THE PROSPECTS OF OUR FOREIGN TRADE.

Timaru Herald, Volume XXIX, Issue 2101, 26 July 1878, Page 3

THE PROSPECTS OF OUR FOREIGN TRADE.

(Pall Mall Budget.)

Jt is impossible to couceive a more important subject than that which is dealt with m these volumes. This L is nothing less than to examine into the causes of the present -widespread depression, to determine what the prospect of recovery may be, and what efl'ect the whole range of circumstances will have upon tbe future prosperity of this country. The plan adopted m order to carry out this wide survey of the existing condition of trade is to take each of the countries with which we do business m succession ; to consider its debt, its political and economical condition and general reBources ; and then to frame an estimate as to how far we can depend upon a continuance of demand for our goods, or to what extent we may anticipate even a competition from that quarter. Mr Wilson seems to have done the work ho act himself thoroughly ; and the conclusion which he comes to is certainly as uncomfortable as can well be. From first to last he takes a gloomy view of the situation. It is not meroly that one country has becomo impoverished m its undue haste to get rich, but that the whole world has been living too fast ; and we have not yet felt by any means the worst pressure which must follow. If, however, all our customers are m difficulties, clearly England, which 18 more dependent upon her capacity to sell her goods for the maintenance of her present prosperity than any other country, will suffer seriously ; and it may bo that the next few years will witness a very severe strain upon our home population. So far, we must admit, the course of trade has to a great degree followed Mr Wilson's dreary forecast. Nearly every country with which we have a trade connection has borrowed up to the hilt, and now that further borrowing is impossible, the capacity to buy has been greatly diminished ; the result of which will be not only, as some economists urge, that we shall lose the profit on that trade, but that we shall be unable to

* " The Resources of Modem Countries." By Alexander Johnatono Wilson. (London : Xiongmans and Co. 1878.)

give employment to those who have been kept from emigrating by the prospect of increased work at home. But grave as arc the facts which Mr Wilson has .; arranged m separate batches, and still grave:- as they appear when they are all summed up together, we cannot but think that he has been but too careful to eliminate favorable chances from his calculations. During this whole period of stagnation people m general have been practising economy. _ Much of the capital sunk m unremunerative and not immediately remunerative enterprises has been of some service to the countries m which it was spent. Bad harvests m England and droughts m India are not likely to bj continuous ; and a good harvest at Homo or a scries of favorable years m India would produce a marked effect. Tho omission of these and similar considerations is a fault ; for the dark side of tho picture is m all conscience dark enough. Another mistake is tho vehemence with which Mr Wilson puts forward political views of a peculiarly shallow and uninformed character. In spite- of these drawbacks, however, the book is valuable at the presont time, and we proceed to notice a few of its more salient features.

Of the condition of India Mr Wilson takes a very pessimist view. We aro developing India on far too expensive a method. Wo are deliberately shutting our eyes to facts which if they were true of any othor country would occasion the deepest consternation. Year by year we borrow more money, increase taxation, and enlarge the famine area. " Were no more loans allowed to be raised," it would spe*dily appear " that India has been living, these five-nnd-twenty yeaTs at least, beyond her means, and is doing so practically as much now as ever ; that we aro taxing her till her people starve ; and that her very trade, augmented though it bo, supplies us with an index to her exceeding poverty. " The figures m support of these statements are put forward with considerable skill ; and the exchange barometer, as Mr Wilson says, gauges roughly the condition of Indian trade as well as the extent of Indian poverty. Nothing short of an entire change m our financial system can possibly work any remedy ; and of this there is no sign whatever. The importance of the subject, however, apart from its political side, cannot be gainsaid ; for the present demand for cotton goods alone from India is £18,000.000 to £19,000,000, which would be largely increased if the general condition of the people were to improve. Such an increase cannot, however, be looked for at present from that cause ; and, according to Mr Wilson, we may anticipate a slackened demand m the coming year. Should the present drain continue, the result may even be a permanent impoverishment of the bulk of the people. Of China just now little more that is favorable can be said ; and the lesson of the effects of adulteration is read m an important extract from an American commercial journal — though our author holds that America cannot hops to compete with us with any success m the end, provided our manufacturers are wise and become decently honest m time. Prom our two great Eastern customers, therefore, no very hopeful reaction can be looked for at present, and we must turn elsewhere for more pleasing prospects. This quarter will certainly not be the United States unless the protective tariffs which weigh so heavily upon the geueial industry of that great country are removed. Mr "Wilson reiterates the arguments which have been so ably made use of by Mr David Wells and othei'3 m America itself against the senaebss system which has driven people into manufacture who would have been far more profitably employed m developing the agricultural wealth of the country. Owing to this tariff, added to the profound depression which exists from the Atlantic to the Pacific, the exports of Great Britain to the United States have decreased from £37,000,000 m 1873 to little over £20,000,000 m 1877, and are still slowly declining. "Hence," says Mr Wilson, "we find that aliuo3t nothing except Nevada mining and. agriculture has thriven lately m the States." But the farmers themselves have not done so well, from various causes, as Mr Wilson seems to think, although the good harvest of 1877 seemed likely to benefit the whole Union at one time ; and the heavy debts •which have been incurred, not only by States and municipalities, but by small townships and the like, for public buildings, railroads, &c, weigh heavily on the community. Still, it seems to us that Mr Wilson has arrived at far too low an estimate of the power of recovery possessed by the Americans. In the United States, perhaps more than anywhere else, the last few years have been years of retrenchment and economy. The development of the country, even duringthese dull times, is somethingamazing. To speak only of one State, Texas, which a few years ago was almost unknown, is now progressing with " leaps and bounda," bidding fair to rival the oldest States m the Union m wealth and general prosperity. When, therefore, a change begins the reaction will be surprising ; whilst a free tariff and the resumption of specie payments, both of which seem far more probable now than even a few months ago, would commence a period of prosperity for America such as perhaps no other country m the -world could rival. There will, m our judgment, be no very long interval between the present unsatisfactory condition of our dealings with America and a far sounder state of things. But Mr Wilson is certainly right m thinking that the immediate future is not promising for our market m that country. Of Russia and Germany we shall not apeak ; nobody expects much, revival m those quarters. Ofthefonner empireitis difficult to say which would produce the more dangerous effect upon her commercial and social system, peace or war. France stands m a different position ; and Mr Wilson truly points out that could French statesmen work upon really freetrade lines, the French trade with us would be practically unlimited. But here, too, the protectionist craze i 3 rampant, and the impatience of anything which savours of direct taxation renders it almost impossible to advance. The financial position of France, m spite of its enormous taxation, is, as Mr Wilson satisfactorily shows, we think, far better than would appear at first sight. Here, therefore, although she at present attempts — and, m regard to Italy at least, successfully attempts — to compete with us m other markets, we may anticipate improvements as timo goes on.

We have no space to do more than glance at Mr Wilson's estimate of the. position of our colonies. Canada and New Zealand fall terribly into his disfavor. In the former colony nothing pleases him. There is stagnation m the present and ruin m the future. 111-placed geographically, ill-managed internally, a misbegotten sort of colony altogether, the Dominion fares badly indeed at Mr Wilson's hands. The only hope for the poor place is to fall under the rule of the United States. The fact that we have neglected the interests of our great dependency In

all our negotiations with the United Statrs, is pointed to as the reason why we now foolishly attempt to aimmd our own handiwork by methods which can have no good effect. Canada is doomed to decay, and nothing wo can do can save it if it remains under our control. There can be no doubt that the quiet homely life of the Dominion strikes one as not promising after the stir and bustle of the States ; and Canada at the present time is undoubtedly suffering considerably. Still, a colony which, with a population of scarce 4,000,000, has over 17,000,000 acres under crops and grass, and which possesses the fourth mercantile marine m the world, may claim to have, done something to justify its existence ; though certainly the dull unprogressive French Canadians, with their deep-seated prejudices and unmanageable obstinacy, lie like a deadweight on the rest of the colony, and the frontier line is most unfortunately drawn. Canadian trade will probably revive at the same time with that over the border ; but so far her depression has not been as severe as that of the United States. New Zealand fares almost as badly as Canada, and Sir Julius "Vowel's most virulent opponents will scarcely desire to say more than is to be found m Mr Wilson's second volume with regard to the policy pursued of late m that colony. Speaking generally, however, we may saj' that Mr Wilson seems to us altogether to underrate the power of recovery m new countries where the climate is temperate, the Government stable, and a stream of fresh immigrants is continually pouring m. Hitherto the increased trade with our colonies has gone far to counterbalance the depression elsewhere ; yet Mr Wilson cannot get rid of his pessimism even m respKct to New South Wales. In short, now that wo have followed Mr Wilson through nearly the whole of his survey, we perceive that, m American phraseology, the whole world must, according to him, shortly " bust up." But his view, however cleverly worked out, appears extravagant ; and without doubt Mr Wilson has omitted to consider some modifying circumstances which would materially affect the judgment of his readers. The work, nevertheless, is well worth perusal, bearing m mind this tendency of the writor.