlooked that every trada produces not only its own employment, but its own unemployment, and to import a trade by tariffs and taxes is not a measure that will absorb the unemployed ia bad times ; it is to import unemployment as well a« employment. Tki» thb Americans found when, at an enormous co3t toother unprotected industries, they violently imported a tin-plate manufacture.'* Regular employment, in fact, implies conFtant and even demand, and no conceivable tariff can ensure that. In. thiß country a tariff would almost certainly displace large quantities of labour which would not _bo suitable for absorption in any of tho industries which the protectionists liouq to foster.

The Rev. Thomas Clayton Twitchell, vicar of All Hallows, East India Docks (says the Times) has been nominated by the Archbishop of Canterbury, acting in conjunction with the Bishop of London, to fill the post of Missionary Bishop in Polynesia. His work will consist in giving the ministrations of their Church to all members of the Anglican communion in those regions, and in missionary work among Indian coolies and importea labourers. The Bishop of London will transfer to the new bishop all his jurisdiction in Polynesia. It is arranged that Bishop Willis shall cany ou aa heretofore nis works in Tonga.

Many interesting items of shipping re. cord are disclosed when statistics^ ar« delved into. It has now been ascertained that the first steamer* to exceed 10,000 tons was the City of Paris, m 1888; in 1901 the 20,000 tonner Celtio came under review, and now the Lusitania, 30,000 tons, is afloat. Oreatnst speed attained in 1840 was under nine knots; in 1850, 12 knots; 1860, almost 13 knots; 1870, 144 knots; 1880, 15A knots; 1890, 20 knots; 1900. 234 knots! and in 1908. 25 knots.

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Bibliographic details

INTERNATIONAL FREETRADER, Evening Post, Volume LXXV, Issue 122, 23 May 1908

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1,384

INTERNATIONAL FREETRADER Evening Post, Volume LXXV, Issue 122, 23 May 1908

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