Chapter IV.

Diminution in our Foreign Trade Amply Made up by the Good Harvest of 1884 and the Consequent Expansion of our Home Trade—Effects of this Substitution on the General Prosperity of the Country.

3. We have now to consider the effects which the good harvest of 1884, and the consequent decline, in that and the present year, of our foreign trade, produced on the general condition of the country. It will easily be made clear that the partial evil which the improved harvest caused by diminishing foreign trade, was more than counterbalanced by another and far happier effect of the same cause, viz., an active and prosperous home trade. The £15,700,000 worth of cereals, which we in 1884 raised at home instead of importing from abroad, were still exchanged (as they would have been in the latter case) for various commodities, the produce of British labour and capital, but with this difference: that the exchange now took place between the British manufacturers and the British agriculturists at home, instead of taking place between the British manufacturers and the agriculturists of America, India, Russia, &c. That large sum chiefly went to improve the condition and to increase the purchasing power of the agricultural classes, while the manufacturing classes obtained a home market for their wares, to at least the same extent as they would if those wares had been sent abroad to pay the foreigner for his grain, instead of remaining at home to supply the increased demand from the agriculturists. This sum of £15,700,000 was, in both cases, spent in paying British wages of labour and profits of capital, with the great additional advantage of its, at the same time, relieving the burdens and contributing to the comforts of the land-cultivators, on whom a succession of bad harvests had pressed so heavily. page 18 Moreover, to manufacturers and dealers it afforded the advantage of selling at home what they otherwise would have sold abroad. To them the home is always preferable to the foreign trade, because, in the former, transactions are more rapidly closed, and the risks from fluctuating markets, bad debts, political complications, &c., are very much less. Thus it is clear that, on the whole, the good harvest of 1884 has proved a blessing all round, as indeed all increase of production from the same expenditure of capital and labour must ever prove, in every branch of wealth-creation.

Of course there were exceptions to this general state of well-being. All improvements, while beneficial to the entire community, must of necessity cause to some, a displacement of labour and capital, and therefore entail partial loss and temporary suffering. We have already pointed out the classes which have mainly been affected by the abrupt falling-off in our foreign trade. Ship-owners, ship-builders, iron-masters, &c., and the artisans and labourers connected with these, have, in the present conjuncture, had to bear the chief brunt. To these we might here properly add another class whose case is less pressing, but is not less pressed, whose losses are comparatively much smaller, but whose impatience of them are quite as great. We mean those foreign merchants, brokers, and agents through whom Imports and Exports percolate, and those bankers, money dealers, &c., whose business is curtailed by the curtailment of foreign trade. These are mostly well-to-do persons who can, without much inconvenience, await the return of the tide, which has, for the moment, receded from them. It is, however, from the capitalists and extensive traders who largely constitute the upper middling class, that the cry of "bad times" most loudly proceeds. The comparative prosperity of the less wealthy classes is hardly a consolation to them for the slower accumulation of their own wealth.

Thus, then, did there, in 1884, spring out of the soil an addition of £15,700,000 to the wealth of this country, as page 19 compared with the soil's produce during preceding years; and thus were we well able to endure the consequent falling off in our foreign trade. How different would be the effects of diminished Imports and Exports were they caused, not by the bounty of Nature, but by the artificial restraints of man! In the latter case, the good would be eliminated and only the evil would remain An import duty would cause no increase of production from the same amount of labour and capital, but would simply constitute a poll-tax on every bread-eater, that is, on every man, woman, and child in the country, with the result of increasing landlords' rents. Against such a poll-tax innumerable Wat Tylers would arise.

The foregoing considerations account for the curious contrasts and apparent anomalies which Mr. Goschen and others have noticed when comparing the collapse of our foreign trade with the simultaneous prosperity of our home trade. In 1883 our total foreign trade (Imports and Exports) was £731,041,000. In 1884 that foreign trade suddenly fell to £685,147,000—a diminution in the course of a few months of no less than £45,894,000! Such a drop as this from one year to another never before occurred in the history of British commerce. Even in 1878, a year of universally great commercial and agricultural prostration, our Imports and Exports only exhibited a decrease from the preceding year 1877, of 35 millions, viz., from £646,000,000 to £611,000,000. In proportion, then, we might have expected that the prosperity of the country would have received a far ruder check in 1884 than it did in 1878. But such has not been the case. On the contrary, the Income Tax returns show that the profits, both from trade and from agriculture, had increased, the increase being greater, as a percentage, on small than on large incomes. The savings of the people have continued to accumulate; pauperism has declined, and the consuming power of the country has been as great as ever except in the article of alcoholic liquors; and who is there that will repine at that exception? Labour, save in the few and partial page 20 instances that we have pointed out, has been in better demand and has obtained, on the whole, better remuneration than before, while the retail traders of the country have enjoyed special prosperity. When have the masses, the labour-sellers, the pith and marrow of the nation, been so well off? The improvement in their diet, their dress, their education, their habits, their tastes, and their self-respect, must deeply impress those who remember the condition of the same classes some thirty, forty, or fifty years ago.

At first sight it appears difficult to reconcile this general well-being with the fact that its existence was simultaneous with an enormous falling-off in our foreign trade between the years 1883 and 1884. But further reflection shows us that the good harvest of 1884, as it was the direct and chief cause of our diminished foreign trade, so it also was the redeeming circumstance which counteracted the injurious effects of that diminution. Indeed, it not only cured the wound it made, but it also infused fresh strength and vigour into the social frame. True that some few suffered, but, through the impulse given to the home trade, its beneficial effects were widely diffused among the less affluent and more numerous classes of the country.