The Pamphlet Collection of Sir Robert Stout: Volume 51
14. England has not prospered under Free Trade, and is living on her former capital
14. England has not prospered under Free Trade, and is living on her former capital.
Both statements are the reverse of true. As to the first, the marvellous expansion of England's prosperity and wealth within the last thirty years is so notorious, and has been so clearly, amply, and conclusively shown by statistical records, that it is mere waste of time to dwell upon it. The great wonder to us is that any man should be found so blind as not to recognise, or so bold as to deny, the fact. As to the second, the only ground on which the statement is based is the permanent excess of our imports over our exports—a fact which, far from proving, effectually disproves the statement that England "is living on her former capital." For, as we have before put it, how can receiving a hundred millions per annum more from abroad than we send away be a cause of impoverishment? Or, rather, how can it be other than a splendid accession to our wealth and capital?
It is said that this excess of imports has been partly paid for by the redemption of American Government bonds, and that consequently the indebtedness of the world to England is to that extent less. Let us examine this assertion. It is quite true that the United States have paid off a portion of their national debt, some of which was held in England; and all honour be to them for it! But how can the creditable liquidation of their debts prove page 41 a source of impoverishment and diminution of capital to us? "They now owe us less," is your feeble moan. Why not? How can it be a loss and a grievance to you that a high-minded debtor should take the earliest opportunity of repaying what he owes you? If it be an injury to you to have solvent debtors, then long live the Turks and Egyptians! As regards them, you will ever be free from the nuisance of having the world's indebtedness to you diminished. But how the repayment of a loan can injure a creditor passes conception. Because our Anglo-Saxon brethren in the other hemisphere have repaid a portion of their national debt, does it follow that the aggregate indebtedness of the world to you (on which you lay such stress) has diminished? Not at all. Both in financial circles and on the Stock Exchange (the best, and indeed the only, authorities on the subject) the verdict is (1) that a larger sum than has been repaid to us by the United States in one form has, during the same period, been invested by us in other American securities, and (2) that, in addition, England has been, year by year, making fresh loans to, and large investments in, other countries (chiefly her own colonies). The result is—and it will relieve the fears of our timorous friends to know it—that the present indebtedness to England of the world at large is greater than it has ever been before. Paying us off is a very rare operation; borrowing from us a very frequent one.
There are also other proofs patent to everyone who looks around him that, far from England's living on her capital, that capital is yearly increasing at a rapid rate; for it is accumulating before his eyes. Every year the fixed capital of the country is, visibly and tangibly, receiving a vast accession by the construction of new dwelling-houses, new ships, new factories, new railways, new harbours, new docks, new warehouses, &c., &c., of which the aggregate value is enormous. Every year vast sums are invested in new commercial enterprises, both at home and abroad. Every year our population increases at the rate of about 1,000 a day; while food, clothing, lodging, &c., are more easily and abundantly supplied to them than ever, for pauperism has decreased 19 per cent, since 1870. And it is in the page 42 face of these facts that we are told that England is living on her capital! Out of what fund, then, if not from our annual savings (excess of income over expenditure), does the money come to provide these enormous annual additions to our national wealth? To sum up, the truth is that Under Free Trade we have Accumulated Wealth with Unprecedented Rapidity, and are Yearly making Very Large Additions to our Capital.