Chapter I.

The Question Stated and its Solution Set Forth.

What are the causes of the recent and existing depression in certain branches of our trade?

A very natural and very important question! Various answers have been given to it, but it appears to us that the most simple, the most obvious, and by far the most conclusive has not yet been put forward. No doubt that, of the various causes assigned, most of them have concurred, in a certain degree, to produce the result. But they do not nearly cover all the ground, and some far more efficient factor than any hitherto adduced must be sought for.

During the year 1884 there occurred a vast and sudden falling off in our foreign trade in both Imports and Exports. The average Imports and Exports for the four years 1880 to 1883 were £710,293,000,^* while in 1884 these sank to £685,147,000, exhibiting a sudden collapse of £25,146,000, of which, as we shall afterwards show, £21,622,000 occurred

^*

Our Imports and Exports were in 1880	£697,615,000
Our Imports and Exports were in 1881	£693,856,000
Our Imports and Exports were in 1882	£718,662,000
Our Imports and Exports were in 1883	£731,041,000
	£2,841,174,000
Which divided by 4 gives an average of	£710,293,000
Deducting our Imports and Exports in 1884	£685,147,000
Leaves deficiency in 1884	£25,146,000

page 6 in the Imports, and £3,525,000 in the Exports. Note that there had been no gradual decline in our foreign trade since 1880, culminating in 1884. On the contrary, the amount of our foreign trade in 1883 had been greater (viz., £731,041,000) than in any of the previous years, and therefore, the deficiency of 1884 in our Imports and Exports might have been reckoned as much larger (viz., £45,894,000), if we had confined ourselves to a comparison between the years 1883 and 1884. We deem it, however, fairer and safer to take as a standard for comparison the average Imports and Exports of the four years preceding 1884.

How then stand the facts? Thus: that during the year 1884 there occurred a sudden drop in our Imports and Exports of no less than twenty-five millions sterling in value. It will, we think, be readily conceded that in explaining the cause of this falling-off in our foreign trade we are, in fact, explaining the main, if not the sole, cause of the trade depression into which we are inquiring. That cause is not far to seek. The great diminution in 1884 of our Imports, and consequently of our Exports, was the natural and necessary result of the improved and fairly good harvest with which this country was favoured in that year. No doubt, at first glance, and by some persons, this statement will be regarded as a paradox. "What!" it will be said, "are we expected to believe that our trade was bad because our harvest was good? That the blessing of comparative abundance has been a source of evil and distress?" Our reply is that the distress is only partial, and will be temporary, whereas the benefits of a good harvest are a gratuitous boon to the entire community, and moreover that, even if it were not so, our statement will be found, on examination, to be perfectly and logically accurate.

The connection between the good harvest of last year and the simultaneous dimunition of our foreign trade is, we submit, susceptible of easy and conclusive proof. Let us see by how much, in money value, the cereal products raised in the United Kingdom in 1884 exceeded those of the preceding years. page 7 That excess is easily measured by ascertaining how much less of foreign cereal products we imported in 1884 than we had imported in previous years. True that we always do, and shall, require a considerable supply from abroad of wheat and other cereals, but our imports are regulated by our requirements, and the more plentiful our own harvests, the smaller the deficiency that we have to make good by importing. Now the amount of our cereal importations in 1884 was £47,563,000, being £15,719,000 less than the average annual amount of the four preceding years. Here are the figures, taken from the Board of Trade returns, which clearly demonstrate the fact:—

The value of Wheat, Barley, Oats, Peas, Beans, Maize, Flour and Meal imported in 1880 was	£62,339,000
The value of Wheat, Barley, Oats, Peas, Beans, Maize, Flour and Meal imported in 1881 was	£60,557,000
The value of Wheat, Barley, Oats, Peas, Beans, Maize, Flour and Meal imported in 1882 was	£63,195,000
The value of Wheat, Barley, Oats, Peas, Beans, Maize, Flour and Meal imported in 1883 was	£67,040,000
	£253,131,000
Which divided by 4 gives an average of	£63,282,000
Whereas in 1884 our imports of the same were	£47,563,000
Deficiency in our imports of cereals in 1884	£15,719,000*

It thus appears that in 1884 our foreign supplies of cereals fell short of the average of previous years to the extent of 15½ millions of pounds sterling; and to that extent, therefore,

^* It is interesting and instructive to observe how faithfully the fluctuations of our imports of cereals are reflected in those of our total foreign trade. Their close connection and correlation could hardly be more forcibly corroborated. If we take the cereal imports and the total foreign trade for the last five years and compare them, we shall find that, reckoning the amounts in millions of pounds sterling, there were

In 1883 Cereals imported 67, total foreign trade 731, in both, the largest.

1882 Cereals imported 63, total foreign trade 719. in both, the 2nd largest.

1880 Cereals imported 62, total foreign trade 698, in both, the 3rd largest.

1881 Cereals imported 61, total foreign trade 694, in both, the 4th largest.

1884 Cereals imported 48, total foreign trade 685, in both, the smallest.

It is well worth noting how simultaneously the amount of our cereal imports and the amount of our aggregate foreign trade have moved up and down in close sympathy with each other.

page 8 we may infer that the home harvests of 1884 had exceeded in yield the harvests of the previous few years. Here, then, arising out of the improved yield of our crops in 1884, we have a sudden curtailment to an enormous amount in the importation of the single article of cereals. The effect of so vast a deviation from the normal average, over our total Imports, total Exports and foreign trade generally, we shall now proceed to trace.