V. The Future of our Country as a Manufacturing Nation.

An impartial review of the figures presented in diagrammatic form in this Chapter shows that the wonderful expansion and progress which characterised the middle portion of the century have not been continued to its closing years. The writer has already alluded to the practically stationary position of our export trade during the last twenty-five years. The following table, showing the annual values of the imports and exports per head of the population, in the successive years of census, is worthy of careful study.

The values per head before and after 1853 (above and below the line) cannot be directly compared for the reason given on page 30; but otherwise the figures

¹ Estimated; no census in 1811.

page 39 show the relative annual values of our imports and exports per head at the various decennial periods. Up to 1851 our exports grew much more rapidly than our population, and the values of the exports per head increased fourfold between 1811 and 1851. In the second half of the century it is the imports which show the greater expansion, the values of imports per head of the population having advanced from £7.38 in 1861 to £11.96 in 1899. The exports show no such satisfactory increase. They advanced, it is true, from £4.52 to £7.07 per head between 1861 and 1871; but since the latter year there has been a steady fall, and in 1881, and again in 1891, the value of the exports per head of the population shows a marked decline.

These figures can only be understood by a study of the industrial progress of Germany and the United States, for it is chiefly due to the competition of these two countries that our progress has suffered such a severe check in the closing years of the century.

In 1898, for the first time in her industrial history, the United Kingdom had to relinquish the first place to the United States as regards the value of the export trade, and the figures for 1902 repeat this phenomenon. For the purpose of showing the relative changes in the position of the six chief exporting countries during the last quarter of the century, Diagram IV. has been prepared. A study of this diagram is recommended to those whose faith in worn-out dogmas has led them to the comforting belief that our position as a manufacturing nation was permanently secured.

In 1875 the value of the export trade of the United Kingdom was double that of its chief rivals, Germany and the United States; and France stood second in the list of exporting countries. In 1899 the United States heads the list, with the United Kingdom second, and Germany closely in her rear. In the intervening years what do we see? The export trade of three countries increasing by page 40 irregular movements—namely, that of Holland, Germany, and the United States: and the export trade of Belgium. France, and the United Kingdom practically stationary or declining.

It is therefore certain that it was to a combination of causes, of which the adoption of a Free Trade policy was only one, that we owed the wonderful expansion and

Diagram IV.—Showing Export Values for the Chief European Exporting Countries and for the United States During the Last Quarter of the Century. Each Vertical Division Equals Ten Millions Sterling; each Lateral Division One Year.

progress of the middle years of the last century; and now that some of these causes have ceased to operate, our industrial supremacy is being successfully assailed. The opinion frequently expressed by leading political economists twenty or thirty years ago, that no Protectionist country could hope to compete with us in the open markets of the world, is proving fallacious. Opinions founded on insufficient page 41 data usually are fallacious. Our most dreaded and successful rivals are both Protectionist countries. That the competition which we now have to meet in all the markets of the world will increase in severity is also certain. In a Report prepared by Sir Courtenay Boyle in 1896,¹ it was shown that the manufacturing populations of Germany and of the United States were growing more rapidly than our own. As a natural consequence of this it follows that the supplies of manufactured goods to be disposed of in the outside markets of the world must increase. We have already lost the first place to the United States, and many believe that it will not be long before we have to relinquish the place which we now occupy in the ranks of the exporting countries, to Germany. But while admitting that this change of position is a result of natural law, and is therefore inevitable, we must guard against taking a too gloomy view of our country's position. While our coal lasts and can be worked at a reasonable cost, we possess an asset of inestimable value. The fear that the waterfalls of France, Switzerland, and Norway will render this asset of little value is due to lack of knowledge. The nineteenth century has been the century of steam-power. Electricity, not steam, will be the universal power-agent of the century just born. But electricity can be generated from coal—with modern plant and machinery—almost as cheaply as from any of the larger waterfalls in Europe and America. In Norway, it is true, electrical power can be generated at a very low cost. But the economic advantages of a waterfall in Norway, as compared with a coal-pit in South Lancashire, are largely discounted by its distance from the markets of the world for the raw materials and for the manufactured products.

The possibilities of utilising the energy stored up in coal in new ways are also great. The problem of power

¹ "Memorandum upon the Export Trade of the United Kingdom, United States, France, and Germany."—Board of Trade Papers. 1896.

page 42 generation from the waste gases of blast furnaces has been solved in a practical manner in Germany and in Belgium; and a new form of gas producer in Germany has nearly doubled the thermal energy which can be extracted from 1 lb. of coal.

If our manufacturers will but make use of every advantage that applied science can offer to them for increasing the efficiency of their works or factories; and if our workers will second these efforts of their employers by doing all in their power to obtain the maximum of output at the minimum of cost, we may hope to maintain, so long as our coal lasts, our position as one of the leading manufacturing nations of the world. And before our coalfields are exhausted we may have realised the dream of a federated Empire. The waterfalls of Canada and the coalfields of South Africa and of Australasia, developed by British capital and by British labour, may then win for the Empire in the present century a place equal to that held by the Mother Country in the century which has just closed.

Should our prosperity be further checked, and this natural development of the resources of the Empire be hindered, by a fiscal policy adopted half a century ago, under circumstances widely different from those of the present time, it will be necessary to reconsider that policy, and to inform each of our chief competitors in trade, that we can no longer grant to them the privilege of free entry to all our markets, except as a return for similar privileges in all countries under their flag.