Cobden under the name of 'Free Trade' is wanting, in the practice of 'Free Imports.' And so far from each nation devoting itself to the production of what it could produce cheapest and best, to the general ease of all, every nation but our own is striving to find employment for its population by keeping their own markets to themselves, whilst enjoying the benefits of selling freely in ours. If the system of Free Imports,' therefore, is a good thing, it must be so upon very different grounds, and must be upheld by very different reasoning from that upon which the doctrine of Free Trade was preached and accepted.

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I have endeavoured, I hope not without success, to ascertain what these grounds are, and to appreciate the reasoning by which the new system of Free Imports' is now maintained. But I confess it has not always been easy to obtain reasoning from those who are most in favour of it. In the mouths of many the arguments offered are simply the arguments upon which Free Trade' was originally based, which, for the reason just given, are inapplicable to Free Imports '-while others are so entirely convinced that Free Trade,' with all its benefits of reciprocal interchange, is identically the same thing as 'Free Imports,' with no interchange at all, that they put down all controversy with the remark that the question was settled by the Nation at the repeal of the Corn Laws, and with as free a suggestion as courtesy will permit, that those who doubt the wisdom of their principles are well-below the usual standard in intelligence.

I recur, therefore, to what I will call the Cobden Club pamphlets,' as being likely to contain the most authoritative statements of the arguments by which the system of 'Free Imports' is to be upheld. I will venture to quote again the passage above referred to, from the pamphlet Pleas for Protection Examined, in order to fix attention upon the exact definition of Free Trade' as there given:

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The test that shall draw the line between true 'Free Traders' and sham Free Traders' is simple and easy of application. Free Trade' does not allow of any import duties being imposed on such articles as are likewise produced at home.

If this principle be sound, it settles the question for all species of goods. If it be not sound, then, and not till then, will arise the question whether any, and if any, which of our imports should be taxed?-a question the discussion of which I leave to others.

Now, at first sight, it is obvious enough that, if the people of this country, instead of consuming the products of 'home' labour, consume the goods made by the foreigner, they withdraw in the same degree from the 'home' markets the demand for goods of English origin, and directly injure the 'home' producer by decreasing the demand for his goods.

On the other hand, it is equally obvious that by admitting the

successful competition of the foreigner the price of the article is likely to be maintained at its lowest point, which is a direct benefit to the consumer.

In a national point of view, the question will be which of these two results is of the higher concern to the community-to benefit the producer by securing him a market, or the consumer by securing for him a low price.

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The doctrine of Free Imports' settles the question in favour of the consumer, and that without any distinction as to the nature of the goods, the classes that consume them, or the character of the wants which they supply. Upon the question of duty or no duty, it ignores the claims of the home-producer to any consideration whatever. This, however, is denied by the 'Free Importers: it is here indeed that the main argument in favour of Free Imports' arises, an argument most specious and attractive, and which has been repeated over and over again in all the writings and speeches to which I have had access.

The argument is this, and I cannot do better than quote it from the writings of Mr. Mongredien, who has published so much on the subject for the Cobden Club; he says:

The trade of a country consists of the aggregate operations of individual traders, which are always equal, co-ordinate and self-balancing, and which necessitate to a mathematical certainty (excepting bad debts) an import to every export, and vice versâ.

And again:

Now if the country imports articles X, Y, Z, it necessarily exports in exchange for them (for every increase of imports necessitates an increase of exports) other articles of native production, which we may call A, B, C; and thus further channels of employment are created.

I need quote no more; the argument in various forms of expression is in the mouth of everyone who is called upon to justify the injury done to 'home' production and to the employment of our dense population, by the successful competition of the foreigner. It must be admitted that this proposition, if sound, does indeed justify a system of free imports to the full-for the interest of both producer and consumer, instead of being opposed to one another, are both served by the same system; and though the production at 'home' of any particular class of goods may be checked by the import of foreign goods, an impetus is given to 'home' production in the same degree for other classes of goods in order to pay for them. If complaint is made that a particular industry of this country has received a fatal check by its produce being thrust out of the market, the ready answer of the 'Free Importers' is found in the suggestion that those who followed it should turn their hands to something else.' It is not denied that the dislocation of trained workers from their work, and the enforced acquirement of new aptitudes, is an evil, but this is

represented as the inevitable friction only that attends the shifting needs of trade. Because, say they, the imports which have injured some one of our 'home' manufactures, have at the same moment, and in the very act, given birth to a foreign demand of equal value for some other manufacture equally of English production. And this, they add, is 'mathematically certain.' The foreigner who imports into this country does not make us a present of his goods-he must be paid; it is certain that gold or silver is not exported to pay him— therefore he must be paid in English goods. All, therefore, that the English worker has to do, if the trade he was brought up to has been injured or stifled, is to transfer his energies to the production of the particular class of goods which the foreigner wants, and which he must have, as the only means of receiving payment for the goods which he has sold. So runs the argument-I believe I have stated it fully and fairly; I have endeavoured to do so, for I look upon it as containing the substance of the theory upon which the system of Free Imports' is upheld. If foreign nations mean to continue to reap the advantage of importing their produce and manufactures into this country, these imports must be paid for ; and they can only be paid in goods, and British goods, therefore, of some kind they must inevitably take. So say the advocates of 'Free Imports.' But are they right? Is it true that the foreigner must be paid, and is in fact paid, by receiving British goods? I fear not. Indeed, in thinking the subject out, I am only surprised that anyone could ever have thought that it was.

For what is it that determines whether a particular country, say France, shall import half a million or a million or five millions' worth of any British produce? Surely nothing else than the wants of its population for the thing imported, and the comparative attractions in merit and price of the British article over those of other countries. The trade of a country consists of the aggregate operations of its individual traders, as Mr. Mongredien truly says. Let us take, therefore, the case of some individual trader in France who is in the habit of importing from England a given class of goods, say iron manufactures. Now, in any given year, what is it that determines whether he shall import much or little British iron? Does he inquire how much silk, or wine, or other produce is being exported to this country from France, and has got to be paid for, and regulate his purchases accordingly? Has he the means of entering upon such a calculation? and if he had, how can he tell how far the operations of others in France have already supplied the needful payment? The bare statement of such a thing on paper looks foolish, and I cannot suppose for a moment that anyone, however keen in this controversy, will suggest that the Frenchman's purchases are really regulated in the smallest degree by anything but the one consideration of his own interests, or that he asks himself any other question than this; whether he can sell at a profit the amount of iron, great or small,

which he is about to order from England. The purchase of British produce in any given year, or in other words British exports, is the aggregate result of the volitions of millions of foreign purchasers, each acting independently, and each in his own interests alone. And these volitions are again guided by the volitions of tens of millions of consumers, each acting independently, and producing collectively that demand for British produce which set the importers of it in motion. How is it possible that a result so brought about can be caused by, or regulated in its amount by, the quantity of foreign goods which are at the same time being imported by others into this country? An import of French goods into this country cannot of itself, therefore, as it seems to me, bring about an export from this country of the like value or of any value at all. The one thing cannot be the cause of the other. On the contrary, the causes which regulate the amount of either are absolutely independent of one another -the Englishman ordering just so many French goods as there is a demand for here, and the foreigner ordering such English goods as meet the demands of his own market on the other side.

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But here comes the most extraordinary part of this controversy. For forty years this doctrine of every import necessitating' an equal export has held its ground, and yet during the whole of this forty years the exports in no single year have equalled, or anything like equalled, the value of the imports. The difference yearly and every year is enormous; it has only to be stated, to dispel all suggestions of error and all possibilities of mistake. In the year 1880 the imports were in round numbers 411 millions and the exports were 286 millions: the difference between them amounting to the vast sum of 124 millions. And so it has been, though of course in a less degree, ever since the system of free imports was adopted, and for long before that.

Is it true, then, as a matter of fact, that every import necessitates an equal export? It is all very well to argue and show by argument that it must be so, that it is a mathematical certainty that it should be so. But calculations, even if they be mathematical, must give way to facts. It is facts that must govern the prosperity of the kingdom, and not calculations or mathematics, however exact: and however the fact may be accounted for or its existence explained, it remains a fact that every import is not balanced and paid for by an export of equal value. How then do those who rely so constantly upon this argument explain the fact, or reconcile it to their contention? I will quote the same writer, Mr. Mongredien. He says (Pleas for Protection Examined, p. 15):

Beside the normal commercial profits which naturally contribute to make what comes in of greater value than what goes out, wealthy nations which have lent money to foreign States, or otherwise invested money in foreign countries, have annually to receive large amounts for dividends on those loans and investments.

These amounts are periodically remitted to them in goods (not in specie), which figure in their statistical returns as excess of imports. Let us take the case of England. She has yearly to receive about 60,000,000l. from abroad for interest on foreign investments. She has also to receive some 40,000,000l. to 50,000,000%. more for ocean freight (gross) and charges, because two-thirds of the entire oceancarrying trade of the world is conducted by her mercantile navy. Now, since England has to receive about 100,000,000l. per annum from abroad in goods, for which, as they constitute a payment to her and not a sale, she has to make no return, it is clear that these will figure in the Board of Trade returns as imports without any corresponding amount of exports. They will appear as an excess of imports over exports to the extent of 100,000,000l.

This advances the investigation a considerable stage, for it is clear that the difference between imports and exports in the opinion of the writer is a real one; and so far from its being accounted for by any difficulty in the mode of calculating their respective values, it shows that the excess is not only real, but that it requires the sum of a hundred millions every year of money due to England to pay for it. In other words, what the writer says is that of our total imports at least one hundred millions' worth on the average are in every year sent to this country in payment of existing obligations by foreign countries. But how then can any portion of this hundred million pounds' worth of goods cause an export of equal value, or indeed of any value, to pay for them? As regards these hundred millions at least, not a single pound's worth of British goods is exported in connection with them and the dictum. that every import necessitates an equal export must be largely modified -it must run thus: Every import, over and above one hundred millions, necessitates an equal export. This is, surely, a very notable deduction, and those who complain of the injury done to 'home' products by the importation of foreign goods free of duty cannot look for any compensation in the stimulation of exports of equal value until that hundred millions' worth have been imported without any such compensating effect. It is very far from true, therefore, to say that every import leads by an unerring law to an export of similar value.

One might well stop here perhaps. The above considerations show that, whatever benefits the nation obtains in the direction of cheapness to the consumer by free imports, it cannot be said in addition that the interests of the producer are advanced in a similar degree by these imports, by reason of the exports to which they inevitably lead. On the contrary, such a proposition is subject to the enormous deduction of a hundred millions annually. It is just, in passing, however, to say that in some of the publications by the Cobden Club, the existence of this large sum of money coming to this country annually by way of debt or obligation is acknowledged and deducted, as it were, beforehand, in the statement of the proposition. Thus in the pamphlet entitled Free Trade and English Commerce, by Mr. Mongredien, I find his second chapter headed thus: Exports (unless in payment of debt) necessitate imports to the same amount.'