CHAPTER XXV.

DEAR CHEAP FOOD.

Don’t you see, what a fallacy underlies your cry for cheap bread. Does the consumer eat nothing but bread? Is everything to be sacrificed to the consumer? Don’t you see that cheap bread is not all that is necessary to prosperity.

Have not you seen that, during one year of greatest prosperity, the price of wheat rose to 58_s._ 8_d._ per quarter, far higher than it was in ten years, 1831-40, before the repeal of the Corn Laws, whilst during the present time of depression it is down to 41_s._ 5_d._, and that, in 1835, before the repeal of the Corn Laws, it was down to 39_s._ 4_d._[94]

Cannot you see that cheap food is dear if the causes of its cheapness deprive the labourer of that employment which enables him to purchase it? Cannot you see that, although a healthy competition stimulates production, a crushing competition in the end causes the rise of prices by the lessening of production?

Do you not know that, in the opinion of many political economists, dear food has been considered a cause of progress and prosperity to a nation, by stimulating its inhabitants to exertion and thrift,--notably so in the case of Holland?

Do you not know that, in many countries, where food is cheap, the natives are degraded and wretched?

Cannot you see that the revenue of the country must be raised in some manner, and if a tax be put on corn, it may be _taken off some other article_ of consumption, almost equally important? and therefore that, if the substitute be judiciously chosen, the tax on it comes back to the consumer in some shape or other? Do you not know that an import tax does not always fall on the consumer?[95]

Cannot you see that the want of a _light_ tax on corn (I do not defend the Corn Laws as they existed, for they imposed an excessive tax) has ruined agriculture, and you are preparing for yourself a serious difficulty? In case of war with any combination of strong maritime powers[96] wheat will rise to famine rates.

Don’t you see that if we transferred a small portion of the tax on tea, sugar, coffee, &c., giving a preference to our dependencies in the case of wheat, we should not only encourage our home, but also our colonial, industries, which are trembling in the balance between existence and nonexistence for want of some slight fostering care.

You are like Nero fiddling while Rome was burning. You are fiddling with your Free Trade, whilst England is going to ruin.

How can it be otherwise? Unlimited foreign competition must necessarily end in disaster. Don’t you see that you are handicapping your people in every way. They have higher wages than other nations. You tax them more heavily, and you pass enactments to prevent their working long hours. You thereby place them at a disadvantage with people who are thrifty and industrious and are not restricted in their hours of work. The same amount of money now buys only half the labour it did forty years ago, this increases the cost of production. Competition forces your manufacturers to work only three or four days a week. This again increases it. Increased leisure gives opportunities for intemperance. This again has a deteriorating effect on produce. Your best hands emigrate to prosperous countries not cursed with free trade,--another cause of deterioration in quality of manufactures. The cheap freights, almost nominal, place foreign productions in England at prices very little beyond that at which they can be produced in their native country.

The money spent on foreign produce, instead of being spent in England, is so much capital taken away from this country, helping foreigners to compete with you. You have, in fact, in Free Trade, the most ingeniously devised plan of impoverishing the country. We had a good start, and other countries have been a long time in catching us up, so that we did not feel their competition at first, but they are now passing us hand over hand. English pluck, English capital, and English credit have until now stood the strain bravely, and the general advance of the wealth of the world has blinded our eyes to our real danger, but the struggle cannot last much longer. Capital is draining out to protectionist countries in all directions, but the amount at stake in our manufactories is so enormous that the struggle must be continued at any risk. Credit alone sustains the fabric, and as soon as that is thoroughly shaken, the collapse will be terrible and sudden. The working classes, so long as they receive higher wages than before, are unable to see the danger, but when the collapse comes--and come it surely will before long--the working classes will be the first to demand protection. There are symptoms of it already, for Sir Edward Sullivan has stated:--

“Already a number of operatives, far more than is necessary to turn a general election, have, through their delegates, given in their adherence to Fair Trade.”[97]

FOOTNOTES:

[94] Average price of corn for ten years ending 1845 = 57_s._ 10_d._

[95] Taxes on commodities do not always fall on consumers, but sometimes on producers, and sometimes on the intermediate agent. When a duty is imposed on a foreign commodity, which the importing country has facilities for producing at home, in ordinary cases the duty falls, in the first instance, on the consumer; but when the duty has the effect of increasing competition, the tendency is to a reduction in price, and therefore to the ultimate benefit of the consumers. As the duty equalizes the conditions of production between the local and foreign producers, it enables an entirely new class of competitors to enter the field,--namely, the local producers; and as the circle of competition becomes extended, the rivalry among producers becomes keener, and prices become lower; for competition inevitably leads to this when it is genuine and not a monopoly in disguise, as is often the case. If the duty fails to increase competition, it goes direct into the treasury as revenue; if it fails partially as a revenue tax, owing to the local producer contributing part of the supply, and paying no duty, the competition between the local and foreign producers will cause a reduction in price to the consumer, so that the falling off in the revenue will in some measure be compensated for. If the revenue from duty fail altogether, owing to the local article taking the place of the imported and duty-paying article, a three-fold benefit will be secured. The consumer will gain by a reduction in the price of commodities; the public will gain by increased employment of labour and capital; and, lastly, the State will gain by increased revenue from the additional number of revenue-producing population, supported by the new industry. (David Syme. _Fortnightly Review_, April, 1873.)

So with the English shipping dues, which, as a matter of fact, are not paid by the merchants or consumers, but by the shipowners.

In answer to a deputation which waited on the Chancellor of the Exchequer recently, Mr. Lowe, _adopting the popular view on the question_, attempted to explain that the shipowners did not pay the dues out of their own pockets, that they only advanced the money to the merchant, that the merchant again indemnified himself by raising the price of goods to the consumer. But it appeared that in this particular case _Mr. Lowe’s theory did not square with the facts_, as the deputation, which consisted of the leading shipowners in England, positively assured him that no such transfer took place.

A tax may, under certain conditions, have the very opposite effect from that which it usually has, for instead of increasing the price of a commodity it may have the effect of diminishing it. (This has been the case with cotton in America, as shewn by the evidence given before the Select Committee of the House of Commons, in 1840.) (_Fortnightly Review_, 1873.)

[96] Competent authorities state, that the French navy alone will be far more powerful than that of England, when the ships now in course of construction have been completed, and the French navy can be much more concentrated than ours, which must be distributed over the whole world.

[97] _The Mail_, Decr. 19th, 1883.