We have said that the modern theories when applied to practice, have, in a remarkable manner, failed. In saying so, we have chiefly in view the acknowledged failure of the strenuous efforts made by England, during the last twenty years, to effect an interchange in the advantages of free trade, and the entire disappointment which has attended the long establishment, on a great scale, of the reciprocity system. To the first we shall advert in the present paper; the second will furnish ample room for reflection in another.
The abstract principles on which the doctrines of free trade are founded, are these; and we put it to the warmest advocates of those principles, whether they are not fairly stated. All nations were not intended by nature, nor are they fitted by their physical circumstances, to excel in the same branches of industry; and it is the variety in the production which they severally can bring to maturity, which at once imposes the necessity for, and occasions the profit of, commercial intercourse. Nothing, therefore, can be so unwise as to attempt, either by arbitrary regulations, to create a branch of industry in a country for which it is not intended by nature, or to retain it in that branch where it is created by forced prohibitions. Banish all restrictions, therefore, from commerce; let every nation apply itself to that particular branch of industry for which it is adapted by nature, and receive in exchange the produce of other countries, raised, in like manner, in conformity with their natural capabilities. Then will the industry of each people be turned into the channel most advantageous and lucrative to itself; each will enjoy the immense advantage of purchasing the commodities it requires at the cheapest possible rate; hopeless or absurd hot-bed attempts to force extraneous industry will cease; and, in the mutual interchange of the surplus produce of each, the foundation will be laid of an advantageous and durable commercial intercourse. England, on this principle, should not attempt to raise wine, nor France iron or cotton goods; but the calicoes and hardware of Great Britain should be exchanged for the wines and fruits of France: both nations will thus be enriched, and a vast commercial traffic grow up, which, being founded on mutual interest and attended with mutual advantage, may be expected to be durable, and to extinguish, in the end, the rivalry of their respective people, or the jealousy of their several governments.
Such is the theory of free trade; and it may be admitted it wears at first sight a seducing and agreeable aspect. Let us now enquire how far experience, the great test of truth, has verified its doctrines, or demonstrated its practicability. To illustrate this matter, we shall have recourse to no mean or doubtful authority; we shall have recourse to the statement of an enlightened but candid contemporary, whose advocating of a moderate system of free trade has excited no small anxiety in the British empire; and which report, from the information and ability it displays, has assigned to the present accomplished head of the Board of Trade.
The efforts made in Great Britain to introduce a general system of free trade, especially within the last three years, are thus enumerated in the Foreign and Colonial Review.
"England, without gaining or asking a single boon from any foreign country, has—
"1. Reduced by about one-half the duties upon foreign corn.
"2. By nearly the same amount, the duties on foreign timber.
"3. Has removed her prohibitions against the importation of cattle and other animals for food, and has fixed upon them duties, ranging on the average at about ten per cent ad valorem.
"4. Has made flesh meat admissible.
"5. Has reduced the duty on salt provisions for home consumption by one-third, and one-half; and has placed them on a footing of entire equality with the British article for the supply of the whole marine frequenting her ports.
"6. Has lowered her duties on vegetables and seeds in general to one-half, one-sixth, and even one-twelfth (in the case of that most important esculent the potatoe) of what they formerly were.
"7. Has made all great articles of manufacture, except silk, which is reserved for future negotiations, admissible at duties of ten, twelve and a half, and fifteen per cent, and only in some few instances so much as twenty per cent.
"8. Upon some minor articles of manufacture, where our people lie under heavy disadvantages in obtaining the raw material, and where their habits have been formed in their particular occupation, wholly under the shelter, and therefore upon the responsibility of the law, she has retained duties in some cases as high as thirty per cent ad valorem, but yet has reduced them to rates insignificant in comparison with those formerly charged.
"9. In her colonies, she has fixed the ordinary rules of differential duties upon foreign productions at four and seven per cent, with exceptions altogether trifling in amount, on which a higher charge has been laid for special reasons.
"10. She has withdrawn the prohibition to export machinery, except so far as regards the linen manufacture, and the spinning of the yarns employed in it.
"11. With regard to many other articles, such as butter and cheese, indeed, with regard to all articles to which the simple and essential interests of the revenue will allow the same rules to be applied—it has been declared that they are only temporarily exempted from the operations of those rules, and it is well understood, that no time will be allowed to pass, except such as is necessary, before the work is completed; and lastly,
"12. She has not even excluded from the benefit of these reductions the very countries under whose simultaneous enactments, of a hostile character, she is at this moment suffering: these advantages will be enjoyed by the tar and cordage of Russia; by the corn and timber, the woollens, linens, and hosiery of northern Germany; by the gloves, the boots and shoes, the light writing-papers, the perfumery, the corks, the straw-hats, the cottons and cambrics, the dressed skins, the thrown silk, and even (from an incidental charge with respect to the charge of duty on the bottles) the wines of France; by the salt provisions, the ashes, the turpentine, the rice, the furs and skins, the sperm oil of America; and she in particular may expect to derive advantage from the alteration in our colonial import duties upon the great articles of flour, salt, provisions, fish and lumber."[15]
Such have been the sacrifices which Great Britain has recently made in order to secure a system of free commercial enterprise throughout the world. Let us now enquire what return she has met with for these concessions; and the recent occurrences in this respect are detailed in the same unexceptionable authority.
"Within the last year, France has passed an ordinance, doubling the duty on linen yarns—a measure hostile enough, had it been uniform in its application to all countries; but, lest there should be any ambiguity about its meaning, she has actually left open her Belgian frontier to that article at the former duty, on the condition that Belgium should levy the high French duty in her custom-houses, so as to prevent the transit of the British yarns through that country. To this disreputable and humiliating proposal, Belgium has consented. Again, amidst the loudest professions from the Prussian government, of an anxiety to advance the relaxation of commercial restrictions, that government has, nevertheless, adopted a proceeding not less hostile or mischievous than the measure of France with regard to linen yarns. The Congress of the Deputies of the Zollverein, at Stuttgard, have in a new tariff, which was to take effect on the 1st of January, besides some minor alterations of an unfavourable kind, decreed, upon the proposal of Prussia, that goods mixed of cotton and wool, if of more than one colour, shall pay fifty thalers the centner, instead of thirty; that is, instead of a very high, shall be liable to an exorbitant, and, as it may prove, a prohibitory duty. Next, America, as all our readers must be aware, has, after a struggle, passed a tariff, subverting altogether the arrangement established by the Compromise Act of 1833, and imposing upon the various descriptions of manufactured goods rates of duty varying from thirty to forty and fifty per cent and upwards, which have had the effect of stopping a great portion of the shipments of cotton goods to that country from Great Britain during the past autumn, and, without doubt, have added greatly to the distresses of our manufacturing population. Besides these greater instances, Russia, according to her wont in such matters, and Spain, have published, within the test fifteen months, new tariffs, of which it is difficult to say whether they are still worse than, or only as execrably bad, as those which they succeeded, but, in the close rivalry between the old and the new, the latter seem, upon the whole, entitled to the palm of prohibitive rigour. And Portugal, likewise, has augmented the duties payable upon certain classes of her imports, by a measure of the recent date of March 1841, and by another of last year. In the mean time, Spain has concluded a treaty with Belgium for the admission of her linens. And the king of Prussia has effected an arrangement with the czar, which, in certain particulars, secures, upon his own frontier, a relaxation of the iron strictness of the Russian system. England has concluded no commercial treaty with any of these powers; and the negotiation with France, which the measures of Lord Palmerston interrupted in 1840, at the very period of its ripeness, appears still to slumber—owing, we believe, in part, to the prevalence of an anti-Anglican feeling in that country, which, for the credit of common sense and of human nature, we trust will be temporary; but much more to the high protective notions, and the political activity and influence of the French manufacturers, which overawe an administration far less strong, we regret to say, than it deserves."
Our recent attempts, therefore, to introduce a general system of free trade among nations have proved a signal failure, on the admission of the most enlightened advocates for that species of policy. Nor have our earlier efforts been more successful. Mr Huskisson, as it is well known, introduced, full twenty years ago, the system of free trade, and repealed the navigation laws, in the hope of making the Northern Powers of Europe more favourable to the admission of British manufactures, and materially reduced the duties on French silks, watches, wines, and jewellery, in the hope that the Government of that country would see the expedience of making a corresponding reduction in the duties levied on our staple manufactures in the French harbours. But after twenty years' experience of these concessions on our part, the French Government are so far from evincing a disposition to meet us with a similar conciliatory policy, that they have done just the reverse. Scarce a year has elapsed without some additional duty being imposed on our fabrics in their harbours; and the great reductions contained in Sir R. Peel's tariff were immediately met, as already noticed, by the imposition of an additional and very heavy duty on British linens. Nay, so far has the free trade system been from enlarging the market for our manufactures in Europe, that after twenty years' experience of its effects, and an increase over Europe generally of fully a third in numbers, and at least a half in wealth, it is an ascertained fact, that our exports to the European-States are less than they were forty years ago.[16] "That part of our commerce," says Mr Porter, himself a decided free trader, "which, being carried on with the rich and civilized inhabitants of European nations, should present the greatest field for extension, will be seen to have fallen off in a remarkable degree. The annual average exports to the whole of Europe were less in value by nearly twenty per cent, on an average of five years, from 1832 to 1836, than they were during the five years that followed the close of the war; and it affords strong evidence of the unsatisfactory footing on which our trading regulations with Europe are established, that our exports to the United States of America, which, with their population of 12,000,000, (in 1837,) are situated 3000 miles from us across the Atlantic, have amounted to more than half the sum of our shipments to the whole of Europe, with a population fifteen times as great as that of the United States of America, and with an abundance of productions suited to our wants, which they are naturally desirous of exchanging for the produce of our mines and looms."[17]
This was written by Mr Porter in 1837; but while subsequent times have evinced an increased anxiety on the part of this country to extend the principles of free trade, they have been met by such increased determination on the part of the European governments to resist the system, and adhere more rigorously to their protecting policy, that the disproportion is now universal, and is every day becoming more remarkable. The following table will show that our exports to Europe, notwithstanding our twelve reciprocity treaties with its maritime powers, and unceasing efforts to give a practical exemplification of the principles of free trade, are stationary or declining.[18]
In one particular instance, the entire failure of the free trade system to procure any corresponding return from the very continental states whose harbours it was chiefly intended to open, has been singularly conspicuous. In February 1821 the reciprocity system, in regard to shipping, was introduced by Mr Huskisson, and acted upon by the legislature; and the following reason was assigned by that eminent man for deviating from the old navigation laws of Cromwell, which had so long constituted the strength of the British navy. Mr Huskisson maintained—"That the period had now arrived, when it had become indispensable to introduce a more liberal system in regard to the admission of foreign shipping into our harbours, if we would avoid the total exclusion of our manufacturers into their harbours. The exclusive system did admirably well, as long as we alone acted upon it; when foreign nations were content to take our goods, though we excluded their shipping. But they had now become sensible of the impolicy of such a system, and, right or wrong, were resolved to resist it. Prussia, in particular, had resisted all the anxious endeavours of this country, to effect the introduction of goods of our manufacture, on favourable terms, into her harbours; and the reason assigned was, that the navigation laws excluded her shipping from ours. The reciprocity system has been rendered indispensable by the prohibitory system, which the other European powers have adopted. The only means of meeting the heavy duties they have imposed on our goods and shipping, is to place our duties upon a system of perfect reciprocity with theirs. Foreign nations have no advantage over us in the carrying trade: from the London report, it clearly appeared, that the ships of Norway, Sweden, Russia, Prussia, France, and Holland, cannot compete with British, either in long or short voyages. But at any rate, the repeal of our discriminating duties has become matter of necessity, if we would propose any trade with these countries."[19]