ARE WE RUINED BY THE GERMANS?
BY HAROLD COX,
FORMERLY SCHOLAR OF JESUS COLLEGE, CAMBRIDGE.
Republished from the "Daily Graphic" for the Cobden Club.
CASSELL and COMPANY, LIMITED: LONDON, PARIS & MELBOURNE.
The greater part of the contents of this little volume appeared originally in the Daily Graphic, in the form of a series of six articles written in criticism of Mr. Ernest Williams's "Made in Germany." To these articles Mr. Williams replied in two letters, and to that reply I made a final rejoinder. In the present reproduction this sequence has been abandoned. For the convenience of readers, and for the economy of space, I have anticipated in the text all of Mr. Williams's objections which appeared to me to have any substance, and, in addition, I have modified or omitted phrases, in themselves trivial, upon which he had fastened to build elaborate but unsubstantial retorts. By doing this I have been able to preserve the continuity of my argument and at the same time to cut down a somewhat lengthy rejoinder into a brief concluding chapter. Incidentally a few new points and some further figures have been added to the articles. This arrangement, unfortunately, deprives Mr. Williams's reply of most of its original piquancy; but, in order that my readers may have an opportunity of seeing what the author of "Made in Germany" was able to say for himself, his letters are reprinted verbatim in an Appendix. I am indebted to the proprietors of the Daily Graphic for their courteous permission to republish the articles, and to the Committee of the Cobden Club for undertaking the republication. I have only to add that the opinions expressed throughout are my own, and that the Cobden Club does not necessarily endorse every one of them.
GRAY'S INN, December, 1896.
I.—OUR EXPANDING TRADE 1
II.—GERMANY: ONE OF OUR BEST CUSTOMERS 8
III.—PICTURESQUE EXAGGERATIONS 14
IV.—MORE MISREPRESENTATIONS 21
V.—OUR GROWING PROSPERITY 33
VI.—LET WELL ALONE 43
ARE WE RUINED BY THE GERMANS?
OUR EXPANDING TRADE.
In a little book recently published, an attempt is made to show that British trade is being knocked to pieces by German competition, that already the sun has set on England's commercial supremacy, and that if we are not careful the few crumbs of trade still left to us will be snapped up by Germany. This depressing publication, aptly entitled "Made in Germany," has received the quasi-religious benediction of an enterprising and esoteric journalist, and the puff direct from a sportive ex-Prime Minister. Thus sent off it is sure to be widely circulated, and, being beyond dispute well written, to be also widely read. Unfortunately—such is the nature of the book—it cannot be so widely criticised. It consists largely of quoted statistics and deductions therefrom, and few readers will have the means at hand for verifying the many figures quoted, while fewer still will have the patience to compare them with other figures which the author omits to mention. As a necessary consequence, a large number of persons will believe that Mr. Williams has proved his case, and some of them will jump to the conclusion, which is evidently the conclusion to which Mr. Williams himself leans, that the only way to prevent the commercial downfall of our country is to reverse the Free Trade policy which we deliberately adopted fifty years ago.
THE ART OF EXAGGERATION.
That may or may not be a wise thing to do, but at least let us be certain before taking action, or before taking thought which is preliminary to action, that we know our facts, and all our facts. The second point is as important as the first. On hastily reading Mr. Williams's book for the first time, my impression was that he had only erred by overlooking facts which told on the other side. On general grounds, considering the signs of prosperity on every side, it seemed to me impossible that the condition of our foreign trade could be so bad as the author of "Made in Germany" paints it. A cursory glance at a few staple figures convinced me that my general impression was a sound one, that our trade was not going to the dogs, and that Mr. Williams had only succeeded in producing so gloomy a picture by fixing his gaze on the shadows and shutting his eyes to the sunlight. On this supposition I began a more critical examination of his book, not with a view to refuting his positive statements, but with a view to showing that in spite of the ugly facts which he had, on the whole usefully, brought to light, there were counterbalancing considerations from which we might draw, at any rate, partial consolation. This I propose to do, but in addition I shall be able to show that many of Mr. Williams's alleged ugly facts are not in reality so ugly as he makes them look, and that what he has done, in his eagerness to prove his case, is to so choose his figures and so phrase his sentences as to convey in particular instances an entirely false impression. How this is done will be shown in detail later on. For the present it is sufficient to state that it is done, and that some of the most alarmist statements in "Made in Germany" will not bear critical examination. In a word, the author, in his polemical zeal, has sinned both sins—he has suggested the false and he has omitted the true; he has misrepresented, in particular instances, the facts to which he refers, and he has not referred at all to facts which refute his general argument.
THE WHOLE TRUTH.
It is with these that I propose first to deal, with the facts which show that our trade is in a very healthy condition, and that though Germany is also doing well and hitting us hard in some trades, there is no reason to believe that her prosperity is, on the whole, injuring us. And to guard myself, at the outset, against a temptation to which Mr. Williams has frequently succumbed—the temptation of picking out years peculiarly favourable to my argument—I propose to take the last ten or the last fifteen years, for which statistics are available, and to give wherever possible the figures for each year in the whole period. The figures that will be here quoted are all taken from official records, except when otherwise stated.
OUR TOTAL TRADE FOR TEN YEARS.
The first point to attack is the question of the total import and export trade of the United Kingdom. The figures are contained in the following table:—
TEN YEARS' TRADE OF THE UNITED KINGDOM
(Exclusive of Bullion and Specie).
In Millions Sterling.
1886 1887 1888 1889 1890 1891 1892 1893 1894 1895 Total Imports 350 362 388 428 421 435 423 405 408 417 Total Exports 269 281 299 316 328 309 292 277 274 286 Excess of Imports over Exports 81 81 89 112 93 126 132 128 134 131
These figures may be illustrated as follows:—
These figures hardly bear out the statement that "commercial dry rot," to use one of Mr. Williams's favourite phrases, has already laid hold of us. In spite of the fall in prices, the money value of our trade, both import and export, has fully maintained its level. It is true that the year 1886, with which the diagram starts, was a year of depression, but the point which I wish to bring out by the diagram is not that 1895 was a better year than 1886, but that the general course for the whole period of ten years shows no downward tendency. Later on I shall give a diagram, covering a period of fifteen years, which brings out the same point even more clearly. It is important, however, at once to point out that the mere comparison of the money totals of our trade in different years is necessarily inconclusive, because no account is taken of prices. To get a true comparison between any two years, say 1895 and 1890, we ought to calculate what the value of our trade in 1895 would have been if each separate commodity had been sold at the prices of 1890. Were this done, it would probably be found that 1895, instead of showing a decline, would show an immense advance. A similar comparison has been privately worked out in one of the Government offices for the years 1873 and 1886 with startling results, which I am permitted to quote. It must be premised that only certain articles are entered in our returns by quantity as well as by value, and it is therefore only between these that such a comparison as I have indicated can be made. In 1873, the total declared value of our exports of these articles was 172 millions sterling; in 1886, it was 131 millions, showing an apparent fall of 41 millions. But if these exports of 1886 had been declared at the prices of 1873 the total value would have been 215 millions. In this sense, then, our aggregate trade in these commodities in 1886, instead of being 41 millions worse than 1873, was 43 millions better. This is undoubtedly an extreme illustration, for the prices of 1873 were exceptionally high, and those of 1886 exceptionally low. Nevertheless, the illustration is most instructive as showing how extremely misleading it may be to compare values only, without taking account of quantities. Unfortunately, when we are dealing with the total trade of a country, a comparison of values is the only comparison possible, for there is no other common denominator by means of which varied articles—say, steam ploughs, cotton piece-goods, and patent medicines—can be brought into our table.
OUR IMPORTS OF GOLD AND SILVER.
To return to our diagram—it may be asked, "How does it happen that there is such a large and growing excess of imports over exports? Surely that is a bad sign." On the face of it, why should it be? It only means that we are, apparently, getting more than we give, and most people do not in their private relations regard that as a hardship. There are, however, people to be found who, seeing that we every year buy more goods than we sell, will jump to the conclusion that we must pay for the difference in cash. Where we are to get the cash from they do not pause to think. Hitherto the Welsh hills have resolutely refused to give up their gold in paying quantities, and as for the silver which we separate from Cornish lead, it is worth something less than L50,000 a year. The notion then that we pay for our foreign purchases with our own gold and silver may be dismissed at once, although a hundred years ago this same delusion had not a little influence in shaping our commercial policy. As a matter of fact, instead of sending gold and silver out of the country to pay for our excess of imports, we almost every year import considerably more bullion and specie than we export. The actual figures are given in the following table:—
THE MOVEMENTS OF BULLION AND SPECIE.
In Millions Sterling.
1886 1887 1888 1889 1890 1891 1892 1893 1894 1895 Imports Gold 12.9 10.0 15.8 17.9 23.6 30.3 21.6 24.8 27.6 36.0 " Silver 7.5 7.8 6.2 9.2 10.4 9.3 10.7 11.9 11.0 10.7 Exports Gold 13.8 9.3 14.9 14.5 14.3 24.2 14.8 19.5 15.6 21.4 " Silver 7.2 7.8 7.6 10.7 10.9 13.1 14.1 13.6 12.2 10.4 Total excess or deficiency of imports - + - + + + + + + + over exports of gold and silver together .6 .6 .5 2.0 8.8 2.3 2.4 3.6 10.8 15.0
EXCESS OF IMPORTS OVER EXPORTS.
The movements of gold and silver then, instead of helping to explain the excess of imports over exports, only increase the need for explanation. Happily, the explanation that can be given, though it cannot be statistical, is fully sufficient. It is fourfold. In the first place the Custom House returns do not include in the tables of exports the large export which we every year make of ships built to order for foreign buyers, so that our exports appear smaller than they really are by at least five millions a year. Secondly, an allowance must be made for the profit on our foreign trade. If, in return for every pound's worth of British goods sent out from our ports, only a pound's worth of foreign goods came back, our merchants would make a better living by selling penny toys along the Strand. What the average profit is on our foreign trade there is no means of knowing, but putting it as low as 10 per cent. on the double transaction, we at once account for some L30,000,000 sterling in the difference between our exports and imports. The third item in the explanation is the sum earned by British shipowners for carrying the greater part of the sea-commerce of the world. This sum has been estimated at L70,000,000 a year, but that is only a guess, and it is certainly a high one. Lastly, we have the enormous sum annually due to this country for interest on the money we have lent abroad. The amount of this annual payment can again only be guessed at, but it probably exceeds L100,000,000 a year. Adding then these four items together, and making every allowance for over-estimates, we not only account for the whole excess of imports over exports, but have a balance over, which means that we are still exporting capital to foreign countries. The capital we export goes out in the form of mining machinery to South Africa, steel rails to India, coal to South America; the interest due to us comes home in the form of American wheat, Argentine beef, Australian wool, Indian tea, South African diamonds.
THE WORLD'S TRIBUTE.
Of what do the Protectionists complain? Would they have us forego the interest we are owed? Apparently Mr. Williams would, for he says (page 19) that we ought not to spend all our income from foreign investments "in foreign shops." How else, in the name of the Prophet, are we to receive all or any part of what is due to us from foreigners, whether it be due for interest on investments, or for goods carried, or for ships sold? Does Mr. Williams mean that we are to compel foreign nations to pay us a couple of hundred millions a year in actual gold and silver, and then dig a hole in the ground and sit on our hoard like an Indian cook who has saved money out of the perquisites of his profession? Gold and silver are useless to us beyond a very few millions every year; if more bullion were sent the market would reject it. If we are to be paid at all we must be paid in foreign commodities, and the mechanism of commerce enables us to select just those commodities which we most want. This is the whole story of our excess of imports over exports. Furthermore, that excess would be even greater than it is did we not every year send fresh millions abroad on loan to our Colonies and foreign countries, to produce in due course (it is to be hoped) additional hundreds of thousands in the way of interest.
OUR ENTREPOT TRADE.
There is one other important point to be dealt with in considering the movement of our trade as a whole. It is this—that part of the enormous quantity of goods we import is not consumed by ourselves, but is re-exported to foreign countries or to our Colonies. For many reasons it is interesting to distinguish these re-exports from the exports of goods produced within the United Kingdom. The separate figures for the last fifteen years are given in the following table:—
OUR ENTREPOT TRADE AND OUR HOME TRADE.
In Millions Sterling.
- - - - - - - - - - - - - - 1881 '82 '83 '84 '85 '86 '87 '88 '89 '90 '91 '92 '93 '94 '95 - - - - - - - - - - - - - - Re-exports of Imported Goods 63 65 66 63 58 56 59 64 67 65 62 65 59 58 60 Exports of Home Produce 234 242 240 233 213 213 222 235 249 264 247 227 218 216 226 - - - - - - - - - - - - - - Total Exports 297 307 306 296 271 269 281 299 316 329 309 292 277 274 286 - - - - - - - - - - - - - -
There is not much to grumble at in these figures. Our entrepot trade, which was supposed to be slipping away, seems somewhat to halt in the process, in spite of the notorious and not entirely unpleasing fact that our Colonies are now doing a larger direct trade with foreign countries than ever before. At the same time the figures for the exports of our own goods are most satisfactory if we take into account the lower range of prices at which our manufacturers are now working. Altogether there is nothing in the general figures of our trade to justify the wild statements that "dry rot" has set in, and that "the industrial glory of England is departing."
GERMANY: ONE OF OUR BEST CUSTOMERS.
In the previous chapter it was shown that the general figures of our import and export trade gave no indication of the ruin of our commerce either by Germans or by anybody else. In the present chapter it is proposed to show that though Germany is among the keenest of our trade competitors, she is also one of our best customers. For a sufficient indication of the truth of this proposition we have only to turn to the annual statement of the trade of the United Kingdom. It is true that the figures there published are not entirely satisfactory, because much of the trade of Germany is shipped from Dutch or Belgian ports, and credited to Holland and Belgium respectively. But this is probably also true, and to about the same extent, of British goods destined for Germany, and travelling via Belgium or Holland, so that in comparing imports and exports this factor may be neglected. The same cause of error will probably be also present to the same extent in successive years, so that we can ignore it when comparing one year with another. Purely for comparative purposes then the annexed table, and the diagram illustrating it, are sufficiently accurate, although the actual figures for any one year by itself have, for the reasons given, little positive value.
OUR TOTAL TRADE WITH GERMAN PORTS.
In Millions Sterling.
1886 1887 1888 1889 1890 1891 1892 1893 1894 1895 Imports from Germany 21.4 24.6 26.7 27.1 26.1 27.0 25.7 26.4 26.9 27.0 Exports to Germany 26.4 27.2 27.4 31.3 30.5 29.9 29.6 28.0 29.2 32.7
These figures may be illustrated diagrammatically as follows:—
A VERY SATISFACTORY TRADE.
These figures furnish a striking answer to the alarmists who can see in Germany nothing but a vigorous and not too scrupulous rival. In every year during the last ten years she has apparently bought more from us than she has sold to us. It is quite true that all the things she has bought from us were not produced or manufactured by us. A portion of her purchases consists of foreign or colonial goods sent to London, or Liverpool, or Hull, and there purchased for re-sale in Germany. But in the same way some of the goods we buy from Germany certainly had their origin in other countries, and have only passed through Germany on their way to us; so that the fairest way of making a comparison is to take the whole trade in each case. Moreover, this entrepot trade of ours is not in itself a thing to be sneezed at; it contributes a goodly fraction of the wealth of the city of London. In order, however, to complete the picture of our trade with Germany, the following table is appended, distinguishing in each of the ten years under review the home produce exported from the foreign and colonial goods re-exported. This table shows that in purely British goods we are doing a very satisfactory trade with Germany. Taking averages, we see that during the ten years our export of our own manufactures and produce to German ports was at the rate of L17,800,000 a year, against a total import from German ports of L25,900,000, this figure including both German goods and other countries' goods passing through Germany. If we recollect that on the whole our imports from the outside world must be very much larger than our exports, for the reasons detailed in the preceding chapter, it will be seen that these two figures, even by themselves, are not unsatisfactory.
ANALYSIS OF OUR TRADE WITH GERMAN PORTS.
In Millions Sterling.
1886 1887 1888 1889 1890 1891 1892 1893 1894 1895 British Goods exported 15.7 15.7 15.8 18.5 19.3 18.8 17.6 17.7 17.8 20.6 to German ports Foreign and Colonial 10.6 11.5 11.6 12.8 11.2 11.1 12.1 10.3 11.4 12.2 Goods exported from British ports to German ports
OUR PRINCIPAL CUSTOMERS.
Let us now go a step further and compare our trade with Germany and our trade with other principal customers. The comparison is worked out in the following table, which shows the total imports into the United Kingdom from the respective countries, and the total exports from the United Kingdom to the same countries:—
TRADE OF THE UNITED KINGDOM WITH THE FOLLOWING COUNTRIES.
Ten Years' Average, in Millions Sterling, according to British Returns.
- - Imports Exports into U.K. from U.K. - - From and to Germany 25.9 29.2 " " France 42.6 21.7 " " United States 91.8 40.2 " " British India 30.5 31.3 " " Australasia 28.3 23.1 " " British North America 12.2 8.4 - -
These figures are taken from the British Custom House returns, and are subject to the objection to which allusion has already been made, that the Custom House authorities have no means of ascertaining the real origin of goods entering this country, nor the real destination of goods leaving it. Thus, for example, everyone knows that there is a considerable trade between Great Britain and Switzerland, yet Switzerland has no place at all in the Custom House returns, because, having no seaboard, all her goods must pass through foreign territory, and each package is credited by our Customs House to the port—French, or Belgian, or Dutch—through which the package passes to England. In order, therefore, to provide some check on the above figures, I have averaged in the same way the figures collected by the different foreign countries in their Customs Houses. These foreign and colonial figures have no more title to be considered absolutely accurate than ours, nor do they cover quite the same ground. Their value lies in the rough confirmation they give of the very rough conclusion which we are able to draw from our own figures:—
TRADE OF THE FOLLOWING COUNTRIES WITH THE UNITED KINGDOM.
Ten Years' Average, in Millions Sterling, according to Foreign and Colonial returns.
- - - Exports to U.K. Imports from U.K. - - - Germany 29.1 26.6 France 38.2 22.0 United States 84.6 34.2 British India (Rx) 36.4 (Rx) 60.4 Australasia 28.5 27.2 British North America 10.5 9.1 - - -
[Footnote 1: These figures include treasure as well as merchandise.]
On the whole, these figures tally more closely with those derived from British returns than might have been expected, and if we make allowance for the fact that the Colonial figures include treasure, it will be seen that both tables show that Germany is our best customer after the United States and India.
THE ALARMIST'S ARTS.
In order to obscure this important fact, while alarming the British public with the notion that English manufacturers are being ruined by German competition, Mr. Williams picks out half a dozen or so items of our imports from Germany, and then exclaims in horror at the amount of "the moneys which in one year have come out of John Bull's pocket for the purchase of his German-made household goods." He prefaces his list with the unfortunate remark that the figures are taken from the Custom House returns, "where, at any rate, fancy and exaggeration have no play." That is so; the fancy and exaggeration are supplied by Mr. Williams. In 1895, he says, Germany sent us linen manufactures to the value of L91,257. He omits, however, to mention that according to the same authority—the Custom House returns—the value of the linen manufactures which we sold to Germany was L273,795. Again, he mentions that we bought from Germany cotton manufactures to the value of L536,000, but he is silent on the fact that our sales to Germany amounted to L1,305,000. He does not even hesitate to pick out such a trumpery item as L11,309 for German embroidery and needlework, but he forgets to tell his readers that the silk manufactures which in the same year we sold to Germany were worth L92,000. In the same way, were it worth doing, one could go through the whole of Mr. Williams's list, pitting one article against another. It would be labour wasted. The simple fact is that, according to the authority upon which Mr. Williams relies for all the figures just quoted, our total exports to Germany exceed our total imports from Germany, and no trickery with particular items can destroy, though it may obscure, that broad fact.
A SELF-DESTRUCTIVE POLICY.
But, for the reasons already explained, in replying to Mr. Williams I do not rely wholly on British figures. It is from the double testimony of British and foreign figures that I deduce the fact that of all our customers Germany is one of the best. The practical moral of this fact is sufficiently obvious. In private business a tradesman does not go out of his way to offend a good customer, even though that customer is also a keen trade competitor. He bestirs himself instead to keep ahead, if possible, of his rival without doing anything to destroy the mutually profitable trade relationship between them. Such palpable considerations of expediency are ignored by our latter-day Protectionists, among whom Mr. Williams deservedly ranks as a leading prophet. Their ambition is to induce the Colonies to discriminate in their tariffs between goods from the Mother Country and goods from foreign countries, admitting the former on favourable terms and penalising the latter. It is avowedly against German competition that this policy is directed, and we are light-heartedly told to risk our trade with one of our best customers on the chance of encouraging trade with Colonies which so far have shown much more eagerness to sell their goods to us than to buy ours. Even supposing that this policy succeeded in destroying the whole of the German export trade to our Colonies and Possessions, the possible gain to us would be very small.
Here are the figures of the trade of our three principal Colonies with the United Kingdom and with Germany, derived in each case from the Colonial returns:—
TRADE OF THE FOLLOWING BRITISH POSSESSIONS WITH THE UNITED KINGDOM AND WITH GERMANY.
Ten Years' Average, in Millions Sterling or Millions Rx.
- - IMPORTS. EXPORTS. - - - From Germany. From U.K. To Germany. To U.K. - - India (Rx) .9 58.4 3.8 36.4 Australasia .9 27.4 .7 28.2 Brit. N. America .8 9.1 .1 10.1 - - - -
Thus these great groups of Colonies and Dependencies together buy rather less than L3,000,000 worth of German goods against more than L60,000,000 worth of British goods. Yet in order to crush this fractional competition of Germany in neutral markets, in order to scrape up these crumbs that have fallen from our table, we are invited to risk the loss of a direct trade with Germany worth nearly ten times as much as all the crumbs heaped up together.
It has now been shown, first that there is nothing in the general figures of our import and export trade to warrant the alarmist view expressed in "Made in Germany," and secondly, that the country whose rivalry is supposed to be ruining us is one of the best of all our customers. What I propose to do in the present chapter is to examine some of the detailed statements in Mr. Williams's book and to show that in many cases the inferences he draws are so seriously exaggerated as to amount to a positive misrepresentation of the facts. For the purposes of this examination we cannot do better than begin with the chapter which Mr. Williams devotes to chemicals. "The chemical trade," he tells us, "is the barometer of a nation's prosperity.... The discomforting significance of the appearance of chemicals in this Black List of mine will, therefore, be at once apparent." More follows about a "Bottomless pit for capital," and "Germany seizing the occasion while England has let hers slide," and so on.
THE ALKALI TRADE.
Thus much for generalities with regard to the chemical trade; now for details. Let us begin with alkalies, which Mr. Williams selects for special comment. He says:—
"Here we are confronted with the damning fact that whereas fresh uses and (owing to the growth of manufactures abroad) fresh markets for alkali products are continually being found, the export of the greatest alkali trader of the world was last year of little more than half its value in the early seventies. Nor do the latest years show any sign of recuperation. The decline since 1891 has been continuous.... There is no question here of an insidious advance. The matter is simply that our trade has gone to the devil, while the Germans are piling up fortunes."
To the average reader this paragraph would certainly suggest that at least half our trade in alkali had already disappeared, and that the remainder would soon be gone to the devil or elsewhere. I have not verified Mr. Williams's statement with regard to the early seventies, but it is quite sufficient to point to the course of the trade during the last fifteen years. Both quantities and values are given in the following table:—
EXPORTS OF ALKALI FROM THE UNITED KINGDOM.
+ + -+ -+ -+ -+ -+ -+ -+ -+ -+ -+ -+ -+ -+ - 1881 '82 '83 '84 '85 '86 '87 '88 '89 '90 '91 '92 '93 '94 '95 + + -+ -+ -+ -+ -+ -+ -+ -+ -+ -+ -+ -+ -+ - Quantities million Cwts. 6.8 6.7 6.9 6.6 6.7 6.2 6.2 6.3 6.0 6.3 6.2 5.9 5.8 6.0 6.2 Values million L's 2.1 2.1 2.1 2.1 2.0 1.8 1.7 1.6 1.6 2.1 2.3 2.1 1.9 1.6 1.6 + + -+ -+ -+ -+ -+ -+ -+ -+ -+ -+ -+ -+ -+ -
These figures show that our alkali trade has been on the whole remarkably steady, except for the slight ups and downs in successive years to which all trades are liable.
To show these ups and downs more graphically, I have drawn the following diagram, covering the last ten years' exports:—
DIAGRAM OF THE QUANTITIES OF BRITISH ALKALI EXPORTED.
If the reader will examine this diagram and the more complete figures given above he will be able to see how completely misleading are Mr. Williams's sensational statements about the British alkali trade. I do not for a moment deny that the German alkali trade has made remarkable progress; I only assert that there is no evidence that "our trade has gone to the devil."
We turn next to chemical manures. On this subject Mr. Williams remarks:—
"Every farmer will testify to the exceeding value of these stuffs. 'Tis a modern means of fertilising the soil, and there can be no doubt that it has a very great future. Obviously then it is in the highest degree important that England should keep a firm hold of the trade. What, alas! is equally obvious is that England's grip on it is relaxing, but that Germany is tightening hers."
It may be true—probably is true—that the industry of Germany is expanding in this as in almost every other branch of the chemical trades. It is also true that the value of chemical manures sent by Germany to this country—still only a quarter of what we send to Germany—is increasing. What is not true is the statement that England's grip on the trade is "obviously relaxing." The figures are given below. They do not look much like a relaxed grip.
EXPORTS OF CHEMICAL MANURES FROM THE UNITED KINGDOM.
In Millions Sterling.
1881 1882 1883 1884 1885 1886 1887 1888 1889 1890 1891 1892 1893 1894 1895 1.8 2.0 2.2 2.1 1.7 1.6 1.6 1.8 2.1 2.1 2.1 2.1 2.3 2.3 1.9
The figures for the past ten years are illustrated in the following diagram:—
SOME SUPPOSITIONS ABOUT SALT.
Salt is the next subject to which Mr. Williams turns. What he has to say about it is more picturesque than accurate:—
"The story is worth study. The Salt Union was formed in England in 1889, and the manufacture of salt thereby converted into a big monopoly.... The directors reckoned without their Germany. They can make salt there, too. It is not so good as the Cheshire product, but it is salt, and it is much cheaper than that sold by the Salt Union. When that syndicate's price went up the German manufacturers pushed into the world market, and that to a purpose which is strikingly illustrated in the case of our great Dependency. India needs much foreign salt, and the Indian ryot needs it cheap: for the salt he uses has to bear the burden of a tax. The natural result followed: German salt to a large extent ousted English from the Indian market."
Most impressive! if only it were true. So far as the world market is concerned, the figures below give no indications of the havoc alleged to have been wrought by the machinations of the Salt Union.
EXPORTS OF BRITISH SALT.
- 1886 1887 1888 1889 1890 1891 1892 1893 1894 1895 - Quantities thousand tons 805 819 899 667 726 671 654 636 769 741 Values thousand L's 588 525 486 539 653 596 539 505 604 546 -
So far as India is concerned, Mr. Williams is doubly wrong. In the first place, German salt has not "to a large extent ousted English." During the past five years—it was only in 1889 that the wicked Salt Union came into being—Indian imports of salt have been as follows:—
INDIAN IMPORTS OF SALT.
Thousands of Tons.
——————————————————————————— Years ending March 31st. From U.K. From Germany. ——————————————————————————— 1891 273 61 1892 222 103 1893 241 47 1894 269 48 1895 315 82 ———————————————————————————
This does not look as if English salt were being ousted by German. In the second place, it is not true that German salt is much cheaper than Cheshire, at any rate so far as the Indian market is concerned. It will be found by reference to the Indian Blue Books that the price of German salt imported into India in 1894-5 works out to 17.6 rupees per ton, and the price of English salt only to 17.0 rupees per ton. In other words, German salt was of the two slightly the dearer. So much for the salt bogey which Mr. Williams had conjured up.
CHEMICAL DYE STUFFS.
We next pass to chemical dye stuffs. It is undoubtedly true that in this branch of manufacture Germany has gone ahead at a remarkable rate, and it is also probable that some of our manufacturers have allowed themselves to be passed in the race by neglecting the scientific methods which Germans employ. But that is no reason why Mr. Williams should exaggerate his case. In order to magnify the fall in our trade, if such there be, he picks out the year of highest export (1890) and says, Lo! since 1890 our export of dye stuffs has dropped from L530,000 to L473,000. One cannot tell whether this is a real drop in trade, or merely the consequence of a fall in price, but this we do know—that the value of our exports fluctuates largely from year to year, and that 1895 was a good average year. The figures for ten years are given below:—
VALUES OF DYE STUFFS EXPORTED.
1886 1887 1888 1889 1890 1891 1892 1893 1894 1895 Thousands of L's 483 499 469 492 531 524 443 452 415 473
FANCY SOAPS AND FANCY ASSERTIONS.
The last point in Mr. Williams's chapter on the chemical trades with which it is worth while to deal is what he says about soap:—
"In the old days, when brown Windsor was a luxury, Englishmen washed with soap of English make; and those who could not afford 'scented' cleansed themselves with 'yellow' or 'mottled.' Thanks (partly) to Continental chemistry, we have changed all that.... The progress of practical chemistry has evidently reached a point at which the manufacture of agreeable toilet soaps at a low figure is possible. But why should this manufacture be so largely in foreign hands? They twit us with our debased fondness for the tub, and they do but add injury to insult when they send us soap for use therein. The Germans—a non-tubbing race—have not yet invaded the English soap market so victoriously as is their wont, though even here the Teuton hand may be discerned by the expert in forged trade marks."
If this paragraph means anything at all, it means that even in the soap industry our manufacturers are being beaten by the foreigner. To what extent foreign soap is imported into the United Kingdom it is impossible to ascertain, for no separate entry under that head is kept at the Custom House. But from the German Green Books one may learn that in 1895 Germany sent to Great Britain soap valued at L35,700. The amount sent by France may have been as much, and probably the United States also sent us a little. The total export of German soap to all parts of the world in 1895 was valued at L197,000. Now for the British side of the case! As to the total production and consumption of soap in this country, no figures are available, but everyone knows how enormous is the consumption of soap produced by English firms whose names are household words. In addition to their providing for the wants of probably ninety-nine out of a hundred of their own countrymen, our soap manufacturers do an enormous and rapidly growing business abroad.
Here are the figures:—
EXPORTS OF SOAP FROM THE UNITED KINGDOM.
+ + -+ -+ -+ -+ -+ -+ -+ -+ -+ -+ -+ -+ -+ - 1881 '82 '83 '84 '85 '86 '87 '88 '89 '90 '91 '92 '93 '94 '95 + + -+ -+ -+ -+ -+ -+ -+ -+ -+ -+ -+ -+ -+ - Quantities thousd. cwts. 354 409 392 476 402 427 453 500 493 497 524 541 605 577 728 Values thousd. L's. 398 458 450 548 472 447 452 482 503 534 571 586 644 621 757 + + -+ -+ -+ -+ -+ -+ -+ -+ -+ -+ -+ -+ -+ -
The following diagram illustrates the almost continuous increase in the value of our soap exports during the last ten years:—
Looking at the above figures, it will be seen that in the last six years alone we have added to our exports a sum greater than the total yet attained by Germany. Is it necessary to say more? What pessimistic madness could have led Mr. Williams to "black-list" such a splendidly-thriving and notoriously profitable industry as this, just because he finds a few thousand hundredweight of foreign soap creeping into the country?
Attention was called in the last chapter to some of the picturesque exaggerations—to use the mildest possible term—in which Mr. Williams had indulged in dealing with the chemical trades. We now pass to the two chapters which he devotes to the iron and steel and their "daughter trades." And at the outset let it be clearly understood that I do not for a moment deny that in some of these trades the progress of Germany has been relatively more rapid than our own. A child, if it is to grow at all, must move faster than an adult. An infant four weeks old doubles its age in a month; an adult takes thirty or forty years to double his. Nor can we expect that the whole world will stand still while Great Britain goes on every year adding to her strength. All that I do argue is that the shooting-up of the German infant does us on the whole no harm, and that there is nothing whatever in the figures of our trade to suggest that full-grown England is approaching senile decay.
"ICHABOD! OUR TRADE HAS GONE."
With this general prelude let us turn to what Mr. Williams has to say about the industries connected with iron and steel. He opens by referring to a visit of the English Iron and Steel Institute to Duesseldorf in 1880:—
"And when the time of feasting and talk and sight-seeing was over, they returned to their native land, and there, in the fulness of time, they perused the fatuous reports of the British Iron Trade Association, which bade them sleep on, sleep ever. And they did as they were bid, until the other day, when they awoke to the fact that their trade was gone."
Another paragraph, headed "Ichabod!" begins:—
"And now all that is changed. The world's consumption (of iron) is greater than ever before. Yet our contribution in the years since 1882 has dropped at a rate well nigh unknown in the history of any trade in any land. From the 8,493,287 tons of 1882 pig iron has gone hustling down to the 7,364,745 tons of 1894."
Truly Mr. Williams is an ingenious person. By picking out the two years 1882 and 1894 he has cunningly obscured the fact that the production of pig iron, as of everything else, is subject to fluctuations, and that 1894, following worse years than itself, will in all probability be followed by better. Here are all the figures for the last fifteen years for which statistics are available, with the German figures set beside them:—
PRODUCTION OF PIG IRON.
In Millions of Tons.
+ + -+ -+ -+ -+ -+ -+ -+ -+ -+ -+ -+ -+ -+ - 1880 '81 '82 '83 '84 '85 '86 '87 '88 '89 '90 '91 '92 '93 '94 + + -+ -+ -+ -+ -+ -+ -+ -+ -+ -+ -+ -+ -+ - In the United Kingdom 7.7 8.1 8.6 8.5 7.8 7.4 7.0 7.6 8.0 8.3 7.9 7.4 6.7 7.0 7.4 In Germany 2.7 2.9 3.4 3.5 3.6 3.7 3.5 4.0 4.3 4.5 4.7 4.6 4.9 5.0 5.4 + + -+ -+ -+ -+ -+ -+ -+ -+ -+ -+ -+ -+ -+ -
These figures show that Germany has without doubt been rapidly gaining upon us, but it is the grossest exaggeration to say that our trade "has gone." As a matter of fact the output of pig iron in the United Kingdom rose to 7.9 million tons in 1895, and—according to the Economist of November 11th—the estimated output for the present year (1896) is 8.7 million tons. If that figure is realised it will be the largest on record. So much for Mr. Williams's "Ichabods," and all his talk of departed glory!
COMPARISONS SAID TO BE "ODIOUS."
Turning to another paragraph headed "Odious Comparisons," we find—
"Under the general heading of iron, wrought and unwrought, the returns of our German exports exhibit a fall from 374,234 tons in 1890 to 295,510 tons in 1895.... Of unenumerated iron manufactures Germany supplied us with 219,841 cwt. in 1890 and with 311,904 cwt. in 1895."
Had Mr. Williams taken the trouble to convert the German figures from cwts. into tons he might have found this comparison somewhat less "odious." If we send Germany 295 thousand tons against 15 thousand tons she sends us, our iron manufacturers have not much to grumble at. But, as a matter of fact, no reliance can be placed upon these particular figures, because, as was pointed out in a previous chapter, much of the stuff that we get from Germany is credited in our Blue Books to Holland and Belgium, and these countries in the same way are debited with a large amount of British stuff that ultimately finds its way to Germany. Exactly the same causes of error vitiate the figures published in the German Green Books, and it may safely be asserted that there is no means of ascertaining with even approximate accuracy how much British iron and steel goes to Germany and how much German steel and iron comes to Great Britain. What can be ascertained is the total export of German iron from Germany to all parts of the world, and the total export of British iron from the United Kingdom to all parts of the world. This comparison, which is one of the best means of testing the relative progress of Great Britain and Germany, is worked out in the following table:—
IRON AND STEEL GOODS.
In Millions of Tons, Metrical and British.
[A Metrical Ton = 2,204 lb.; a British Ton = 2,240 lb.]
-+ + -+ -+ -+ -+ -+ -+ -+ -+ -+ - 1884 '85 '86 '87 '88 '89 '90 '91 '92 '93 '94 -+ + -+ -+ -+ -+ -+ -+ -+ -+ -+ - Total Exports from Germany (Metrical Measure) .8 .7 .8 .8 .7 .7 .6 .8 .8 .8 .9 Total Exports from Belgium (Metrical Measure) .4 .3 .3 .4 .4 .5 .4 .4 .4 .4 .4 Total Exports from United Kingdom (British Meas.) 3.5 3.1 3.4 4.1 4.0 4.2 4.0 3.2 2.7 2.9 2.6 -+ + -+ -+ -+ -+ -+ -+ -+ -+ -+ -
The above figures undoubtedly show a distinct decline in British exports of iron and steel, but they also show that that decline is not due to the increased invasion of our own or of neutral markets either by Germany or by Belgium. It is due to a decline which subsequent events have shown to be temporary in the world's demand for iron and steel goods. Even were this decline permanent, it would not be the fault of our manufacturers, nor—except as a device for reducing their personal expenditure—is there any reason why these gentlemen should sit in sackcloth and ashes.
We pass to the subject of shipbuilding. Mr. Williams is good enough to admit that England is actually at the head of the shipbuilding trade. But having made this admission, a pang of regret comes over him, and he tries to show that he is justified in putting even the British shipbuilding trade on his "black list." This is his argument:—
"In 1883 the total tonnage built in the United Kingdom was 892,216; in 1893 it reached only 584,674; in 1894, 'tis true, it rose to 669,492, but this is much below the total even of 1892, which was 801,548."
Again one can only admire Mr. Williams's ingenuity. Reading his paragraph, who would dream that between the years so skilfully selected for comparison the trade had experienced an enormous drop, and afterwards, to all intents and purposes, completely recovered itself; that then a smaller drop had occurred, and that this in turn was being fast made good? The best way to expose the above piece of statistical legerdemain is to give without further comment the whole of the figures for the past fifteen years. They will be found in the following table. With figures such as these before him—and they must have been before him—it is astounding that Mr. Williams should have ventured to put shipbuilding on his black list.
FIFTEEN YEARS OF BRITISH SHIPBUILDING.
Total Output of British and Irish Yards.
In Thousands of Tons.
1881 1882 1883 1884 1885 1886 1887 1888 1889 1890 1891 1892 1893 1894 1895 609 783 892 588 441 331 377 574 855 813 809 801 585 669 648
These figures may be illustrated as follows:—
SHIPS BUILT FOR FOREIGNERS.
But his perverse ingenuity does not end with the paragraph quoted. A few lines lower down he says:—
"All these figures include vessels built for foreigners as well as those for home and the Colonies. The year in which we built most vessels for other nations was 1889, when we supplied them with 183,224 tons. The four following years showed a progressive decrease, getting down as low as 89,386 tons in 1893; and though 1894 showed an increase to 94,876 tons, their upward movement was slight compared with the successive decreases of the previous years."
The man who wrote these sentences obviously intended to convey to his readers the impression that our trade in the building of ships for foreign purchasers was a declining trade. That impression is false, and it is a little hard to understand how Mr. Williams could fail to see its falsity. The following figures show—what to most persons would be sufficiently obvious on reflection—that the tonnage of ships launched at our great yards varies largely from year to year. To pick out the year 1889, as Mr. Williams does, and declare that since that year there has been a decline in our sales to foreigners, is as grossly unfair as it would be, on the other hand, to pick out the year 1885, and say that since then there had been a fourfold increase.
SHIPS BUILT BY US FOR FOREIGNERS.
Thousands of Tons.
1881 1882 1883 1884 1885 1886 1887 1888 1889 1890 1891 1892 1893 1894 1895 108 116 124 91 36 39 70 91 183 161 139 109 89 95 128
WAR-SHIPS FOR FOREIGNERS.
The above figures include war-ships as well as merchant-ships built by us for foreigners, and, noting this fact, Mr. Williams is distressed to find what he calls a drop in our output of foreign war-ships. He writes:—
"Still more remarkable is the drop in our supply of foreign war-ships from 12,877 tons in 1874 to 2,483 in 1894."
What is even more remarkable still is the fact that Mr. Williams should have dared to put such a statement before the public, knowing, as he must have known, how completely it misrepresents the truth. I wonder what he would have said of me if I had spoken of the remarkable growth in our output of foreign war-ships as evidenced by an increase from 14 tons in 1876 to 4,152 tons in 1895! Yet this statement would have been every bit as justifiable as his own. The whole truth of the matter of course is, that such an industry as the construction of foreign war-ships must vary enormously from year to year, and a comparison between any two single years can prove nothing, except the folly or the mala fides of the person who makes it. In order that the reader may see for himself the source from which Mr. Williams drew his "remarkable" statement, I append all the figures since 1870:—
WAR VESSELS BUILT FOR FOREIGNERS.
Years. Tons. Years. Tons. Years. Tons. 1870 970 1879 716 1888 1,899 1871 80 1880 385 1889 726 1872 40 1881 5,338 1890 3,437 1873 280 1882 447 1891 300 1874 12,877 1883 270 1892 2,792 1875 12,280 1884 2,339 1893 2,471 1876 14 1885 5,462 1894 2,483 1877 3,435 1886 840 1895 4,152 1878 2,482 1887 3,966
MACHINERY AND STEAM ENGINES.
It is becoming monotonous to follow Mr. Williams in detail through his ingenious misrepresentations. I will therefore hastily pass over the many pages which he devotes to "black-listing" sundry iron and steel manufactures. His black list, which includes "steam engines," "other machinery," and "tools and implements" of industry, is arrived at by giving only the figures for 1890 onwards and ignoring the preceding years. The unfairness of this procedure need not be again pointed out. The figures for a decade, or for a longer period, show that trade moves up and down, and that a depression in one year or group of years is succeeded by an elevation a few years later. Throughout his book, in instances too numerous to be especially mentioned, Mr. Williams has persistently ignored this obvious fact. Again and again he has picked out years favourable to his argument, while even a cursory glance at a series of years must have shown him that the truth was the exact opposite to his representation of the facts. Here are the figures for the last fourteen years, showing the relative progress of Great Britain and Germany in the export of all kinds of machinery, including the domestic sewing machine and the locomotive engine.
EXPORTS OF MACHINERY OF ALL KINDS.
(Including Steam Engines and Sewing Machines.)
In Millions Sterling.
1882 1883 1884 1885 1886 1887 1888 1889 1890 1891 1892 1893 1894 1895 From United Kingdom 11.9 13.5 13.2 11.2 10.2 11.1 12.9 15.3 16.4 15.7 13.9 13.8 14.2 15.0 From Germany 3.1 3.3 2.8 2.5 2.4 2.6 2.8 3.1 3.3 3.3 3.1 3.2 3.9
To our textile industries Mr. Williams has devoted a chapter which is one of the gloomiest in his book. Let it be at once admitted that we are no longer the monopolists of the textile industries of the world to the extent to which we once were. Nor could any sane man expect that we should for ever retain our former exceptional position. Other nations move as well as we. They buy the machines which we invent and make; they employ our foremen to teach them the arts we have acquired, and in time they learn to weave and spin for themselves instead of coming to us for every yard of cloth or every pound of yarn. This relative advancement of foreign nations and, too, of our own Colonies and Dependencies was and is inevitable. It is part of the general industrialization of the world. But what we have to note with satisfaction is that this process has involved little or no positive loss to us, that we are still far ahead of all other nations in the production of textiles, and that even in those cases, notably the woollen industry, where our export has fallen off we can point to an increased demand by our own people for the goods we manufacture. It is not in this spirit that Mr. Williams will look at any British industry. Even where he has a fairly good case, he spoils it by gross exaggeration and by the suppression of counterbalancing facts.
COTTON YARN AND THE PRICE THEREOF.
Dealing first with cotton, he follows his usual device of picking out bumper years, and then exclaiming, "See what a fall since then!" he goes on:—
"A consideration of moment is that this decline in values does not signify a corresponding decline in quantities. On the contrary, in yarn manufactures, with an actual increase in the exported weight, there is a decrease in the cash return. Thus in bleached and dyed cotton yarn and twist there was a qualitative rise between 1893 and 1895 from 36,105,100 lb. to 40,425,600 lb., with a fall in the value thereof from L1,862,880 to L1,832,477. Between 1865 and 1895 the average price per lb. of cotton yarn declined from 23.98d. to less than 8.85d. 'Tis a good enough explanation of the vanishing dividends, the low wages, the lack of enterprise and initiative."
Mr. Williams must either be very innocent, or expect his readers to be. He apparently has forgotten that the most important element in the price of cotton yarn is the price of the raw cotton out of which the yarn is spun. What the Lancashire spinner cares about is not the absolute price of yarn or the absolute price of raw cotton, but the margin between the two. If that be satisfactory his profit is secure. Therefore, the mere statement that the prices of yarn have fallen so much in so many years, by itself explains nothing. As a matter of fact the price of cotton yarn has followed, and continues to follow, very closely the price of raw cotton, the spinners' margin remaining fairly constant. It is useless to go back to 1865, when the most careless economist might surely have remembered that the American war made cotton dear, and machines were less efficient than they now are. But I have taken the trouble to work out for the last ten years, from figures kindly supplied by the Manchester Chamber of Commerce, the average margin between the price of a pound of standard yarn (32's twist) and a pound of standard cotton (middling American). The result shows that while the spinners' margin was slightly less in 1895 than in 1893, it stood at practically the same figure as in 1892 and 1894, and was a good deal higher than it had been in 1886. So that here again there is no real foundation for Mr. Williams's statement.
THE DAYS OF BIG FORTUNES.
It is undoubtedly true that big fortunes are no longer made in the cotton trade, or at any rate not so rapidly as in the days when cotton spinners waxed fat on the labour of tiny children who had to be flogged to keep them awake. It is also true that many joint-stock spinning companies have paid no dividends, and that many have collapsed altogether. But those who know anything of Lancashire know that a very large number of these companies were not started in response to any real increase in the demand for cotton goods, nor on account of any genuine anticipation of such an increase. They were started, as a good many companies are started in a county south of Lancashire, in order to put money into the promoters' pockets. Having served that purpose they were allowed quietly to collapse. Lancashire does not miss them. That the cotton trade, as a whole, is in a healthy condition in spite of these manoeuvres of the company-promoter will be seen from the figures relating to cotton in the following table, and from the diagram that illustrates them:—
YARNS. Ten Years' Exports. In Millions of Lbs.
- - - - - - - - - - - 1886 1887 1888 1889 1890 1891 1892 1893 1894 1895 - - - - - - - - - - - Cotton 254 251 256 252 258 245 233 207 236 252 Jute 31 24 27 34 34 33 26 29 35 35 Linen 16 16 15 14 15 15 15 16 16 17 Silk .6 .6 .6 .8 .8 1.0 .7 .8 .8 .7 Woollen 46 40 43 45 41 41 45 50 53 61 - - - - - - - - - - -
PIECE GOODS, ETC. Ten Years' Exports. In Millions of Yards.
- - - - - - - - - - - 1886 1887 1888 1889 1890 1891 1892 1893 1894 1895 - - - - - - - - - - - Cotton 4,850 4,904 5,038 5,001 5,125 4,912 4,873 4,652 5,312 5,033 Jute 216 244 232 265 274 284 266 265 233 255 Linen 164 164 177 181 184 159 171 158 156 204 Silk 7 7 8 10 10 6 6 6 6 7 Woollen 273 281 264 268 253 223 213 194 168 242 - - - - - - - - - - -
[Footnote 2: Includes "Woollen Tissues," "Worsted Coatings and Stuffs," "Damasks, Tapestry, and Mohair Plushes," "Flannels," and "Carpets and Druggets."]
The figures for cotton piece goods may be illustrated as follows:—
LINEN, SILK, AND WOOLLENS.
So much for cotton! With regard to linen, it is unnecessary to follow in detail what Mr. Williams says, for he himself admits that the decline which has taken place since the 'sixties is largely due to a change in fashion, jute and cotton goods taking the place of linen. In the last decade, however, as will be seen from the above table, the linen industry has held its own. With regard to silk, the figures show that there is no cause for serious alarm. In woollens, on the other hand, there is apparently better ground for Mr. Williams's mourning. The table on the preceding page points to a distinct downward tendency in our export of woollen manufactures, a tendency which has been only partly checked by the inflation of 1895. If this were the whole truth about our woollen trade, it might be conceded that here at any rate Mr. Williams had made out his case. But it is not the whole truth. Almost pari passu with this decline in our export of woollens, which began some twenty years back, there has been a steady increase in the consumption of our woollen manufactures by our own people, and this increased home demand has more than made good the decline in the foreign demand.
THE EXPANSION OF OUR WOOLLEN INDUSTRY.
The proof of this statement will be seen in the following figures. During the five years, 1870 to 1874, the average yearly import of raw wool into the United Kingdom was 342,000,000 lb.; during the years 1890-94 the average was 475,000,000. That gives the measure of the enormous increase in the amount of the raw material worked up by our woollen manufacturers. Take next the question of the amount of labour employed. Unfortunately, there are no official figures since 1890, but that year will serve. Here is the comparison:—
PERSONS EMPLOYED IN WOOLLEN AND WORSTED MILLS.
+ -+ -+ - Men. Women. Children. + -+ -+ - 1870 94,000 116,000 24,000 1890 118,000 156,000 23,000 + -+ -+ -
These figures are doubly satisfactory, for they point, first, to a large increase in the adult labour employed; and, secondly, to a small but gratifying decrease in child labour.
THE NATURE OF GERMAN COMPETITION.
To still further reassure politicians and others who have been alarmed by Mr. Williams's book, I may quote two passages from lectures on German competition recently delivered in the West Riding. The first is from a lecture by Professor Beaumont, delivered in the Yorkshire College in October last. From the report in the Leeds Mercury of October 10th, I take the following:—
"In the woven fabrics imported from Germany we have examples of the standard of workmanship attained in German mills. These textures chiefly comprise low mantle cloths and cloakings, and limited quantities of dress stuffs composed of mixed materials, showing that almost invariably it was the price which caused these goods to sell in British markets. Viewed from this standpoint, there is an impregnable argument in favour of our industrial pursuits; for in all classes of fancy fabrics of a high quality, whether in woollen, worsted, cotton, linen, or jute materials, the manufacturers of the United Kingdom have scarcely felt the effects of German competition."
My second quotation is from a lecture delivered by Mr. Swire Smith, of Keighley, at the Bradford Technical College, and reported in the Bradford Observer of November 27th last:—
"Those who tell us that our English worsted industry is being ruined by the competition of Germany, must be unaware of the fact that the German worsteds, whose increasing exports were creating such alarm among the Fair-traders, are mainly composed of yarns 'made in Bradford.' Indeed, Bradford afforded a concrete example of the effect of German competition, for it would be difficult to say which country had benefited most by it. The export of woollen, worsted, and alpaca yarns to Germany in the average of the following periods of years amounted in 1880-85 to 41,500,000 lb. per year; 1890-95, to 63,800,000 lb. per year; and 1895, to 78,900,000 lb. Bradford had been the greatest contributor to German success in the weaving of worsteds and alpacas, and Germany had been the greatest contributor to the success of the spinning industry of Bradford by buying its yarns. To put a tax on German worsteds that would shut them out of England would stop the sale of Bradford yarns in Germany."
THE "PERCENTAGE TRICK."
That is enough about woollens. About jute a couple of sentences will suffice. In order to make the facts in this trade look worse than they are—there is nothing really bad about them—Mr. Williams first places German figures in marks side by side with English figures in pounds sterling, and then plays what can only be called the "percentage trick." The German increase in eleven years, he says, is at the rate of 1,100 per cent., while the British is only 19 per cent. Remarkable! Yet Mr. Williams might have discovered from his own figures, if he had only taken the trouble to turn marks into pounds, that the German increase in eleven years was only L107,000, while the British increase was L412,000. In other words, our increase was almost four times as great as Germany's, and our total is now L2,588,000, against their total of L117,000. Exactly the same percentage trick is employed by Mr. Williams in comparing German and English trade with Japan. In this case there is also an important error in his arithmetic; but let that pass. The trick consists in deluding the uncritical reader into the belief that German trade with Japan is increasing faster than our own, whereas during the period selected by himself for comparison our increase has been almost exactly double the German increase. It is by devices such as these that Mr. Williams has succeeded in filling his pages with gloomy statements and gloomier prophecies. To track him further along his tortuous path would be profitless. "Here ends," he writes at the close of one of his most despairing and most deceptive chapters, "the tale of England's industrial shame." If candour should be an essential to fair controversy, there is other shame than England's to be ended.
OUR GROWING PROSPERITY.
Having now shown, both generally and in detail, how absolutely void of foundation are many of the most gloomy statements in "Made in Germany," we can dismiss Mr. Williams and his fanciful forebodings, and examine instead the direct and abundant evidence of the growing prosperity of our country. The first point to notice is the immense development of our shipping industry. In the last quarter of a century the tonnage of shipping engaged in foreign trade entering our ports has more than doubled, and this increase has been steady and persistent, with no retrogression worth noticing in any year. But that is not all. Twenty years ago the proportion of British ships engaged in this foreign trade of ours was only 67 per cent. of the total; it is now well over 72 per cent. In the same period the number of tons of shipping per hundred of the population, taking entries and clearances together, has risen from 130 tons to 200 tons. No other country can point to such figures. Germany, starting from small beginnings, has improved rapidly, but her totals are insignificant compared with our own. Only 43 per cent. of her foreign trade is carried in her own ships, as against nearly 73 per cent. in our case, while per hundred of the population the shipping to and from her ports is less than a quarter of ours. If we turn to France we find that while the total shipping to and from French ports has increased as rapidly as with us, the proportion carried under the French flag has appreciably fallen. In the case of the United States there has been a still greater fall. Twenty years ago 33 per cent. of the foreign trade of the United States was carried in United States ships, now the proportion is only 23 per cent. The following table shows the growth of shipping of all kinds to and from British ports:—
TWENTY-FIVE YEARS' SHIPPING TO AND FROM PORTS OF THE UNITED KINGDOM.
Entries and Clearances together, in Millions of Tons.
+ -+ - FOREIGN TRADE. COASTING TRADE. Average of + -+ -+ - Five Years. Under British In this Trade practically all Flag. Total. the Shipping is British. + -+ -+ - 1870-74 28 42 38 1875-79 35 51 46 1880-84 43 61 50 1885-89 49 67 54 1890-94 55 75 58 Year 1895 59 81 61 + -+ -+ -
In order to further compare our progress with the progress of other countries the following table has been prepared to show the relative position of the principal countries now and twenty years ago. If we consider merely the rate of progress, the German percentage of increase is undoubtedly better than ours. But in national life, as in individual, it is not percentages but amounts that are important, and the table shows that while Germany has added 6,000,000 tons to her shipping, we have added 27,000,000 tons to ours. As long as anything similar to that proportion is maintained we have no need to fear German rivalry.
BRITISH AND FOREIGN SHIPPING.
In Millions of Tons.
- - - Average Annual Entries and Clearances. 1870-74 1890-94 - - - British tonnage engaged in the foreign trade of the U.K. 28 55 German " " " " " Germany 4 10 French " " " " " France 5 9 United States " " " " the U.S. 7 9 - - -
The figures for 1890-94 may be illustrated diagrammatically as on opposite page.
It must be noticed that this comparison takes no account of the enormous carrying trade done by this country for foreign countries or British Colonies trading with one another; nor are there figures available for showing how in this matter we compare with our rivals. The figures, if they existed, would show that in this international industry Great Britain is first, and the rest of the world nowhere.
Before passing to another point it is worth while to call attention to the enormous development of the coasting branch of our shipping trade, as shown in the figures given above. This branch of shipping is really of the nature of internal traffic, as distinguished from foreign trade. That it should have increased so steadily and so rapidly is by itself a striking proof of the commercial activity of the country.
THE DEVELOPMENT OF OUR RAILWAYS.
Proof even more convincing is apparent in the enormous development of our railway system. It is difficult to know from which side first to approach the tremendous figures in which this development is portrayed. Taking, at hazard, mileage first, we find within the last twenty-five years an increase of 6,000 miles in our railway system—namely, from 15,000 in 1870, to 21,000 in 1895. Of this increase, 2,000 miles are due to the last decade. Looking next at the capital expenditure, we find that in the ten years from 1885 to 1895 the total capital of the various railway companies of the United Kingdom rose from 816 millions sterling to 1,001 millions. Part of this immense increase was, it is true, only nominal, being due to consolidation of stock, etc. But when all allowance has been made on that score, we are left with a real net increase in the ten years of 170 millions sterling. During the same period of ten years the receipts from passenger traffic rose from 30 millions sterling to 37 millions, while the receipts from goods traffic rose from 36 to 44 millions. In the last quarter of a century the number of passengers carried by the railways, exclusive of season-ticket holders, has risen from 337 millions to 930 millions. Were it possible to record the number of journeys made by season-ticket holders, we should obtain an even more striking picture of the development of passenger traffic on our railways. Such figures as are available are given in the next table, and illustrated by the accompanying diagrams:—
THE RAILWAYS OF THE UNITED KINGDOM.
Ten Years' Work and Receipts.
- 1886 1887 1888 1889 1890 1891 1892 1893 1894 1895 - Goods carried: Million Tons 255 269 282 297 303 310 309 293 324 334 Passengers carried: Million persons 726 734 742 775 818 845 864 873 911 930 - Goods receipts: Million L's 36.4 37.3 38.7 41.1 42.2 43.2 42.9 41.0 43.4 44.0 Passenger receipts: Million L's 30.2 30.6 31.0 32.6 34.3 35.1 35.7 35.8 36.5 37.4 -
The figures may be illustrated diagrammatically as follows:—
These diagrams and the figures they illustrate hardly look as if the nation were on the verge of decay, ruined by German cheap goods. If such be the signs of national collapse, no country in the world can be called prosperous. For there is this feature about our railway development which entirely differentiates it from the railway expansion of newer countries—that every pound of capital required has come out of our own pockets: we have borrowed from no one. Instead, while planking down in ten years 170 new millions to add to our own railways, we have been lending with large hands to railway builders in every part of the globe.
LENGTHENING TRAM LINES.
From railways we pass to tramways. Here the figures are less considerable in amount, but they are striking enough. In 1876 there were only 158 miles of tramway open for public traffic; by 1885 that number had risen to 811 miles, and by 1895 to 982 miles. In the same periods the paid-up capital had increased from 2 millions sterling to 12, and thence to 14 millions. Lastly, between 1885 and 1895 the number of passengers carried upon tramways has risen from 365 millions to 662 millions. These figures are principally interesting because the tramcar is essentially a popular means of conveyance. If the working-classes of this country are being reduced to starvation, as the Protectionists say, by the invading Teuton, it is astounding that they should be able to afford so many pennies to pay for tram fares.
POST OFFICE EXPANSION.
From this last comparatively limited but not unimportant test of the general prosperity of the country, we pass to the Post Office returns. Next to the test of railway traffic, already dealt with, no better evidence of the prosperity and commercial activity of a country can be found than is furnished by the growth of post office business. A nation whose trade is being filched from it by foreigners, whose blast furnaces are cold, and whose looms are silent, as Mr. Williams would have us believe, does not add every year forty million letters to the amount of its correspondence. Yet this is what we have been doing in the United Kingdom for a good many years past. Starting from the year ending March 31st, 1878, when a slight alteration was made in the method of presenting the statistics, we find that in the nineteen years that have since elapsed the number of letters delivered annually has increased from 1,058 millions to 1,834 millions. In the same period postcards have increased from 102 millions to 315 millions; newspapers and book packets, from 318 to 821 millions. Moreover, the increase has been steady, with one significant exception. In the year 1894-95, which was notoriously a year of bad trade, there was a drop in the number of letters delivered. The drop was more than made good in 1895-96. Turning to telegrams, we find a similar story. Here we are compelled to start with the year 1886-87, the first complete year after the introduction of sixpenny telegrams. In the ten years that have since elapsed the number of telegrams delivered has steadily increased from 50 millions to 79 millions.
Another test of our national prosperity is furnished by the income tax returns. When the annual value of the property and profits assessed for income tax exhibits a steady increase, it is hard to believe that our manufacturers, and all the classes that depend upon them for support, are being ruined by Germans or by anybody else. Here are the figures:—
INCOME TAX ASSESSMENTS.
In Millions Sterling.
- - - Five Years' Schedule D. All Average. Schedules. - - - 1870-74 210 490 1875-79 263 575 1880-84 268 601 1885-89 292 634 1890-94 350 699 - - -
The return from which the above figures are taken stops with the year 1894; but a somewhat similar comparison was brought up to date in the last Budget speech of the Chancellor of the Exchequer. The following table is taken from the "explanatory memorandum" that accompanied that speech:—
YIELD PER PENNY OF THE INCOME TAX.
- - Ten Years' Growth, after allowing for alterations in Year Yield the incidence of the tax. Ending per - - March 31st. Penny. Amount of Percentage of Growth. Growth. - - - Thousand Thousand Per Cent. L L 1876 1,978 1886 1,980 62 3.23 1896 2,012 207 11.47 - - -
With such figures as these available it is difficult to understand how people can continue to pour forth nonsense about the ruin of our national industries. During the very decade in which the blight of German competition was supposed to have destroyed the profits of our manufacturers, it is clear from the above infallible test that the incomes of our commercial, professional, and property-owning classes have been growing with increasing rapidity.
REDUCTION OF NATIONAL DEBT.
Passing from taxation to the question of what has been done with the taxes, it is sufficient to select one fact for comment—the enormous reduction in the National Debt. Here are the figures:—
THE INDEBTEDNESS OF THE NATION.
Aggregate Gross Liabilities. Per Head of Population. 1876 L776,000,000 L23 13 9 1886 L745,000,000 L20 13 8 1896 L652,000,000 L16 13 2
That is to say, that within the past ten years—the years of alleged depression and blight—we have reduced our national indebtedness by over 90 millions sterling. During the same period it is worth while to point out that we have expended enormous sums in the almost complete reconstruction of our navy. Meanwhile Germany—the hated rival—has, since the war, added as many millions to her debt as we in ten years have taken from ours.
SOME STAPLE COMMODITIES.
In case the pessimists and the Protectionists should be still unconvinced by these proofs of national prosperity, let us turn to a new series of tests, the test of consumption. The great staple commodities which we will first take (cotton, wool, and coal) are partly required for manufacturing purposes and subsequent export, and partly for home use. The word "consumption" covers both uses, and we cannot, except in the case of wool, readily ascertain to which use the greater effect is attributable. In the case of wool it so happens, as was previously pointed out, that our export trade in manufactured goods has declined. But since the total consumption of raw wool by the United Kingdom has gone on increasing, it is clear that the decline in woollen exports has been more than made good by the increased home demand, unless, indeed, it be imagined that woollen manufacturers go on weaving an endless web which nobody wears. Nor is that all, for the figures of our import trade show that in addition we are importing considerable and increasing quantities of foreign woollen manufactures. So that not only have the home consumers more than recouped the British woollen manufacturer for the decline of his export business, but so great is their purchasing power that they can, at the same time, afford to send abroad for fresh woollen stuffs to please their fancy. Here are the figures showing the consumption by the inhabitants and manufacturers of the United Kingdom of three staple articles referred to:—
CONSUMPTION OF COTTON, WOOL, AND COAL IN THE UNITED KINGDOM.
+ -+ + + -+ Average of Five Cotton (Raw) Wool (Raw) Coal Years. Million lbs. Million lbs. Million Tons. + -+ + + -+ 1870-74 1,178 342 108 1875-79 1,221 353 118 1880-84 1,445 354 136 1885-89 1,467 416 141 1890-94 1,590 475 151 Year 1895 1,635 510 157 + -+ + + -+
With regard to the figures for cotton in the above table, it is only necessary to remark that the British manufacturer, whether for sale abroad, or for sale at home, is clearly working up more stuff than ever before. The figures for wool have already been explained. With regard to coal, the figures necessarily include both domestic and industrial consumption; but whichever be the more important element, the totals are remarkably healthy.
PERSONAL AND DOMESTIC EXPENDITURE.
An even better test of the increased spending power of the nation is furnished by the figures giving the rate of consumption of such articles of everyday use as tea, sugar, and tobacco. It will be seen from the following table how rapidly our national consumption of these staple articles has increased during the past decade—the decade of alleged ruin:—
TEA, SUGAR, AND TOBACCO.
-+ Lbs. consumed by every 100 persons. Year ending March 31st. + Tea. Sugar. Tobacco. - 1876 451 6,078 147 1886 465 7,028 144 1896 574 8,916 169 -
It is useless to worry the reader with further figures. Evidences of the prosperity of the country are around us on every side for those to see that have eyes to see—a higher standard of dress in every class of the community; better built and better furnished houses for artisan and labourer, as well as for millionaire; new public buildings, new libraries, new hospitals; improved paving, improved water-supply, improved drainage; more newspapers, more theatres, more lavish entertainments; in a word, a higher standard of comfort or of luxury in every domain of life.