Chapter 2
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 _viâ_ 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 _entrepôt_ 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 £17,800,000 a year, against a total import from German ports of £25,900,000, 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[1] | (Rx) 36·4 | (Rx) 60·4 Australasia[1] | 28·5 | 27·2 British North America[1] | 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 £91,257. 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 £273,795. Again, he mentions that we bought from Germany cotton manufactures to the value of £536,000, but he is silent on the fact that our sales to Germany amounted to £1,305,000. He does not even hesitate to pick out such a trumpery item as £11,309 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 £92,000. 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 £3,000,000 worth of German goods against more than £60,000,000 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.