A moment's reflection serves to dissipate the vague apprehension which such a remark is apt at first sight to create. Mr. Mulhall, in the passage quoted (pp. 2 and 3), is speaking of sums total, without reference to the numbers of the respective populations.

Is it reasonable to suppose that in 1890 the industries of our thirty-eight millions will rival in amount those of sixty-three millions of our energetic cousins, helped as these are by the enterprise and capital of the old country? As to any argument in favour of Protection to be drawn from 'reflection' on such facts, that is simply absurd. Lord Penzance considers it to be food for reflection also that we stand alone in the wide world after forty years' display of the benefits of Free Trade,' as we call it; the other great nations, who have heard our arguments, watched our celebrated system of Free Imports' for nearly half a century, deliberately declining to adopt it; and he asks, Are we, then, so much wiser than the rest of the world?'

Anyone unacquainted with the facts, and studying the subject for the first time, would gather the impression that our celebrated system of Free Imports' had proved a failure, and that Protection had in some way triumphed. But what are the facts? It is true that we stand alone in the wide world of commerce, but where? Why, at the very head of the nations! In the international race there is not even a good second to us. There is not a nation that approaches us in the money value of our foreign commerce within hundreds of millions sterling; there is not one that does half as much as we do; while, if we reckon per head of population, the difference between us and them becomes still more striking.

The following table shows the figures relating to Great Britain and our three great rivals for 1884:

The table, so far as it goes, speaks for itself, but there are other things which must also be taken into account before we can form anything like an adequate notion of the position in which the one Free-Trading nation stands relatively towards her Protectionist rivals and the rest of the world. Our position is simply unique. We possess more than half of the effective ocean tonnage of the world, and we have managed to make the rest of mankind indebted to us to some 1,500 or 2,000 millions sterling, from which we draw an annual tribute of from 60 to 80 millions. It must be remembered, moreover, that most, if not all, of this marvellous achievement has been effected under that system of Free Imports' which Lord Penzance assumes to be so disastrous. Surely, with such results

before us, we may answer his question, 'Are we really, then, wiser than the rest of the world?' by an emphatic 'Yes!'

It is true that in some respects our commerce is threatened, and, in view of the competition which is daily becoming more severe, it behoves us, as Lord Penzance says, to do what the sailor does when it comes on to blow, that is, to look after his tackle. It is this consideration, he says, which has led him to ask himself whether we can safely rely upon the abstract principle of Free Imports' in our international dealings, as stated, for example, in Mr. Mongredien's Pleas for Protection Examined: "Free Trade" does not allow of any import duties being imposed on such articles as are likewise produced at home.'

Lord Penzance says rightly that, if the principle be sound, it settles the question for all species of goods, and 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."

This system of Free Imports,' he says, ' may be a good thing, or it may not, but it is not the thing that the national judgment approved when the Corn Laws were repealed.' He bewails the fact that

the beneficent project of 1845 reveals itself in 1885 as little better than a baseless dream. It could not be tried without the co-operation of other nations, and they have refused to co-operate. It is natural that those who laboured to erect this system, which, both in its direct and indirect effects, would have been a priceless blessing to mankind, should be loth to retrace their steps-loth to resign hope under the pitiless pressure of experience. It is fatuity to shut our eyes to the fact that what we accepted in 1845 was Free Trade-that is, a free interchange of commodities unfettered by fiscal laws-and that what we are living under in 1885 is 'Free Imports' in our own country and a commerce loaded with fetters abroad.

Assumptions similar to those on which I have already remarked run through this passage. It is assumed that our fiscal policy has been a disastrous failure, and that the priceless blessing of universal Free Trade is nothing but a baseless dream; and the conclusion is drawn that we ought, under the pitiless pressure of experience, to retrace our steps towards Protection. But the notion that our policy has been a failure is an assumption which is not only wide of the mark, but one which is the exact opposite of truth. It is assumed that in manufactures and commerce other nations by remaining protectionist, while we have been free-trading, have stolen a march on us, and have benefited at our expense. Statistics, however, those measures of facts, all tell the other way. So far as they go, they bear out to the hilt the Free Trader's contention. He maintains that, other things being equal, so long as our rivals are protectionist and we are free-trading, we have a distinct advantage in the general competition as regards cheapness of production. This proposition he holds to be in theory mathematically demonstrable, and in practice strictly conformable to fact.. He appeals to such figures as those which I have already given, showing the total foreign trade of ourVOL. XIX.-No. 112.

selves and of our three great rivals, and he also points to the following figures which show the shares which each of us has in the trade among the four.

Take first the market of the United States

Great Britain sold there goods to the value of 32,510,000

Next take that of Germany :

Great Britain sold there goods to the value of 25,365,000

Great Britain sold there goods to the value of 24,652,000

The lion's share of the trade in these homes of Protection falls to free-trading Great Britain, therefore, and for reasons which ought to be obvious, must continue to do so, so long as protective tariffs endure.

And now a word or two on the unfulfilled prophecies of Peel and Cobden as to other nations following in our footsteps. Their predictions were uttered during that long interval of peace which succeeded the exhausting wars which closed in 1815. When they were uttered, neither Peel nor Cobden, nor anyone else, foresaw the wars and revolutions on which the world was about to enter, the gigantic expenditure to which they would give rise, the military' spirit which would be evoked, and all the other consequences which would follow, among the worst of which was the calling into existence of those protected interests whose strength forms the principal barrier to the adoption of universal Free Trade.

In 1848 the national debts of the world amounted to 1,731 millions sterling. At this moment they cannot be less than 5,000 millions, and they are increasing year by year. The raising of revenue to meet the interest on them becomes more and more difficult every day, and the statesmen who have the task on their hands are at their wits' end how to raise the required sums. Protectionist nations with vast armaments find themselves in dire straits for money to meet the constantly increasing expenses, and their rulers see no way of raising the requisite funds but by the creation of monopolies, or the imposition of customs duties. In face of such facts it is absurd to assert that Protection is the outcome of wise thought, the product of economic knowledge. In the building up of their protectionist tariffs the rulers are urged on by the interests which have grown up under the baneful system, while the ignorant people, who groan under this organised system of robbery, are com

forted in their afflictions by being assured that these exactions are necessary in order to protect them from the competition of the dreaded foreigner.

Neither Peel nor Cobden imagined what was going to happen, or their forecasts would have taken another shape. As to the prediction that other nations would follow us, the argument, though used, did not cover the real ground on which 'Free Imports' were recommended by them, as also by Ricardo, Villiers, and others. For a quarter of a century before we began to remit duties, we had been struggling by means of them to obtain reciprocal reductions from other nations, and we had utterly failed, and our reformers were advocates for the abolition of protective duties whether foreign nations followed us or not. They held that, whether they maintained their duties or not, it was our interest to abolish ours, and that our trade would prosper whatever they did.

That our trade did prosper is incontestable.

F

Our exports averaged in the five years 1836-40 about 50,000,000

showing a large and continuous increase as the successive instalments of Free Trade came into operation, while all subsequent statistics combine to demonstrate that a high state of prosperity has been perfectly compatible with that system of 'Free Imports' which Lord Penzance considers to have been so disastrous.

He complains that the very essence of the system promulgated by Cobden under the name of "Free Trade" is wanting in the practice of "Free Imports." And he says that if "Free Imports " be a good thing, it must be so on very different grounds, and must be upheld by very different reasoning from that upon which the doctrine of "Free Trade" was preached and accepted.'

What does Lord Penzance mean by calling Free Imports' a new system? Neither in fact nor in theory is it new. It has been practised by us for over forty years, and it was advocated by Peel, Ricardo, and Gladstone before it came into operation. In one of the finest speeches he ever made, Sir Robert Peel stated his reasons for adopting a Free Trade policy, and from that time down to the present moment those reasons have held their ground.

If he studies the reasonings of these men, he will see that there is no antagonism, as he supposes there is, between Free Trade' and 'Free Imports.' The principle is the same in both, and is upheld by the same arguments. The Free Trader says: Get as much interchange as possible; the more you get the more you benefit yourself as well as the nation which trades with you. If trade be univer

sally free, that would be the state of things which would be most beneficial to the world at large. If trade be not universally free, the principal benefit will accrue to the nation whose ports are open. In the one case the greatest possible production and interchange take place, to the benefit of all parties. In the other there will be less production and interchange, but of this lessened trade the nation which keeps its ports open, while others keep theirs closed, will have a larger proportionate share than she would have if all ports were open. Thus the Free Trade doctrine arises that hostile tariffs must be met by Free Imports,' and in illustration of its truth one has only to look at the trade figures of the world to see how it is borne out. Lord Penzance, however, is of a totally different opinion. He thinks that the competition of the foreigner in the importation of manufactures is an injury to home production and to the employment of our dense population, because the Free Trade argument, which maintains that every import necessitates an export, is unsound in theory and false in fact; the truth being, according to him, that these importations are paid for in actual money, as may be seen by an inspection of our Board of Trade returns, in which the actual results of a system of Free Imports' are recorded for us.

The above is the substance of Lord Penzance's argument, which is spread over several pages. It is brimful of fallacies. In the first place he asserts that we pay for these importations in 'actual money.' But what does he mean by the term? He cannot mean bullion, for in the very next line (p. 391) to that in which he says that we pay in money he writes: It is plain that we do not pay by sending bullion abroad.' He thus draws a distinction between money' and 'bullion.' But in international dealings there is none. A nation cannot pay another nation in money except by the transmission of bullion. If bullion be not sent, no money is sent. Something else may be sent; it may be money's worth, but that is not money. The moment this is admitted, however, the bottom of the argument (to use Lord Penzance's own words) tumbles out.' Money's worth can consist of only two sorts of things, merchandise or securities; and if either of these be transferred to the foreigner, it constitutes the 'export' which balances the 'import.' If merchandise be taken, there can be no injury to home production and home industry in the aggregate. One sort of goods has been taken in exchange for another sort, to mutual advantage, and our shipping and foreign mercantile interests derive profits thereby. If, on the other hand, securities be taken, they must be either home or foreign ones which are on the market waiting a purchaser. If a home security be bought, the foreigner, instead of taking away the principal of what is owing to him, leaves it here, and draws an annual interest for it. Such transactions as this, however, are, comparatively speaking, very rare, and may be regarded as negligible quantities. There remains now only