Chapter VII: Political Extravagance

You are very fond, my Friend, of talking about political economy. Suppose, for a change, we discuss a certain political extravagance, of which you are guilty.

“Look!” you say, “at the visible signs of prosperity caused by
free trade, our annual imports are in excess of our exports by
£100,000,000. This represents the annual accumulation of our
national wealth.”

Now, my friend, I want you to try and take a common-sense view of things:--

Mill says, that “_saving_ enriches, and spending impoverishes, the community along with the individual.”[25] Now let us apply England’s action in this respect to the assumed case of an individual. Suppose a farmer should allow his land to go out of cultivation and purchase farm produce, for his own consumption, from the open market; suppose at the same time he has a limited supply of iron ore on his estate, which he sells at a rate that does not quite cover the cost of its production; would you argue that the more food such a one purchased and consumed, and the more iron ore he sold, the greater was his prosperity; and especially so because he _consumed_ more than he _sold_?

In my ignorance of political economy I should have said that such a man was on the highroad to bankruptcy. Now this is precisely what England is doing.

She is allowing her land to go out of cultivation. She is purchasing from foreign countries food which she might produce herself, and which, when consumed, leaves nothing to show for the expenditure. Her manufacturing industries are losing concerns; her shipping is carrying at nominal rates; her iron industry has been losing at the rate of £40,000,000 a year; and she is parting with her _limited capital_ of iron at a loss. The excess of Imports over Exports does not represent wealth capable of accumulation, but consists of consumable articles of food.

The annual imports of the principal staples of food in 1881 were:--

Capable of being produced { Corn and flour £ 60,856,768[26]
in England. { Live animals 8,525,256[27]
{ Meat 35,760,286[27]
-------------
£ 105,142,310
=============

Capable of being produced { Tea £ 11,208,601[28]
in England’s dependencies { Sugar 24,288,797[28]
------------
Total £ 140,639,708
=============

Besides these, there are butter, cheese, eggs, coffee, cocoa, and other articles of food, which must probably amount to something between 20 and 30 millions sterling. So that the excess of £100,000,000 sterling is _entirely due to consumable food, much of which might be produced in England_. If this be not political extravagance, I am at a loss for a definition of Extravagance. My friend, it appears to me that you are burning the candle at both ends.

Mr. Leffingwell, an intelligent American, writes:[29]--

“Should the day ever arrive when most of her mills are silent,
her ‘Black country’ again green, her furnaces cold, her shops
filled with foreign wares, and her food brought from distant
lands, it will add little to her welfare that all other nations
find a market on her shores for the products of their factories
and fields.”

Let us now hear what America has to say about free trade:--

“If, during the last fifty years, America had permitted a system
of unrestricted trade with all the world, she would never have
reached that development of her manufactures which has rendered
her independent, but would to-day be little more than a huge
agricultural colony exchanging the produce of her fields for the
manufactures and fabrics of Europe.

“Under a system of protection America has been able to develop
her boundless mineral resources, to encourage the growth of
her manufacturing industries, until to-day she is not only
independent and able to supply her own needs, but she exports to
foreign nations, and has begun to compete with England for the
trade of the world.”

A few quotations from the utterances of our own countrymen may serve to show what Protection has done for America:--

“The edge tool trade is well sustained, and we have less of
the effects of American competition. That this competition is
severe, however, is a fact that cannot be ignored, and it applies
to many other branches than that of edge tools. Every Canadian
season affords unmistakable evidence that some additional article
in English Hardware is being supplanted by the produce of the
Northern States; and it is notorious how largely American wares
are rivalling those of the mother country in others of our
colonial possessions as well as on the continent. The ascendency
of the protectionist party in the States continues to operate
most favourably for the manufacturing interests there, and it
is no wonder that under such benignant auspices the enterprise
in this direction is swelling to colossal proportions. The
whole subject is one demanding the serious attention of our
manufacturers.” (Rylands’ Trade Circular, Birmingham, March 4th,
1871.)

“A leading manufacturer expressed himself startled and alarmed at
what he saw (at the Paris Exhibition) as the proofs of successful
rivalry on the part of the Americans in branches of his own
trade.” (Lectures at the Colonial Institution, November, 1878.)

“Unless our manufacturers bestir themselves, the Americans will
completely command the markets of Europe.” (Col. Wrottesby’s
Letter to the _Times_, July 6, 1869.)

“Manufactories have been _created and fostered by a system of
protection_, which, through enhanced prices paid by consumers,
must have been very costly to the nation, but of the result of
which they have reason to be proud, since it has made them to so
great an extent independent of other nations for their supply.”
(Report of Philadelphia Exhibition, Mr. P. Graham, Vice-President
of the Society of Arts.)

“The worsted manufacture of the United States is comparatively
of recent origin, but it has made very rapid progress during
the past ten or twelve years, the _high tariff having greatly
stimulated its development_.” (Report of Philadelphia Exhibition.
Mr. H. Mitchel, Member of Bradford Chamber of Commerce.)

“America is not only supplying her own country with goods, but
exporting her manufactures to such an extent that she has become
a powerful rival to England.” (Mr. Mundella, Nov. 21, 1874.)

“There is no time to be lost if we mean to hold our own in
the hardware trade.” (J. Anderson’s Report on Philadelphia
Exhibition.)

“For years Sheffield has supplied not only our own country,
but nearly the whole world. The monopoly remains with us no
longer. It would be foolish not to recognize the fact that at
Philadelphia Great Britain was in the face of a powerful rival in
manufactures.” (Report on Philadelphia Exhibition--D. McHardy.)

Some idea of the increase of American manufacture may be found in
the example of two items--Paper and Carpets.

Value of paper imported into the United States--

In 1870 = £145,000
1876 = 4,000

Value of exports of paper--

1869 = 750
1876 = 162,000

Tapestry carpet imported into the United States--

1872 = 2,754,000 yards.
1879 = 23,900 ”

FOOTNOTES:

[25] ‘Political Economy,’ by Mill, Bk. I. Chap. V.

[26] ‘Statesman’s Yearbook,’ 1883, p. 257.

[27] ‘Whitaker’s Almanack,’ 1883, p. 254.

[28] ‘Statesman’s Yearbook,’ 1883. p. 257.

[29] Albert Leffingwell.