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RECIPROCITY



BY

A MANUFACTURER.

M



LEEDS: BAINES & NEWSOME;

AND SOLD IN LONDON BY

SIMPKIN, MARSHALL, & CO., STATIONERS' HALL COURT;

AND

SMITH, ELDER, & CO., CORNHILL.



'



PREFACE.



" FREE Trade is an excellent thing in the abstract ; very
desirable if it could be placed upon an equitable system
of reciprocity."

Such is the substance of remarks which I have fre-
quently heard from merchants or manufacturers of high
standing, practical in their views of any other subject but
that of Free Trade. The application of this question
they stave off until certain very improbable or impossible
conditions can be fulfilled, viz., that Foreign Powers should
receive our manufactures on favourable conditions, whilst
we accept only their raw produce.

In most cases affecting their own interests, these prac-
tical men are shrewd enough ; but their expectations of the
benefits to be reaped from commercial treaties are vague and
ill defined, whilst they blindly surrender into the variable
policy of party administrations, a full control over duties
which have a most injurious effect upon their trade. A want
of self reliance and a craving from Government for measures

B



IV

of relief beyond the power of the legislature to afford,
are the prevalent errors of tradesmen at home and abroad.
Hence foreign administrations are pestered by conflicting
claims for protection from rival manufactures, more especially
from the cheap productions of Great Britain; hence our
own landowners cling with desperate pertinacity to their
protecting Corn Laws ; and hence our manufacturers
loudly call on our Foreign Secretary to attempt vain nego-
tiations, for the purpose of moderating the hostility of
foreign tariffs.

The object of this pamphlet is to give a practical aim
to our pressure upon Government, to point out what we
may expect, and to restrict our efforts to such measures
as we may hope eventually to carry. Foreign tariffs are
beyond our power to regulate ; but our own, which oppresses
us still more heavily, is within our reach. A combined
movement, on the part of the commercial interest, may
readily carry such alterations in our prohibitory and pro-
tective tariffs, as are essential to the expansion of our com-
merce.

Gaining a lesson from the past revulsions of trade, the
time is arrived when the manufacturer should learn what
security he has for the extent and continuance of his
business, or how far he is justified on the faith of our
existing tariff, in fixing his capital in mills or machinery.
It is hard that he should suffer from foreign prohibitive
tariffs, but the evil is aggravated by the vacillating attempts
of our own Government to negotiate more favourable treaties.



Foreign prohibitions are best met by the enterprise of our
own merchants.

In the ensuing pages I have fully discussed the indefinite
notions of reciprocity which are gaining ground with the
public, and I have branched off to certain popular objections
against Free Trade, which, trite as they are to the political
economist, still retain their secret hold in the breasts of many
tradesmen. As a manufacturer myself, I have honestly and
sincerely endeavoured to dispel the false alarm which has
been so industriously circulated, of the danger to our manu-
facturing superiority from the spread of manufactures abroad.
I apprehend no danger, but a positive benefit. If even the
alarm were well founded, why not meet it like men ?

If, unfortunately, some unintentional error be discovered
in this short work, my apology must be, that it has been
written in the intervals of a weighty business, with but
few leisure hours at my disposal. It was commenced before
the clear-headed author of " Corn and Currency" had taken
the field in the Economist, and to his vigorous advocacy I
leave the support of a cause to which I lend a more willing
than able assistance.

My object is to convince not to shine. If I succeed
in furnishing some who are not deeply read in the science
of political economy, especially my brother manufacturers,
whose avocations engross their attention, with more correct
notions of Free Trade and RECIPROCITY, if I aid in
dispelling the doubts and fears arising from the spread
of manufactures abroad, if I induce my commercial readers

B 2



VI

to ask from Government such measures only as are prac-
ticable, and to rely mainly upon their own energies for the
opening of foreign markets, I shall rest satisfied that I have
not written in vain.

A MANUFACTURER.



CHAPTER I.



WHAT is THE OEDINARY MEANING OF RECIPROCITY PROBABILITY OF OBTAIN-
ING RECIPROCAL TARIFFS MODERN ATTEMPTS ABSURDITY COLONEL
TORRENS'S ARGUMENT HOW CAN WE MEET HOSTILE TARIFFS? INDEPEN-
DENT COURSE OF ACTION FOR THIS COUNTRY TO PURSUE.

THERE is a vague idea, exceedingly prevalent amongst
commercial men, that all foreign treaties should stipulate
for reciprocal advantages: that, in fact, they should be
made a matter of bargain ; our object being to secure an
unlimited market for our manufactures, at the lowest possible
rate of duty, and receive back merely the raw materials of
manufacture or agricultural produce.

This notion of reciprocity is borrowed from the existing
navigation treaties, which have been concluded with nearly
all the foreign powers since 1815. Herein the shipping
interest alone has been consulted ; but our mercantile navy,
as the source whence our men-of-war draw their experienced
hands, has ever been deemed by our monarchs of paramount
importance. The powerful combination of shipowners needs
to be reminded, that they are merely carriers, and that their
prosperity is dependant upon the home manufacturer and
foreign producer.

The history of our navigation laws is instructive. In
1651 we attempted, by our famous navigation act, to drive
off the seas the Dutch vessels, our only rivals. AH their
vessels were excluded from our ports. The Republican



8

Parliament overlooked one necessary result, that hereby
they shut out a considerable portion of Dutch and German
produce ; a strange way of increasing our commerce, by
lessening our imports ! According to M'Culloch, the act
failed in its operation. " It is not to our navigation law, or
" the restrictive regulations of other foreign powers, but to
" the abuse of the funding system, and the excess of taxation,
" that the decline of the commercial greatness and maritime
" power of Holland was really owing."

The folly of injuring our manufacturing interest for the
sake of the shipowners, and the recoil upon the latter, were
not fully exemplified until the Americans retorted this very
act upon us, almost in the identical words, immediately after
they had succeeded in establishing their independence. At
first we attempted to retaliate, but " at length it became
obvious to every one that we had engaged in an unequal
struggle, and that the real effect of our policy was to give a
bounty on the importations of manufactured goods of other
countries into the United States, and thus gradually exclude
both our manufactures and ships from the ports of the
Republic."* The result of this conviction was the establish-
ment of a treaty between Great Britain and the United
States, in 1815, and the first introduction of the principle
of reciprocity in our commercial treaties, as set forth in the
fourth section of the act 6 Geo. IV., c 1, " That his Majesty
" may, by an order in council, admit the ships of foreign
" states into our ports, on payment of the like duties that are
" charged on British vessels, provided that British ships are
" admitted into the ports of such foreign states, on payment
" of the like duties that are charged on their vessels."

Other Powers were not slow to adopt the same mode of
bringing us to terms. Prussia took similar measures against
us in 1822 ; and in 1824 Mr. Huskisson found it imperative
to make a similar concession. Denmark, Sweden, France,
Austria, Russia, and other Powers, have subsequently brought
us to the same terms.

* M'Culloch's Dictionary of Commerce.



9

Mutual benefits have resulted from this extension of our
navigation act. Our previous attempts at monopoly and over-
reaching had militated against us, and placed Great Britain
in a most humiliating and dangerous position. Our system of
exclusion had induced other Powers to apply the same means,
and then it was discovered that we had more to lose than to
gain by the system. Most unwillingly was our Government
forced to submit to fair dealing ; nay, to beg for it.

A growing conviction is springing up, that this system of
reciprocity has fallen short of its most important end. Of
what use to gain an entrance for our vessels into foreign
ports, if their cargoes be excluded ? Why not apply to our
manufactures the same freedom of ingress which is granted
to our shipping ? Why not negotiate with foreign powers to
take our goods at the same duties as those we levy upon their
produce, and vice versa 9

These questions suggest themselves to all who are desirous
of accomplishing so great a desideratum as that of a reci-
procal system of Free Trade. So far from depreciating this
object, I would uphold it as the greatest boon to commerce.
Whether or not it may be safe to depend upon the legislature
or the executive, for the accomplishment of this purpose,
requires from every practical man a searching investigation.

The first difficulty arises out of the very words of the
navigation act we have previously alluded to. Each separate
treaty contains a provision, that there is to be " no priority or
preference," but that the vessels and cargo of the contracting
Power are to be admitted " on the terms of the most favoured
nations." If, then, we negotiate a reduction in our duties
upon the imports of any separate Power, in order to induce
such Power to receive our goods on favourable terms, we
directly admit, by our previous treaties, other nations, grow-
ing the same products, to a participation in the benefits of
our concession. A nominal distinction may be made in our
tariff betwixt the products of various countries, thus :
Portuguese wines might possibly be classed at higher duties
than French or Rhenish wines. Such an attempt I hold to



10

be a virtual infraction of the navigation act, and in other
cases it would not apply. If, for instance, we attempted to
negotiate with Prussia for the free introduction of our
manufactures into the territories of the Zoll Yerein, and
offered in return to modify our duties upon their corn or
timber, we are bound to admit, at the same duty, Russian
or American corn. With Brazils the case is different. She
offers us tropical produce, interfered with only by our own
colonies. Hence a marked and exclusive distinction is readily
made in our tariff.

A still greater obstacle to the formation of reciprocal
duties, has been the want of sincerity, and the spirit of mono-
poly or exclusion which have characterized the pretended
efforts of governments in behalf of commerce; above all, a
growing jealousy of our manufacturing power, which is rife
amongst our neighbours, coupled with the false inference
that this power is or has been propped up by our system of
protection.

As the preliminaries to a reciprocal treaty of commerce,
an uniform ad valorem rate of duty, and the abolition of all
differential duties, are requisite. Any import calculated by
weight, would fall heavily upon a bulky class of commodities,
such as are consumed by the lower orders, or used in various
processes of manufacture. Instance our trade with the States
of the German League, and suppose for a moment that we
opened a reciprocal tariff with them, founded on their own
principles. Our imports from thence, being chiefly wool, corn,
and produce, would be taxed much more heavily than our
exports, which consist chiefly of light manufactured goods
and yarn. Again, suppose we retained in our tariff the pre-
sent distinction betwixt the rates applied to raw materials and
those levied on articles of greater value, whereon more
labour had been bestowed we should lightly tax Prussian
imports ; but if Prussia were to adopt the same principles,
(which, to carry out the system of reciprocity, she necessarily
must,) our manufactured produce would in return be taxed
much more heavily. It is evident, therefore, that no com-



11

mercial treaty based upon an equitable adjustment of mutual
reciprocity, could be drawn up, unless founded upon an
uniform ad valorem rate of duty. If our Government had
been willing to accede to these terms, there would have been
little difficulty at one period in establishing a system of
reciprocal tariffs co-extensive with our navigation treaties.
Suppose we had offered to Prussia an admission of her ex-
ports on payment of 10 per cent, duty, to press equally on
every article without distinction, on condition that she ad-
mitted our produce on the same terms, there is little doubt
that she would have accepted our offer. We must, then,
have given up our antiquated notions of protection ; the
argument of vested interests, meaning, in other words, power-
ful interests, must have been relinquished ; the differential
duties in favour of our colonies would have been abandoned,
or placed under new regulations ; and we should have been
prepared to extend the system to all other countries that
chose to accept it. Other difficulties might be started.
The various necessities of foreign powers prompt them to
levy different scales of taxation on imports or exports for
the purpose of revenue. When the national treasury becomes
exhausted, a common resource has been to advance the duties,
certainly not always with a corresponding advantage ; yet
if this resource were taken away by the fixedness of the duty,
and the necessity of forming another treaty before an altera-
tion could be effected, other measures of finance must be
adopted. When we have to consider not only our own com-
plicated interests, but those of negotiating Powers, whilst
on the one hand we view our first statesmen continually
evading the application of views of commercial policy which
they acknowledge to be just, and, on the other hand, observe
the jealous rivalry of other Powers, and their all-absorbing
desire to copy our manufactures, we are led to despair of
ever seeing such a principle of reciprocity carried out.

What shall we say to the miserable attempts at negotiating
commercial treaties, which have lately exercised the diplo-
matic skill of our Secretary for Foreign Affairs, and his



corps of ambassadors, consuls, attaches, &c. Nothing can
exceed their ludicrousness, hut the humiliation they bring
upon this country. Our very anxiety to negotiate treaties
and obtain modifications of foreign tariff's, causes jealous
suspicions in the breast of the Government we want to deal
with, that we are a set of sharpers, trying to overreach and
arrogate to ourselves some peculiar advantages. The con-
tracting party is led to infer, that by taking our manufactured
goods, he confers a benefit only half requited by our churlish
acceptance of his raw produce. Look at our present position
with commercial nations. We have earnestly and deprecat-
ingly begged of Prussia not to raise her duties upon certain
descriptions of our goods, and to give the most favourable
interpretation to the new tariff of the Zoll Verein. Repulsed
in this quarter, we make an application to our favourite child,
Portugal, whom we have nourished with our treasure, and
protected with our blood, for whom we have vitiated our
palate, and cherished an exclusive taste for the medicated
port and sherry, to the neglect of the more genuine wines of
France or the Rhine. We allude to our ancient treaties of
alliance, the Methuen treaty of commerce, and argue that we
have a claim upon her for a market for our woollens in return
for our imports of her wines. After months spent in making
offers and refusing absurd proposals, whilst the hopes and
fears of merchants and manufacturers are kept in a state of
feverish suspense, all negotiations are abruptly broken off, in
order to create a semi-monopoly for some half-dozen rude
Portuguese fabrics, wherein a member of the Government is
interested. In reference to these protracted negotiations,
the Lisbon correspondent of The Times newspaper well
remarks :

" The untoward delays which have marked the progress of these negotia-
tions, have done more to discredit diplomacy than any event of modern
times. The preference obviously given to individual considerations over the
momentous pressure of national interests, to the desire of displaying mere
personal dexterity, finesse, and cunning of fence, to the determination (no
matter what thousands may suffer) to outwit antagonists, or come off at
least with the reputation of having effected that pettiest of triumphs, and



13

still worse, the unblushing coolness with which weeks and months have been
suffered to elapse, for the mere chance of tiring out the patience of rival
negotiators, or wresting some advantage from their fears, or deriving some
possible benefit from the unopened chapter of accidents, must have point-
edly directed men's attention to the question, how far they are benefitted by
the existing forms of international dealing. The world has outlived the
babyhood of ceremonial and the pupilage of sounding names. It is things,
not mere logomachy, that can satisfy the aspirations and the wants of the
community ; and it is not difficult to predict, that before many years shall
have elapsed, all questions of tariff regulation, and shipping and commercial
interest, will be decided without reference to so-called Excellencies, who
are excellent only for producing complication, embarrassment, and delay, by
the simple machinery of a mixed commission of merchants."

The same correspondent remarks further on the 27th of
March " The present conduct of the negotiators on the
" part of Portugal is downright insulting. They trifle with
" us as if we were children."

Not yet discouraged, but manfully bearing up against dis-
appointment, our Foreign Secretary next paid his respects to
the proud offset from the house of Braganza to Brazils.
The first point at issue was the termination of the existing
treaty; the Brazilian Government maintaining that it ex-
pired in November, 1842, whilst Great Britain contended
that it remained in force until November, 1844. Eventually
Brazils conceded the point somewhat grudgingly, as if anxious
to escape from an arrangement which she considered injuri-
ous to her interests, and refused to enter into farther stipula-
tions until the expiration of the treaty. The communications
of their minister, Senor Continho, contains a few remarks
derogatory to the good faith of our Government, and fur-
nishes another illustration of the rebuffs we experience in
our begging petitions for commercial treaties.

f< However much the imperial government may respect the opinion of
that of her Britannic Majesty^ they cannot be brought to a conviction that
their own is erroneous, and consider they have the same right to insist on
the conditions of the treaty alluded to being deemed mutually obligatory
on Brazils and Great Britain, only to November, 1842, the term when they
believe it ought to expire. But, notwithstanding, as the two governments
have not been able, to the present moment, to agree as to the due inter-
pretation of the contested clause, and as the term designated is fast
approaching, the government of his Majesty the Emperor, anxious always



14

to make manifest its moderation and good faith, at the same time protesting
against the construction put upon the said article by the government of her
Majesty the Queen, have consented to issue the necessary orders to the
respective public officers concerned, for the stipulation of the said treaty to
be continued in full force and vigour, as hitherto, until November, 1844,
provided the two governments should not in the meantime come to a
mutual understanding as to the precise period of its termination ; the
imperial government being fully confident, that that of her Britannic
Majesty will be finally convinced, that the construction given by them to
the article in question is the most conformable to reason, and to the spirit
and letter thereof. And inasmuch as these disputations are a sufficient
proof of the necessity of maturely weighing and duly considering any
engagements of this nature, between two sovereigns who deem it their duty
to consult the interests of the people over whom they preside, his Majesty,
the Emperor, considers it incumbent on him to defer, until the period at
which the said treaty shall terminate, his determination whether in his
wisdom he shall consider it proper and convenient to enter into any new
engagement, and will then take into consideration the different items con-
tained in the outline submitted by Mr. Hamilton to the consideration of the
imperial government."

Public opinion in Brazils runs counter to the formation
of another treaty with Great Britain, on the terms of the
existing tariff. An opposition journal at Rio observes :

" It is feared that the machinations of England will too soon follow this
up with a lasting convention, which will establish in favour of her commerce
a monopoly that will be useful neither to the Brazilian treasury, nor to the
actual circumstances of the country, and that cannot fail to excite serious
clamours and vehement protests on the part of those Governments which
have not concluded treaties with Brazil."

There is manifestly a fear of being taken in an alarm on
the part of the Brazilians lest England should overreach
them in commercial diplomacy. They seem to be thoroughly
acquainted with our internal struggles to expand trade and
throw off protection ; they take a comprehensive view of our
commercial position, and keep a watchful eye upon the rela-
tive state of parties in this country. Witness the shrewd
remarks of one of their senators, Senor H. Rezende

" It was his conviction, and he should maintain it until he was convinced
to the contrary, that the English nation, by which he did not mean either
the Government or the aristocracy, but the people, lost more by the existing
treaties than the people of Brazil, and that the commerce of England was
more injured by them than the commerce of Brazil. This opinion was at



15

present gaining ground in England, and on this account the English Cabi-
net was strongly urged to do justice with respect to the productions of
Brazil. What, in fact, had been the conduct of England with regard to
colonial produce ? It received the cotton of Brazil because the West Indian
colonies produce no cotton. It received their coffee, by way of the Cape of
Good Hope, because the West Indian colonies did not produce as much
coffee as was wanted ; but it refused to receive their sugar, because the
West Indies produced that article. All the world knew that the English
population was sacrificed to the interests of the English landowners and of
the proprietors of the West Indian estates. All the world knew that the
consumption of Brazilian sugar was prohibited in England, but that it was
refined there and sent to the West Indies, in order that the planters of
Jamaica and the other islands might be able to buy it at a very low price
there, and in that way be able to send all their produce to England, to be
sold at monopoly prices to the English people. All the world knew that the
interests of the English people were thus sacrificed ; but they had long been
accustomed to submit to monopolies of all descriptions. Now, however, that
the English population was becoming familiar with the discussion of such
questions now that they saw the flagrant injustice of sacrificing the work-
ing and labouring population to the proprietors now that they saw that
they were not allowed to taste the cheap sugars of Brazil, but were restricted
to the dear ones of the Antilles, whilst the West Indians were allowed to
purchase Brazilian sugars at a low price from this time it would be impos-
sible for the English Cabinet to maintain the interests of the aristocracy
against those of the nation."

Such being the tone of public feeling in Rio with respect to
commercial relations with England, it is not surprising that
Mr. Ellis, who was sent over to negotiate a further treaty,
altogether failed in the object of his mission.

These failures in our attempts to enlarge our intercourse
with other nations by means of treaties, are only what might
be expected from former experience. For more than two


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