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tendency to augment indirect taxation. There does not appear to be any prospect as yet of large reductions of public expenditure by any power. Military and naval requirements are not likely to lessen.

TARIFF WARS.

Before concluding this part of the paper, international disagreements which have led to definite retaliatory action should be mentioned. Passing over measures relating to public health, adopted in consequence of insufficient sanitary precautions in particular foreign countries, and which are usually effective in bringing about satisfactory arrangements on these points, a recent Colonial instance may first be adduced. In 1885, the Canadian Legislature passed a law affecting certain Newfoundland products. The object in view was to bring pressure upon Newfoundland, either to become part of the Dominion, or to grant certain terms desired on behalf of Canadian trade. Thereupon the Newfoundland Legislature imposed additional duties on imports from any country which, while making use of Newfoundland fisheries, imposed a discriminating duty on the produce of those fisheries caught by Newfoundlanders, and imported into such countries. In consequence of this threatened retaliation, the Canadian Government did not enforce the Act under which the duties in question were to have been levied.

France and Italy.-The operation of the Commercial Treaty of 1882 did not afford satisfaction to either country; and notice was given for the termination of its tariffs in 1888. Italy adopted a protectionist tariff in July, 1887. Long and fruitless negotiations ensued; and on March 1st, 1888, special retaliating tariffs came into force in each country. These restrictive measures were taken off by mutual consent in January, 1890, when their products came under the ordinary tariffs. In November, 1898, a commercial agreement was concluded between the two Powers on the basis of most favoured nation treatment with special tariff arrangements with regard to certain goods. The results were that Italy lost great part of her wine trade with France, and France ceased to supply Italy with colonial products; and certain branches of Italian textiles, iron, and machinery trade passed to German houses.

Germany and Russia.-The commercial relations between these two Powers were disturbed by their respective alterations of tariff

between 1885 and 1893. The Russian Government established a new maximum tariff in 1893, and applied it to German goods. Germany replied by similar measures. Very influential interests in the two conterminous States were affected, and it became necessary for both parties to replace their trade relations on a friendly footing. A new treaty was negotiated and came into force in March, 1894. Each Government seems to have been satisfied that their respective grievances were removed.

France and Switzerland. The French Chamber of Deputies rejected in December, 1892, a Bill to accord to Switzerland certain improvements on the minimum tariff of 1892. In the end France granted a few concessions to Switzerland, and Switzerland simply granted most favour-nation treatment to France. The trade between the two countries appears to be still below the level of the years previous to the protectionist French tariff of 1892, and the Swiss transit trade seems to have been diverted to other channels, and German and Italian houses have gained in the Swiss market to the detriment of their French competitors.

Germany and Spain.-In 1894 the commercial treaty concluded between the German and Spanish Governments (which was in most respects framed upon the same principles as the treaty existing previously between Germany and Spain) was rejected by the Spanish Cortes, and in consequence German goods in Spain (and Spanish goods in Germany) were deprived of any "most-favoured nation," or tariff privileges enjoyed by them, and were subjected to considerably higher rates of duty than goods imported from most other countries.

The German Government thereupon, viz., in 1895, had a law passed by the Imperial Parliament at Berlin, giving it the right to use more severe relaliatory measures than had until then existed towards countries imposing higher duties on German goods than on those of other States. This new law provided that dutiable goods coming from such States as treated German ships and goods more unfavourably than those of other nations, might be subjected to a further "sentaxe," not exceeding one hundred per cent. of the amount of duty imposed on entry by the German Customs tariff (providing no treaty provision existed of a contrary effect); and that goods which were admitted duty free by the tariff, might, in the same conditions, be subjected to a duty not exceeding twenty per cent. of their value.

The power thus given to the German Government was at once made use of against Spanish goods imported into Germany, and for some time the same were subjected to the ordinary duties of the German general tariff. After about five years the Spanish Government (in view more especially of the prejudice caused to the Spanish wine export trade by these high German duties) found itself compelled to come to terms, and to conclude a fresh treaty of commerce with Germany, which came into force in the year

1900.

Germany and Hayti.-In consequence of the refusal of the Haytian Government to grant German imports and German shipping the same privileges as to those of France (German trade being unfavourably affected by the preferential treatment of French products), the German Government in April, 1901, imposed an additional import duty on the prominent Haytian products brought to this country, viz., coffee, cocoa, and logwood, and this régime still continues at the present time.

THE ECONOMIC QUESTION.

As regards the economic position of the fiscal problem, it is to be borne in mind that the general conditions of different manufacturing countries, and the capacity and requirements of the working population, vary largely. The differences of wants, habits, and tastes are such that a comparative statement of the governing considerations affecting the occupa tions and welfare of the people cannot be shown fully by statistical tables. Moreover, an adequate examination of these details, and deductions from their study, in order to present a fair statement of the subject from this point of view, would in itself exceed the limits of this paper. It would also more properly come within the scope of another society. The remarks under this heading will therefore be restricted to certain leading facts, chiefly concerned with the industrial interests of the United Kingdom, but with reference also to foreign countries on points directly bearing upon these enquiries. The following summary of persons employed in the principal productive industries in England and Wales is taken from the recent Board of Trade Blue Book on British and Foreign trade and industrial conditions. In first referring to this publication by its title, it is a matter of pleasure, as well as duty, to call special attention to it. As remarked in the preface, this Blue Book is a collection of separate memoranda, statistical tables, and charts; the information which they afford is very complete, and is not to be found in any other single volume. The study of this volume is essential to a correct knowledge of the subjects now before the country, yet its value and accuracy, and the magnitude of the task accomplished in a short space of time, and in pressure of business, can only be adequately appreciated by those who are familar with economic, industrial, and statistical questions. Public thanks are due in this matter to Sir Alfred Bateman, Mr. Llewellyn Smith, and the whole staff, who have bestowed great care and labour in preparing memoranda on intricate subjects involving much research, and in collecting and revising a mass of

The Haytian coffee trade is likewise stated to have been more largely transferred to France during the past two years than before. This condition of things is considered to have reacted also unfavourably upon the export trade from Hamburg to Hayti, but it should at the same time be noted that the generally unfavourable financial condition of the Haytian Republic has no doubt likewise had a larger share in prejudicially affecting German trade with that country during recent years.

There have also been, during late years, "tariff wars" between France and Spain and Portugal. The details of these conflicts are not sufficiently known to enable statements to be made respecting them. Tariff wars it thus appears lead to dislocation of commercial arrangements, and to the transfer of particular branches of trade from one country to another. They lead, however, in some instances to the removal of grievances which cannot be otherwise remedied, and thereby prevent last-figures never before put together in a single ing injury to particular trades, and may

volume.

According to leading opinions at Hamburg, the effect of this tariff war, however, between Germany and Hayti has been almost more detrimental to German trade and industry than to the Haytian export trade, for it is declared that the trade in Haytian dyewood has now almost been entirely diverted to France, and that the dyeing extracts are now made there and exported from France subsequently to Germany.

bring about better relations than those which subsisted previous to the conflict. This part of the economic question requires very careful handling, and it especially should not be treated for political party purposes.

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Agriculture, cattle rearing, and

gardening

Mining of all kinds

Coal mining only...

Metal work of all kinds

Iron and steel industry only..
Textile industry

230,029

22,718

116,320

129,507

123,812

142,955

255,791

46,576

64,148

53,611

Other official publications relative to the occupations of the people shows the following approximate percentages on the latest figures available to the total population:-Agriculture, 3'47; cotton and woollen factories, 190; coal mining, 2.00; iron and steel manufactures, 026; shipbuilding, 0.27; total, 7'90; estimating the number of persons employed in minor industries (including fisheries) at 4:10-the relative proportion of the whole classes engaged in productive labour (not including dependents on them) may be reckoned approximated at 12 per cent. of the population of the United Kingdom. The number employed in industries not entirely productive, such as building, and in distributive occupations, may be estimated at 12 per cent. This calculation brings us to the estimate given to me by an eminent statistical authority, that the total industrial population of the country may be reckoned at 10,000,000.

I have not been able to obtain corresponding particulars relative to the employment of the people in other countries. It may be mentioned, however, that according to German statistics for 1895 the percentage of the following occupations to the total population of the empire was :

15975
1.09

.67

1.67

1871.

1,423,854 583,019

315,398

508,715

*44

1.80

49,370

246,645

18,680

82,963

191,291

172,948

149,864

224,559

64,226

75,202

65,478

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• Including ironfounders.

+ Excluding blacksmiths and ironfounders.

In 1901 a different classification was adopted from that of previous censuses, which makes it impossible to state a comparative figure.

1901.

988,340

945,875

648,944

582,119

36,439

236,106

4,956

39,035

216,022

259,292

251,143

149,793

121,531

92,556

If the amount of exports in years since 1895 may be taken to indicate increase or decrease in occupations, these percentages have increased since that year. The percentage of the average number of persons in the receipt of relief in England and Wales to the whole population, decreased gradually from 47 in each of the quinquennial periods, 1855-59 and 1860-64 to 2-6 in 1895-9. The averages of the three years, 1900-2, is below that of the five years, 1895-9; but it is now rising. The statistics of emigration from the United Kingdom are really records of persons proceeding to places out of Europe. They do not aid in the study of the economic question; the number is small, less than 1 per cent. of the population.

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Turning next to the information afforded in the Board of Trade Blue Book (p. 260) with regard to the general course of wages in the United Kingdom, it appears that between 1900 and 1903 there has been an increase of remuneration in agricultural and engineering occupations; that it has been stationary in building and textile trades; and that decrease has taken place in coal mining wages. The general course of money wages is rather below the level of 1900; but it is above the average level of the period 1860-1902. With regard to the prices of food, clothing, and lodging, calculated with especial reference to the case of the labouring classes, this Blue Book shows (1) that the average retail price of the principal foods is much below the cost

25 years ago, but above the rates of six years ago; (2) that there is a steady growth in expenditure on clothing, but it is not proved that this growth is owing to increase in the selling price of these goods; (3) that rents in London have certainly increased in recent years; and it seems also certain that house rent has increased in great Britain, especially in urban districts, since 1891.

Lastly, in connection with matters specially relating to the economic condition of the people, there has been an uninterrupted and remarkable increase in the total computed capital of Post-office and Trustee Savings Banks, since the first returns for the latter in 1854, and for the latter in 1862. The amount for 1902 was £197,100,000.

Comparing the conditions above indicated with the corresponding returns for the three countries for which particulars are included in this Blue Book, the United States, France, and Germany, it is shown that the comparative rates of workmen's wages and family incomes stand in the following order: United States, United Kingdom, France, Germany. As regards the cost of living, it must be remembered that the staple articles of food are not identical in these countries. An exact comparison cannot be attempted within our limits. The conclusion arrived at as between the United Kingdom and Germany is, "That in the last ten years the change in the cost of food has been comparatively small, and has not greatly differed in the two countries." If, however, "we take the first and last quinquennial periods [1886-1890 and 1896-1900] for which complete figures for all four countries are available," the fall in the prices of wheat and meat was greatest in America, followed by the United Kingdom, France, and Germany." As regards clothing and rent, "the American workman spends more on his clothes than the English; the English more than either the French or the German." With respect to housing, "The evidence of the members of the Moseley Commission on the question whether the American workman is better housed than the English, appears on the whole indecisive." "As regards Germany, there is evidence that the condition of housing of the working classes is inferior to that which prevails in this country." In all these matters, however, "differences of wants and tastes are such that the comparative welfare of the working classes in various countries, in the broadest sense of the term, cannot be determined by any statistical

66

method." In any complete comparison between the economic conditions of industrial countries, other elements - amongst them relative hours of labour, production in working hours, and regularity of employment, must be taken into account.

In the United Kingdom in 1851, 374, out of a total revenue of 48 millions were raised by indirect taxation; in 1901, 62 out of 122. The ratio of indirect to direct taxation has thus declined from 77 to 51 per cent. In 1901, 92 per cent. of imports were duty free, 8 per cent. subject to import duty. Some of the existing direct taxes, such as the death duties, are a consumption of capital, and therefore economically unsound; the burdens upon land, in the present position of agriculture, are unduly heavy. The limits of taxation have thus been unduly contracted. It is more easy to raise the rates of existing duties than to impose fresh taxes; and often wiser to lower than to abolish duties.

In 1850 the proportionate distribution of our total export as between the protected and unprotected markets of the world was 56 to 44; in 1902 the proportion was 42 to 58. Taking manufactured articles separately, the proportions were, in 1850, 57 to 43; in 1902, 38 to 52. Allowing for certain changes affecting these markets at the two periods, "there can be no doubt as to the effect of continental and American tariffs in checking our own export trade, especially in manufactured articles, with the group of protected countries during the last two decades." (Blue Book, No. 1761, p. 16). It will be remembered that "the last two decades" is the period since the lapse of the commercial treaty system of 1860, which has been explained at p. 44.

In finishing this part of the paper it is well to quote a statement as to deposits in savings' banks per head of population in different countries by Mr. John Rolt Schooling, which appeared in the Pall Mall Gazette, of the 16th of October last:-Denmark, £15 11s. 6d.; Switzerland, £13 0s. 3d.; Australia, £7 15s. 10d.; Germany, £7 10s. 7d.; Norway, £7 8s. 7d.; Belgium, £5 7s. od.; United States, £6 4s. 10d.; Austria-Hungary, 5 8s. 4d.; Sweden, £5 1s. 5d. ; United Kingdom, £4 10S. Iod. These figures are only quoted to show that our own savings' banks returns cannot be used as affording conclusive evidence of greater prosperity existing in the United Kingdom than in other countries. Mr. D. A. Thomas, M.A., M.P., in a paper read before the Royal

Statistical Society, on the 19th of May lastwritten as a free trade statement before the present fiscal controversy began-sums up his observations respecting the occupations of the people "The number employed in agriculture has again largely fallen during the past decade, while those engaged in mining other minerals than coal, in the manufacture of iron and steel, and in the textile industries, have either decreased in number, or not increased proportionately to the growth of the people at large; and that the increase in the total number has been largely absorbed by coal mining, commerce, railway transport, distribution of goods, and building operations."

THE QUESTION OF FOREIGN TRADE.

In entering upon this part of the subject it is necessary at the outset to explain certain difficulties, and to make certain cautions. Accounts are not made out on uniform bases. The mode in which they are compiled has varied from time to time in each country. Details on those points are afforded at pp. 5 and 6 of the Board of Trade Blue Book No. 1761. The political character of certain territories has changed. Alsace, an important producing province, was included in France up to 1870; and since then in Germany. The Hans Towns came into the Zollverein system in 1888. Changes in Colonial possessions-extensions and losses, have likewise altered the headings under which trade with certain parts of the world (more particularly in Africa, and the East and West Indies) is to be classed. Again, recently foreign countries and colonies have been divided into "protected," that is to say countries which maintain tariffs for protective purposes, and non-protected. It has been shown, however, in the narrative portion of this paper that the fiscal policy of European countries and the United States has greatly varied at different periods during the last half century; so here again there are no uniform bases available for long periods.

The Board of Trade reckon Austria-Hungary, Belgium, France, Germany, Holland, Italy, Portugal, Russia, Spain, and the United States to be the "principal protected foreign countries." Holland more especially, and Belgium in a minus degree, are noted "protected countries, "because a large part of the trade recorded in our official returns, as between the United Kingdom and Holland and Belgium, is in reality, trade with Germany, which passes through Rotterdam and Antwerp, so that it

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would be misleading to place Holland or Belgium in a different list from Germany." The German tariff is, in its effect, highly adverse to the principal British exports.

Canada and Victoria are the only colonies which are designated "protected" for the purposes of the Blue Book, No. 1761, p. 171.

The following Table gives the estimated average ad valorem equivalent of the import duties levied on the principal articles of British export from the United Kingdom :

Russia..

United States Austria-Hungary

France

Italy
Germany

Canada
Belgium

New Zealand.

Australian Commonwealth..
South African Customs Union (new tariff)

"It must be remembered that the protective effect of a tariff is not necessarily proportionate to the average level of the duties, but also depends on many other factors, such as the comparatively advanced or backward state of the home industries protected. A 25 per cent. duty in Germany may give as complete protection to its native industry as a 100 per cent. duty in a more backward country. A high duty may have no protective effect if the article to which it applies happens not to be manufactured in the country in question."

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Per cent.

Principal protected countries and colonies.

Per cent.

56

51

53

49

46

45

42

131

73

35

34

27

25

16

13

9

6

6

All other countries and colonies.

Per cent.

44

49

47

51

54

55

58

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