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The Pamphlet Collection of Sir Robert Stout: Volume 77

I. The Present Position of the United Kingdom as an Exporting Country

I. The Present Position of the United Kingdom as an Exporting Country.

The United Kingdom, as a manufacturing country', no longer occupies the position of commanding importance won during the middle years of the nineteenth century. This loss of position is to some extent due to natural causes. The long period of peaceful development enjoyed by the nations of Europe after 1870; the growth of populations in Germany and America; and the spread of scientific and technical knowledge, have produced the only result possible. In most highly civilised countries the people are forsaking agricultural for manufacturing pursuits, and are flocking from the country districts into the towns. No country can now be called the workshop of the world, for all have workshops at home. The equipment of the factories and works of our chief rivals is equal to, and in some instances better than, our own. But artificial aids have been employed to assist the development of industries and manufactures in foreign countries, and to some extent the loss of position by the United Kingdom is due to the bounty and protective systems of our manufacturing rivals. That these have favoured our competitors rather than ourselves is proved by the official figures for the value of the export trade of the leading manufacturing countries in the period 1881—1900. These figures are reproduced in a diagrammatic form on the following page. The curves clearly indicate that, while all countries have suffered from periods of boom and depression, Germany and America have shown greater page break
Comparative Exports of the Leading Manufacturing Countries for the Period 1881—1900.

Comparative Exports of the Leading Manufacturing Countries for the Period 1881—1900.

page 47 relative and actual progress than the United Kingdom. In the latter case there has been retrogression rather than progress, when the actual increase in population is considered. Comparisons for individual years, owing to the periodic character of trade depressions, are untrustworthy. Many carefully compiled statistical articles relating to trade have been made the basis of wholly fallacious conclusions, owing to the neglect of their authors to use quinquennial or decennial averages in place of the figures for single years. The addition of ships to the export returns in 1899 is also causing many to fall into error when comparing export values before and after the year 1898. Taking quinquennial averages, and deducting the values for new ships in the export returns for 1899, 1900, and 1901. we find that while in 1871 our exports amounted in value to £7.07 per head of the population, in 1899 they amounted only to £6.21 per head. In the same period our chief rivals, Germany and the United States, can show an actual gain in the value of exports per head of the population. The following are the figures by which the value of British exports per head have been calculated for the years of 1871, 1881, 1891, and 1899 respectively—
Table I. British Exports per Head of the Population for the Period 1871—1899.
Year. Population. Quinquennial Averages. Value of Export Trade. Value in £ sterling per head of Population.
1871 31,845.000 224,800,000 7.07
1881 35,241,000 226,000,000 6.42
1891 38,104,000 240,800,000 6.32
18991 41,100,0002 255,400,0003 6.21

1 This is the last year for which a quinquennial average can be calculated.

2 The estimate of population in 1899 is based on the census of 1901.

3 The value of new ships has been deducted from the exports in 1899, 1900, and 1901 in order to obtain an average comparable with those preceding it.

page 48

The study of the figures of our foreign trade for the last thirty years, therefore, emphasises the need for improving our trade relations with our Colonies, and with other countries willing to consider the advantages of reciprocal duties. Had the last twenty-five years witnessed a decline in the protective policy of foreign nations, it is possible that the agitation for closer trade relations between the Mother Country and her Colonies would not have resulted in such a definite call for action. Protection as a system of fiscal policy has, however, triumphed, and the rapid growth of the United States and of Germany, as manufacturing countries, is a decisive proof of the fallacy of certain arguments used by the Manchester school of economists.1 Protection and decaying industries are not necessarily allied.

The area of the world's surface open to our manufacturers and traders having been reduced by this action of foreign Governments, many consider that the time has arrived when the British Empire might with every justification copy the protective policy of her rivals. A consideration of those reforms which involve a change in the fiscal policy of our own, or of other nations, makes it, however, first necessary to refer to the ideal of that small remnant of orthodox Free Traders, who still believe that the conversion of the industrial nations of the earth to Free Trade will occur by means of example and of moral suasion. The futility of this ideal is, however, becoming each year more apparent. After fifty years of effort to convince our industrial neighbours of the advantages of Free Trade, not one of the leading manufacturing nations shows the slightest inclination to change its present fiscal policy. There are indications that even the most staunch Free Traders are beginning to recognise the hopelessness of modifying the fiscal policy of our neighbours by argument for example. When we find the Cobden Club admitting

1 See Farrer's "Free Trade v. Fair Trade" (1885), p. 196; also Bowley's "England's Foreign Trade" (1892), p. 144.

page 49 that "It will be our duty to maintain valuable trade rights already acquired in territories which other Powers may-annex—and we freely recognise the necessity of being prepared to do this" 1—it is evident that the era of moral suasion is over. Being prepared to maintain trade rights can have no meaning unless it indicates the use of force.

The conversion of the world to Free Trade principles by moral suasion is, therefore, an exploded policy; and the vision of the leading manufacturing countries of the earth voluntarily levelling their protective barriers, and throwing open their markets to the goods of all rivals, is fading from our eyes. But Free Trade within more limited areas of the world's surface is not such an impracticable ideal; and in the following pages the writer will discuss the arguments for and against, the only two proposals of a fiscal character which seem to offer relief from our present difficulties. The; one—the adoption of a preferential tariff for the Empire—has for its aim the promotion of trade within the British Empire; the second—the adoption of an international tariff based on reciprocal duties—has for its aim the promotion of trade irrespective of flag. The second proposal is thus seen to have the same aim as that before the free traders of the last generation; but the methods used would probably be more effective and convincing than those which: have left the chief markets of the world more strictly guarded and hedged in by protective tariffs to-day, than a quarter of a century ago.

1 Times, January 5th, 1899. See also letter from Sir Bernhard Samuelson to the Times, November 6th, 1901.