National presperity and the monetary system. page 2

These enactments proved an immense advantage to the people of the nations affected by them, and gave satisfaction to all parties but the ship-owners, who cried out loudly that their interest was ruined. But their complaints were altogether unfounded, as will appear from the following figures. Under the restrictive system, from 1804 to 1823, the tonnage of British shipping had increased only ten per cent. Under the Reciprocity Acts and the free trade system, from 1823 to 1845, the increase rose to forty-five per cent. This result fully bore out the calculations and anticipations of Mr. Huskisson, in his answer to the arguments of the protectionists. They contended that the end of the free trade system would be to drive the trade of Great Britain into the hands of foreign countries; that other nations would not reciprocate in the same liberal spirit; that five-sixths of the carrying trade between Great Britain and America was carried on in American ships; and that it was quite impossible, without a repeal of the duties on Baltic timber, that British ship-builders could compete with foreign nations, who had wood at their own doors, and could navigate their ships for half the wages that the British ship-owners were obliged to pay to their sailors. Referring to the retaliatory measures of other countries, Mr. Huskisson said: - " In such a state of things it is quite obvious that we must adopt one of two courses. Either we must commence a commercial conflict through the medium of protective duties and prohibitions (a measure of impolicy which it is believed no man will now propose), or we must admit other powers to a perfect equality and reciprocity of shipping duties. The latter appears to be the course which we are bound to adopt. Its effect, I am persuaded, will be to lead to a great increase of the commercial advantages of the country; while, at the same time, it will have a tendency to promote and establish a better political feeling and confidence among the maritime powers, and abate the sources of commercial jealousy. It is high time, in the improved state of civilisation of the world, to establish more liberal principles, and show that commerce was not the end, but the means of diffusing comfort and enjoyment among the nations embarked in its pursuit. Those who have the largest trade must necessarily derive the greatest advantage from the establishment of better international regulations. When England abandons her old principle, the united Netherlands, and the other powers who are now prepared to retaliate, will gladly concur in the new arrangement. I am prepared to hear from the other side that the proposed alteration will be prejudicial to the British shipping interest. In this observation I cannot concur. I think, on the contrary, that the shipping interest of this country has nothing to apprehend from that of other nations. When the alteration in the navigation laws was first projected, similar unfavourable prognostications were made by part of the shipping interest; but these anticipations have proved to be entirely unfounded. The shipping of Great Britain is perfectly able to compete with that of other countries. It is quite time to get rid of the retaliatory principle, which, if carried to the extreme of which it is susceptible, must injure every species of trade. One sort of shipping would be carrying the trade of our country, and then returning without any equivalent advantage, to make way for the countervailing regulations of another power, or else to return in ballast. What would be thought of our establishment if a wagon should convey goods to Birmingham and afterwards return empty? The consumer would, it was probable, be little satisfied with such a way of conveying his merchandise. The consequence would be that there would necessarily be two sets of wagons to do that work which was now performed by one, and that, too, at a considerable increase of price on the raw material. We are not now able to carry on a system of restriction, labouring, as we have for some time been, under many and unavoidable restrictions. Our trade and commerce, it is true, are rapidly improving, but they still require that we should adopt every measure by which either could be fostered or improved. What I propose is, that the duties and drawbacks should be imposed and allowed upon all goods equally, whether imported or exported in British or foreign vessels, giving the king in council a power to declare that such regulations should extend to all countries inclined to act upon a system of reciprocity, but reserving to the same authority the power of continuing the present restrictions with respect to those powers who should decline to do so."

The great principle of free trade had been first distinctly enunciated, not by any minister of the crown, but by the London merchants, in a petition adopted by them in 1820, embodying the maxim of buying in the cheapest market and selling in the dearest, which regulates every merchant in his individual dealings, and which, they contend, is strictly applicable as the best rule for the trade of the whole nation, as it would render the commerce of the whole world an interchange of mutual advantages, and increase the amount of wealth and enjoyment among the inhabitants of each state. They remark that, unfortunately, a policy the reverse of this had been adopted, and more or less acted upon by the government of this and every other country, each trying to exclude the productions of other countries, with a specious and well-meant design of encouraging its own productions, thus inflicting on the bulk of its own people, who are the consumers, the necessity of submitting to privations in the quantity or quality of commodities, and thereby rendering what ought to be source of mutual benefit and of harmony among states a constantly recurring occasion of jealousy and hostility. They argue, that whereas the prevailing prejudices in favour of the protective or restrictive system arise from the supposition that the importation of foreign commodities occasions a diminution or discouragement of our own productions to the same extent, it may be clearly shown that though the production of one particular commodity might be discouraged because we could get it cheaper and better elsewhere, yet the production of other commodities would be encouraged to a far greater extent, so that the general industry of the country would be fostered and promoted by the more extensive and more beneficial employment of capital and labour. They pointed out, amongst the numerous evils of the protective system, the fact that the artificial protection of one branch of industry becomes the ground of a claim put forth by all other branches for similar protection; so that if the principle were fully carried out, it would tend to the exclusion of all foreign commerce, and cut off the nation from the enjoyment of the benefits which other nations, more favourably circumstanced for the production of certain commodities, are ready to supply us with on moderate terms. With enlightened views far in advance of the statesmen of Europe at the time, and perhaps in advance of some of its governments at the present time, the London merchants thus answer the leading objection against the principles of free trade: - " Although, as a matter of mere diplomacy, it may sometimes answer to hold out the removal of particular prohibitions or high duties, as depending upon corresponding concessions by other states in our favour, it does not follow that we should maintain our restrictions in cases where the desired concessions on their part cannot be obtained; our restrictions would not be the less prejudicial to our own capital and industry because other governments persisted in preserving impolitic regulations. Independent of the direct benefit to be derived by this country on every occasion of such concessions or recognitions, a great incidental object would be gained, by the recognition of the sound principle or standard to which all subsequent arrangements might be referred, and by the salutary influence which the promulgation of such just views by the legislature and by the nation at large could not fail to have on the legislation of foreign states. As long as the necessity for the present amount of revenue subsists, it cannot be expected that so important a branch of it as the customs should be given up, or materially diminished, unless some substitute for it less objectionable be suggested. But it is against every restrictive regulation of trade not essential to the revenue, against all duties merely protective, against foreign competition, and against the excess of such duties as are partly for the purposes of revenue, partly for that of protection, that the prayer of the present petition is respectfully submitted to the wisdom of parliament."

This petition, which was drawn up by Mr. Tooke, contains a statement of the case against protection, which, for force and perspicuity, has never been surpassed by any subsequent writer. The effects of the commercial policy which the London merchants may be said to have originated were not confined to commercial matters. They embraced the whole system of government, and indicated the dawn of a brighter era in our national policy, when the system of toryism - which may be described as an organisation of class selfishness and national jealousy - was about to give way to the reign of liberality and Christian philanthropy in the legislation of the country. The ablest champion of protection, Sir Archibald Alison, frankly admits, while deploring, the importance of the change, which amounted to an entire revolution. "It indicates," he says, "the advent of a period when the commercial body were not content to take the regulations affecting their ' interests from the hands of the legislature, but thought for themselves, and approached parliament rather as teachers than suppliants. Its subsequent adoption as a part of the settled policy of the country proved that the time was approaching when the commercial interests were to gain the ascendancy over the producing, and when every other interest was to be sacrificed to those of cheapness in production and economy in consumption. Whatever may be thought of these principles, upon which the opinions of men will probably be divided to the end of the world, according as they belong to the buying and selling or producing class, one thing is clear - that they came from the country, not the government; and that they are not so much to be ascribed to the influence of any individuals, however powerful, as to the immense growth of the commercial class in society, which enabled it to command the press, influence the majority of parliament, and obtain the general direction of public opinion."

Of course, the commercial changes introduced by Mr. Huskisson and Mr. Robinson excited loud murmurs of dissatisfaction from the interests affected, especially the shipping interest. But the best answer to all objectors was the continuous flourishing state of the country. At the opening cf the session in 1825, lord Dudley and Ward, in moving the address in answer to the king's speech in the upper house, observed: - " Our present prosperity is a prosperity extending to all orders, all professions, and all districts, enhanced and invigorated by the flourishing state of all those arts which minister to human comfort, and those inventions by which man obtains a mastery over nature by the application of her own powers, and which, if one had ventured to foretell a few years ago, it would have appeared almost incredible. There never was a time when the spirit of useful improvement, not only in the arts but in all the details of domestic administration, whether carried on by the public or by individuals, was so high. That world, too, which had first been opened to us by the genius of a great man, but afterwards closed for centuries by the absurd and barbarous policy of Spain, has, as it were, been re-discovered in our days. The last remnant of the veil which concealed it from the observation and intercourse of mankind has just been torn away, and we see it abounding not only in those metals which first allured the avarice of needy adventurers, but in those more precious productions which sustain life and animate industry, cheering the mind of the philosopher and statesman with boundless possibilities of reciprocal advantages in civilisation and commerce. The people of England felt and acknowledged their happiness; the public contentment was upon a level with the public prosperity. We have learned, too, from what source these blessings flow. All the complaints of the decay of our manufactures from the change of system have proved fallacious. We no longer dread the rivalry of the foreigner in our markets; we can undersell him in his own. The silk manufacture, since it was freed from shackles, has increased almost as fast as the cotton, which has been always free from them. We have now been fully taught that the great commercial prosperity of England has arisen, not from our commercial restrictions, but in spite of them." The "Annual Register," which records this speech, goes more into detail on the same subject: - "Agricultural distress had disappeared; the persons engaged in the cotton and woollen manufactures were in full employment; the various branches of the iron trade were in a state of activity; on all sides new buildings were in a state of erection, and money was so abundant that men of enterprise, though without capital, found no difficulty in commanding funds for any plausible undertaking. This substantial prosperity was stimulated by the operations of the many joint-stock banks and companies which had recently sprung into existence." The "Quarterly Review " of that year gives a vivid picture of the prosperous state of the nation. "The increased wealth of the middle classes," says the great tory organ, " is so obvious that we can neither walk the fields, visit the shops, nor examine the workshops and store-houses without being deeply impressed with the changes which a few years have produced. We see the fields better cultivated, the barns and stack-yards more fully stored, the horses, cows, and sheep more abundant and in better condition, and all the implements of husbandry improved in their order, their construction, and their value. In the cities, towns, and villages we find shops more numerous, and better in their appearance, and the several goods more separated from each other - a division that is the infallible token of increased sales. The increase of goods thus universally diffused is an indication and exhibition of flourishing circumstances. The accounts of the bankers in the metropolis and provincial towns, small as well as large, with the balances of money resting in them, ready to embrace favourable changes in the price of any commodity, or to be placed at interest as beneficial securities present themselves, have increased to an enormous amount. The projects for constructing tunnels, railroads, canals, or bridges, and the eagerness with which they are embraced, are proofs of that accumulation from savings which the intermediate ranks of society have by patience and perseverance been enabled to form. The natural effect of this advancement in possessions has been an advance in the enjoyments which those possessions can minister; and we need not be surprised at the general diffusion of those gratifications which were formerly called luxuries, but which, from their familiarity, are now called by the softened name of English comforts."