excess of exports, which is balanced in the world's trade by her excess of imports.1 No important country but England will bear an excess of imports that can possibly be prevented by home production.

The Other European Nations Keep Down Their Foreign Buying with tariffs similar to those of the past intended to prevent sending out gold. These nations could not, if they desired, bear a trade balance against them, year after year, unless they had ships and investments earning money abroad. Among them Germany alone has these means of income on a large scale. For admitting a needed American commodity free, or at low duty, their tendency is to exact from us a similar favor in return. Russia in 1901 shut out some forms of American steel and machinery by a high tariff, prohibitory and retaliatory, because we stopped admitting free her partly refined beet sugar. To a considerable extent in recent years, our protective policy has doubtless tended to tighten Continental tariff restrictions. The recently proposed German tariff strikes directly at American food products, and follows the French system of maximum and minimum rates, designed to force other nations to ask and give reciprocal concessions. An Austrian tariff proposed later is said to be fully as severe. Even Great Britain's steady adherence to free trade might be modified against us if we continued to take her trade in distant lands and to shut her out of America by high tariffs.

Her desire for the

1 How It Has Grown.-Our sales to Great Britain in the year to June 30, 1901, were nearly a hundred millions more than ever before, reaching $631,000,000 (total to all Europe $1,136,000,000); but our purchases of her were forty millions less than in 1893, amounting to only $143,000,000, making our excess of sales to her last year $488,000,000. Since 1895 our annual sales to Great Britain have increased $244,000,000, a little more than our increase in all the rest of Europe. We sold France last year twenty millions less than in 1892.

cheapest supply of food has probably prevented her from favoring her colonies with a low duty on American and other foreign grain-the reason why she has not complied with requests from her colonies for a duty against German bounty-fed sugar. Her objection to this course may be lessened as Canada, Egypt, Australia, and India become better able to produce food on a large scale. Sometimes her Fair Trade party agitate for duties against nations that levy duties against her; and greater economic independence for her has been thought of in the development of food and cotton production in her colonies.'

Soon We Too Must Buy in Order to Sell. If the new beet sugar industry in America should become able to supply all our demand, Germany would probably shut out, or cease buying, our meat and fruit products, unless

"The Open Doors Will Be Closed.—In fact, there are signs on all hands of a concerted effort to resuscitate British trade. . . . Many things are pointing to a campaign in favor of English-made products as sweeping and as successful as that now affecting union and non-union-made products.' (Letter from an American in London, World's Work, Jan. 1902. Will England Return to Protection ?-The British government's proposal (April, 1902) to levy a tariff duty of three pence per hundred weight on imports of grain, and five pence on flour, is due to a necessity for new taxes to meet an estimated expense for this year of $850,000,000. Ordi. nary sources of revenue have been nearly exhausted, the duty on tea being now 75 per cent and the duties on tobacco and liquors being so high that total revenue from them is falling off. The grain and flour duties may be levied as unavoidable, but the Liberals are earnestly opposing such a tax on the food of the poor. Perhaps one of the worst effects of the Boer war is the present danger that Great Britain, to increase her military strength, may be drawn into protection, through an effort to bind her colonies to her more closely in an imperial federation, by means of free trade in their products while levying duties on those of other lands. That is an effective way of buying a strong union with colonies, as will be explained later in connection with Hawaii. British duties now fall on all imports alike, whether colonial or foreign; but Canada in late years has favored the mother country's products with preferential or lowered duties. The demand of some of the colonies for preferential treatment Mr. Chamberlain is disposed to grant.

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her sugar were taken in exchange or something else in its stead. It would be the same with Brazil if all our coffee should be produced in our new tropical possessions; and the same with China and Japan if the new industry lately started in South Carolina should supply all our tea. It is a doubtful kind of patriotism that is so anxious to produce everything at home. A country that did all its own producing would soon have to do all its own consuming, which it must do anyhow, but with foreign exchange it has choice of quantities and varieties. Ships will never come home to America loaded with money. It would not do for too many people to be much influenced in their buying by the suggestion of the words "Made in America." Theirs would be that form of withholding that tendeth to scatter. There is no need for coalition of mutually suspicious European nations against us in tariffs, nor in war as some predict, nor even

'Yet We Cannot Have Too Many Industries. It is well to grow sugar and tea, and all else, if we can do so at a profit; and for the government, by gathering information, and by experiments, even to the extent of large cost, to encourage new lines of industry. Possibly bounties for a short time, to start a badly needed industry, might be wise with a government above the reach of undue influence from persons directly benefited. To some extent this may have been the case with the Germans and their sugar bounties, which for a time increased the world's supply of sugar, and lowered its price, but which later have become an intolerable burden not easily to be removed. Harm comes when consumers are forced by a tariff to buy a home product not naturally worth its cost, when they would otherwise, by buying a foreign product, save money for themselves and enable foreigners to buy of us other products well worth their cost. When left free to choose, people's self-interest will tell them when to produce at home, and when to buy abroad. Then they will buy abroad neither too much nor too little. We want all the industries nature has provided resources for; but when public help is required to the extent of cash contributions, the chances are that the industry will cause a net loss to the people. Nature's industries scarcely need such assistance among people able to take care of themselves.

in separate retaliatory action. Ceasing to buy, because gold is flowing out, and hard times setting in, will be more effective.

But the Intention Here is Not to Defend the English. They have admitted our products free because they have gained by it (the proper reason), not to help America. And until 1846 they followed the protective system with the same selfish spirit pointed out above. By reason of their gain from buying American goods, they have seemed not to notice the unfriendliness of some classes in America-to have no disposition to be unfriendly in return, by transferring their custom to Argentina and other food producing countries. As their wars with us, in 1776 and 1812, are very briefly mentioned in their histories (doubtless in part because unsuccessful and unpopular), they do not think of us as enemies but rather as kindred. The French are their hereditary enemies. The unreasonableness of their old hatred of France, in) whose prosperity as a customer they might have rejoiced, was pointed out by Hume a century and a half ago. France is so near that free trade with her would then have yielded quick returns, like internal trade at home, and might have been greatly preferable to slow and risky commerce with distant colonies.

Freer Trade Will Draw the World Together. - Free trade, however, or rather lower and more friendly tariffs, will eventually draw the world together, as the people of a town are drawn together by the desire of each for the prosperity of others, for the sake of trade and mutual helpfulness. Friendliness over the wider circle rests upon reasons similar to those of friendliness over the narrower circle. Self-interest, when properly enlightened, ap

1 Quoted at length by Ely, in Problems of To-Day.

proaches unselfishness. The hope of Richard Cobden, that free trade would bring peace and friendliness among all nations, has not been blasted-only deferred. Unlimited patience is necessary in human progress.1

Free Trade Movement Stopped by Wars.-After England's change in 1846, there was a decided movement toward free trade. "The United States seemed committed to low duties by the undoubted success of the tariff of 1847, and of the Canadian reciprocity treaty of 1854." France then adopted freer trade by means of reciprocity treaties. But wars soon came, in America, France, and Germany, and stopped the promising growth toward free trade. In America higher duties, necessitated by temporary need for war revenue, were allowed to continue; and in Europe antagonism between nations was reflected in tariffs. Small countries followed the example of the larger, until before 1890 protection had spread to colonies all over the world. Down to the present time, as indicated by the recent German and Russian tariffs against America, commercial hostility has tended to increase. Yet this does not prove it to be a good policy. "It is perhaps safe to regard the policy of these years as a set-back in the general current of

1Foresaw That Men Would Cling to Protective Favors.-Adam Smith in 1776 did not expect much of short-sighted self-interest. He wrote: "To expect that freedom of trade should ever be entirely restored in Great Britain, is as absurd as to expect that an Oceania or Utopia should be established in it. Monopoly has so increased some tribes of them that, like an overgrown army, they intimidate the legislature. The member who supports monopoly acquires popularity with men of wealth, and reputation for understanding trade. If he opposes them, neither probity, nor rank, nor public service, can protect him from infamous abuse, nor sometimes from real danger." The progress of free trade, therefore, has been much greater than Adam Smith expected. See note in Chapter XV. regarding America as a peacemaker.

2 Hadley, 422.