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fed by cotton grown in the country by agriculturists who are paid still lower wages ? It is clearly out of the question.

But there is still another all-important advantage which we must score on the side of the Chinaman. This alone, and quite apart from the wages question, is sufficient to cut the ground from under the feet of our manufacturers in cotton or in any other business. It is the fact that we are, whether rightly or wrongly, wedded to gold monometallism in a falling market for silver. This practically puts an enormous and steadily increasing premium or bounty on the productions of silver-using countries. Thus, in 1872 a British sovereign corresponded in value to five silver dollars. Now it represents about 101. The parchasing power of the sovereign in labour is to-day in Britain about what it was in 1872; but it will now, when turned into silver, employ more than double the Asiatic labour it did then. This simply gives a premium or advantage to Eastern labour of over 100 per cent.

Briefly, in opening up a silver-using country where wages aro extraordinarily low and raw material abundant and cheap, while also sticking fast to gold monometallism, we are infallibly preparing for ourselves in the future a condition of things in which our manufactures of all kinds will be driven out of the world's markets everywhere by Eastern competition. Our mills and factories will by-and-by be closed, and the operatives forced to emigrate by tens of thousands.

This disastrous result may, however, be long postponed, if it cannot ultimately be averted, in two ways. First we might remodel our monetary system in conjunction with India and the foreign Powers so as to abolish this ruinous premium on Eastern production, which is even now encouraging the East to start now cotton mills, &c., every day. To

To this course the present attitude of Lombard Street, and of the majority of British bankers and financiers generally, is strongly opposed. Meanwhile, Manchester and Bradford are even now feeling the first catspaws—or something considerably more than catspaws -of a coming wind of competition from the East; presently it will blow a gale. It will then be too late; for once let the course of trade be fairly diverted from Britain and she will never recover it. Secondly, there will be a further postponement if the Peking Government be able to hold its ground. Thereby the real opening up of China, which would follow directly and immediately upon its partition among the Western Powers, will be indefinitely delayed by the reluctance, obstruction, and rooted conservatism, whether of the Central Government at Peking, or of the greedy provincial mandarins depending upon it. These have not brains to recognise that China might easily become the workshop of the world.

Hence, from this point of view, it will be to the direct advantage of our posterity that the present Chinese Government should endure, and make a stubborn and prolonged resistance to the inroads of the outer barbarians. The obstruction of the Chinese themselves to their own exploitation will also obstruct and procrastinate the future revenge of China.

THE AUTEOR OF “1920.”

FREE TRADE AND FOREIGN POLICY.

THE

of

IHE economic significance of our recent foreign policy has not

received the close attention it deserves. Posing as champions

open markets," we appear to be maintaining the principles and practice of Free Trade. It is true that the very Government which engages in this Free Trade crusade has, during its three years of office, regulated its domestic policy by & series of financial and legislative acts of “protection " directed to secure the interests of special social and commercial classes. These petty domestic infidelities might well awake suspicion of the foreign policy of a party which has never welcomed Free Trade principles in head or heart. Nevertheless, we find the majority both of leaders and followers in the Liberal party endorsing and supporting, apparently without qualm or hesitancy, a working scheme of foreign policy which is in effect nothing else than a direct repudiation both of the logic and the utility of Free Trade.

The “ Free Trade” pretensions of the open markets policy will not bear the slightest scrutiny. The working principle it avowedly involves is the supposition that England must be prepared to "fight for markets," not only for the retention of our colonial possessions, bat for new markets and for the acquisition of fresh territory, or, at any rate, for the exercise of such influence over weaker foreign nations as shall prevent them from giving to other nations trading advantages denied to us. This is mis-named the policy of “the open door." In truth, it is the policy of forcing doors open and forcibly keeping them open. Now, this use of the instruments of force in order to win foreign trade is a violation of the primary principles of Free Trade, and if the Liberal party consent to or condone it, they abrogate all rightful claim to be Free Traders.

The larger meaning of Free Trade ranks it as a phase of social evolution by which, on the one hand, militarism is displaced by industrialism, and, on the other hand, political limits of nationalism yield place to an effective internationalism based upon identity of commercial interests.

To organise the forces of political nationalism in order to secure by an appeal to military power the maximum quantity of commerce for the members of a nation is, in terms of the case, to revert from a higher to a lower stage of social life. But such reversion, it may seem to some, is necessary : the appeal to the intelligent self-interest of nations has failed, or they have been compelled to sacrifice their purely industrial interests to other political considerations. If this be so, let us abandon our Free Trade pretensions, and set ourselves to the mortal struggle for markets which we are told is necessary. But let us not pretend that we are fighting the battle of Free Trade. A “ freedom " initiated and maintained by military power is at best a doubtful and unstable sort of freedom. But, granting that we are justified (whatever that word may mean in international affairs) in planting both our feet in front of “the door ” of the Yang-tse valley to keep it against Russia or Germany, can we seriously conceive that such “open markets,” girt with garrisons and gunboats, embody the great principle which animated Cobden and the prophets of the middle century in their heroic struggle?

Cobden was a plain practical man, but he had his vision, and it was not so idle as it seems to our Liberals of to-day.

“Do you suppose,” said Cobden in 1850, “ that I advocated Free Trade merely because it would give us a little more occupation in this or that pursuit ? No; I believed Free Trade would have the tendency to unite mankind in the bonds of peace, and it was that, more than any pecuniary consideration, which sustained and actuated me, as my friends know, in that struggle. And it is because I want to see Free Trade, in its noblest and most humane aspect, have full scope in this world, that I wish to absolve myself from all responsibility for the miseries caused by violence and aggression, and too often perpetrated under the plea of benefiting trade. I may say, when I hear those who advocate warlike establishments or large armaments for the purpose of encouraging our trade in distant parts of the world, that I have no sympathy with them. We have nothing to hope from measures of violence in aid of the promotion of commerce with other nations."

Addressing the Manchester Chamber of Commerce in 1862, he thus concisely summarised his teaching : “In applying Free Trade, we have renounced the principle of force and coercion.”

It is quite true that a large section of the most active members of the Anti-Corn Law League, wealthy manufacturers and merchants, whose short-sighted and cold-hearted ambitions were satisfied by the victory in our domestic policy which enabled them to import cheaply

raw materials and pay low rates of wages, deserted Cobden and Bright so soon as they attempted a wider application of the Free Trade doctrine.

Bat was Cobden right or wrong in his interpretation of the Free Trade economy? Let us calmly examine his position in the light of the more developed issues of to-day. Cobden was not a peace-atany-price man, nor was he & Little Englander, but he believed that trade could be more safely and profitably advanced by peaceful appeals to the interests of nations than by force or threats. It is worth while to discover why this policy of Cobden has been overridden.

Three deeply rooted assumptions underlie the persistent refusal of all British Governments to apply the Free Trade principles to our foreign policy. These assumptions may be thus expressed: (1) England requires continual expansion of foreign trade; (2) this expansion can only be adequately secured by increased armaments and an extension of the area of empire ; (3) it is sound "economy ” to undergo these risks and these expenses in order to promote foreign trade.

In testing the validity of these assumptions we may conveniently postpone the first till we have examined the two latter.

Assuming, then, that a continual expansion of foreign trade is essential to England's prosperity, must we be prepared to fight for empire or for “open markets"? Is coercion the only method by which a Free Trade nation can get foreign trade ? In face of an apparent unanimity of conviction that force must stand behind diplomacy in pushing trade, it would be rash to answer these questions with an abrupt dogmatic negative. But we may observe how this assumption utterly ignores the accepted theory of international trade, by roverting to a notion of commercial competition which implies an absolute antagonism of interest among competitors. Take the case of China, which is most in evidence. The necessity of obtaining and defending by force a separate sphere of British influence there is avowedly based on the belief that China represents, at any given time, a certain quantity of foreign trade, and that if Russia gets so much, Germany so much, and France so much, none will be left for England. Now, if the theory of Free Trade is sound, the notion is quite unwarranted. Even if the whole of China were thus parcelled out to other industrial nations, and these nations imposed such conditions as prohibited all direct import and export trade between England and Chinese ports—the most extreme assumption of a hostile attitude--it by no means follows that England would not reap enormous benefits in the expansion of her foreign trade. Even under the comparatively simple conditions of international trade last century the policy of directing trade policy by a mere computation of the balance of trade with each several foreign nation was detected and discarded. The

VOL. LXXIV.

M

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