CHAPTER VI.

LET WELL ALONE.

The preceding chapters have been mainly statistical. Their object has been to show, by producing the best evidence available, that alarmists like the author of "Made in Germany" have no real ground for their fears, that British trade is not going to the devil, but that, on the contrary, the nation as a whole is in a condition of marvellous and still rapidly-growing prosperity. If that be so, if there be no disease, then obviously is there no need for the remedy which Mr. Williams and other Protectionists are anxious to foist upon the country. But though that conclusion will be sufficiently obvious to most minds, there are among us hypochondriacal persons who never think that they are quite well, and these unfortunates will still hanker after some patent medicine to cure their imaginary ills. It is worth while, therefore, briefly to point out how utterly unsuited to our alleged ailments, even if they existed, is the remedy which the Protectionists propose.

THE CASE FOR PROTECTION.

Personally I am not a fanatical believer in Free Trade, or, for that matter, in anything else except the law of gravitation and the rules of arithmetic. I am quite willing to admit that there are circumstances under which a Protectionist tariff might be advantageous to a country. But the practical question is whether, under the present circumstances of Great Britain, Protection is likely to bring any advantage to her. In dealing with that question I will venture at the outset to deny that Protection has been any real advantage to Germany. The Protectionists are fond of arguing that the heavy import duties which Germany levies on British goods have enabled German manufacturers in the first place to secure their home market, and in the second place to build up an enormous export trade at our expense. The argument is plausible, but it suffers from one fatal defect: it is unsupported by facts. As one reads the writings and listens to the talk of Protectionists, one's mind becomes unconsciously saturated with the notion that British trade is rapidly declining and German trade as rapidly increasing. It is upon this implied proposition that all their arguments are based; this is the primary postulate upon which rests their whole house of cards.

THE ALLEGED EXPANSION OF GERMAN TRADE.

But what are the facts? I have looked carefully through the figures showing the progress of German trade during the last ten or fifteen years, and I can discover no difference in character from the figures which show the progress of British trade. Let the reader look for himself. He will find the figures for fifteen years set out in the following table, and a diagram to illustrate them. Let him notice that what is called the entrepot trade, consisting of goods merely passing through the one country or the other, is in these figures excluded from the comparison. Thus "British imports" here means the total imports into the United Kingdom, minus those goods which are subsequently re-exported; "British exports" means all articles of British production exported from the United Kingdom. The same interpretation applies to the German figures, all goods in transit through Germany one way or the other being excluded. The comparison is therefore complete. And what does it show? That, so far from Germany's export trade increasing by leaps and bounds, while ours is steadily declining, German trade has followed, though at a lower level, the same general course as British trade. Therefore, whatever else Protection may have done for Germany, it certainly has not improved her export trade as compared with that of the United Kingdom. An even more striking demonstration of the utter hollowness of the Protectionist case can be seen when we turn from exports to imports. If Protection is to do anything for a country it must at least diminish imports from abroad while increasing exports from home. That is the whole object of Protection, the great ambition which every Protectionist statesman sets before him. Has Protection done this for Germany? Once again let the reader look for himself at the figures and the diagram. He will see that while German exports have remained stationary, German imports have very largely increased, and moreover that their increase has been relatively greater than the increase of imports into Free-Trade England.

BRITISH AND GERMAN TRADE COMPARED.

Fifteen Years' Imports and Exports, exclusive of Goods in Transit.

In Millions Sterling.

-+ + -+ -+ -+ -+ -+ -+ -+ -+ -+ -+ -+ -+ -+ - 1880 '81 '82 '83 '84 '85 '86 '87 '88 '89 '90 '91 '92 '93 '94 -+ + -+ -+ -+ -+ -+ -+ -+ -+ -+ -+ -+ -+ -+ - Brit. Imports 348 334 348 362 327 313 294 303 324 360 356 373 360 346 350 Brit. Exports 223 234 242 240 233 213 213 222 234 249 263 247 227 218 216 Ger. Imports 141 148 156 163 163 147 144 156 165 201 208 208 202 199 198 Ger. Exports 145 149 160 164 160 143 149 157 160 158 166 159 148 155 148 -+ + -+ -+ -+ -+ -+ -+ -+ -+ -+ -+ -+ -+ -+ -

These figures may be illustrated diagrammatically as follows:—



WOULD PROTECTION HELP US?

So far, therefore, as Germany is concerned, Protection has been, for the general ends for which it was intended, a complete failure. Is there any reason to believe that it would be more successful in Great Britain? Every consideration of common sense points the other way. What Germany had to do was to build up comparatively new industries, in face of the overwhelming competition of Great Britain. In some instances she has been successful, and in some instances it is possible that Protection may have helped her by giving particular manufacturers an advantage in their home market at the expense of the whole German nation. But in England we have no such task to undertake. Our industries are already established; our wares are already known in every quarter of the globe; it is our competition that every other manufacturing country dreads. Nor is that the only difference. In Germany and in France and in the United States it is the home market that Protectionist manufacturers and Protectionist statesmen are anxious to secure. All their efforts are directed towards preventing their own citizens from purchasing British or other foreign goods. But with us the home market is not the primary consideration. Our business is with the whole world: our customers are of every race and colour from the patient Chinaman to the restless New Englander, from the supple Bengalee to the African savage. If we can keep their custom we need have no fear of our power to satisfy the wants of our own countrymen.

ON WHAT SHALL WE LAY A TAX?

It is, indeed, just because the advance of Germany in a few limited directions has scared some people into the belief that we are losing our foreign trade, that such books as Mr. Williams's "Made in Germany" are written. The whole point of their lament is that Germany is ousting us from neutral markets. Assume that it is so—though it is not—what then? How will Protection help us to maintain the hold we are said to be losing? All that Protection can do is to make more difficult the entry of foreign goods into our own country. But what are the foreign goods that enter our country? Four-fifths at least are food or the raw materials of manufacture. In support of this statement I must refer the reader to the Custom House returns to make his own classification. After going through the figures carefully I arrive at the following rough result for 1895:—

Million L's. Food and Drink 177 Raw Materials 163 Manufactured Goods 76 Total Imports 416

Colonel Howard Vincent, I see, puts the total of manufactured goods at 80 millions. His figure will serve as well as mine. Either shows clearly enough the character of the great mass of our imports. On which of the two main branches, on food or on raw materials, do the Protectionists propose to levy a tax? It is a strange way of helping our manufacturers in their struggle for the markets of the world to impose additional taxation on the food of their workpeople or on the raw materials of their industry.

A NEW ROAD TO FORTUNE.

There remains the comparatively small amount of manufactured goods we import, representing articles which our manufacturers cannot or will not produce at all, or cannot produce so cheaply as the foreigner does. Supposing we taxed every one of these articles as it entered our ports, where would the advantage be to British manufacturers whose main ambition is to send their goods abroad? There is, it is true, just one possibility of benefit to them. It is possible that the imposition of a tax on some of these foreign manufactured articles would enable the British manufacturer so to raise his prices in the home market that he could afford to forego all profit on his sales abroad and sell to his foreign customers at or below cost price. That is the only conceivable way in which a Protective tariff could help the British manufacturer in his rivalry with his German competitors for the markets of the world. As for the cost of this topsy-turvy system of trade it is to be borne of course by that patient ass the British public. The British consumer is to be compelled to pay more dearly for certain goods in order that some other people, Japs or Chinamen, may be able to buy those goods below cost price. Here, again, I will not assert that such an apparent act of folly is not worth committing under given conditions. I can imagine a firm or a country consenting for a time to work for less than no profit in order to get a foothold in a new market. But we already have the foothold, and have already worked it for what it is worth. If now we discover that, for one reason or another, there is no more profit in it, surely our wisest policy is to try something else. Otherwise we might continue for ever to sell at a loss—individual or national—for the sole pleasure of adding to the total figures of our turnover. Even the Protectionists would hardly contend that along such lines lay national prosperity.

INTER-IMPERIAL TRADE.

There is, however, another, though not entirely distinct, proposal for dealing with the alleged mischief of German competition. It is this—that we should try and persuade our Colonies and Possessions to give preferential treatment to our goods in return for a similar preference accorded by us to their goods. It would be unfair to call this scheme Protectionist in the ordinary sense of the term, for it is inspired as much by the desire to bring about a closer union of different portions of the empire as by the fear of foreign competition; but as it is with the question of foreign competition that we are here primarily concerned, we will deal first with the Protectionist side of the proposal. On this side the object aimed at is the destruction or diminution of foreign competition in our Colonial markets. Undoubtedly, were the Colonies willing to make the necessary tariff adjustments in our favour, that object could be attained and our German rivals could be excluded in part or in whole from Canada, from Australia, from India, or from the Cape. So far so good. But what would that exclusion be worth to us? In a previous article I referred to figures showing how insignificant as compared with our own is German trade with our Colonies. It is worth while to present these figures in a fuller form. They will be found in the following table:—

IMPORTS INTO THE FOLLOWING BRITISH POSSESSIONS.

Average of the Three Years—1890, 1891, 1892.

In Millions Sterling.

- Total Amount Amount Amount Amount Imports from from from from from all United United Germany France. Countries. Kingdom. States. - India 84 58.9 1.5 1.6 1.2 Australasia 66.6 28.4 2.6 1.6 .3 South Africa 12.7 10.3 .4 .2 .04 North America 24.6 9.2 11.2 .8 .5 West Indies 6.4 2.8 1.9 .05 .1 Other British Possessions 31.4 6.6 .6 .4 .6 Total 225.7 116.2 18.2 4.6 2.8 -

These figures are, unfortunately, two or three years behind date, and probably a later return would show that the proportion of British exports to our principal Colonies had fallen off and the German proportion somewhat increased, but this change has certainly not been sufficiently great to affect the general aspect of the table. That table shows that more than half of the total import trade of our Colonies is in our hands, and that our three principal rivals together have little more than a tenth of the whole trade. Indeed, were it not for the inevitably big trade of the United States with Canada, our three rivals together would only have about one-fifteenth of the trade of our Colonies. As for Germany in particular the table shows that the amount of the trade she has so far been able to secure is absolutely insignificant in comparison with our figures.

THE COST TO THE COLONIES.

"But," argue the preferentialists, "German trade with our Colonies has been growing rapidly, and may continue to grow." Possibly it may, if our manufacturers go to sleep; but what we have here to consider is whether it is worth while to take any political action to stop the possible growth of a competing trade which at present is insignificant in amount. Remember that if such action is taken by the Colonies to please us, we shall have to pay a price for their complaisance—for their loss by the exclusion of German or any other foreign goods would be twofold. In the first place the Colonial consumer would suffer. He now buys certain German goods because they suit him best, either in quality or in price. That privilege it is proposed to take from him. His loss is therefore certain. Secondly, there is a considerable danger of injury to the Colonial producer. If the Colonies close their markets to German goods Germany may retaliate by closing her markets to Colonial goods; and Germany is, so far as the trade goes, a fair customer to the British Colonies. Here are the figures:—

TRADE OF BRITISH POSSESSIONS WITH GERMANY.

Average of Three Years (1890, 1891, 1892).—In Thousands Sterling.

Imports from Exports to Germany. Germany. India 1,556 5,338 Australasia 1,631 1,106 South Africa 228 113 North America 781 113 West Indies 52 85 Other British Possessions 351 691 Total 4,599 7,446

WHAT CAN WE OFFER?

This table shows that the Colonial producer stands to lose as much, or more, than the Colonial consumer by cutting off trade connections with Germany. What can we offer in return? It is suggested by the advocates of preferential trade that we should offer better terms to Colonial products in our markets. But already all Colonial products, except tea and coffee, enter the United Kingdom free, therefore we can only give better terms to the Colonies by imposing a tax on those foreign products which compete with the principal Colonial products. What, then, are these competing products? With some trouble I have extracted from the Custom House returns the following list of articles in which there seems to be tangible competition between foreign countries and British Possessions:—

COLONIAL VERSUS FOREIGN GOODS.

Principal Competing Articles Imported into the United Kingdom in 1895.

Millions Sterling.

- From Foreign From British Countries. Possessions. - Animals, Living 7.5 2.4 Bacon and Hams 10.1 .7 Butter and Cheese 14.8 4.0 Caoutchouc and Guttapercha 2.9 1.2 Copper 3.9 1.1 Corn and Flour 44.0 5.7 Dye Stuffs and Dye Woods 2.3 2.5 Fruits 5.8 .6 Hides, Skins, and Furs 3.8 3.6 Leather 4.6 3.5 Linseed 2.3 1.1 Meat, Salt and Fresh 6.9 4.8 Oils 2.9 1.6 Rice .6 1.4 Sugar (Unrefined) 6.8 1.5 Tallow and Stearine .4 2.1 Wood and Timber 12.4 4.0 Wool 4.6 22.8 Coffee 2.6 1.1 Tea 1.6 8.7 Cotton (Raw) 29.6 .8 Jute (Raw) .0 4.3 Other Articles 150.8 16.0 Total 321.2 95.5 -

It will be seen that without exception the articles in the above list belong either to the category of raw materials or to that of food. Any taxation therefore imposed upon any portion of these articles for the benefit of the Colonial producer would be a disadvantage to the British manufacturer, either by increasing the cost of his raw material or by diminishing the effective wages of his workpeople. Remembering that the main object of the British manufacturer is to keep his hold on the markets of the world, is it likely that he would ever consent to allow himself to be handicapped by such taxation? For all you can offer him in return is preferential treatment in Colonial markets, whereas more than three-quarters of the trade he wishes to retain is with foreign countries.

DIVERGENT AMBITIONS.

There is, however, an even more fundamental difficulty, which neither Colonial nor British preferentialists have yet had the courage to face. It is this:—That the Colonist and the Britisher are aiming at different ends. The Britisher wishes to expand in ever-increasing proportions his manufacturing business, and it is solely because he thinks that he may possibly get a better market for his manufactures in the Colonies than in foreign countries that he gives even momentary approval to the idea of preferential trade. But no Colonist looks forward to his country remaining for ever the dumping ground for British manufactures. He wishes, and wisely wishes, to manufacture for himself, and he has deliberately arranged his tariffs with that end. Towards realising this ambition it will advance him nothing to shut out the puny Teutonic infant and let in the British giant. In like manner, if we turn from manufactures to agriculture we find the same essential divergence of view. The Colonial producer regards England as the best market for his meat and corn and butter. But the British farmer wants none of it. If he is to be ruined by competition from abroad he would as lief that the last nail were driven into his coffin by Argentine beef as by New Zealand mutton.

A DREAM OR A NIGHTMARE?

These objections go to the root of the matter, and show how futile it is to hope that the Mother Country and the Colonies will ever agree on any scheme of preferential trade. But need we, therefore, sit down sorrowing? Does the dream of inter-Imperial trade, if we come to examine it closely, really hold all the beauties that its shadowy shape suggests? Take it either way. Take the scheme either as an end in itself, or as a means to an end. As for the first hypothesis, if trade is itself an end, it matters to us nothing whether we trade with foreigners or fellow subjects; all we have to think of is the profitableness, immediate or prospective, of the trade itself. And from this point of view a growing trade with Germany is worth a good deal more than a declining trade with Australasia. But most advocates of inter-Imperial trade would not admit that their dream is an end in itself. They adopt the second of the two hypotheses just mentioned, and look upon the expansion of inter-Imperial trade as the most convenient means of drawing the Colonies closer to the Mother Country, and to one another.

DOES TRADE UNITE?

With that end no one will quarrel; but how will preferential trade promote it? The preferentialists assume that mutual trade must of necessity promote the closer union of different parts of the Empire. Neither in individual life nor in national life can any fact be found to support that assumption. A man does not necessarily make a bosom friend of his baker and his butcher; he may even be at daggers drawn with his tailor. As for nations it might almost be said that there is the least love exchanged between those who exchange most goods. We are splendid customers to France; we buy French goods with open hands and ask for more, yet where is the love of France for England? Never for a moment do the French cease to gird at us and to try and thwart our national projects solely because we are doing in Egypt what they have done in Tunis and are on the way to do in Madagascar. Germany, on the other hand, is one of our best customers; yet at the beginning of this year, when there seemed to be a chance of war with Germany, a feeling of elation ran through the whole of England. One more illustration: when in December, 1895, President Cleveland's Message aroused all decent folk on both sides the Atlantic to protest that war between the United Kingdom and the United States was impossible, was it of trade interests that all men thought, or of the tie of common blood? Or, again, did Canada pause to calculate that her best customer was her Southern neighbour, or did she for a moment weigh that fact against the loyalty she owed to the Mother Country?

A NEXUS STRONGER THAN CASH.

The simple truth is that trade has no feelings. We all of us buy and sell to the best advantage we can, and on the whole we do wisely. It is a shrewd saying that warns men to beware of business transactions with their own kinsfolk; nor do we need a prophet to tell us that an attempt to fetter Colonial trade for our own benefit may lose us more affection than it wins us custom. After all, why worry? Our world-embracing commerce is to-day as prosperous as ever it has been. The loyalty of our Colonists no one questions. Let well alone. Our industrial success has not hitherto been dependent on favouring tariffs, nor is there the slightest evidence that old age has yet laid his hand upon our powers. As for the closer union between our Colonists and ourselves, it will hardly be promoted by asking them to sacrifice their commercial freedom to increase the profits of our manufacturers, nor by taxing our food to please their farmers. It is indeed a sign of little faith to even look for a new bond of empire in an arrangement of tariffs. The tie that binds our Colonists to us will not be found in any ledger account, nor is ink the fluid in which that greater Act of Union is writ.



CHAPTER VII.

CONCLUSION.

In the foregoing pages I have been obliged more than once to accuse Mr. Williams of misrepresenting facts in order to bolster up his argument. That accusation I cannot withdraw. It has been deliberately made because the facts compelled it. Doubtless in the ordinary affairs of life Mr. Williams is not less honourable than other men, but in his zeal to establish a case, which cannot be established, he has blinded himself to the main facts of the matter with which he was dealing, and has often so quoted facts and figures as to convey an impression the reverse of the truth. Even from his own point of view this was a pity, for it throws discredit upon the whole of his work, whereas several of his statements are quite true. It is, for example, true that Germany has made great progress in the chemical and in the iron trades. It is also true that her commerce is gaining a foothold in Eastern markets once almost exclusively our own. These, and several other perfectly true statements, are to be found in Mr. Williams's pages, and might have been edifying to exalted persons who can only discover a distorted image of the truth ten years after the main facts have been clearly seen by those common folk who are primarily concerned with them. To such individuals Mr. Williams, without his picturesque exaggerations and strange twistings of the truth, might have been really useful. As it is, he has only helped to lead them astray. Indeed, it is much to be feared that these hasty students of a big subject have by the perusal of Mr. Williams's neatly-turned sentences and epigrammatic phrases acquired an impression which no drab-coloured statement of simple fact will ever be able to dislodge.

NOT ONLY A PROTECTIONIST PAMPHLET.

One ground of complaint Mr. Williams may possibly feel that he has against me—that I have so far treated his book as if it were only a Protectionist pamphlet. My excuse is that the spirit of the Protectionist breathes in almost every page he has written. Nowhere does he show the slightest grasp of the central fact that all commerce must be mutual, that exports cannot exist unless there are imports to pay for them; everywhere he speaks as if each useful commodity sent us from abroad were a net loss to the British nation, and as if the people who sent it were "robbing" us of our wealth. Nor is that all. I take his chapter dealing with the reasons "why Germany beats us," and I find that after examining some half dozen reasons in succession and dismissing them as unimportant, he comes to Protection and exclaims, "Here at last, we are on firm ground." Again, in his next chapter he specifies "Fair Trade" as the first of the "things that we must do to be saved." The second is the commercial federation of the Empire. I think, therefore, that I have had good reason for concentrating my argument on these two points.

TECHNICAL EDUCATION AND THE METRIC SYSTEM.

There are, however, several minor suggestions in "Made in Germany," and I am glad to be able to express my full agreement with what Mr. Williams said about technical education, about metric weights and measures, and about the excessive conservatism of the English people. I agree with him that it is monstrous that English lads should nowadays have no chance of thoroughly learning any trade. The old system of apprenticeship is almost dead, and the modern device of technical education remains a pure farce, mainly owing to the political influence of trade unions. In the same way I agree that it is ridiculous that Great Britain should go on using a clumsy and exclusive system of weights and measures, when the rest of the world is rapidly adopting the almost ideally perfect system invented a hundred years ago by the French. This is a striking instance of the conservatism and self-conceit of the English race, of which Mr. Williams so justly complains. But in this particular case, as it happens, it is not the commercial classes who are to blame. For years Chambers of Commerce throughout the Kingdom have petitioned for the legalisation of the metric system, and yet last Session when a Bill to grant this prayer was at length introduced into the House of Commons by the Government the most audible comment from the assembled wisdom of the nation was a silly guffaw.

NO SIGNS OF DECAY.

Let me, however, not be misunderstood. I agree with Mr. Williams that these things are desirable, but not for the reason for which he desires them. By him they are put forward as devices to help to stave off the impending ruin of the country. For that purpose they are not needed, for there is not the slightest real evidence that ruin is impending. On the contrary, we are progressing rapidly in trade abroad and in prosperity at home. It is solely because I believe that we are capable of making even more rapid progress, and because I realise how great is the mass of misery still to be removed, that I support Mr. Williams's demand for technical education, for metric weights and measures, for the more careful study of foreign languages, and generally for a greater readiness to receive new ideas, and a greater promptitude to meet new wants.

THE CRY OF "WOLF!"

One word more—Mr. Williams's book has been defended, by himself and by others, on the ground that it is a useful warning, that the nation requires to be stirred up, and so on. Has Mr. Williams forgotten the story of the little boy who cried "Wolf! Wolf!" when there was no wolf? It is one thing to warn the country of a problematic danger in the dim future; it is another to scream in the market-place that the danger is at our doors. Mr. Williams's book is one long scream—a literary scream, I admit, and therefore in some measure harmonious, but still a scream in the sense that there is no reason behind the noise that is made. The danger is not at our doors, our industrial glory is not departing from us, our trade is not being ruined by Germany. On the contrary, in spite of the remarkable progress of Germany in a few limited directions, the general figures show that we are fully maintaining our splendid lead, if indeed we are not actually bettering it. I cannot, therefore, admit this attempted justification of the character of Mr. Williams's book. To quote Mr. Punch's admirable picture, Mr. Williams, like his pupil Lord Rosebery, has been trying to make our flesh creep. There is more harm than humour in such a pastime. That the motives of both these disturbers of our nerves were patriotic I do not for a moment doubt; but their conduct is neither patriotic nor wise. It does us no manner of good to be for ever cheapening ourselves in the eyes of the world. A great nation should have dignity enough to be silent about her own greatness, neither on the one hand perpetually boasting of her pre-eminent virtue, nor on the other fretfully asking how her credit stands with other countries. We are what we are—what our forefathers and our own brains and arms have made us. Let us be content to possess our souls in peace, and to get on with our work.



APPENDIX.

MR. WILLIAMS'S REPLY.[3]

[Footnote 3: This reply has been reprinted verbatim from the Daily Graphic. On the other hand, in preparing my own articles for republication I have made certain modifications with a view of meeting Mr. Williams's objections, where I thought they were worth that trouble. Many of the objections have therefore lost their point; but I thought it better to let Mr. Williams's reply stand as he wrote it.]

To the Editor of the "Daily Graphic."

Sir,—The first reflection arising from a perusal of your correspondent's criticism of "Made in Germany" is that perhaps it is as well that he and I are English and not French journalists. Across the Channel disagreeable formalities sometimes ensue when one writer takes to dealing in such expressions as "artfully picked out," "trickery," "gross exaggeration and suppression," "misrepresentations," "exaggerations—to use the mildest possible term," "grossest exaggeration," "skilfully conveyed a false impression," "twisting the truth," and others of like offensiveness. As they are a direct impeachment of my honour as a man, apart from my ability as an economist, I am compelled to preface my defence with a protest. The adoption of this style is a pity, too, in that it was wholly unnecessary. My antagonist was not in the position of the proverbially abusive lawyer; he had a case to state; and, apart from personalities and some other faults to be mentioned later, I sincerely congratulate him on the ability with which he has stated that case. Of course no one will mistake my meaning. By admitting that my opponent has a case I am not confessing defeat; I am simply testifying to the general truth of the saying that there are two sides to every question, albeit one side is the right one.

THE "ADVOCATUS DIABOLUS."

It is possible to raise objections (and not necessarily foolish objections) to almost any thesis, and the thesis is not hurt thereby. The Vatican wisely employs an advocatus diabolus, whose paradoxical function is to establish the sanctity of a candidate for canonisation by alleging all of what is not saintly that he can rake up in the candidate's career. Your correspondent has acted as advocatus diabolus to "Made in Germany." He has said what there is to be said for the other side, and my book, I respectfully submit, is uninjured. Unfortunately in this case it is the case of the advocatus diabolus only with which most of his readers are acquainted—a circumstance calculated to obscure their judgment. To them I would say: Read my book; you can buy it for half-a-crown, or you can get it for nothing out of the Free Library. This is not a puff of my own wares; it is a necessity of the case. Until you have read the book you cannot form an opinion on the worth of the attack. The small space allotted to me for criticism of my critic is obviously quite insufficient to prove a case which was with difficulty compressed into 174 octavo pages; neither, apart from consideration of space, would you thank me for copying out matter already published elsewhere. You will therefore kindly bear in mind that the ensuing remarks are not a complete statement of my position, but only some supplementary criticisms prompted by the attack.

NOT A PROTECTIONIST PAMPHLET.

First, I join issue with respect to the motive and nature of my book. Your correspondent says that I lean to the conclusion that "the only way to prevent the commercial downfall of our country is to revise the Free Trade policy which we deliberately adopted fifty years ago," and, as his readers will remember, he proceeds on that assumption, and reiterates that statement throughout his articles. It is really unpardonable. Would any of those readers, who were not also readers of my book, imagine that the first chapter of that book contains a disclaimer of holding a brief in favour of any particular doctrine or remedy, Fair Trade being specially named; that not more than seven of my 174 pages are concerned with Protection; that I strenuously and at considerable length advocate other reforms, and often point to other matters as being the determining causes of the decline in a particular trade? Your correspondent knew all this perfectly well, and yet, in order to damage my book with a Free Trade public, deliberately conveyed to them the impression that "Made in Germany" was merely a Protectionist pamphlet. He omitted all reference to technical education, the superiority of German business methods, and the other reforms whose advocacy formed the bulk of the book. And this is the man who sprinkles around charges of "misrepresentation," and of having "skilfully conveyed a false impression"! From a child I was never much impressed by outbreaks of virtuous indignation.

THE CHARGE OF DATE-COOKING.

He reviles me for my dates, and in his own diagrams proves the wisdom of my choice. The object of my book was to show that England's industrial supremacy was departing. Clearly the way to do this was to show the height to which that supremacy had attained, and to contrast it with the position to-day. Now, his first diagram shows that the highest point was reached at the commencement of the nineties. Of course, therefore, I made my comparisons beginning with that period, except where the decline had begun earlier. What is there wrong in this? Similarly I am derided as an "ingenious person" because, in order to show that our production of pig-iron was on the downward grade, I gave the figures for 1882, the highest year, and for 1894, the latest available year. If there were any truth in the charge of date-cooking I should have given to my readers the figures for 1892, which was the lowest year since 1882. It has suited the correspondent to misconceive the whole purport of my book. I was not writing an industrial history of Europe for use in schools. My work was to rouse the manufacturers of England to a sense of the danger threatening their dominion, and I went in detail through the various trades wherein this danger was apparent, showing how great they had been and what was their condition to-day. In different trades the decadence had begun at different periods; to take the same starting year of comparison in each case would, therefore, have been a stupid error. "Made in Germany" is a call to arms, not an academic disquisition on the movements of trade.

"ARTFUL AND INGENIOUS."

But what of your correspondent's method? With a large air of virtuous impartiality he adopts 1886 for his starting-point all through his tables. It may be my denseness, but beyond meaningless uniformity, I can see absolutely nothing in this method to commend it. I see, however, that it is very useful for optimistic purposes. Did it not strike the reader that, in most industries, 1886 was a year of bad trade, and that therefore its adoption as a starting year of comparison would result in a very inaccurate view of England's former industrial glory? If I felt inclined to adopt his language towards myself I might be tempted to say that his choice of years was "artful" and "ingenious," for to say, with blunt frankness, "I will take the last decade and stick to it all through," is an admirable way to score with the unsuspecting public. The pose of impartiality is excellent. Your correspondent's figures are doubtless as correct as they are interesting, but (in the light of the explanation I have given) I submit that those diagrams might as well have remained undrawn; they do not destroy the tables in "Made in Germany," and, so far as dates are concerned, are ineffectual as a commentary.

THE ABUSE OF STATISTICS.

Your correspondent has a better case for his diagrams when he gives weights as a set-off against money figures, and I cannot, of course, take exception to the use of those statistics. But I do take exception to their abuse; and when he attempts to draw from them the inference that the British manufacturer has nothing to complain of in the matter of falling prices, I suggest that there is an abuse. Of course, in some industries the decrease in the price of raw material has made it possible to manufacture for a lower price, but your correspondent goes much farther than the facts warrant when he assumes that the difference in price is balanced by an all-round difference in raw material. He forgets, for example, that coal, which in most manufactures is an item of prime importance in the cost of production, is not cheaper than it used to be in his favourite year 1886. Then the average price was 8.45s. per ton, in 1894 it was 10.50s. per ton. Wages, too, are an even more important item, and these are on the upward grade. So also are rent, rates and taxes. Take his champion instance of the cotton trade. Men used to make fortunes at it. Whoever hears of fortunes being made to-day in cotton manufacture? What we do learn is that recently fifty-two out of ninety-three spinning companies were paying no dividend at all. Prices are cut because of foreign competition. The foreigners have to cut their prices too, but that does not make the fact of foreign competition any the less disagreeable. I still think, therefore, that I followed the right method in laying more stress on money than on weights and measures, and anyway no harm could be done by it, because I used money figures for comparison in both the English and the German tables. To read your correspondent one would imagine that I had confined myself to money figures when tabulating English trade, and to weights when giving the corresponding instances from Germany. Your correspondent was so preoccupied with my skilful conveyance of false impressions that he apparently overlooked the misleading nature of many of his own impressions.

EXCESS OF IMPORTS OVER EXPORTS.

This anxiety has also seemingly taken his attention away from consistency in his own statements. In the first article he rejoices over the fact that our imports exceed our exports, regarding that circumstance as a sign of prosperity; in his second article (when he has another sort of article in hand) he writes as follows:—"When two tradesmen have mutual transactions, that man will feel that he is doing best who sells more to his neighbour than he buys from him. And rightly so!" That note of exclamation is his. It also represented my feelings when I read the statement. I am also quite at one with him in the quoted remark, but (as in my poor way, I tried to be consistent) I am at issue when in his first article he chuckles over the excess of imports. Suppose that excess to be made up entirely of shipping, sale commissions, and interest on foreign investments, and that it does not imply that we are living on our capital; even then the thing does not work out quite happily. Shipping is all right, of course, but sale commissions less so; they spell enrichment, doubtless, to a certain class of City men, but the working and manufacturing classes generally get nothing out of these foreign manufactures. Still less do they share in the third item. It does not help this country's industries to aid the establishment of rival industries abroad, which is what foreign investments mostly mean; while when the returns on those investments are used to purchase foreign goods it is again difficult to see exactly where the English industrial classes come in. With regard to the entrepot trade, your correspondent says that it "seems somewhat to halt in the process" of slipping away; but as his own figures show that the sixty-seven millions of 1889 have dwindled in six years to the sixty millions of 1895, I don't think I need occupy further space by combating his assertion with figures of my own.

Yours faithfully, ERNEST E. WILLIAMS.

(To be concluded.)

MR. WILLIAMS'S REPLY.—II.

To the Editor of the "Daily Graphic."

Sir,—In my first article I endeavoured to show that the charges of disingenuousness brought against me by your critic not only missed their aim, but possessed a boomerang quality. I will ask your attention to another instance. In his second article your correspondent, in order to damage my reputation for intellectual honesty, writes:—"Mr. Williams has artfully picked out half-a-dozen or so items of our imports from Germany, and then exclaims in horror at the amount of 'the moneys which in one year have come out of John Bull's pocket for the purchase of his German-made household goods.'" This, in vulgar language, is a staggerer.

Let me explain my artfulness. In a half-jocular section in my first chapter, I invited the reader just to look round his own house and make an inventory of the German goods it probably contains. I helped him with a list of the toys in the nursery, the piano in the drawing-room, the servant's presentation mug in the kitchen, the pencil on the study table, &c., and then tried to give point and solidity to my little excursion into the lighter style of writing by enumerating the yearly national bill which Germany presents to us for these household items. The correspondent (to use his own admirable verb) "twists" this into the implication above quoted, and writes as though these were the only figures I had adduced. Ingenuous, is it not?

THE ALKALI TRADE.

Now to another matter wherein the correspondent has superficially scored a point, but has done so largely by the process of quoting me in disconnected bits. I refer to his alkali trade section in the third article. He quotes two or three sentences of mine commenting on some startling English export figures I had just given. Then he misses out a couple of most important pages, and finishes the quotation with two sentences referring to the increase of German trade. This leaving-out of the pith of the matter, and the bringing into juxtaposition of two sets of unrelated semi-rhetorical remarks, gives to the quotation a forced and rather non sequitur air. The part that was left out is too long for me to reproduce, but it comprises a number of most pregnant instances of the havoc wrought in England's alkali trade, and of the great progress made in the German trade. The correspondent might, with advantage to the forwarding of public knowledge on the subject, have made some reference to these facts, even had it cramped the space at his disposal for inveighing against my "grossly inaccurate impressions." Here is a case which illustrates the necessity of my appeal to the reader to go direct to the incriminated book.

THE CHEMICAL MANURE TRADE.

Neither can I admire the correspondent's sudden and peculiar change of method in dealing with the chemical manure trade. Anyone acquainted with the trade in sulphate of ammonia knows how the Germans are capturing it, their estimated annual production amounting now to 100,000 tons. It is among the most startling instances of Germany's wonderful progress in her chemical trades. Even the correspondent loses heart, and is fain to confess the expansion here. But in order that he may at all hazards score a point, he introduces the argument that "probably the British farmer ... does not regard this competition of German with English manure manufacturers as altogether disadvantageous." This is all very well; but even a hard-pressed critic cannot serve two masters; he cannot set out to prove that the Germans are not beating us, and then, when he tumbles against an instance to the contrary which repulses all attempts to explain it away, turn round and say that it is a very good thing. It is possible to score points in a way which does not improve the scorer's position. Altogether, I venture to suggest to the correspondent that his general case would have been strengthened had he passed over the chemical trades in discreet silence.

SOAP IMPORTS FROM GERMANY.

Especially was he ill-advised when, for the purpose of bringing into greater prominence my addiction to false statement, he burst out into italics in the following sentence: "So far as the Custom House returns show, not one single ounce of foreign soap is imported into the United Kingdom, either from Germany or from any other country." Because the German returns show an export of soap to England under three different headings. The correspondent should have provided himself with Green Books as well as Blue Books before he set out to demolish me. He would then have learned—what he should have known anyway, considering the attention he has given to the subject—that the English Custom House returns do not show everything.

IMPORTS OF IRON.

This limited acquaintance with German statistics has caused the correspondent to go wrong on other occasions. For instance, in the fourth article he produces a table purporting to show our iron trade with Germany, in which the iron exports from Germany to England cut a very insignificant figure beside the English exports to Germany. To quote his own words in another place—"Most impressive! if only it were true." I had occasion the other day to get out a detailed list of the German exports to England of iron and steel manufactures in 1891; they reached a total of 109,956 tons. The correspondent gives 11,000 tons as the total of iron manufactures; the complete total of iron and steel manufactures, according to the source whence he obviously drew his information, was about 16,000 tons. The explanation is of course that the English returns do not always show the actual place of origin. (It doesn't matter much; competition in any other name hits just as hard, and Germany, after all, is but one rival out of many. I only used her as an instance of foreign competition generally.)

A "PETTY ACCUSATION."

This particular table is, therefore, hopelessly wrong, and is certainly valueless for any purpose of destructive criticism. It is on this page that the correspondent brings against me a petty accusation of which he should have been ashamed. He says that I have "skilfully conveyed a false impression" by giving certain German figures in hundredweights and English figures in tons. Surely he had the wit to see that I was merely transcribing figures without stopping to translate them; and it is difficult to imagine he could think I was so witless as to adopt a silly sleight-of-hand trick such as that of which he accuses me, a trick which would not deceive a child in the lowest standard of a Board school.

FANCIFUL FOREBODINGS?

Here I must bring to an end my short, detailed criticism of the Daily Graphic correspondent's attack, for I have already exceeded the space offered to me by the editor, though I have perforce left untouched a number of points on which I should have liked to enlarge my defence. I have not touched the two concluding articles in the series. The last is a statement (more lucidly and ably put than anything I remember ever to have read) of the Free Trade position in general and the case against a Customs Union in particular; but I have recently elsewhere stated my views on those subjects at length. Regarding the penultimate article, I should like to say a word in conclusion. That article attacks me by a side wind. It does not contest the facts contained in my book; on the contrary, it leads off with an airy dismissal of "Mr. Williams and his fanciful forebodings," and it shows, by much rhetorical writing and some interesting illustrations, that England is a land flowing with milk and honey and manufactures and money, and generally in a wonderful state of millennial prosperity. My answer is two-fold. In the first place I must congratulate the correspondent on the pleasant surroundings among which alone his days can have been passed; but I should like to take him through some awful wildernesses I know—deserts of "mean streets," where half-clothed, underfed children shiver for warmth and food at the knees of women gaunt and haggard with the suffering which hopeless poverty inflicts on them; and by way of explanation of these grisly phenomena I would take him to the dock gates in the early morning, where not unlikely he would see men literally fighting for entrance because there is not work enough to go round. If that does not point him out the cause with sufficient clearness I would suggest an examination of the employment returns of the trade unions. There, by-the-by, he would see the greatest want of employment to be in those trades where the pinch of foreign competition—"the harmless growth of the German infant," he phrases it—is most in evidence.

A WARNING.

In the second place, I would point out to him that the initial object of my book was to warn the nation in the day of its prosperity—such as it is—that a grave danger was lurking in the way. The fact that the easy-going man of business is surrounded by so many signs of industrial prosperity, such as those which the correspondent details, only made it the more important that he should be aroused to a knowledge of the forces that were undermining the foundations.

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