THE DEPRESSION OF TRADE.

Nelson Evening Mail, Volume XX, Issue 57, 9 March 1886, Page 4

THE DEPRESSION OF TRADE.

The depression of trade now existing is < not confined to one country nor to any one ' of the great divisions of agriculture, tnanu- 1 factnres, or commerce. In the mother j country, in the colonial empire, in India, and throughout Europe, a great depression is apparent, and after some years of unexampled prosperity the United States has at length fallen under its influence. Agriculture, manufactures, and commerce are each severely affected by ifc. A depression so universal is unprecedented in the annals of enterprise during the hundred years in which the utilisation of capital, and the amazing development of inventive genius, bave resulted in a concentrated energy of productive force, the like of which has never been witnessed in any preceding period of the world's history. During this period the wages of labour have steadily advanced, and the productions [.ol labour and capital have increased in '" volume as steadily as they have decreased in price, with the result tbat, whilst labour was never so well paid, capital and enterprise were never so poorly rewarded as at the pr-gen. time. Broadly stated— wages were never so high, and profits were never so low. This is a condition, as I think, pregnant with peril to both labourer and employer. For it is evident that if capital employed in agriculture, manufactures, and commerce not only does not meet with its legitimate reward, bub leads to losp, it will reduce, more or less extensively, the employment of labour when ifc finds that the employment of labour can no longer be made profitable. For instance, in one vital department of agricultural enterprise — fche production of wheat — this result is already apparent in the diminished area under wheat this 'year in almost every wheat-producing: country. Now, what are the causes of this depression 1 That tbere are causes will be readily admitted. Bub what the causes are is a question not so easily answered. In times when the transmission of intelligence and the transit of produce were very much slower tban they are now, depressions in trade possibly as severe as thafc now affecting us were experienced in England, in European countries, or in the United States, hut those depressions differed from the present one, in not being universal or current afc the same time. In former depressions a succession of bad harvests in England entailed ,heavy losses upon English farmer., which, though mitigated to some extent in their case by increased prices for their diminished products, decreased the volume of the English home trade, and brought bad trade, shorttim", and heavy losses upon British manufacture-*-. But, inasmuch as bad harvests were never general, our foreign export trade, not then so trammelled as now, by heavy protective tariffs, to some extent compensated English manufacturers for the reduced " home trade." Whereas now, whilst England, under the regime of free trade, admits the productions of foreign nations practically free, the English farmer has no longer the compensation for reduced yields by an increase in price, and the repression of our foreign export trade by the prohibitive tariffs of almost every foreign nation, deprives our manufacturers of any compensative advantage in that direction. During the hundred years which have passed away since Watt and his contemporaries invented the steam engine, the spinning jenny, and the power loom, England became the workshop of the world, and the envy of European nations. During this eventful century, immense areas of virgin lands have been occupied, chiefly by the English-speaking race. Both in the Old World and the New, masses of men have concentrated npon ancient historic points, or have marched into the wilderness, cultivated immense areas, and built great cities there. Whatever else colonisation, mechanical energy, and concentration, may or may not have done, it is certain that they have been potent factors in developing the power of production in every direction ; in greatly reducing the cost of the necessaries of life ; in increasing the wages of labor; and though at their present stag c of development they do not yield equally satisfactory results to such potent agencies as brain, capital, and enterprise, we are not therefore to fall back upon low wages and dear food as the corrective agencies needed to remove the present depression and restore prosperity. The remarkable fluctuation and final declension in values in the century will be apparent from the following : — Table of prices in Great Britain* of the principal raw materials of Industry and Life, at three periods in tbe century. First period, 1782 to 1790, commencement of manufacturing era. Second period, 1831 to 1840, just prior to the adoption of free trade. Third period, _ISBI to 1885, after forty years of free trade.

'^Extracted aad corrected to date, from Mr Mulhall's able article ia the Contemporary, for August, 1885. These low values have been accompanied by a lower value for money than has before been known. The reason for this is not. difficult to find. When, say, a woollen manufacturer, believing that wool had touched its lowest value, has at various periods during tbe last Beven years purchased largely, if he has uniformly found, before he could place hia woollen cloth in the market, that wool had descended to lower and lower values, he naturally steadily restricted his purchases. With scarcely an exception, purchasers of raw materials and manufactured goods of every kind have had a like experience, until money, ceasing to be profitably, employed for suoh purposes, became concentrated on Consols and other stocks, and, like some other life-giving fluids, being withdrawn from healthy circulation, became congested ; and in this manner, money, like all other articles, fell in price, not because of any want of confidence in persons as in times of panic, but because of a want of confidence in the stability of the prices then current of materials of every kind. Under these conditions, England and foreign nations have produced more than they can sell, until, under the influence of accumulated and profitless stocks of manufactured articles, the prices of every one of which have descended to lower values than were ever before known, and the prices of the raw materials, including money required for producing them, have been reduced in an equal or greater ratio. The producers of the raw materials and of the articles manufactured therefrom, have too often, as already noted, alike suffered, not only a total loss of profit, but during the present depression, iv many cases, a ruinous loss of capital as well. Had foreign nations responded to Cobden's invitation to adopt his free trade system of levying duties for revenue purposes only, the markets of the world would have been open to English manufactures, and the illusory efforts to stimulate a country to produce articles for which Nature had provided no special advantages or facilities, . would never have been made. What should we say of an attempt to produce turnips in India, or rice in .Germany. And yet both articles might be produced in those countries were the requisite conditions artifically provided. The folly of such repressive and stimulating agencies in other directions, has unhappily not been recognised by the obtuse intellects which, during the last forty years, nave been engaged in attempts to coerce Nature by operations similar in kind and differing from them only in degree. Now what are among the results of this 3ystem of free trade so-called ? They are very patent. Throughout the civilised world a more Bevere and universal depression prevails than as been hitherto known under the repressive influence of practically prohibitive tariffs, Many English factories are running half time or are closed altogether. English agriculture is in a condition of ruinous collapse. English shipping, to an enormous extent, is lying idle in English ports ; and English colonies, '- notwithstanding their inherent vitality, are in a state of suspended animation, to give it no worse term. Are foreign nations prosperous under this one-j-ided free trade? Has the stimulating influence of the beet-root bounty system

benefitted French or German sugar producers? Has it not reduced them to a condition of hopeless poverty verging on ruin ? Have the United States benefitted by the false stimulus given to American wheat growers by English free trade in grain ? Have they not been Belling wheat afc prices far below a rate which wheat could be profitably produced ? — thus exhausting their fertile soils, with the further result of involving thousands of American wheat--1 growers and others in loss and ruin. Again, what has stimulative protection done for American manufacturers? Has their foreign trade increased ? Nob at all in a corresponding degree ; for, whilst protection has greatly increased the cost of nearly every manufactured artiole to American consumers, ifc has by this increased cost of proiiuction effectually closed all markets bub their own, and in so doing it has reduced American manufacturers to a condition well nigh as bad as that of their agricultural brethren.

1782-90 1831-40 1881-85 Coal, shillings ... 14 10 9 per owt Copper, shillings... 81 93 67 „ cwt Cotton, pence ... 18 1\ 6 „ lb Iron, shillings ... 83 102 43 „ ton Rice, shillings ... 19 32 8 „ cwt Sugar, shillings ... 30 33 19 „ cwt Tea, pence 44 20 12 „ lb Wheat-, pence ... 7G 84 56 „ bush Wool, pence ... 39 29 10 „ lb