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THE last quarterly article in reason to be gratified with the 'Board of Trade Journal,' these results, achieved during which deals with the twelve a period of such profound inmonths ended 30th June 1926, dustrial depression, and they indicates very clearly the grow- afford both encouragement and ing importance of our Empire ample justification for the contrade. An examination of the sideration of a further extentotal import figures shows that, sion of preferences in foodwhereas in 1913 we drew less stuffs at the present Imperial than one quarter of our im- Economic Conference. ports from the Empire, in 1926 It is a basic argument of this proportion had increased Free Traders that exports must to over 30 per cent. Our pay for imports, and conseexport figures to the Empire quently if by a tariff imports are even more satisfactory. In are restricted exports must 1913 they were 37 per cent of equally be restricted, so that our total exports, and in 1926 on balance there is no gain over 41 per cent. The most from a protective tariff. It is noteworthy feature, however, by the reiteration of plausible of this latter increase is that, half-truths such as this that whereas between 1913 and 1925 the shibboleths of free trade it only amounted to a little have been hitherto maintained. over 1 per cent, last year the The fact is conveniently ignored increase was more than 3 per that many other considerations, cent, a result which is directly such as interest on capital due to reciprocal trade brought investment, shipping services, about by the extension of and emigration, influence the

, Imperial Preference in our Bud- balance of trade to an importget of 1925.

ant extent. This is more espeThe Government have every cially true in the case of our VOL. CCXX.-NO. MCCCXXXIII.



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Dominions and Colonies, where markets and their continued British capital has been largely prosperity under protective invested and tariffs voluntarily tariffs, brought forward his imposed on foreign products great scheme of fiscal reform with the object of developing based on Imperial Preference. Empire trade.

Mr Chamberlain's prevision Another plausible half-truth of the conditions which would on which Free Traders love to arise if the country blindly generalise is that as a country continued to adhere to the fetish we depend, above all, on inter- of free trade has proved to be national trade. In the early so accurate that it is not indays of free trade that may appropriate here to quote from have been true, but to-day it one of his great speeches. Adis fundamentally wrong. We dressing an immense gathering are a country that has achieved of his fellow-townsmen in Birgreatness in the past by our mingham in May 1902, he pre-eminent power of produc- said : tion, but when we lose that “The old ideas of trade, of pre-eminence and begin to rely free competition, are changed more upon international trad. ... even the industries and the ing in the manufactures of commerce which we thought to other nations, we are on the be peculiarly our own are in road leading to extinction. Un- danger. It is quite impossible fortunately it is on that road that these new methods of we are now beginning to travel, competition can be met by a and we are doing so alone, strict adherence to old and because other producing coun- antiquated methods, which were tries are wisely guarding their perfectly right at the time at home industries by protective which they were developed. ... tariffs.

If by adherence to economic There was a time no doubt pedantry, to old shibboleths, when the free trade protagonist we are to lose the opportunities had a good case. That was of closer union which are offered before Germany and other us by our Colonies, if we are countries became serious com- to put aside occasions which petitors in nearly all our staple are now within our grasp, if industries, when we could not we do not take every chance only find a ready market for in our power to keep British all our own products, but could trade in British hands, I am conduct at the same time a certain that we shall deserve world trade in the manufactures the disaster which will infallibly of other nations. Then camo

come upon us." the time when that far-seeing These words of a great statesstatesman, Joseph Chamber man once himself

a Free lain, realising the increasing Trader-must to-day strike a ability of other nations to com- responsive note in the minds pete with us in the world's of many men who believe that

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if Joseph Chamberlain had lived of their pre-war value. Were to carry out his great concep- it not for interest on British tions, the solidarity of the capital invested abroad, payBritish Empire would long ago ments for shipping and other have become an accomplished services, all of which are generfact, and even the world war, ally classified as our “invisible with all its disastrous con- exports,” the balance of trade, sequences, might have been as conceived by Free Traders, avoided. Unfortunately, in the would cut a sorry figure. The critical election of 1906–the same may be said of their conlast in which Mr Chamberlain tention that as a country we was destined to take part,- depend above all on

on interthe old parrot cry of “dearer national trade. There was some food,” in its many variations plausibility about that asserunscrupulously employed by his tion so long as British capital opponents, triumphed at the invested in foreign countries Polls, and with Mr Asquith as meant the return of much of Prime Minister, the country that capital and interest in the embarked upon what future purchase of British manufacgenerations will probably re- tures. Then our international gard as the most disastrous trade and international finance epoch in the whole of her went hand in hand, and British political history.

ships which conveyed British It has taken this long period goods to foreign countries were of growing industrial adversity, able to bring us back food during which foreign competi- supplies. Those were the days tion in the race for the world's when British manufactures still trade has caught us up and dominated the markets of the passed us, to convince even the world, when, in fact, no altermost enlightened Free Traders native to free trade was rethat those two articles of their quired. Unfortunately to-day faith to which I have referred that happy state of affairs no are sadly in need of revision. longer exists. Foreign counIt is common knowledge to-day tries are as ready as ever to that the imports of this country employ British capital, but exceed the exports by a very they are not inspired by any large amount. In the first four sentimental regard for Britain. months of this year (i.e., before Consequently, when they find the calamitous Coal Strike) our that material, or manufactured total import of goods exceeded goods, which they may require, our total exports by 133 mil- can now be obtained in cheaper lions, and that this difference markets than ours, British capiis mainly due to a diminishing tal is no longer employed by volume of exports is proved them in the purchase of British by the fact that our exports products. This means export to the markets of the world of British capital without any are now only about 80 per cent balance of trade in the shape of exported manufactures on the outcome of capital invested which British labour and ma abroad, not only made up the terial have been employed. difference between our imports There would not even be export and exports of goods, but left service for a single British ship a balance on the right side of to effect a small import balance over 200 millions per annum, by bringing back a cargo of which made possible the investfoodstuff. All these advan- ment overseas each year of tages derived from British capi- new British capital. Since the tal would go to a competitor war our adverse balance has country.

been growing with alarming Our free trade methods are rapidity, and our “invisible opposed even to reciprocal exports are diminishing. In treaties, so that in the face of 1925 our export in goods was wide international competition nearly 400 millions less than the unconditional export of our imports, and when this British capital to foreign coun- difference was made up by our tries reacts year by year with “invisible exports,” there reincreasing injury upon our home mained a surplus of only 28 industries, many of which are millions available for investthemselves in desperate need ment abroad. This is surely of more capital for the replace an ominous indication of the ment of obsolete plant and bankruptcy into which the machinery.

country is drifting through Britain may be compared to grinding taxation, industrial a well, fed by the springs of depression, and labour troubles, industry. In the days of our all of which can be attributed, prosperity these springs were in

in a large measure, to the kept so active by our export economic fallacies of the free trade that there was a large trade policy to which we have and constant overflow of liquid so blindly adhered. capital available for investment To record the misfortunes of abroad. This was mainly ex- one's country is never a gratifypended in the purchase of ing task, and it is difficult to British goods, which helped con- do so with restraint when one stantly to replenish the springs holds, as we do, the conviction of industry. Of late years that our misfortunes have been these springs have been run- mainly attributable to the ning dry, and the overflow of country's imperishable faith liquid capital has been dimin- hitherto in free trade, coupled ishing in consequence until with the blundering and irreto-day it has become a mere solute methods of one Governtrickle, and is threatening to ment after another during the cease altogether.

last twenty years. It is pleasThis is not a pictorial ex- anter to record the belief that aggeration. In pre-war days the worst heresies of free trade our “invisible exports," mainly are at length being convincingly

exposed, that the country is were returned with a sweeping awakening to the necessity for majority because the electors stronger measures of Imperial had awakened to the fact that Preference and the Safeguarding a patriotic and trustworthy of Industries, and that we have party in power had become a at last a Government in power national necessity, and the which is moving in the right Conservative Government was direction, although some of us given a free hand to take any are inclined to think that it is action it deemed necessary in moving too slowly and leaning order to restore public contoo much towards methods of fidence and to remove induspolitical expediency. That, trial unrest. however, is the failing of all It is fair to remember that democratic Governments, and the Government is hampered the nation, which is sick to by the conditions of their death of party politics and damnosa hereditas in trying to politicians, who seem wholly carry out the unmistakable incapable of envisaging indus- mandates which they received trial realities, has much cause from the electorate in the end for thankfulness that in these of 1924. Nevertheless it is anxious times we have at last undeniable that they have alienin power an honest Conserva- ated many of those who suptive Government largely com- ported them at the Polls by posed of business men.

not at once taking in hand the Unwise legislation of bygone much-needed revision of the years has created for trade Trade Disputes Act of 1906, unions privileges beyond those and the introduction of further enjoyed by any other section legislation to enable them to of the community, and it is deal with Communists and other the latitude afforded by these revolutionary firebrands. The privileges, far more than sym- manner in which the Governpathy with Labour, which in ment handled the General Strike recent years has attracted to in May proved that they could its ranks so many egotistical really govern with firmness and cranks and agitators. It was the courage when constrained by pressure of the extremists with necessity to do so, and that in the Socialist ranks and reck- did much to enhance their less concessions made to Com- prestige. On the other hand, munists which aroused the sober their vacillating attitude since and responsible sections of then with regard to the Coal the community, irrespective of Strike has not redounded to party, to a clear perception of their credit. The general view the dangers lurking behind is that they have badly muddled the Socialist Government, and this matter, and that by intercaused the country to turn fering at all they have increased them out at the last General the difficulties in a dispute Election. The Conservatives which in the end can only be

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