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                         ARE WE RUINED BY THE
                               GERMANS?

                                  BY
                              HAROLD COX,

             FORMERLY SCHOLAR OF JESUS COLLEGE, CAMBRIDGE.


      _Republished from the "Daily Graphic" for the Cobden Club._


                            [Illustration]


                     CASSELL and COMPANY, LIMITED:
                     _LONDON, PARIS & MELBOURNE._




PREFACE.


The greater part of the contents of this little volume appeared
originally in the _Daily Graphic_, in the form of a series of six
articles written in criticism of Mr. Ernest Williams's "Made in
Germany." To these articles Mr. Williams replied in two letters, and to
that reply I made a final rejoinder. In the present reproduction this
sequence has been abandoned. For the convenience of readers, and for the
economy of space, I have anticipated in the text all of Mr. Williams's
objections which appeared to me to have any substance, and, in addition,
I have modified or omitted phrases, in themselves trivial, upon which he
had fastened to build elaborate but unsubstantial retorts. By doing this
I have been able to preserve the continuity of my argument and at the
same time to cut down a somewhat lengthy rejoinder into a brief
concluding chapter. Incidentally a few new points and some further
figures have been added to the articles. This arrangement,
unfortunately, deprives Mr. Williams's reply of most of its original
piquancy; but, in order that my readers may have an opportunity of
seeing what the author of "Made in Germany" was able to say for himself,
his letters are reprinted _verbatim_ in an Appendix. I am indebted to
the proprietors of the _Daily Graphic_ for their courteous permission to
republish the articles, and to the Committee of the Cobden Club for
undertaking the republication. I have only to add that the opinions
expressed throughout are my own, and that the Cobden Club does not
necessarily endorse every one of them.

                                                       H. C.

    GRAY'S INN,
        _December, 1896._




CONTENTS.


  CHAP.                                           PAGE

    I.--OUR EXPANDING TRADE                          1

   II.--GERMANY: ONE OF OUR BEST CUSTOMERS           8

  III.--PICTURESQUE EXAGGERATIONS                   14

   IV.--MORE MISREPRESENTATIONS                     21

    V.--OUR GROWING PROSPERITY                      33

   VI.--LET WELL ALONE                              43

  VII.--CONCLUSION                                  54

  APPENDIX                                          57




ARE WE RUINED BY THE GERMANS?




CHAPTER I.

OUR EXPANDING TRADE.


In a little book recently published, an attempt is made to show that
British trade is being knocked to pieces by German competition, that
already the sun has set on England's commercial supremacy, and that if
we are not careful the few crumbs of trade still left to us will be
snapped up by Germany. This depressing publication, aptly entitled "Made
in Germany," has received the quasi-religious benediction of an
enterprising and esoteric journalist, and the puff direct from a
sportive ex-Prime Minister. Thus sent off it is sure to be widely
circulated, and, being beyond dispute well written, to be also widely
read. Unfortunately--such is the nature of the book--it cannot be so
widely criticised. It consists largely of quoted statistics and
deductions therefrom, and few readers will have the means at hand for
verifying the many figures quoted, while fewer still will have the
patience to compare them with other figures which the author omits to
mention. As a necessary consequence, a large number of persons will
believe that Mr. Williams has proved his case, and some of them will
jump to the conclusion, which is evidently the conclusion to which Mr.
Williams himself leans, that the only way to prevent the commercial
downfall of our country is to reverse the Free Trade policy which we
deliberately adopted fifty years ago.


THE ART OF EXAGGERATION.

That may or may not be a wise thing to do, but at least let us be
certain before taking action, or before taking thought which is
preliminary to action, that we know our facts, and all our facts. The
second point is as important as the first. On hastily reading Mr.
Williams's book for the first time, my impression was that he had only
erred by overlooking facts which told on the other side. On general
grounds, considering the signs of prosperity on every side, it seemed to
me impossible that the condition of our foreign trade could be so bad as
the author of "Made in Germany" paints it. A cursory glance at a few
staple figures convinced me that my general impression was a sound one,
that our trade was not going to the dogs, and that Mr. Williams had only
succeeded in producing so gloomy a picture by fixing his gaze on the
shadows and shutting his eyes to the sunlight. On this supposition I
began a more critical examination of his book, not with a view to
refuting his positive statements, but with a view to showing that in
spite of the ugly facts which he had, on the whole usefully, brought to
light, there were counterbalancing considerations from which we might
draw, at any rate, partial consolation. This I propose to do, but in
addition I shall be able to show that many of Mr. Williams's alleged
ugly facts are not in reality so ugly as he makes them look, and that
what he has done, in his eagerness to prove his case, is to so choose
his figures and so phrase his sentences as to convey in particular
instances an entirely false impression. How this is done will be shown
in detail later on. For the present it is sufficient to state that it is
done, and that some of the most alarmist statements in "Made in Germany"
will not bear critical examination. In a word, the author, in his
polemical zeal, has sinned both sins--he has suggested the false and he
has omitted the true; he has misrepresented, in particular instances,
the facts to which he refers, and he has not referred at all to facts
which refute his general argument.


THE WHOLE TRUTH.

It is with these that I propose first to deal, with the facts which show
that our trade is in a very healthy condition, and that though Germany
is also doing well and hitting us hard in some trades, there is no
reason to believe that her prosperity is, on the whole, injuring us. And
to guard myself, at the outset, against a temptation to which Mr.
Williams has frequently succumbed--the temptation of picking out years
peculiarly favourable to my argument--I propose to take the last ten or
the last fifteen years, for which statistics are available, and to give
wherever possible the figures for each year in the whole period. The
figures that will be here quoted are all taken from official records,
except when otherwise stated.


OUR TOTAL TRADE FOR TEN YEARS.

The first point to attack is the question of the total import and export
trade of the United Kingdom. The figures are contained in the following
table:--

TEN YEARS' TRADE OF THE UNITED KINGDOM

(Exclusive of Bullion and Specie).

In Millions Sterling.

--------------+----+----+----+----+----+----+----+----+----+----
              |1886|1887|1888|1889|1890|1891|1892|1893|1894|1895
--------------+----+----+----+----+----+----+----+----+----+----
Total Imports | 350| 362| 388| 428| 421| 435| 423| 405| 408| 417
Total Exports | 269| 281| 299| 316| 328| 309| 292| 277| 274| 286
              +----+----+----+----+----+----+----+----+----+----
Excess of     |    |    |    |    |    |    |    |    |    |
Imports       |    |    |    |    |    |    |    |    |    |
over Exports  |  81|  81|  89| 112|  93| 126| 132| 128| 134| 131
--------------+----+----+----+----+----+----+----+----+----+----

These figures may be illustrated as follows:--

[Illustration]

These figures hardly bear out the statement that "commercial dry rot,"
to use one of Mr. Williams's favourite phrases, has already laid hold of
us. In spite of the fall in prices, the money value of our trade, both
import and export, has fully maintained its level. It is true that the
year 1886, with which the diagram starts, was a year of depression, but
the point which I wish to bring out by the diagram is not that 1895 was
a better year than 1886, but that the general course for the whole
period of ten years shows no downward tendency. Later on I shall give a
diagram, covering a period of fifteen years, which brings out the same
point even more clearly. It is important, however, at once to point out
that the mere comparison of the money totals of our trade in different
years is necessarily inconclusive, because no account is taken of
prices. To get a true comparison between any two years, say 1895 and
1890, we ought to calculate what the value of our trade in 1895 would
have been if each separate commodity had been sold at the prices of
1890. Were this done, it would probably be found that 1895, instead of
showing a decline, would show an immense advance. A similar comparison
has been privately worked out in one of the Government offices for the
years 1873 and 1886 with startling results, which I am permitted to
quote. It must be premised that only certain articles are entered in our
returns by quantity as well as by value, and it is therefore only
between these that such a comparison as I have indicated can be made. In
1873, the total declared value of our exports of these articles was 172
millions sterling; in 1886, it was 131 millions, showing an apparent
fall of 41 millions. But if these exports of 1886 had been declared at
the prices of 1873 the total value would have been 215 millions. In this
sense, then, our aggregate trade in these commodities in 1886, instead
of being 41 millions worse than 1873, was 43 millions better. This is
undoubtedly an extreme illustration, for the prices of 1873 were
exceptionally high, and those of 1886 exceptionally low. Nevertheless,
the illustration is most instructive as showing how extremely misleading
it may be to compare values only, without taking account of quantities.
Unfortunately, when we are dealing with the total trade of a country, a
comparison of values is the only comparison possible, for there is no
other common denominator by means of which varied articles--say, steam
ploughs, cotton piece-goods, and patent medicines--can be brought into
our table.


OUR IMPORTS OF GOLD AND SILVER.

To return to our diagram--it may be asked, "How does it happen that
there is such a large and growing excess of imports over exports? Surely
that is a bad sign." On the face of it, why should it be? It only means
that we are, apparently, getting more than we give, and most people do
not in their private relations regard that as a hardship. There are,
however, people to be found who, seeing that we every year buy more
goods than we sell, will jump to the conclusion that we must pay for the
difference in cash. Where we are to get the cash from they do not pause
to think. Hitherto the Welsh hills have resolutely refused to give up
their gold in paying quantities, and as for the silver which we separate
from Cornish lead, it is worth something less than L50,000 a year. The
notion then that we pay for our foreign purchases with our own gold and
silver may be dismissed at once, although a hundred years ago this same
delusion had not a little influence in shaping our commercial policy. As
a matter of fact, instead of sending gold and silver out of the country
to pay for our excess of imports, we almost every year import
considerably more bullion and specie than we export. The actual figures
are given in the following table:--

THE MOVEMENTS OF BULLION AND SPECIE.

In Millions Sterling.

----------------------+----+----+----+----+----+----+----+----+----+----
                      |1886|1887|1888|1889|1890|1891|1892|1893|1894|1895
----------------------+----+----+----+----+----+----+----+----+----+----
Imports Gold          |12.9|10.0|15.8|17.9|23.6|30.3|21.6|24.8|27.6|36.0
   "    Silver        | 7.5| 7.8| 6.2| 9.2|10.4| 9.3|10.7|11.9|11.0|10.7
Exports Gold          |13.8| 9.3|14.9|14.5|14.3|24.2|14.8|19.5|15.6|21.4
   "    Silver        | 7.2| 7.8| 7.6|10.7|10.9|13.1|14.1|13.6|12.2|10.4
                      +----+----+----+----+----+----+----+----+----+----
Total excess or       |    |    |    |    |    |    |    |    |    |
deficiency of imports | -  | +  | -  | +  | +  | +  | +  | +  | +  | +
over exports of gold  |    |    |    |    |    |    |    |    |    |
and silver together   |  .6|  .6|  .5| 2.0| 8.8| 2.3| 2.4| 3.6|10.8|15.0
----------------------+----+----+----+----+----+----+----+----+----+----


EXCESS OF IMPORTS OVER EXPORTS.

The movements of gold and silver then, instead of helping to explain the
excess of imports over exports, only increase the need for explanation.
Happily, the explanation that can be given, though it cannot be
statistical, is fully sufficient. It is fourfold. In the first place the
Custom House returns do not include in the tables of exports the large
export which we every year make of ships built to order for foreign
buyers, so that our exports appear smaller than they really are by at
least five millions a year. Secondly, an allowance must be made for the
profit on our foreign trade. If, in return for every pound's worth of
British goods sent out from our ports, only a pound's worth of foreign
goods came back, our merchants would make a better living by selling
penny toys along the Strand. What the average profit is on our foreign
trade there is no means of knowing, but putting it as low as 10 per
cent. on the double transaction, we at once account for some L30,000,000
sterling in the difference between our exports and imports. The third
item in the explanation is the sum earned by British shipowners for
carrying the greater part of the sea-commerce of the world. This sum has
been estimated at L70,000,000 a year, but that is only a guess, and it
is certainly a high one. Lastly, we have the enormous sum annually due
to this country for interest on the money we have lent abroad. The
amount of this annual payment can again only be guessed at, but it
probably exceeds L100,000,000 a year. Adding then these four items
together, and making every allowance for over-estimates, we not only
account for the whole excess of imports over exports, but have a balance
over, which means that we are still exporting capital to foreign
countries. The capital we export goes out in the form of mining
machinery to South Africa, steel rails to India, coal to South America;
the interest due to us comes home in the form of American wheat,
Argentine beef, Australian wool, Indian tea, South African diamonds.


THE WORLD'S TRIBUTE.

Of what do the Protectionists complain? Would they have us forego the
interest we are owed? Apparently Mr. Williams would, for he says (page
19) that we ought not to spend all our income from foreign investments
"in foreign shops." How else, in the name of the Prophet, are we to
receive all or any part of what is due to us from foreigners, whether it
be due for interest on investments, or for goods carried, or for ships
sold? Does Mr. Williams mean that we are to compel foreign nations to
pay us a couple of hundred millions a year in actual gold and silver,
and then dig a hole in the ground and sit on our hoard like an Indian
cook who has saved money out of the perquisites of his profession? Gold
and silver are useless to us beyond a very few millions every year; if
more bullion were sent the market would reject it. If we are to be paid
at all we must be paid in foreign commodities, and the mechanism of
commerce enables us to select just those commodities which we most want.
This is the whole story of our excess of imports over exports.
Furthermore, that excess would be even greater than it is did we not
every year send fresh millions abroad on loan to our Colonies and
foreign countries, to produce in due course (it is to be hoped)
additional hundreds of thousands in the way of interest.


OUR _ENTREPOT_ TRADE.

There is one other important point to be dealt with in considering the
movement of our trade as a whole. It is this--that part of the enormous
quantity of goods we import is not consumed by ourselves, but is
re-exported to foreign countries or to our Colonies. For many reasons it
is interesting to distinguish these re-exports from the exports of goods
produced within the United Kingdom. The separate figures for the last
fifteen years are given in the following table:--

OUR _ENTREPOT_ TRADE AND OUR HOME TRADE.

In Millions Sterling.

--------------+----+---+---+---+---+---+---+---+---+---+---+---+---+---+---
              |1881|'82|'83|'84|'85|'86|'87|'88|'89|'90|'91|'92|'93|'94|'95
--------------+----+---+---+---+---+---+---+---+---+---+---+---+---+---+---
Re-exports of |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
Imported Goods|  63| 65| 66| 63| 58| 56| 59| 64| 67| 65| 62| 65| 59| 58| 60
Exports of    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
Home Produce  | 234|242|240|233|213|213|222|235|249|264|247|227|218|216|226
--------------+----+---+---+---+---+---+---+---+---+---+---+---+---+---+---
Total Exports | 297|307|306|296|271|269|281|299|316|329|309|292|277|274|286
--------------+----+---+---+---+---+---+---+---+---+---+---+---+---+---+---

There is not much to grumble at in these figures. Our _entrepot_ trade,
which was supposed to be slipping away, seems somewhat to halt in the
process, in spite of the notorious and not entirely unpleasing fact that
our Colonies are now doing a larger direct trade with foreign countries
than ever before. At the same time the figures for the exports of our
own goods are most satisfactory if we take into account the lower range
of prices at which our manufacturers are now working. Altogether there
is nothing in the general figures of our trade to justify the wild
statements that "dry rot" has set in, and that "the industrial glory of
England is departing."




CHAPTER II.

GERMANY: ONE OF OUR BEST CUSTOMERS.


In the previous chapter it was shown that the general figures of our
import and export trade gave no indication of the ruin of our commerce
either by Germans or by anybody else. In the present chapter it is
proposed to show that though Germany is among the keenest of our trade
competitors, she is also one of our best customers. For a sufficient
indication of the truth of this proposition we have only to turn to the
annual statement of the trade of the United Kingdom. It is true that the
figures there published are not entirely satisfactory, because much of
the trade of Germany is shipped from Dutch or Belgian ports, and
credited to Holland and Belgium respectively. But this is probably also
true, and to about the same extent, of British goods destined for
Germany, and travelling _via_ Belgium or Holland, so that in comparing
imports and exports this factor may be neglected. The same cause of
error will probably be also present to the same extent in successive
years, so that we can ignore it when comparing one year with another.
Purely for comparative purposes then the annexed table, and the diagram
illustrating it, are sufficiently accurate, although the actual figures
for any one year by itself have, for the reasons given, little positive
value.

OUR TOTAL TRADE WITH GERMAN PORTS.

In Millions Sterling.

----------------------+----+----+----+----+----+----+----+----+----+----
                      |1886|1887|1888|1889|1890|1891|1892|1893|1894|1895
----------------------+----+----+----+----+----+----+----+----+----+----
Imports from Germany  |21.4|24.6|26.7|27.1|26.1|27.0|25.7|26.4|26.9|27.0
Exports to Germany    |26.4|27.2|27.4|31.3|30.5|29.9|29.6|28.0|29.2|32.7
----------------------+----+----+----+----+----+----+----+----+----+----

These figures may be illustrated diagrammatically as follows:--

[Illustration]


A VERY SATISFACTORY TRADE.

These figures furnish a striking answer to the alarmists who can see in
Germany nothing but a vigorous and not too scrupulous rival. In every
year during the last ten years she has apparently bought more from us
than she has sold to us. It is quite true that all the things she has
bought from us were not produced or manufactured by us. A portion of her
purchases consists of foreign or colonial goods sent to London, or
Liverpool, or Hull, and there purchased for re-sale in Germany. But in
the same way some of the goods we buy from Germany certainly had their
origin in other countries, and have only passed through Germany on their
way to us; so that the fairest way of making a comparison is to take the
whole trade in each case. Moreover, this _entrepot_ trade of ours is not
in itself a thing to be sneezed at; it contributes a goodly fraction of
the wealth of the city of London. In order, however, to complete the
picture of our trade with Germany, the following table is appended,
distinguishing in each of the ten years under review the home produce
exported from the foreign and colonial goods re-exported. This table
shows that in purely British goods we are doing a very satisfactory
trade with Germany. Taking averages, we see that during the ten years
our export of our own manufactures and produce to German ports was at
the rate of L17,800,000 a year, against a total import from German ports
of L25,900,000, this figure including both German goods and other
countries' goods passing through Germany. If we recollect that on the
whole our imports from the outside world must be very much larger than
our exports, for the reasons detailed in the preceding chapter, it will
be seen that these two figures, even by themselves, are not
unsatisfactory.

ANALYSIS OF OUR TRADE WITH GERMAN PORTS.

In Millions Sterling.

----------------------+----+----+----+----+----+----+----+----+----+----
                      |1886|1887|1888|1889|1890|1891|1892|1893|1894|1895
----------------------+----+----+----+----+----+----+----+----+----+----
British Goods exported|15.7|15.7|15.8|18.5|19.3|18.8|17.6|17.7|17.8|20.6
to German ports       |    |    |    |    |    |    |    |    |    |
                      |    |    |    |    |    |    |    |    |    |
Foreign and Colonial  |10.6|11.5|11.6|12.8|11.2|11.1|12.1|10.3|11.4|12.2
Goods exported from   |    |    |    |    |    |    |    |    |    |
British ports to      |    |    |    |    |    |    |    |    |    |
German ports          |    |    |    |    |    |    |    |    |    |
----------------------+----+----+----+----+----+----+----+----+----+----


OUR PRINCIPAL CUSTOMERS.

Let us now go a step further and compare our trade with Germany and our
trade with other principal customers. The comparison is worked out in
the following table, which shows the total imports into the United
Kingdom from the respective countries, and the total exports from the
United Kingdom to the same countries:--

TRADE OF THE UNITED KINGDOM WITH THE FOLLOWING COUNTRIES.

Ten Years' Average, in Millions Sterling, according to _British_
Returns.

----------------------------------+-----------+-----------
                                  |  Imports  |  Exports
                                  | into U.K. | from U.K.
----------------------------------+-----------+-----------
From and to Germany               |    25.9   |    29.2
 "    "     France                |    42.6   |    21.7
 "    "     United States         |    91.8   |    40.2
 "    "     British India         |    30.5   |    31.3
 "    "     Australasia           |    28.3   |    23.1
 "    "     British North America |    12.2   |     8.4
----------------------------------+-----------+-----------

These figures are taken from the British Custom House returns, and are
subject to the objection to which allusion has already been made, that
the Custom House authorities have no means of ascertaining the real
origin of goods entering this country, nor the real destination of goods
leaving it. Thus, for example, everyone knows that there is a
considerable trade between Great Britain and Switzerland, yet
Switzerland has no place at all in the Custom House returns, because,
having no seaboard, all her goods must pass through foreign territory,
and each package is credited by our Customs House to the port--French,
or Belgian, or Dutch--through which the package passes to England. In
order, therefore, to provide some check on the above figures, I have
averaged in the same way the figures collected by the different foreign
countries in their Customs Houses. These foreign and colonial figures
have no more title to be considered absolutely accurate than ours, nor
do they cover quite the same ground. Their value lies in the rough
confirmation they give of the very rough conclusion which we are able to
draw from our own figures:--

TRADE OF THE FOLLOWING COUNTRIES WITH THE UNITED KINGDOM.

Ten Years' Average, in Millions Sterling, according to _Foreign
and Colonial_ returns.

-------------------------+-----------------+-------------------
                         | Exports to U.K. | Imports from U.K.
-------------------------+-----------------+-------------------
Germany                  |       29.1      |       26.6
France                   |       38.2      |       22.0
United States            |       84.6      |       34.2
British India[1]         |  (Rx) 36.4      |  (Rx) 60.4
Australasia[1]           |       28.5      |       27.2
British North America[1] |       10.5      |        9.1
-------------------------+-----------------+-------------------

    [Footnote 1: These figures include treasure as well as
    merchandise.]

On the whole, these figures tally more closely with those derived from
British returns than might have been expected, and if we make allowance
for the fact that the Colonial figures include treasure, it will be seen
that both tables show that Germany is our best customer after the United
States and India.


THE ALARMIST'S ARTS.

In order to obscure this important fact, while alarming the British
public with the notion that English manufacturers are being ruined by
German competition, Mr. Williams picks 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." He prefaces his list
with the unfortunate remark that the figures are taken from the Custom
House returns, "where, at any rate, fancy and exaggeration have no
play." That is so; the fancy and exaggeration are supplied by Mr.
Williams. In 1895, he says, Germany sent us linen manufactures to the
value of L91,257. He omits, however, to mention that according to the
same authority--the Custom House returns--the value of the linen
manufactures which we sold to Germany was L273,795. Again, he mentions
that we bought from Germany cotton manufactures to the value of
L536,000, but he is silent on the fact that our sales to Germany
amounted to L1,305,000. He does not even hesitate to pick out such a
trumpery item as L11,309 for German embroidery and needlework, but he
forgets to tell his readers that the silk manufactures which in the same
year we sold to Germany were worth L92,000. In the same way, were it
worth doing, one could go through the whole of Mr. Williams's list,
pitting one article against another. It would be labour wasted. The
simple fact is that, according to the authority upon which Mr. Williams
relies for all the figures just quoted, our total exports to Germany
exceed our total imports from Germany, and no trickery with particular
items can destroy, though it may obscure, that broad fact.


A SELF-DESTRUCTIVE POLICY.

But, for the reasons already explained, in replying to Mr. Williams I do
not rely wholly on British figures. It is from the double testimony of
British and foreign figures that I deduce the fact that of all our
customers Germany is one of the best. The practical moral of this fact
is sufficiently obvious. In private business a tradesman does not go out
of his way to offend a good customer, even though that customer is also
a keen trade competitor. He bestirs himself instead to keep ahead, if
possible, of his rival without doing anything to destroy the mutually
profitable trade relationship between them. Such palpable considerations
of expediency are ignored by our latter-day Protectionists, among whom
Mr. Williams deservedly ranks as a leading prophet. Their ambition is to
induce the Colonies to discriminate in their tariffs between goods from
the Mother Country and goods from foreign countries, admitting the
former on favourable terms and penalising the latter. It is avowedly
against German competition that this policy is directed, and we are
light-heartedly told to risk our trade with one of our best customers on
the chance of encouraging trade with Colonies which so far have shown
much more eagerness to sell their goods to us than to buy ours. Even
supposing that this policy succeeded in destroying the whole of the
German export trade to our Colonies and Possessions, the possible gain
to us would be very small.

Here are the figures of the trade of our three principal Colonies with
the United Kingdom and with Germany, derived in each case from the
Colonial returns:--

TRADE OF THE FOLLOWING BRITISH POSSESSIONS WITH THE UNITED KINGDOM AND
WITH GERMANY.

Ten Years' Average, in Millions Sterling or Millions Rx.

-----------------+---------------------------+----------------------------
                 |          IMPORTS.         |          EXPORTS.
                 +---------------+-----------+---------------+------------
                 | From Germany. | From U.K. |  To Germany.  |  To U.K.
-----------------+---------------------------+----------------------------
India (Rx)       |    .9         |   58.4    |      3.8      |   36.4
Australasia      |    .9         |   27.4    |       .7      |   28.2
Brit. N. America |    .8         |    9.1    |       .1      |   10.1
-----------------+---------------+-----------+---------------+------------

Thus these great groups of Colonies and Dependencies together buy rather
less than L3,000,000 worth of German goods against more than L60,000,000
worth of British goods. Yet in order to crush this fractional
competition of Germany in neutral markets, in order to scrape up these
crumbs that have fallen from our table, we are invited to risk the loss
of a direct trade with Germany worth nearly ten times as much as all the
crumbs heaped up together.




CHAPTER III.

PICTURESQUE EXAGGERATIONS.


It has now been shown, first that there is nothing in the general
figures of our import and export trade to warrant the alarmist view
expressed in "Made in Germany," and secondly, that the country whose
rivalry is supposed to be ruining us is one of the best of all our
customers. What I propose to do in the present chapter is to examine
some of the detailed statements in Mr. Williams's book and to show that
in many cases the inferences he draws are so seriously exaggerated as to
amount to a positive misrepresentation of the facts. For the purposes of
this examination we cannot do better than begin with the chapter which
Mr. Williams devotes to chemicals. "The chemical trade," he tells us,
"is the barometer of a nation's prosperity.... The discomforting
significance of the appearance of chemicals in this Black List of mine
will, therefore, be at once apparent." More follows about a "Bottomless
pit for capital," and "Germany seizing the occasion while England has
let hers slide," and so on.


THE ALKALI TRADE.

Thus much for generalities with regard to the chemical trade; now for
details. Let us begin with alkalies, which Mr. Williams selects for
special comment. He says:--

    "Here we are confronted with the damning fact that whereas fresh
    uses and (owing to the growth of manufactures abroad) fresh
    markets for alkali products are continually being found, the
    export of the greatest alkali trader of the world was last year
    of little more than half its value in the early seventies. Nor
    do the latest years show any sign of recuperation. The decline
    since 1891 has been continuous.... There is no question here of
    an insidious advance. The matter is simply that our trade has
    gone to the devil, while the Germans are piling up fortunes."

To the average reader this paragraph would certainly suggest that at
least half our trade in alkali had already disappeared, and that the
remainder would soon be gone to the devil or elsewhere. I have not
verified Mr. Williams's statement with regard to the early seventies,
but it is quite sufficient to point to the course of the trade during
the last fifteen years. Both quantities and values are given in the
following table:--

EXPORTS OF ALKALI FROM THE UNITED KINGDOM.

--------------+----+---+---+---+---+---+---+---+---+---+---+---+---+---+---
              |1881|'82|'83|'84|'85|'86|'87|'88|'89|'90|'91|'92|'93|'94|'95
--------------+----+---+---+---+---+---+---+---+---+---+---+---+---+---+---
Quantities--  |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
million Cwts. | 6.8|6.7|6.9|6.6|6.7|6.2|6.2|6.3|6.0|6.3|6.2|5.9|5.8|6.0|6.2
              |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
Values--      |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
million L's   | 2.1|2.1|2.1|2.1|2.0|1.8|1.7|1.6|1.6|2.1|2.3|2.1|1.9|1.6|1.6
--------------+----+---+---+---+---+---+---+---+---+---+---+---+---+---+---

These figures show that our alkali trade has been on the whole
remarkably steady, except for the slight ups and downs in successive
years to which all trades are liable.

To show these ups and downs more graphically, I have drawn the following
diagram, covering the last ten years' exports:--

DIAGRAM OF THE QUANTITIES OF BRITISH ALKALI EXPORTED.

[Illustration]

If the reader will examine this diagram and the more complete figures
given above he will be able to see how completely misleading are Mr.
Williams's sensational statements about the British alkali trade. I do
not for a moment deny that the German alkali trade has made remarkable
progress; I only assert that there is no evidence that "our trade has
gone to the devil."


CHEMICAL MANURES.

We turn next to chemical manures. On this subject Mr. Williams
remarks:--

    "Every farmer will testify to the exceeding value of these
    stuffs. 'Tis a modern means of fertilising the soil, and there
    can be no doubt that it has a very great future. Obviously then
    it is in the highest degree important that England should keep a
    firm hold of the trade. What, alas! is equally obvious is that
    England's grip on it is relaxing, but that Germany is tightening
    hers."

It may be true--probably is true--that the industry of Germany is
expanding in this as in almost every other branch of the chemical
trades. It is also true that the value of chemical manures sent by
Germany to this country--still only a quarter of what we send to
Germany--is increasing. What is not true is the statement that England's
grip on the trade is "obviously relaxing." The figures are given below.
They do not look much like a relaxed grip.

EXPORTS OF CHEMICAL MANURES FROM THE UNITED KINGDOM.

In Millions Sterling.

----+----+----+----+----+----+----+----+----+----+----+----+----+----+----
1881|1882|1883|1884|1885|1886|1887|1888|1889|1890|1891|1892|1893|1894|1895
----+----+----+----+----+----+----+----+----+----+----+----+----+----+----
 1.8| 2.0| 2.2| 2.1| 1.7| 1.6| 1.6| 1.8| 2.1| 2.1| 2.1| 2.1| 2.3| 2.3| 1.9
----+----+----+----+----+----+----+----+----+----+----+----+----+----+----

The figures for the past ten years are illustrated in the following
diagram:--

[Illustration]


SOME SUPPOSITIONS ABOUT SALT.

Salt is the next subject to which Mr. Williams turns. What he has to say
about it is more picturesque than accurate:--

    "The story is worth study. The Salt Union was formed in England
    in 1889, and the manufacture of salt thereby converted into a
    big monopoly.... The directors reckoned without their Germany.
    They can make salt there, too. It is not so good as the Cheshire
    product, but it is salt, and it is much cheaper than that sold
    by the Salt Union. When that syndicate's price went up the
    German manufacturers pushed into the world market, and that to a
    purpose which is strikingly illustrated in the case of our great
    Dependency. India needs much foreign salt, and the Indian ryot
    needs it cheap: for the salt he uses has to bear the burden of a
    tax. The natural result followed: German salt to a large extent
    ousted English from the Indian market."

Most impressive! if only it were true. So far as the world market is
concerned, the figures below give no indications of the havoc alleged to
have been wrought by the machinations of the Salt Union.

EXPORTS OF BRITISH SALT.

---------------------+----+----+----+----+----+----+----+----+----+----
                     |1886|1887|1888|1889|1890|1891|1892|1893|1894|1895
---------------------+----+----+----+----+----+----+----+----+----+----
Quantities--thousand |    |    |    |    |    |    |    |    |    |
tons                 | 805| 819| 899| 667| 726| 671| 654| 636| 769| 741
                     |    |    |    |    |    |    |    |    |    |
Values--thousand L's | 588| 525| 486| 539| 653| 596| 539| 505| 604| 546
---------------------+----+----+----+----+----+----+----+----+----+----

So far as India is concerned, Mr. Williams is doubly wrong. In the first
place, German salt has not "to a large extent ousted English." During
the past five years--it was only in 1889 that the wicked Salt Union came
into being--Indian imports of salt have been as follows:--

INDIAN IMPORTS OF SALT.

Thousands of Tons.

------------------------------------------------------
Years ending March 31st.    From U.K.    From Germany.
------------------------------------------------------
   1891                        273             61
   1892                        222            103
   1893                        241             47
   1894                        269             48
   1895                        315             82
------------------------------------------------------

This does not look as if English salt were being ousted by German. In
the second place, it is not true that German salt is much cheaper than
Cheshire, at any rate so far as the Indian market is concerned. It will
be found by reference to the Indian Blue Books that the price of German
salt imported into India in 1894-5 works out to 17.6 rupees per ton, and
the price of English salt only to 17.0 rupees per ton. In other words,
German salt was of the two slightly the dearer. So much for the salt
bogey which Mr. Williams had conjured up.


CHEMICAL DYE STUFFS.

We next pass to chemical dye stuffs. It is undoubtedly true that in this
branch of manufacture Germany has gone ahead at a remarkable rate, and
it is also probable that some of our manufacturers have allowed
themselves to be passed in the race by neglecting the scientific methods
which Germans employ. But that is no reason why Mr. Williams should
exaggerate his case. In order to magnify the fall in our trade, if such
there be, he picks out the year of highest export (1890) and says, Lo!
since 1890 our export of dye stuffs has dropped from L530,000 to
L473,000. One cannot tell whether this is a real drop in trade, or
merely the consequence of a fall in price, but this we do know--that the
value of our exports fluctuates largely from year to year, and that 1895
was a good average year. The figures for ten years are given below:--

VALUES OF DYE STUFFS EXPORTED.

------------------+----+----+----+----+----+----+----+----+----+----
                  |1886|1887|1888|1889|1890|1891|1892|1893|1894|1895
------------------+----+----+----+----+----+----+----+----+----+----
Thousands of L's  | 483| 499| 469| 492| 531| 524| 443| 452| 415| 473
------------------+----+----+----+----+----+----+----+----+----+----


FANCY SOAPS AND FANCY ASSERTIONS.

The last point in Mr. Williams's chapter on the chemical trades with
which it is worth while to deal is what he says about soap:--

    "In the old days, when brown Windsor was a luxury, Englishmen
    washed with soap of English make; and those who could not afford
    'scented' cleansed themselves with 'yellow' or 'mottled.' Thanks
    (partly) to Continental chemistry, we have changed all that....
    The progress of practical chemistry has evidently reached a
    point at which the manufacture of agreeable toilet soaps at a
    low figure is possible. But why should this manufacture be so
    largely in foreign hands? They twit us with our debased fondness
    for the tub, and they do but add injury to insult when they send
    us soap for use therein. The Germans--a non-tubbing race--have
    not yet invaded the English soap market so victoriously as is
    their wont, though even here the Teuton hand may be discerned by
    the expert in forged trade marks."

If this paragraph means anything at all, it means that even in the soap
industry our manufacturers are being beaten by the foreigner. To what
extent foreign soap is imported into the United Kingdom it is impossible
to ascertain, for no separate entry under that head is kept at the
Custom House. But from the German Green Books one may learn that in 1895
Germany sent to Great Britain soap valued at L35,700. The amount sent by
France may have been as much, and probably the United States also sent
us a little. The total export of German soap to all parts of the world
in 1895 was valued at L197,000. Now for the British side of the case! As
to the total production and consumption of soap in this country, no
figures are available, but everyone knows how enormous is the
consumption of soap produced by English firms whose names are household
words. In addition to their providing for the wants of probably
ninety-nine out of a hundred of their own countrymen, our soap
manufacturers do an enormous and rapidly growing business abroad.

Here are the figures:--

EXPORTS OF SOAP FROM THE UNITED KINGDOM.

--------------+----+---+---+---+---+---+---+---+---+---+---+---+---+---+---
              |1881|'82|'83|'84|'85|'86|'87|'88|'89|'90|'91|'92|'93|'94|'95
--------------+----+---+---+---+---+---+---+---+---+---+---+---+---+---+---
Quantities--  |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
thousd. cwts. | 354|409|392|476|402|427|453|500|493|497|524|541|605|577|728
Values--      |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
thousd. L's.  | 398|458|450|548|472|447|452|482|503|534|571|586|644|621|757
--------------+----+---+---+---+---+---+---+---+---+---+---+---+---+---+---

The following diagram illustrates the almost continuous increase in the
value of our soap exports during the last ten years:--

[Illustration]

Looking at the above figures, it will be seen that in the last six
years alone we have added to our exports a sum greater than the total
yet attained by Germany. Is it necessary to say more? What pessimistic
madness could have led Mr. Williams to "black-list" such a
splendidly-thriving and notoriously profitable industry as this, just
because he finds a few thousand hundredweight of foreign soap creeping
into the country?




CHAPTER IV.

MORE MISREPRESENTATIONS.


Attention was called in the last chapter to some of the picturesque
exaggerations--to use the mildest possible term--in which Mr. Williams
had indulged in dealing with the chemical trades. We now pass to the two
chapters which he devotes to the iron and steel and their "daughter
trades." And at the outset let it be clearly understood that I do not
for a moment deny that in some of these trades the progress of Germany
has been relatively more rapid than our own. A child, if it is to grow
at all, must move faster than an adult. An infant four weeks old doubles
its age in a month; an adult takes thirty or forty years to double his.
Nor can we expect that the whole world will stand still while Great
Britain goes on every year adding to her strength. All that I do argue
is that the shooting-up of the German infant does us on the whole no
harm, and that there is nothing whatever in the figures of our trade to
suggest that full-grown England is approaching senile decay.


    "ICHABOD! OUR TRADE HAS GONE."

With this general prelude let us turn to what Mr. Williams has to say
about the industries connected with iron and steel. He opens by
referring to a visit of the English Iron and Steel Institute to
Duesseldorf in 1880:--

    "And when the time of feasting and talk and sight-seeing was
    over, they returned to their native land, and there, in the
    fulness of time, they perused the fatuous reports of the British
    Iron Trade Association, which bade them sleep on, sleep ever.
    And they did as they were bid, until the other day, when they
    awoke to the fact that their trade was gone."

Another paragraph, headed "Ichabod!" begins:--

    "And now all that is changed. The world's consumption (of iron)
    is greater than ever before. Yet our contribution in the years
    since 1882 has dropped at a rate well nigh unknown in the
    history of any trade in any land. From the 8,493,287 tons of
    1882 pig iron has gone hustling down to the 7,364,745 tons of
    1894."

Truly Mr. Williams is an ingenious person. By picking out the two years
1882 and 1894 he has cunningly obscured the fact that the production of
pig iron, as of everything else, is subject to fluctuations, and that
1894, following worse years than itself, will in all probability be
followed by better. Here are all the figures for the last fifteen years
for which statistics are available, with the German figures set beside
them:--

PRODUCTION OF PIG IRON.

In Millions of Tons.

--------------+----+---+---+---+---+---+---+---+---+---+---+---+---+---+---
              |1880|'81|'82|'83|'84|'85|'86|'87|'88|'89|'90|'91|'92|'93|'94
--------------+----+---+---+---+---+---+---+---+---+---+---+---+---+---+---
In the United |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
Kingdom       | 7.7|8.1|8.6|8.5|7.8|7.4|7.0|7.6|8.0|8.3|7.9|7.4|6.7|7.0|7.4
              |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
In Germany    | 2.7|2.9|3.4|3.5|3.6|3.7|3.5|4.0|4.3|4.5|4.7|4.6|4.9|5.0|5.4
              |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
--------------+----+---+---+---+---+---+---+---+---+---+---+---+---+---+---

These figures show that Germany has without doubt been rapidly gaining
upon us, but it is the grossest exaggeration to say that our trade "has
gone." As a matter of fact the output of pig iron in the United Kingdom
rose to 7.9 million tons in 1895, and--according to the _Economist_ of
November 11th--the estimated output for the present year (1896) is 8.7
million tons. If that figure is realised it will be the largest on
record. So much for Mr. Williams's "Ichabods," and all his talk of
departed glory!


COMPARISONS SAID TO BE "ODIOUS."

Turning to another paragraph headed "Odious Comparisons," we find--

    "Under the general heading of iron, wrought and unwrought, the
    returns of our German exports exhibit a fall from 374,234 tons
    in 1890 to 295,510 tons in 1895.... Of unenumerated iron
    manufactures Germany supplied us with 219,841 cwt. in 1890 and
    with 311,904 cwt. in 1895."

Had Mr. Williams taken the trouble to convert the German figures from
cwts. into tons he might have found this comparison somewhat less
"odious." If we send Germany 295 thousand tons against 15 thousand tons
she sends us, our iron manufacturers have not much to grumble at. But,
as a matter of fact, no reliance can be placed upon these particular
figures, because, as was pointed out in a previous chapter, much of the
stuff that we get from Germany is credited in our Blue Books to Holland
and Belgium, and these countries in the same way are debited with a
large amount of British stuff that ultimately finds its way to Germany.
Exactly the same causes of error vitiate the figures published in the
German Green Books, and it may safely be asserted that there is no means
of ascertaining with even approximate accuracy how much British iron and
steel goes to Germany and how much German steel and iron comes to Great
Britain. What can be ascertained is the total export of German iron from
Germany to all parts of the world, and the total export of British iron
from the United Kingdom to all parts of the world. This comparison,
which is one of the best means of testing the relative progress of Great
Britain and Germany, is worked out in the following table:--

IRON AND STEEL GOODS.

In Millions of Tons, Metrical and British.

[A Metrical Ton = 2,204 lb.; a British Ton = 2,240 lb.]

---------------------------+----+---+---+---+---+---+---+---+---+---+---
                           |1884|'85|'86|'87|'88|'89|'90|'91|'92|'93|'94
---------------------------+----+---+---+---+---+---+---+---+---+---+---
Total Exports from Germany |    |   |   |   |   |   |   |   |   |   |
(Metrical Measure)         |  .8| .7| .8| .8| .7| .7| .6| .8| .8| .8| .9
                           |    |   |   |   |   |   |   |   |   |   |
Total Exports from Belgium |    |   |   |   |   |   |   |   |   |   |
(Metrical Measure)         |  .4| .3| .3| .4| .4| .5| .4| .4| .4| .4| .4
                           |    |   |   |   |   |   |   |   |   |   |
Total Exports from United  |    |   |   |   |   |   |   |   |   |   |
Kingdom (British Meas.)    | 3.5|3.1|3.4|4.1|4.0|4.2|4.0|3.2|2.7|2.9|2.6
---------------------------+----+---+---+---+---+---+---+---+---+---+---

The above figures undoubtedly show a distinct decline in British exports
of iron and steel, but they also show that that decline is not due to
the increased invasion of our own or of neutral markets either by
Germany or by Belgium. It is due to a decline which subsequent events
have shown to be temporary in the world's demand for iron and steel
goods. Even were this decline permanent, it would not be the fault of
our manufacturers, nor--except as a device for reducing their personal
expenditure--is there any reason why these gentlemen should sit in
sackcloth and ashes.


STATISTICAL LEGERDEMAIN.

We pass to the subject of shipbuilding. Mr. Williams is good enough to
admit that England is actually at the head of the shipbuilding trade.
But having made this admission, a pang of regret comes over him, and he
tries to show that he is justified in putting even the British
shipbuilding trade on his "black list." This is his argument:--

    "In 1883 the total tonnage built in the United Kingdom was
    892,216; in 1893 it reached only 584,674; in 1894, 'tis true, it
    rose to 669,492, but this is much below the total even of 1892,
    which was 801,548."

Again one can only admire Mr. Williams's ingenuity. Reading his
paragraph, who would dream that between the years so skilfully selected
for comparison the trade had experienced an enormous drop, and
afterwards, to all intents and purposes, completely recovered itself;
that then a smaller drop had occurred, and that this in turn was being
fast made good? The best way to expose the above piece of statistical
legerdemain is to give without further comment the whole of the figures
for the past fifteen years. They will be found in the following table.
With figures such as these before him--and they must have been before
him--it is astounding that Mr. Williams should have ventured to put
shipbuilding on his black list.

FIFTEEN YEARS OF BRITISH SHIPBUILDING.

Total Output of British and Irish Yards.

In Thousands of Tons.

----+----+----+----+----+----+----+----+----+----+----+----+----+----+----
1881|1882|1883|1884|1885|1886|1887|1888|1889|1890|1891|1892|1893|1894|1895
----+----+----+----+----+----+----+----+----+----+----+----+----+----+----
 609| 783| 892| 588| 441| 331| 377| 574| 855| 813| 809| 801| 585| 669| 648
----+----+----+----+----+----+----+----+----+----+----+----+----+----+----

These figures may be illustrated as follows:--

[Illustration]


SHIPS BUILT FOR FOREIGNERS.

But his perverse ingenuity does not end with the paragraph quoted. A few
lines lower down he says:--

    "All these figures include vessels built for foreigners as well
    as those for home and the Colonies. The year in which we built
    most vessels for other nations was 1889, when we supplied them
    with 183,224 tons. The four following years showed a progressive
    decrease, getting down as low as 89,386 tons in 1893; and though
    1894 showed an increase to 94,876 tons, their upward movement
    was slight compared with the successive decreases of the
    previous years."

The man who wrote these sentences obviously intended to convey to his
readers the impression that our trade in the building of ships for
foreign purchasers was a declining trade. That impression is false, and
it is a little hard to understand how Mr. Williams could fail to see its
falsity. The following figures show--what to most persons would be
sufficiently obvious on reflection--that the tonnage of ships launched
at our great yards varies largely from year to year. To pick out the
year 1889, as Mr. Williams does, and declare that since that year there
has been a decline in our sales to foreigners, is as grossly unfair as
it would be, on the other hand, to pick out the year 1885, and say that
since then there had been a fourfold increase.

SHIPS BUILT BY US FOR FOREIGNERS.

Thousands of Tons.

----+----+----+----+----+----+----+----+----+----+----+----+----+----+----
1881|1882|1883|1884|1885|1886|1887|1888|1889|1890|1891|1892|1893|1894|1895
----+----+----+----+----+----+----+----+----+----+----+----+----+----+----
 108| 116| 124|  91|  36|  39|  70|  91| 183| 161| 139| 109|  89|  95| 128
----+----+----+----+----+----+----+----+----+----+----+----+----+----+----


WAR-SHIPS FOR FOREIGNERS.

The above figures include war-ships as well as merchant-ships built by
us for foreigners, and, noting this fact, Mr. Williams is distressed to
find what he calls a drop in our output of foreign war-ships. He
writes:--

    "Still more remarkable is the drop in our supply of foreign
    war-ships from 12,877 tons in 1874 to 2,483 in 1894."

What is even more remarkable still is the fact that Mr. Williams should
have dared to put such a statement before the public, knowing, as he
must have known, how completely it misrepresents the truth. I wonder
what he would have said of me if I had spoken of the remarkable
_growth_ in our output of foreign war-ships as evidenced by an
_increase_ from 14 tons in 1876 to 4,152 tons in 1895! Yet this
statement would have been every bit as justifiable as his own. The whole
truth of the matter of course is, that such an industry as the
construction of foreign war-ships must vary enormously from year to
year, and a comparison between any two single years can prove nothing,
except the folly or the _mala fides_ of the person who makes it. In
order that the reader may see for himself the source from which Mr.
Williams drew his "remarkable" statement, I append all the figures since
1870:--

WAR VESSELS BUILT FOR FOREIGNERS.

------------------+------------------+------------------
 Years.    Tons.  | Years.    Tons.  | Years.    Tons.
------------------+------------------+------------------
  1870       970  |  1879       716  |  1888     1,899
  1871        80  |  1880       385  |  1889       726
  1872        40  |  1881     5,338  |  1890     3,437
  1873       280  |  1882       447  |  1891       300
  1874    12,877  |  1883       270  |  1892     2,792
  1875    12,280  |  1884     2,339  |  1893     2,471
  1876        14  |  1885     5,462  |  1894     2,483
  1877     3,435  |  1886       840  |  1895     4,152
  1878     2,482  |  1887     3,966  |
------------------+------------------+------------------


MACHINERY AND STEAM ENGINES.

It is becoming monotonous to follow Mr. Williams in detail through his
ingenious misrepresentations. I will therefore hastily pass over the
many pages which he devotes to "black-listing" sundry iron and steel
manufactures. His black list, which includes "steam engines," "other
machinery," and "tools and implements" of industry, is arrived at by
giving only the figures for 1890 onwards and ignoring the preceding
years. The unfairness of this procedure need not be again pointed out.
The figures for a decade, or for a longer period, show that trade moves
up and down, and that a depression in one year or group of years is
succeeded by an elevation a few years later. Throughout his book, in
instances too numerous to be especially mentioned, Mr. Williams has
persistently ignored this obvious fact. Again and again he has picked
out years favourable to his argument, while even a cursory glance at a
series of years must have shown him that the truth was the exact
opposite to his representation of the facts. Here are the figures for
the last fourteen years, showing the relative progress of Great Britain
and Germany in the export of all kinds of machinery, including the
domestic sewing machine and the locomotive engine.

EXPORTS OF MACHINERY OF ALL KINDS.

(Including Steam Engines and Sewing Machines.)

In Millions Sterling.

--------+----+----+----+----+----+----+----+----+----+----+----+----+----+----
        |1882|1883|1884|1885|1886|1887|1888|1889|1890|1891|1892|1893|1894|1895
--------+----+----+----+----+----+----+----+----+----+----+----+----+----+----
From    |    |    |    |    |    |    |    |    |    |    |    |    |    |
United  |    |    |    |    |    |    |    |    |    |    |    |    |    |
Kingdom |11.9|13.5|13.2|11.2|10.2|11.1|12.9|15.3|16.4|15.7|13.9|13.8|14.2|15.0
        |    |    |    |    |    |    |    |    |    |    |    |    |    |
From    |    |    |    |    |    |    |    |    |    |    |    |    |    |
Germany | 3.1| 3.3| 2.8| 2.5| 2.4| 2.6| 2.8| 3.1| 3.3| 3.3| 3.1| 3.2| 3.9| --
--------+----+----+----+----+----+----+----+----+----+----+----+----+----+----


TEXTILES.

To our textile industries Mr. Williams has devoted a chapter which is
one of the gloomiest in his book. Let it be at once admitted that we are
no longer the monopolists of the textile industries of the world to the
extent to which we once were. Nor could any sane man expect that we
should for ever retain our former exceptional position. Other nations
move as well as we. They buy the machines which we invent and make; they
employ our foremen to teach them the arts we have acquired, and in time
they learn to weave and spin for themselves instead of coming to us for
every yard of cloth or every pound of yarn. This relative advancement of
foreign nations and, too, of our own Colonies and Dependencies was and
is inevitable. It is part of the general industrialization of the world.
But what we have to note with satisfaction is that this process has
involved little or no positive loss to us, that we are still far ahead
of all other nations in the production of textiles, and that even in
those cases, notably the woollen industry, where our export has fallen
off we can point to an increased demand by our own people for the goods
we manufacture. It is not in this spirit that Mr. Williams will look at
any British industry. Even where he has a fairly good case, he spoils it
by gross exaggeration and by the suppression of counterbalancing facts.


COTTON YARN AND THE PRICE THEREOF.

Dealing first with cotton, he follows his usual device of picking out
bumper years, and then exclaiming, "See what a fall since then!" he goes
on:--

    "A consideration of moment is that this decline in values does
    not signify a corresponding decline in quantities. On the
    contrary, in yarn manufactures, with an actual increase in the
    exported weight, there is a decrease in the cash return. Thus in
    bleached and dyed cotton yarn and twist there was a qualitative
    rise between 1893 and 1895 from 36,105,100 lb. to 40,425,600
    lb., with a fall in the value thereof from L1,862,880 to
    L1,832,477. Between 1865 and 1895 the average price per lb. of
    cotton yarn declined from 23.98d. to less than 8.85d. 'Tis a
    good enough explanation of the vanishing dividends, the low
    wages, the lack of enterprise and initiative."

Mr. Williams must either be very innocent, or expect his readers to be.
He apparently has forgotten that the most important element in the price
of cotton yarn is the price of the raw cotton out of which the yarn is
spun. What the Lancashire spinner cares about is not the absolute price
of yarn or the absolute price of raw cotton, but the margin between the
two. If that be satisfactory his profit is secure. Therefore, the mere
statement that the prices of yarn have fallen so much in so many years,
by itself explains nothing. As a matter of fact the price of cotton yarn
has followed, and continues to follow, very closely the price of raw
cotton, the spinners' margin remaining fairly constant. It is useless to
go back to 1865, when the most careless economist might surely have
remembered that the American war made cotton dear, and machines were
less efficient than they now are. But I have taken the trouble to work
out for the last ten years, from figures kindly supplied by the
Manchester Chamber of Commerce, the average margin between the price of
a pound of standard yarn (32's twist) and a pound of standard cotton
(middling American). The result shows that while the spinners' margin
was slightly less in 1895 than in 1893, it stood at practically the same
figure as in 1892 and 1894, and was a good deal higher than it had been
in 1886. So that here again there is no real foundation for Mr.
Williams's statement.


THE DAYS OF BIG FORTUNES.

It is undoubtedly true that big fortunes are no longer made in the
cotton trade, or at any rate not so rapidly as in the days when cotton
spinners waxed fat on the labour of tiny children who had to be flogged
to keep them awake. It is also true that many joint-stock spinning
companies have paid no dividends, and that many have collapsed
altogether. But those who know anything of Lancashire know that a very
large number of these companies were not started in response to any real
increase in the demand for cotton goods, nor on account of any genuine
anticipation of such an increase. They were started, as a good many
companies are started in a county south of Lancashire, in order to put
money into the promoters' pockets. Having served that purpose they were
allowed quietly to collapse. Lancashire does not miss them. That the
cotton trade, as a whole, is in a healthy condition in spite of these
manoeuvres of the company-promoter will be seen from the figures relating
to cotton in the following table, and from the diagram that illustrates
them:--

TEXTILES.

YARNS. Ten Years' Exports. In Millions of Lbs.

-----------+-----+-----+-----+-----+-----+-----+-----+-----+-----+-----
           | 1886| 1887| 1888| 1889| 1890| 1891| 1892| 1893| 1894| 1895
-----------+-----+-----+-----+-----+-----+-----+-----+-----+-----+-----
Cotton     | 254 | 251 | 256 | 252 | 258 | 245 | 233 | 207 | 236 | 252
Jute       |  31 |  24 |  27 |  34 |  34 |  33 |  26 |  29 |  35 |  35
Linen      |  16 |  16 |  15 |  14 |  15 |  15 |  15 |  16 |  16 |  17
Silk       |  .6 |  .6 |  .6 |  .8 |  .8 | 1.0 |  .7 |  .8 |  .8 |  .7
Woollen    |  46 |  40 |  43 |  45 |  41 |  41 |  45 |  50 |  53 |  61
-----------+-----+-----+-----+-----+-----+-----+-----+-----+-----+-----

PIECE GOODS, ETC. Ten Years' Exports. In Millions of Yards.

-----------+-----+-----+-----+-----+-----+-----+-----+-----+-----+-----
           | 1886| 1887| 1888| 1889| 1890| 1891| 1892| 1893| 1894| 1895
-----------+-----+-----+-----+-----+-----+-----+-----+-----+-----+-----
Cotton     |4,850|4,904|5,038|5,001|5,125|4,912|4,873|4,652|5,312|5,033
Jute       |  216|  244|  232|  265|  274|  284|  266|  265|  233|  255
Linen      |  164|  164|  177|  181|  184|  159|  171|  158|  156|  204
Silk       |    7|    7|    8|   10|   10|    6|    6|    6|    6|    7
Woollen[2] |  273|  281|  264|  268|  253|  223|  213|  194|  168|  242
-----------+-----+-----+-----+-----+-----+-----+-----+-----+-----+-----

    [Footnote 2: Includes "Woollen Tissues," "Worsted Coatings and
    Stuffs," "Damasks, Tapestry, and Mohair Plushes," "Flannels,"
    and "Carpets and Druggets."]

The figures for cotton piece goods may be illustrated as follows:--

[Illustration]


LINEN, SILK, AND WOOLLENS.

So much for cotton! With regard to linen, it is unnecessary to follow in
detail what Mr. Williams says, for he himself admits that the decline
which has taken place since the 'sixties is largely due to a change in
fashion, jute and cotton goods taking the place of linen. In the last
decade, however, as will be seen from the above table, the linen
industry has held its own. With regard to silk, the figures show that
there is no cause for serious alarm. In woollens, on the other hand,
there is apparently better ground for Mr. Williams's mourning. The table
on the preceding page points to a distinct downward tendency in our
export of woollen manufactures, a tendency which has been only partly
checked by the inflation of 1895. If this were the whole truth about our
woollen trade, it might be conceded that here at any rate Mr. Williams
had made out his case. But it is not the whole truth. Almost _pari
passu_ with this decline in our export of woollens, which began some
twenty years back, there has been a steady increase in the consumption
of our woollen manufactures by our own people, and this increased home
demand has _more than made good_ the decline in the foreign demand.


THE EXPANSION OF OUR WOOLLEN INDUSTRY.

The proof of this statement will be seen in the following figures.
During the five years, 1870 to 1874, the average yearly import of raw
wool into the United Kingdom was 342,000,000 lb.; during the years
1890-94 the average was 475,000,000. That gives the measure of the
enormous increase in the amount of the raw material worked up by our
woollen manufacturers. Take next the question of the amount of labour
employed. Unfortunately, there are no official figures since 1890, but
that year will serve. Here is the comparison:--

PERSONS EMPLOYED IN WOOLLEN AND WORSTED MILLS.

----------+-----------+-----------+-----------
          |    Men.   |   Women.  | Children.
----------+-----------+-----------+-----------
   1870   |   94,000  |  116,000  |   24,000
   1890   |  118,000  |  156,000  |   23,000
----------+-----------+-----------+-----------

These figures are doubly satisfactory, for they point, first, to a large
increase in the adult labour employed; and, secondly, to a small but
gratifying decrease in child labour.


THE NATURE OF GERMAN COMPETITION.

To still further reassure politicians and others who have been alarmed
by Mr. Williams's book, I may quote two passages from lectures on German
competition recently delivered in the West Riding. The first is from a
lecture by Professor Beaumont, delivered in the Yorkshire College in
October last. From the report in the _Leeds Mercury_ of October 10th, I
take the following:--

    "In the woven fabrics imported from Germany we have examples of
    the standard of workmanship attained in German mills. These
    textures chiefly comprise low mantle cloths and cloakings, and
    limited quantities of dress stuffs composed of mixed materials,
    showing that almost invariably it was the price which caused
    these goods to sell in British markets. Viewed from this
    standpoint, there is an impregnable argument in favour of our
    industrial pursuits; for in all classes of fancy fabrics of a
    high quality, whether in woollen, worsted, cotton, linen, or
    jute materials, the manufacturers of the United Kingdom have
    scarcely felt the effects of German competition."

My second quotation is from a lecture delivered by Mr. Swire Smith, of
Keighley, at the Bradford Technical College, and reported in the
_Bradford Observer_ of November 27th last:--

    "Those who tell us that our English worsted industry is being
    ruined by the competition of Germany, must be unaware of the
    fact that the German worsteds, whose increasing exports were
    creating such alarm among the Fair-traders, are mainly composed
    of yarns 'made in Bradford.' Indeed, Bradford afforded a
    concrete example of the effect of German competition, for it
    would be difficult to say which country had benefited most by
    it. The export of woollen, worsted, and alpaca yarns to Germany
    in the average of the following periods of years amounted in
    1880-85 to 41,500,000 lb. per year; 1890-95, to 63,800,000 lb.
    per year; and 1895, to 78,900,000 lb. Bradford had been the
    greatest contributor to German success in the weaving of
    worsteds and alpacas, and Germany had been the greatest
    contributor to the success of the spinning industry of Bradford
    by buying its yarns. To put a tax on German worsteds that would
    shut them out of England would stop the sale of Bradford yarns
    in Germany."


THE "PERCENTAGE TRICK."

That is enough about woollens. About jute a couple of sentences will
suffice. In order to make the facts in this trade look worse than they
are--there is nothing really bad about them--Mr. Williams first places
German figures in marks side by side with English figures in pounds
sterling, and then plays what can only be called the "percentage trick."
The German increase in eleven years, he says, is at the rate of 1,100
per cent., while the British is only 19 per cent. Remarkable! Yet Mr.
Williams might have discovered from his own figures, if he had only
taken the trouble to turn marks into pounds, that the German increase in
eleven years was only L107,000, while the British increase was L412,000.
In other words, our increase was almost four times as great as
Germany's, and our total is now L2,588,000, against their total of
L117,000. Exactly the same percentage trick is employed by Mr. Williams
in comparing German and English trade with Japan. In this case there is
also an important error in his arithmetic; but let that pass. The trick
consists in deluding the uncritical reader into the belief that German
trade with Japan is increasing faster than our own, whereas during the
period selected by himself for comparison our increase has been almost
exactly double the German increase. It is by devices such as these that
Mr. Williams has succeeded in filling his pages with gloomy statements
and gloomier prophecies. To track him further along his tortuous path
would be profitless. "Here ends," he writes at the close of one of his
most despairing and most deceptive chapters, "the tale of England's
industrial shame." If candour should be an essential to fair
controversy, there is other shame than England's to be ended.




CHAPTER V.

OUR GROWING PROSPERITY.


Having now shown, both generally and in detail, how absolutely void of
foundation are many of the most gloomy statements in "Made in Germany,"
we can dismiss Mr. Williams and his fanciful forebodings, and examine
instead the direct and abundant evidence of the growing prosperity of
our country. The first point to notice is the immense development of our
shipping industry. In the last quarter of a century the tonnage of
shipping engaged in foreign trade entering our ports has more than
doubled, and this increase has been steady and persistent, with no
retrogression worth noticing in any year. But that is not all. Twenty
years ago the proportion of British ships engaged in this foreign trade
of ours was only 67 per cent. of the total; it is now well over 72 per
cent. In the same period the number of tons of shipping per hundred of
the population, taking entries and clearances together, has risen from
130 tons to 200 tons. No other country can point to such figures.
Germany, starting from small beginnings, has improved rapidly, but her
totals are insignificant compared with our own. Only 43 per cent. of her
foreign trade is carried in her own ships, as against nearly 73 per
cent. in our case, while per hundred of the population the shipping to
and from her ports is less than a quarter of ours. If we turn to France
we find that while the total shipping to and from French ports has
increased as rapidly as with us, the proportion carried under the French
flag has appreciably fallen. In the case of the United States there has
been a still greater fall. Twenty years ago 33 per cent. of the foreign
trade of the United States was carried in United States ships, now the
proportion is only 23 per cent. The following table shows the growth of
shipping of all kinds to and from British ports:--

TWENTY-FIVE YEARS' SHIPPING TO AND FROM PORTS OF THE UNITED KINGDOM.

Entries and Clearances together, in Millions of Tons.

------------+---------------------------+-----------------------------
            |      FOREIGN TRADE.       |       COASTING TRADE.
Average of  +-------------+-------------+-----------------------------
Five Years. |Under British|             |In this Trade practically all
            |    Flag.    |    Total.   |  the Shipping is British.
------------+-------------+-------------+-----------------------------
  1870-74   |     28      |     42      |            38
  1875-79   |     35      |     51      |            46
  1880-84   |     43      |     61      |            50
  1885-89   |     49      |     67      |            54
  1890-94   |     55      |     75      |            58
 Year 1895  |     59      |     81      |            61
------------+-------------+-------------+-----------------------------

In order to further compare our progress with the progress of other
countries the following table has been prepared to show the relative
position of the principal countries now and twenty years ago. If we
consider merely the rate of progress, the German percentage of increase
is undoubtedly better than ours. But in national life, as in individual,
it is not percentages but amounts that are important, and the table
shows that while Germany has added 6,000,000 tons to her shipping, we
have added 27,000,000 tons to ours. As long as anything similar to that
proportion is maintained we have no need to fear German rivalry.

BRITISH AND FOREIGN SHIPPING.

In Millions of Tons.

---------------------------------------------------------+-------+-------
          Average Annual Entries and Clearances.         |1870-74|1890-94
---------------------------------------------------------+-------+-------
British tonnage engaged in the foreign trade of the U.K. |  28   |  55
German     "       "      "       "       "     Germany  |   4   |  10
French     "       "      "       "       "     France   |   5   |   9
United States      "      "       "       "     the U.S. |   7   |   9
---------------------------------------------------------+-------+-------

The figures for 1890-94 may be illustrated diagrammatically as on
opposite page.

It must be noticed that this comparison takes no account of the enormous
carrying trade done by this country for foreign countries or British
Colonies trading with one another; nor are there figures available for
showing how in this matter we compare with our rivals. The figures, if
they existed, would show that in this international industry Great
Britain is first, and the rest of the world nowhere.

[Illustration]

Before passing to another point it is worth while to call attention to
the enormous development of the coasting branch of our shipping trade,
as shown in the figures given above. This branch of shipping is really
of the nature of internal traffic, as distinguished from foreign trade.
That it should have increased so steadily and so rapidly is by itself a
striking proof of the commercial activity of the country.


THE DEVELOPMENT OF OUR RAILWAYS.

Proof even more convincing is apparent in the enormous development of
our railway system. It is difficult to know from which side first to
approach the tremendous figures in which this development is portrayed.
Taking, at hazard, mileage first, we find within the last twenty-five
years an increase of 6,000 miles in our railway system--namely, from
15,000 in 1870, to 21,000 in 1895. Of this increase, 2,000 miles are due
to the last decade. Looking next at the capital expenditure, we find
that in the ten years from 1885 to 1895 the total capital of the various
railway companies of the United Kingdom rose from 816 millions sterling
to 1,001 millions. Part of this immense increase was, it is true, only
nominal, being due to consolidation of stock, etc. But when all
allowance has been made on that score, we are left with a real net
increase in the ten years of 170 millions sterling. During the same
period of ten years the receipts from passenger traffic rose from 30
millions sterling to 37 millions, while the receipts from goods traffic
rose from 36 to 44 millions. In the last quarter of a century the number
of passengers carried by the railways, exclusive of season-ticket
holders, has risen from 337 millions to 930 millions. Were it possible
to record the number of journeys made by season-ticket holders, we
should obtain an even more striking picture of the development of
passenger traffic on our railways. Such figures as are available are
given in the next table, and illustrated by the accompanying diagrams:--

THE RAILWAYS OF THE UNITED KINGDOM.

Ten Years' Work and Receipts.

-----------------------+----+----+----+----+----+----+----+----+----+----
                       |1886|1887|1888|1889|1890|1891|1892|1893|1894|1895
-----------------------+----+----+----+----+----+----+----+----+----+----
Goods carried:--       |    |    |    |    |    |    |    |    |    |
Million Tons           | 255| 269| 282| 297| 303| 310| 309| 293| 324| 334
                       |    |    |    |    |    |    |    |    |    |
Passengers carried:    |    |    |    |    |    |    |    |    |    |
Million persons        | 726| 734| 742| 775| 818| 845| 864| 873| 911| 930
-----------------------+----+----+----+----+----+----+----+----+----+----
Goods receipts:--      |    |    |    |    |    |    |    |    |    |
Million L's            |36.4|37.3|38.7|41.1|42.2|43.2|42.9|41.0|43.4|44.0
                       |    |    |    |    |    |    |    |    |    |
Passenger receipts:    |    |    |    |    |    |    |    |    |    |
Million L's            |30.2|30.6|31.0|32.6|34.3|35.1|35.7|35.8|36.5|37.4
-----------------------+----+----+----+----+----+----+----+----+----+----

The figures may be illustrated diagrammatically as follows:--

[Illustration]

[Illustration: RAILWAY PASSENGERS OF THE UNITED KINGDOM (exclusive of
season-ticket holders). 1870--337 Millions, 1895--930 Millions.]

These diagrams and the figures they illustrate hardly look as if the
nation were on the verge of decay, ruined by German cheap goods. If such
be the signs of national collapse, no country in the world can be called
prosperous. For there is this feature about our railway development
which entirely differentiates it from the railway expansion of newer
countries--that every pound of capital required has come out of our own
pockets: we have borrowed from no one. Instead, while planking down in
ten years 170 new millions to add to our own railways, we have been
lending with large hands to railway builders in every part of the globe.


LENGTHENING TRAM LINES.

From railways we pass to tramways. Here the figures are less
considerable in amount, but they are striking enough. In 1876 there were
only 158 miles of tramway open for public traffic; by 1885 that number
had risen to 811 miles, and by 1895 to 982 miles. In the same periods
the paid-up capital had increased from 2 millions sterling to 12, and
thence to 14 millions. Lastly, between 1885 and 1895 the number of
passengers carried upon tramways has risen from 365 millions to 662
millions. These figures are principally interesting because the tramcar
is essentially a popular means of conveyance. If the working-classes of
this country are being reduced to starvation, as the Protectionists say,
by the invading Teuton, it is astounding that they should be able to
afford so many pennies to pay for tram fares.


POST OFFICE EXPANSION.

From this last comparatively limited but not unimportant test of the
general prosperity of the country, we pass to the Post Office returns.
Next to the test of railway traffic, already dealt with, no better
evidence of the prosperity and commercial activity of a country can be
found than is furnished by the growth of post office business. A nation
whose trade is being filched from it by foreigners, whose blast furnaces
are cold, and whose looms are silent, as Mr. Williams would have us
believe, does not add every year forty million letters to the amount of
its correspondence. Yet this is what we have been doing in the United
Kingdom for a good many years past. Starting from the year ending March
31st, 1878, when a slight alteration was made in the method of
presenting the statistics, we find that in the nineteen years that have
since elapsed the number of letters delivered annually has increased
from 1,058 millions to 1,834 millions. In the same period postcards have
increased from 102 millions to 315 millions; newspapers and book
packets, from 318 to 821 millions. Moreover, the increase has been
steady, with one significant exception. In the year 1894-95, which was
notoriously a year of bad trade, there was a drop in the number of
letters delivered. The drop was more than made good in 1895-96. Turning
to telegrams, we find a similar story. Here we are compelled to start
with the year 1886-87, the first complete year after the introduction of
sixpenny telegrams. In the ten years that have since elapsed the number
of telegrams delivered has steadily increased from 50 millions to 79
millions.


EVER-GROWING INCOMES.

Another test of our national prosperity is furnished by the income tax
returns. When the annual value of the property and profits assessed for
income tax exhibits a steady increase, it is hard to believe that our
manufacturers, and all the classes that depend upon them for support,
are being ruined by Germans or by anybody else. Here are the figures:--

INCOME TAX ASSESSMENTS.

In Millions Sterling.

-------------+-------------+-------------
 Five Years' | Schedule D. |     All
 Average.    |             |  Schedules.
-------------+-------------+-------------
   1870-74   |     210     |     490
   1875-79   |     263     |     575
   1880-84   |     268     |     601
   1885-89   |     292     |     634
   1890-94   |     350     |     699
-------------+-------------+-------------

The return from which the above figures are taken stops with the year
1894; but a somewhat similar comparison was brought up to date in the
last Budget speech of the Chancellor of the Exchequer. The following
table is taken from the "explanatory memorandum" that accompanied that
speech:--

YIELD PER PENNY OF THE INCOME TAX.

-------------+------------+-----------------------------------
             |            |        Ten Years' Growth,
             |            | after allowing for alterations in
    Year     |   Yield    |     the incidence of the tax.
   Ending    |    per     +-----------------+-----------------
 March 31st. |   Penny.   |    Amount of    |  Percentage of
             |            |     Growth.     |     Growth.
-------------+------------+-----------------+-----------------
             |  Thousand  |    Thousand     |    Per Cent.
             |      L     |        L        |
    1876     |   1,978    |       --        |       --
    1886     |   1,980    |       62        |      3.23
    1896     |   2,012    |      207        |     11.47
-------------+------------+-----------------+-----------------

With such figures as these available it is difficult to understand how
people can continue to pour forth nonsense about the ruin of our
national industries. During the very decade in which the blight of
German competition was supposed to have destroyed the profits of our
manufacturers, it is clear from the above infallible test that the
incomes of our commercial, professional, and property-owning classes
have been growing with increasing rapidity.


REDUCTION OF NATIONAL DEBT.

Passing from taxation to the question of what has been done with the
taxes, it is sufficient to select one fact for comment--the enormous
reduction in the National Debt. Here are the figures:--

THE INDEBTEDNESS OF THE NATION.

----------+------------------------------+------------------------
          | Aggregate Gross Liabilities. | Per Head of Population.
----------+------------------------------+------------------------
   1876   |         L776,000,000         |        L23 13 9
   1886   |         L745,000,000         |        L20 13 8
   1896   |         L652,000,000         |        L16 13 2
----------+------------------------------+------------------------

That is to say, that within the past ten years--the years of alleged
depression and blight--we have reduced our national indebtedness by over
90 millions sterling. During the same period it is worth while to point
out that we have expended enormous sums in the almost complete
reconstruction of our navy. Meanwhile Germany--the hated rival--has,
since the war, added as many millions to her debt as we in ten years
have taken from ours.


SOME STAPLE COMMODITIES.

In case the pessimists and the Protectionists should be still
unconvinced by these proofs of national prosperity, let us turn to a new
series of tests, the test of consumption. The great staple commodities
which we will first take (cotton, wool, and coal) are partly required
for manufacturing purposes and subsequent export, and partly for home
use. The word "consumption" covers both uses, and we cannot, except in
the case of wool, readily ascertain to which use the greater effect is
attributable. In the case of wool it so happens, as was previously
pointed out, that our export trade in manufactured goods has declined.
But since the total consumption of raw wool by the United Kingdom has
gone on increasing, it is clear that the decline in woollen exports has
been more than made good by the increased home demand, unless, indeed,
it be imagined that woollen manufacturers go on weaving an endless web
which nobody wears. Nor is that all, for the figures of our import trade
show that in addition we are importing considerable and increasing
quantities of foreign woollen manufactures. So that not only have the
home consumers more than recouped the British woollen manufacturer for
the decline of his export business, but so great is their purchasing
power that they can, at the same time, afford to send abroad for fresh
woollen stuffs to please their fancy. Here are the figures showing the
consumption by the inhabitants and manufacturers of the United Kingdom
of three staple articles referred to:--

CONSUMPTION OF COTTON, WOOL, AND COAL IN THE UNITED KINGDOM.

+-----------------+--------------+--------------+---------------+
| Average of Five | Cotton (Raw) | Wool (Raw)   |     Coal      |
|     Years.      | Million lbs. | Million lbs. | Million Tons. |
+-----------------+--------------+--------------+---------------+
|    1870-74      |     1,178    |      342     |      108      |
|    1875-79      |     1,221    |      353     |      118      |
|    1880-84      |     1,445    |      354     |      136      |
|    1885-89      |     1,467    |      416     |      141      |
|    1890-94      |     1,590    |      475     |      151      |
|  Year 1895      |     1,635    |      510     |      157      |
+-----------------+--------------+--------------+---------------+

With regard to the figures for cotton in the above table, it is only
necessary to remark that the British manufacturer, whether for sale
abroad, or for sale at home, is clearly working up more stuff than ever
before. The figures for wool have already been explained. With regard
to coal, the figures necessarily include both domestic and industrial
consumption; but whichever be the more important element, the totals are
remarkably healthy.


PERSONAL AND DOMESTIC EXPENDITURE.

An even better test of the increased spending power of the nation is
furnished by the figures giving the rate of consumption of such articles
of everyday use as tea, sugar, and tobacco. It will be seen from the
following table how rapidly our national consumption of these staple
articles has increased during the past decade--the decade of alleged
ruin:--

TEA, SUGAR, AND TOBACCO.

-------------------------+--------------------------
                         |  Lbs. consumed by every
                         |       100 persons.
 Year ending March 31st. +--------------------------
                         | Tea. | Sugar. | Tobacco.
-------------------------+------+--------+----------
           1876          |  451 |  6,078 |   147
           1886          |  465 |  7,028 |   144
           1896          |  574 |  8,916 |   169
-------------------------+------+--------+----------

It is useless to worry the reader with further figures. Evidences of the
prosperity of the country are around us on every side for those to see
that have eyes to see--a higher standard of dress in every class of the
community; better built and better furnished houses for artisan and
labourer, as well as for millionaire; new public buildings, new
libraries, new hospitals; improved paving, improved water-supply,
improved drainage; more newspapers, more theatres, more lavish
entertainments; in a word, a higher standard of comfort or of luxury in
every domain of life.




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:--

[Illustration]


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, <DW61>s 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- 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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