CHAPTER XLI.

ENGLISH FEAR OF THE MILLS BILL.

THE STATESMEN, ECONOMISTS AND MANUFACTURERS OF ENGLAND ANXIOUS AND WATCHFUL ABOUT IT.

Since the introduction, discussion and passage of the Mills bill through the House the English newspapers, political as well as the special representatives of the trades and different branches of manufactures, appear to be waking up to a realization of the fact that with more liberal customs laws, whereby manufacturing shall be relieved of some of the burdens put upon it in the matter of raw materials. The English supremacy in the markets of the world is likely to be disputed with more success than has ever yet been done. England has heretofore had only to compete with countries in which the trammels of taxes have been diligently maintained. She has, as the result of this, been able to maintain herself and her manufacturing supremacy in all the newer countries of South America and in her own colonies in different parts of the world.

For several years past English economists and statesmen have been saying to the manufacturers that, so long as the United States maintained a tax on raw materials, which was practically prohibition, they could maintain themselves and their business. They have given warning, as they thought, in the most timely manner, that if these restrictions were ever removed, the manufacturers of the United States, with their enterprise and the efficiency of their labor, would at once leap to the front as the most dangerous competitors to this recognized commercial position ever developed.

*I.

Among the earliest to give warning of this was the veteran statesman Gladstone, the admiration of the liberty-loving people of all lands. In an address to a commercial body in Leeds, England, in 1881, he thus expressed his opinion on this question of first importance to the manufacturing elements of England:

Well, now, there is also an idea that America is pursuing a course of profound wisdom in regard to its protective system, and we are told that under the blessed shelter of a system of that kind the tender infancy of trades is cherished, which afterwards, having obtained vigor, will go forth into neutral markets and possess the world. Gentlemen, is that true? America has been too long in various degrees a protective country.

Have the manufacturers of America gone forth and possessed the world? How do they compete with you in those quarters of the world which are, speaking generally, outside the influences of protection? Gentlemen, to the whole of Asia, to the whole of Africa and to the whole of Australasia-which in the main are outside this question, and may fairly be described in the rough as presenting to us neutral markets, where we meet America without fear or favor one way or the other-the whole of the exports of the United States of manufactured goods of those countries amount to £1,751,000, while the exports to those same quarters from the United Kingdom were £78,140,000.

Gentlemen, the fact is this: America is a young country, with enormous vigor and enormous internal resources. She has committed-I say it, I hope, not with disrespect; I say it with strong and cordial sympathy, but with much regret-she is committing errors of which we set her an example. But from the enormous resources of her home market, the development of which internally is not touched by protection, she is able to commit these errors with less fatal consequences upon her people than we experienced when we committed them; and the enormous development of American resources within casts almost entirely in the shade the puny character of the export of her manufactures to the neutral markets of the world.

I will say this, that as long as America adheres to the protective system, your commercial primacy is secure. Nothing in the world can wrest it from you while America continues to fetter her own strong hands and arms, and with these fettered arms is content to compete with you, who are free, in neutral markets. And as long as America follows the doctrine of protection, or as long as America follows the doctrines now known as those of fair trade, you are perfectly safe, and you need not allow, any of you, even your lightest slumbers to be disturbed by the fear that America will take from you your commercial primacy.

II.

*As the views of the leading statesman of the British Empire have thus been given, it will be interesting to find out what the manufacturers and economists think of it.

In 1882 William Rathborne, a member of the English Parliament, in an essay on "Protection and Communism," in which he represented English feeling on our tariff, spoke as follows:

It would be a great mis ake to suppose that at the present time Englishmen were very anxious for their own sakes to see America adopt free trade. There is, on the contrary, a great and growing feeling in this country that it is in the interest of England that the United States should still adhere to protection. As long as they do so it is thought England is safe from her only dangerous competitor in the markets of the world.

At the annual meeting of the Cobden Club in 1882, Mr. Joseph Chamberlain, who is now so well known in this country, gave his opinion on the question. Mr. Chamberlain is interested personally in the maintenance of the tariff on wood screws, in the manufacture of which he is engaged. This interest has led him to accept large subsidies from American competitors, with the understanding that he would not throw his goods into this market. At the meeting in question this English manufacturer said:

For myself, speaking only as an Englishman, I look forward with anxiety, not unmingled with alarm, to the time when our merchants and manufacturers will have to face the free and unrestricted competition of the great republic of the west, and when the enterprise of its citizens and the unparalleled resources of its soil will no longer be shackled and handicapped by the artificial restrictions which have hitherto impeded the full development of its external commerce.

Lord Brassey, one of the most extensive of English manufacturers, in his "Lectures on the Labor Question," said:

But it must also be remembered that, assuming the cost of labor in the United States to be 25 per cent. in excess of the cost in this country, the addition to the value of the product does not exceed 5 or 6 per cent., and if the duties imposed in the United States on all raw materials should be repealed, and if, as we may reasonably anticipate, the cost of living should be materially lessened, the cost of production under those more favorable circumstances would be so much reduced that the present advantages of the British manufacturer would cease, and there would no longer be a sufficient margin to cover the cost of exportation from this country to America.

In 1879 James Thornly, a representative of the Textile Manufacturer of Manchester, England, came to this country to study the cotton industry, as it came into competition with the products of that collection of busy cotton mills. In this industry the free raw materials, giving our manufacturers some conspicuous advan

*For several of the quotations in this section of the present chapter the compiler takes pleasure in expressing his obligations to Mr. Fred. Perry Powers, from whose brief but suggestive article on "British Interest in American Protection," in Belford's Magazine for August, several of the quotations have been culled.

tages, exportation of cotton goods had rapidly increased. Mr. Thornly found that the cost of labor here per yard of product was less than in Manchester, and that the freight on the raw material was, of course, much less. But in spite of these advantages he reported to his people that the mill-owners of Manchester need not indulge in any serious fears of competition from this country. He said in concluding his observation:

While, however, the American nation heaps duties upon the import of foreign machinery, thus increasing the price of mill construction, and in other ways by her tariff arrangements artificially raising the cost of production, American manufactures will continue too high in price to compete with England in all but exceptional cases.

Professor Cairnes, the leading as well as the ablest of later political economists of England, confirms these views in his "Political Economy," in which he asserts: Accordingly, in the United States, as we have seen, coal, iron, lumber, and leather are all loaded with heavy import duties. But what is the consequence? Just this, that American manufacturers are thus deprived of the advantage they would naturally possess of obtaining their raw material cheap. They are placed at a disadvantage in relation to manufacturers in Europe precisely where under free trade their position would be strongest.

Sir Charles Dilke is everywhere recognized as one of the ablest men in England, and one of the most strongly devoted to the cause of free trade. In an interview held with him by a correspondent of a New York paper in London, on August 24th, on the effect which the passage of the Mills Bill would have on English manufactures and commerce, Sir Charles said:

The uninformed public here have the impression, largely created by your protectionists in America, that the opening of American markets would be of advantage to England. In such an event the manufacturers and capitalists here, who know better, would proceed to unload their interests and enterprises at a profitable advance on the uninformed public. A low tariff policy in America might in this way create a good deal of apparent activity in iron here for a year or so, but after that there would spring up a fierce competition for the markets of the world, in which I am unable to see how England can expect to hold her own. One of the chief elements of our present commercial and shipping predominance has always seemed to me to be that our great natural rival of the New World prefers to feed on her own fat, like the hibernating bear, and leaves us free outside to range the globe.

This makes plain the falsity of the charge so persistently made that the manufacturers of England are so much interested in the reduction of our tariff that they are raising money to promote it. On the other hand, all their selfish interests lie in the direction of the maintenance undisturbed of the existing conditions in this country, under which England has not had any serious competition in the markets of the world.

III.

Not only has this been the position of English statesmen, manufacturers and economists, but the question has been fully discussed from this point of view during the present year, while the President's message and the Mills Bill have been leading topics.

In order to demonstrate this the following extracts are given from recent issues of newspapers in all parts of England:

AGAINST THE INTEREST OF ENGLAND.

From the Birmingham Daily Post, July 28.

English traders will learn with a good deal of amusement that in the Presidential elec tion campaign in America the great cry which the Republicans are using against Mr. Cleveland is that he is deliberately betraying the interests of American trade for the benefit of English manufacturers. It is scarcely necessary to say that from an English point of view the Mills Tariff Bill by no means bears that aspect. On the whole, its operation will probably be distinctively to our disadvantage. Only in a few trivial instances the bill reduces the tariff on articles imported from England. The main object of the measure is, by lightening and in some instances removing the duties on raw material, to lessen the cost of the production of American manufactures, and, of course, every step in that direction will make the United States a more dangerous competitor of England in all neutral markets.

It is perfectly clear, therefore, that if the policy of Mr. Cleveland, as embodied in the Mills Tariff Bill and as set forth in the now historic declaration to Congress, has been received with marked satisfaction in England, that satisfaction has not been in any way due to a

sense that the operation of the bill was likely to confer any material advantage on the English trader. That would have been absurd. The cause of the satisfaction was the rebuff which it administered to the fatuous cry for protection in England.

The Mills Bill was not a free trade bill-to so describe it would be a palpable abuse of terms-but it meant, at any rate, an abandonment of high protection, and an admission that protective duties increased the cost of production, and so crippled the nation in its competition with other manufacturing countries in the markets of the world. When Mr. Cleveland's manifesto was make public the fair trade agitation in England, just then at a considerable height, went out like a snuffed candle. That was the reason, and the only reason, for the delight with which that manifesto was received in England. If purely selfish considerations had been allowed to sway English opinion, we do not doubt that the feeling amongst clear-sighted English traders would have been rather for the rejection than the acceptance of the Mills Tariff Bill.

The city of Sheffield, England, is, as is well known, the great centre for the manufacture of cutlery. Here, if any where, there might be found joy over the prospect of gaining access to the American market. But this joy does not seem to exist, if the leading newspaper of that city may be said, in any way to reflect the opinions of its manufacturers and people.

DOESN'T HAVE A FREE TRADER'S METHOD.

said:

In its issue of July 18, the Sheffield Daily Telegraph, a protective paper, President Cleveland is claimed as a Free Trader. With "moral impenitency of assertion" we will repeat the views of this Free-Trader, as expressed by himself in the message to Congress last year-views since endorsed and amplified: "It has been our policy," he said, "to collect the principal revenue by a tax on imports. No change in this policy is desirable." That is pretty definite for a Free Trader. He continues:-But the present condition of affairs constrains the people to demand a revision of the Revenue Laws, So that the receipts may be reduced to what is necessary to cover the expenses of economical administration; and this demand should be recognized and obeyed by Congress. In readjusting the burdens of taxation we should deal cautiously with industries dependent on present conditions, and regard also the interests of American labor. I recommend, keeping in view all these considerations, that the revenue laws be amended so as to cheapen the neces aries of life and give FREER ENTRANCE TO RAW MATERIALS." Did we not know well the methods of Free-Traders we should hope that they would allow these views of Mr. Cleveland's to restrain them from "branding" him as a Free-Trader of their type. But that, with our knowledge, would be, as a great Liberal said of the total repeal of the corn laws, madness."

WHAT AN ENGLISH FAIR TRADER THINKS.

In the same issue of the Telegraph, a correspondent, who is evidently to be classified as an English fair trader, sent that paper a copy of President Cleveland's Tammany Hall Fourth of July letter, and under the head of "representation unmasked," he added:

In consequence of the mis-representation indulged in with respect to President Cleveland's fiscal policy, I venture to enclose the full text of the letter to which allusion has been made.

Now, I have been in America, and I assert without fear of contradiction that you are literally correct in your remark that it is possible to search the States through without coming across a modern Cobdenite. The species is undoubtedly confined exclusively to the British Islands, and is, I am convinced, becoming scarcer and scarcer even there.

There are people in the States who are known as Free Traders, but the term does not mean what it does in England. They are persons who favor import duties on manufactures being reduced, say to 30 per cent. ad valorem, while a few are daring enough to name 20 per cent. They also believe in the policy of free raw materials. President Cleveland is insisting on the need of this latter condition, as far as is safe for American interests. The evils to which he alludes in his letter refer to the unnecessary dearness of raw materials, as will be seen by his allusion to the limitation of the area of their markets.

Protectionists, on the other hand, are persons who insist on all-round heavy tariff, which circumstances do not require, and which is productive of many abuses without compensating advantages. Americans are either Fair Traders or protectionists; of Free Traders there are none. President Cleveland is a Fair Trader, labeled for political purposes a Free Trader. Of this he complains, and justly, for the very name stinks in the nostrils of the people, especially of English immigrants. With reference to the letter of that enlightened statesman (in England, with his views, he would be dubbed a raving Protectionist), let me point out-(1) that President Cleveland does not describe import duties as "extortion." It is the "useless and dangerous surplus in the National Treasury" which, he says, tells no other tale but that of extortion.' (2) That so far from accepting the title of Free Trader, President Cleveland repudiates it, rebukes those who have so "branded him, and declares that he has always been "the friend of American labor."

I leave your readers to judge of the honesty which selects a few words here and there from a communication for purposes of its own, and those purposes quite at variance with the intentions and objects of the communication. Even well-wishers fear to trust this sort of honesty."

THE WIND DOES NOT BLOW IN A FREE TRADE DIRECTION.

The Telegraph appeared to be so positive of its position that on the 24th of July, after the vote in the House on the Mills bill, it again enforced it as follows: The adoption of the Mills Tariff Bill by the House of Representatives has afforded an opportunity of learning what is understood by the term Free Trade" in the United States. Republicans have persistently described the Mills bill as a "free trade" measure. The average rate of duty fixed by the bill is forty-two dollars forty-nine cents per hundred dollars. Under the bill lumber, wood, hemp, tin plates, and other material would enter American ports duty free. But the average decrease of duty on goods exported from England would be only four dollars sixty-one cents per hundred dollars. Therefore, there is not much spilt milk to cry over, from the protectionist point of view. The bill carries out the principle which we have always understood to do duty for free trade in the States, namely, that certain raw materials should enter the country duty free, but that manufactured imports should be stiffly taxed for revenue purposes. Moreover, even this modified reform is not likely to become law at present. The bill is almost certain to be rejected by the Senate. The value of the vote in the House of Representatives is to show that the wind blows in the direction of fiscal reform, certainly not of free trade.

NO OTHER COUNTRY ADOPTING ENGLAND'S POLICY.

On the following day, July 25, the editor of the Telegraph returned with dogged English persistence to the question, and even used the Mills Bill to enforce his own ideas in favor of a tariff, by saying:

Should the Mills Tariff Bill become law in the United States, the effect will not be favorable to the exporting manufacturers of this country. Rightly, Mr. Mills scouts the idea that it is a Free Trade Bill, as Free Trade is understood by the degenerate successors of Mr. Cobden. It grants no special privileges for foreigners. It aims at creating only greater advantages for Americans. Nor is it on the lines of Mr. Cobden's Free Trade. It does not concede the principle of free exchange between nations. It will enable American manufacturers to obtain cheaper raw materials, thus assisting them to become greater exporting competitors with ourselves, but it retains for them their home market.

Neither the people of the States nor of Europe are likely to copy our example, and the lapse of our Cobdenites into the prophetic mood respecting coming Free Trade in America is accountable only from the circumstance that, facts being against them, they are seeking to recall waverers and stimulate the drooping spirits of despondent followers by a repetition of promises which were to have taken effect nearly fifty years ago, but which are still waiting fulfillment in the dimmest of distant futures.

OF GREAT DISADVANTAGE TO ENGLISH BUSINESS.

Turning attention to Birmingham, the very centre of manufacturing industries in England, the Gazette of that city, representing the radical free trade policy, which in England is given the name of "Birmingham School," says in its issue of August 1:

It is a ridiculous mistake for them to suppose that English manufacturers are enthusiastic about the revision of the tariff proposed in the Mills Bill, or that they are pleased with any reduction of duty which has for its object the freer admission of those things which America requires to streng hen her manufacturing resources. Sober-minded Americans may take it from us that manufacturers in this country see in every reduction of the American tariff, centering as it always does upon crude or semi-crude material needful to American producers, a fresh blow to their chances of recovering lost business in the States, and (more important still) a grave menace to their trade in the neu ral markets. Except in special lines in which American manufacturers have a special aptitude, American competition in the neutral markets of the world has not been, and is not, formidable, and it never will be formidable until one of two things occurs-until the Republic adopts free imports or Great Britain reverts to protection. If free trade were adopted in the United States there would be three fat years for English manufacturers and then the wilderness. Rational Americans surely cannot suppose that we should be so short-sighted as to rejoice over such a prospect. We should not only lose the American market to a larger extent than we have lost it already, but we should in a few years be elbowed out of the Colonies, out of South America, South Africa, China, and in some degree probably out of India also. We cannot afford to pit our resources against those of Connecticut and Pennsylvania on equal terms, and much as we regret the gradual exclusion of our products from the States by the action of the tariff, we know well enough that if there had been no tariff the same result would have taken place by the action of a competition in which American manufacturers were not hampered by high prices for material. The Democratic Tariff Bill is not a free trade measure; it is a Bill which adjusts a Protectionist policy on scientific principles, and if Englishmen had to choose they would much prefer the unscientific tariff which it is intended to supersede.