Lace Effect of foreign tariffs. Mr. Walker, of the Dundee Chamber of Commerce, said: When the mills first started at Calcutta and began to compete with us they took the heavy trade from us, and we cannot compete with them. We simply altered our machinery so as to make it suitable for the goods we were introducing into Germany and Russia. Germany was the best market we had, with the exception of America; and after going on in that way for some time those foreign countries began, first of all Italy, and then Germany and Austria, and lastly Russia, to put on very heavy duties. Those duties did not tell at first so adversely, because they had to put up their works to produce the goods. My firm used to send out between 2,000,000 and 3,000,000 yards to Germany alone. Russia was a very large market for us, but in the last two years, since they have built these mills and put on these high duties which, in the case of Germany, equal 27 per cent, and in the case of Russia 112 per cent, my firm have almost entirely lost this trade. In 1882 we exported 47,000,000 yards to Germany; in 1883 that number had decreased to 35,000,000, and in 1884 it had decreased to 27,000,ooo, while last year it was down to 19,000,000.1 LACE INDUSTRY. The import of lace goods into the United Kingdom for home consumption was very insignificant in 1860, amounting to only $277,805, but by 1875 it had increased to $1,940,030. Since that date it has become quite considerable, amounting to $4,538,235 in 1890, an increase since 1875 of 134 per cent. While on the other hand, the exports of domestic productions declined from $13,610,398 in 1881-2-3, to $10,000,368 in 1890-1-2, or 23 per cent. The causes which have contributed to this result are free trade in England and protection in other countries. Rival industries have been built up under protection on the Continent, which have grown so strong that they are invading English markets and driving English manufacturers out of the foreign trade. The English people are still clinging to the policy of free trade, and seeing their own industry undermined and ruined. The evidence of lace manufacturers given before the Royal Commission, contained many pointed facts upon the advantages of protection, showing how the industry has been built up in Germany, employment given to German artisans and a business created which could not have been brought into existence, excepting under the influence of protective tariffs. The following evidence also discloses the reasons why advocates of free trade in the American Congress and elsewhere, attack specific duties with such bitterness. It is a well-known fact that ad valorem duties are favorable to that system of under-valuation and fraud, by which the advantage given by protection is either neutralized or destroyed. Mr. Frederic Carver, from the Nottingham Chamber of Commerce, said: From 1873 to the beginning of 1879, we suffered in like manner with the rest of the country, in fact I think we were suffering as badly as any place could be, from 1 Royal Commission, Report II, Part I., p. 219. the special causes at work to prevent our producing, first, as well as foreign countries, and secondly, as cheaply as foreign countries. The increase of foreign competition can only be shown, I think, or be fairly estimated by the continuous growth in Germany and elsewhere of machinery, which has recently taken place. Prior to 1879, I believe I am justified in saying that there was scarcely a lace machine in Germany whatever. In 1879 a duty was put upon Nottingham manufactured goods of such a character that it at once induced a number of manufacturers in this country, seeing that those duties were almost prohibitory, manufacturers who had difficulties with their workingmen especially, to say, "Well, that being the case, this great duty which they now put upon Nottingham manufactured goods offers a great advantage, and therefore I will take at least some portion, if not the whole, of my plant to Germany;" and the consequence is, at the present time we see a number of Nottingham manufacturers, who actually have establishments at Plauen, and are making goods which, if it were not for the protective duties that were created for them by Germany, would be made in Nottingham. The German tariff being a specific tariff, that at once shut out what the Nottingham and other English goods, I think, are especially noted for, that is, aiming to make a low class, cheap, and effective article; and we find, unfortunately, that wherever these specific tariffs exist, they always have the same result. Unfortunately this process which was initiated in some measure by Austria, has been followed by Germany, and it has been followed by France, and always with the same results, our trade ceasing and our manufacturing decreasing. The tariff in Germany was neither more nor less than a means to tempt machinery from this side to locate itself in Germany. That attempt has been very successful; and at the present time we find that Germany can not only make all the lace curtains they want, but they are now offering certain goods in this market, and in neutral markets, in competition with English manufacturers. I think the evidence carries conviction with it, that if it were not for the immense advantage that they enjoy in the price of labor, they would never be able to compete successfully with us in this market. Russia is another country with which we have lost a considerable amount of business; that is owing to the same operation.1 1 Royal Commission, Report II, Part I, p. 234. CHAPTER V. FREE TRADE AND ENGLISH INDUSTRIES-(Continued). METAL INDUSTRIES. The following quotation throws light on the condition of the metal industries in Great Britain: An analysis of last year's exports reveals an all round decline, which is very unsatisfactory. Between the years 1880 and 1883 the total exports from Germany increased about 25 per cent, say from 992,000 tons to 1,232,505 tons, which found its way to China, India, the River Platte, United States and Australia. In steel and iron wire this competition has been felt most keenly, for whilst the total exports from England in 1883 were 62,784 tons, those from Germany amounted to 203,627 tons, and in 1882 they were 227,416 tons. For a time the Germans even succeeded in beating our English makers on their own ground. But this led to such a reduction in wire drawers' wages as rectified this anomaly; but for exports we are often at a disadvantage when competing with them. The increase of production in Germany will be manifest from the following figures: Loss of markets iron. The great extension in steel wire is, no doubt, due to the large development of "Basic" process. We may anticipate that this competition will increase, and it may be necessary for the English manufacturer most seriously to consider in what way he can meet and overcome it. There is no shutting our eyes to the fact that we are somewhat heavily handicapped in the race. Wages are lower, even after making all fair allowance for the greater efficiency of British labor, but the system of tonnage rates and payment by the piece, in contrast to day labor on the Continent, accounts for a considerable portion of the difference.1 It has come to this, that the British iron and steel manufacturers are for British reducing wages in order to prevent their home trades from being transferred to Continental countries. It was urged, when free trade was adopted, that under its "stimulating breezes " the natural advantage of having coal and iron lying side by side (fuel and raw material), aided by the genius, ability, wealth and mechanical skill of the English people, the supremacy acquired during so many years of protection would be maintained. A high degree of skill has been met by a high degree of skill. Capital has 1 Extract from the Annual Metal Circular of Messrs. W. Fallows & Co., of Liverpool, dated Jan. 9, 1895. been pitted against capital. Coal and iron are found lying side by side in many countries. Sir Lowthian Bell, president of the Iron Trade Association of Great Britain, said before the Royal Commission:1 In Germany, France, Luxembourg, new fields of iron ore have been discovered, very analogous in point of character to those which had led to such great development of the iron trade in Cleveland (England) and elsewhere. The whole constitutes an immense deposit of iron stone, which begins in Luxembourg, and, passing through Alsace, enters France, running through about 150 miles in length of the country by a few miles in width. Q. Why should we not have supplied that which was so wanted abroad? A. We could not supply it and send it to Germany, because in that country they were able to make iron and deliver it at a given point in Germany more cheaply than we could have made it here and deliver it at the same point. In addition to the freight and other charges of transports, there are heavy import duties to pay on entering the German Empire. The same observations made in respect to Germany are also more or less applicable to other European countries. The monopoly of the British iron-masters is broken. Mr. Bell, speaking further of the reduction of prices and expansion of the industry, said: British dustries, 1870-9. There was a considerable increase in the make of iron between 1870 and 1875. I have here the prices of Cleveland iron from 1870 to 1879; this kind of pig iron iron in brought 50s. and 3d. in 1870, 49s. 8d. in 1871, and 1872 795. 1d. 1872 and 1873 were years that I mentioned before as being exceptionally good ones; in 1873 it was 1095. 2d.; in 1874, 70s. 11d.; in 1875, 54s. and 6d.; in 1876, 475. and 10d.; in 1877 42s. and id.; in 1878, 395. and 1d., and in 1879, 34s. and 4d. The make of the whole world, as nearly as I have been able to estimate it, was 11,565,000 tons in 1870. The monopoly of the iron trade held by the English masters at this time enabled them to take advantage of conditions, fix prices to suit themselves and reap enormous profits. To be sure, an unusual demand arose at this time from extensive railroad building and other causes, yet no increase in the cost of production occurred excepting a slight advance in wages, yet the profits were very large. The ability of a country holding a monopoly of a trade to take advantage of such conditions and levy a tribute on the buyers of the world, was well understood by the free trade party in 1846, and was the chief cause of their desire to make England the sole manufacturing nation of the world. As competition arose prices declined. Had other countries neglected to build up their industries under protection, England would have continued to "suck in gold, gold, gold," as Mrs. Trollope said. Notwithstanding the constant harping about protection's raising prices, through the rival industries which have been reared under its influence, the consumers of the world are undoubtedly getting cheaper iron than they could ever have hoped for under free trade monopoly. 1 Second Report Part I. pp. 41-42. Growth of the iron industry in foreign countries. Mr. Bell continues : In the year of 1872, which was the commencement of two or three years of high prices, the make had risen to 14,345,000 tons. After 1879 an extraordinary change became apparent in the volume of make (of the world), for during the ensuing five years the average make was close on 18,000,000 tons, and in one of them, 1883, it rose to 21,663,000 tons, or nearly 50 per cent on what it was in 1879. The make in the United States has increased from 1884, 131 per cent on the make of 1870. That of the rest of the world in 1884 is 237.9 above that year. The production of Great Britain rose between 1870 and 1883 from 5,963,000 tons to 8,529,000 tons, but the foreign quantity rose from 5.602,000 tons to 12,534,000 tons. The iron industry of the United Kingdom has not only received a set-back in the development of the industry in other countries by the loss of foreign trade, but by maintaining open ports the consumers of England are making large purchases abroad. The increase of imports for home consumption of some of the leading metal manufactures from 1860 to 1890, were as follows: Decrease of exports. While the imports have been increasing, as disclosed by the foregoing figures, since 1874 the exports of domestic productions have declined. In 1872-3-4 the total exports of iron and steel manufactures were $143,520,242. During the following twenty years of marvelous development in other countries, as competition increased the exports declined to $118,908,362 in 1890-1-2, a decrease of 17.1 per cent. It has already been pointed out that from the beginning of railroad building in 1850 to 1874, the British iron-masters supplied the world with the larger portion of materials for their construction. The export of railroad iron of all sorts from the United Kingdom in 1872-3-4 was $50,470,966; by 1890-1-2 it had declined to $20,136, 125. It will be remembered that the first steel rails were made in the United States about 1867, when protective duties were first imposed for the purpose of giving employment to American labor in making them for American railways. A similar decline has taken place in British hardware and cutlery, which amounted to $24,052,361 in 1872-3-4, and to $12,477,912 in 1880-1-2, a decline of 48 per cent. In connection with the foregoing, the evidence given before the Royal Commission on Depression of Trade and Industry, becomes very interesting. The witnesses point out in specific detail the causes which have brought |