Copyright
Robert Ellis Thompson.

Social science and national economy online

. (page 32 of 38)
Online LibraryRobert Ellis ThompsonSocial science and national economy → online text (page 32 of 38)
Font size
QR-code for this ebook


by the competition of Italy and the Low Countries, afterwards
by that of England and France, ceased its development. It re-
mained backward, it was paralyzed, while the other countries by



SPANISH TARIFFS. 345



• )



means of Cadiz carried on the commerce of its colonial pos-
sessions, and drew from them the raw materials and the precious
metals which they produced. The tariff of 1778 which im-
posed heavy duties upon goods produced abroad came too late;
the mischief was accomplished, and the industry of Spain was
all but annihilated " (J. F. Constant). It had no time to rally
before the Napoleonic wars completed her misery. She has
suffered more this century than any other country from internal
discord and civil war. The country is rich in the elements of
material wealth, but poor in population, being next to Scandinavia
and Russia in the sparseness of population. The first really
national and simply protective tariff was adopted in 1845; it
abolished all provincial tariffs and most of the prohibitions, and
reduced the duties on a good many articles without in the least
giving up the principle of protection. That Spain has advanced
rapidly in industrial development during the thirty years that
have elapsed is universally conceded. " Progress," wrote M.
Block in 1850, " is so rapid that the figures of to-day are left
behind to-morrow. On every side we see factories and workshops
rising, established either by Spaniards or by foreigners. These
latter crowd into this country of great expectations, where so
much land still awaits active and intelligent occupants, who
bring hither their talents and their capital.

See L'Eitprtgite en 1850, Tableau de sea Progrea lea plus reeenta ; par
Maurice Block. Paris, 1851.

The new tariff of 18b*9 reduced the duties on a great number
of articles without giving up, either in fact or in intention, the
principle of protection ; since its adoption the revenue, which
had fallen off since 18G4, has considerably increased. The re-
ductions beiug as much upon the raw materials of manufacture
as upon manufactured goods themselves, have rather helped
than hindered the Spanish workman to supply the home-market.
Spain is beginning to build her own ships; her vessels even
when owned at home having been hitherto almost invariably
built abroad. The disastrous civil war of the last three years
has of course checked all this improvement.



346 SOCIAL SCIENCE AND NATIONAL ECONOMY.

§ 308. Two European countries enjoy the unhappy distinction
of illustrating the miseries inflicted upon nations industrially
weaker when they engage in free competition with those that
are stronger.

(1) Portugal in 1681 hegan the development of her woollen
manufactures, the Count de Ericeira being Prime Minister and
author of this policy. " Our woollen cloths, cloth serges and
cloth druggetts," says the old British Merchantman, "were
prohibited " after 1684 ; " they set up fabrics for making cloth,
and proceeded with very good success, and we might justly
apprehend that they would have gone on to erect other fab-
rics, until at last they had served themselves with every spe-
cies of woollen goods." The prohibition not extending to all
woollen fabrics, but only to those most in use, was repeatedly
evaded by making goods that differed from these only in some
trifling respect, but bore names invented to suit the Portuguese
tariff. At last, in 1703, after the death of Ericeira, Portugal
negotiated the Methuen Treaty with England, by which Portu-
guese wines were admitted into England at lower rates than
those of France, and English goods into Portugal at the old
rates of duty. The aristocracy, who were large wine-growers,
were chiefly interested in the new arrangement. " Their own
fabrics," says the British Merchantman, ''were perfectly ruined,
and we exported £100,000 value in the single article of cloths
the very year after the treaty. The court was pestered with
remonstrances from their manufacturers; .... but the thing
was passed, the treaty was ratified, and all their looms were
ruined." One of the first effects was such a drain of silver
from Portugal that " there was left very little for their neces-
sary occasions," and this was followed by a drain of gold. Ex-
change stood at fifteen per cent, against Portugal, and her
export of coin to England rose to £1,500,000 a year. Goods
we're not paid for in goods, as Free Traders allege.

Her people were reduced to the monotony of a single occupa-
tion ; the amount of their productive labor was vastly dimin-
ished ; their power of association and mutual helpfulness was



THE RUIN OF PORTUGAL. 347

destroyed. The difference between the price of their raw pro-
duce and the manufactured goods for which they exchanged
them, increased as the workshop was carried away from the
neighborhood of farm and vineyard. ■ The aristocracy of land-
owners found that they had been killing the goose that laid the
golden eggs, for though, as there was no occupation but farming,
the people were competing for the possession of land, the rents
that they were able to pay were much less than if a varied in-
dustry had furnished a home market by withdrawing a large part
of the people from agriculture. One new industry was created —
smuggling. "We do not deny," says Mr. Macgregor in his
Commercial Statistics, "that there were advantages in having a
market for our woollens in Portugal, especially one of which, if
not the principal, was the means afforded of sending them after-
ward, by contraband trade, into Spain." As to her legitimate
commerce, Mr. McCullough says that the tonnage of her ship-
ping is about one-thirtieth of what it was, and that her produce
is mostly carried in foreign ships. Every year saw a decline of
the nation in wealth, civilization, power and prestige. Her peo-
ple retrograded in intelligence and skill. " It is surprising."
says an English traveller, " how ignorant, or, at least, superfi-
cially acquainted, the Portuguese are with every kind of handi-
craft; a carpenter is awkward and clumsy, spoiling every work
he attempts, and the way in which the doors and woodwork,
even of good houses, a're finished, would have suited the rudest
ages. Their carriages, of all kinds, from the fidalgo's family
coach to the peasant's market cart, their agricultural imple-
ments, locks and keys, &c, are ludicrously bad. They seem to
disdain improvement, and are so infinitely below par, so stri-
kingly inferior to the rest of Europe, as to form a sort of dis-
graceful wonder in the middle of the nineteenth century"
(Bailly). "The finances," says the Anmurire de V Economie
Politique for 1849. "are in the most deplorable condition ; the
treasury is dry, and all branches of the public service suffer. A
carelessness and a mutual apathy reign throughout the govern-
ment and the nation."



848 SOCIAL SCIENCE AND NATIONAL ECONOMY.

Nor has England gained as much as Portugal has Inst ; the
country is too poor to be a good customer. The Portuguese de-
mand for English goods is now of no importance, and has no
effect on the English market. The country is a sucked orange,
a thing to be got rid of — "a burden and a curse to England,"
Mr Cobden says.

After the defeat of the Church party and its leader Don
Miguel, a protective tariff was adopted in 1837, and its rate of
duties increased in 1841. It has the merit of being " specific"
in its method, so that its rates fall most heavily upou the com-
moner and cheaper articles. But in a country so demoralized
by contraband trade, so stripped of all the elements of industrial
wealth, so bereft of skill and enterprise, it can only operate
slowly in retrieving the fortunes of Portuguese industry. Still it
has made a change. It has turned the balance of trade with
England in Portugal's favor, and already " manufactures of
woollen and cotton goods, paper and tobacco, employ many per-
sons in Lisbon, and the printing of cotton goods imported from
England, has nearly put a stop to the trade in English printed
goods" (Dr. Yeates).

§ 309. Turkey, Mr. Cobden thinks, is also " a burden and a
curse" to the commercially-powerful nation with whom she has
long enjoyed free trade. Turkey was once a burden to nobody ;
was one of the chief commercial nations of the world. "Greece
and Asia Minor furnished us with their manufactured products,
together with those of India, long after their conquest by the
Turks, and up to the period when the industry of Europe reached
its development. To-day their manufactures have all but dis-
appeared, and those unhappy countries have nothing but farm
products" (Constant). When the power-loom superseded the
hand-loom in Western Europe, there was an immense importa-
tion of British goods. The muslins, the ginghams and the
carpets that for centuries had commanded the markets of the
world, that fifty years ago were worn in the backwoods of America,
were driven out of their own home markets. " Although," says
McCulloch, "our muslins and chintzes be inferior in fineness to



THE RUIN OF TURKEY. 349

those of the East, and our red-dye be inferior in brilliancy, those
defects arc more than balanced by the greater cheapness of our
goods ; and from Smyrna to Canton, from Madras to Samarcand,
we are everywhere supplanting the native fabrics." Turkish
carpets are still unequalled by the Western fabrics, but the
latter have driven them out of the market. "Of six hundred
looms for muslins in Scutari in 1812, only forty remained in
I s .'] 1 ; and of two thousand weaving establishments in Tournovo,
there were only two hundred" left.

Under any financial system, short of enforced prohibition of
foreign manufactures, these Eastern industries would have had
a severe struggle, but would most probably have survived it-
Protection might have been the means of importing foreign
skill, and perhaps, in spite of English prohibition, the necessary
machinery. But the Turkish merchants had all the odds against
them. In the absence of a sufficient revenue from customs'
duties, and of direct taxation, the native industry of the country
was severely taxed. Taxes on trades, taxes on tools, taxes ou
every sort of raw material, taxes on every kind of home-made
fabric, licenses and monopolies, all were laid upon the workman
at home, while his competitor from abroad paid the merest trifle
in customs' duties, and, by special treaties with France and Eng-
land, even that was reduced from five to three per cent, ad
valorem, in consideration of the exemption of Turkish vessels
from certain harbor duties. Native exports pay twelve per cent.

For a time there was left to Turkey a lifeless trade in raw silk,
cotton and the like. Now even that is gone to countries less
burdened with taxation. " Ships carrying goods to Constanti-
nople either return in ballast, or get cargoes at Smyrna, Odessa,
&c." Only a few of the ruder manufactures are still carried on ;
a woman's labor is worth four cents a day; a man's will com-
mand as much as fifty cents a week in the seaports.

•• The provincial populations, though not devoid of capacity
for better tilings, are at present condemned to wither under a
general atmosphere of maladministration and decay. . . . Beg-
gars all, beggars all, marry, good sir; little doing, less likely



350 SOCIAL SCIENCE AND NATIONAL ECONOMY.

to be done; trade degenerated into pedlary, enterprise into
swindling, banking into usury, policy into intrigue, lands un-
tilled, forests wasted, mineral treasures unexplored, roads, har-
bors, bridges, every class of public works utterly neglected and
falling into ruin, pastoral life with nothing of the Abel about
it, agriculture that Cain himself, and metallurgy that his work-
man-son might have been ashamed of; iu public life, universal
venality and corruption; in social life, ignorance and bigotry;
and in private life, immorality of every kind ; not 'something,'
but everything ' rotten in the state of" Turkey. Such is the
picture " drawn by Dr. Lennep. " We may add that it is hardly
an overdrawn one."

See for this aud the quotations that follow, the article " Provincial
Turkey," in the London Quarterly Review for October, 187-4.

Yet the fault is not in the country or the people; for the
Turks are "as a rule industrious, simple, thrifty, ingenious too,
peaceable and orderly ;" as free from the grosser and worser
forms of vice and crime as any nation under the sun. "That they
enjoy a climate than which few are more favorable to labor and
produce; that the soil is almost everywhere fertile above, and
rich in valuable ores below; that the coast abounds in places of
shelter, and the inland with noble rivers, are facts which no one
will question. Yet it is no less certain that capital has van-
ished from the land, that every undertaking, every enterprise,
is surely smitten with failure ; that the social condition is dete-
riorating in every respect, the number of the inhabitants dimin-
ishing, and that the symptoms precursive of a general bank-
ruptcy, not of means and finances only, but of vitality and of
men, become more menacing year by year, almost day by day."

And at the bottom of all the mischief lies the impoverishment
of the people through a bad national economy. " Want of
capital is the head aud front of Turkey's ills throughout her
length and breadth at the present day ; want of men, the ne-
cessary correlative or result of the former, the second." No-
thing is left her but agriculture, and such an agriculture ! " All
up the sides of the green hill " upon which a Turkish governor's



THE DECAY OF TURKISH INDUSTRIES. 351

palace is perched, " far over the wide Asiatic plain, we see the
yet uneffaced traces of irrigation channels, now broken down
and dry ; while removed from their original places, and strewed
at random over the ground here and there, lie the boundary
stones that once marked the limits of fields since abandoned to
weed and bush. At forty per cent, taxation, and such is the
very lowest rate levied by the Stamboulee tithe-gatherers on
the Turkish — if the crop be bad, the percentage may amount to
something much higher — agriculture is not a paying business;
and such luxuries as irrigation, drainage, manure, and improve-
ments of any kind, are out of the question. The landowner,
impoverished and in debt, cannot make them; the government
has very different uses for the money it takes from them, and
will not."

"Another blight overspreads the land as pestilence follows
famine. What the tax-gatherer has left is gleaned by the
usurer. . . There exists even now no credit-system in Turkey,
no country bank, no means of obtaining an advance except by
private loans ; no investment except in such loans ; no limit to
the terms, no security on the payment." With the destruction
of capital through the paralysis of societary circulation, and the
drain of money abroad, the destruction of credit has gone on
pari passu. There are a few banks in the seaport towns, but as
their transactions are chiefly the negotiation of government
loans and speculations with foreign or mixed companies, they
tend " to draw off the wealth of the Empire, not to husband it;
they are not reservoirs, but drains. The peasant, pressed by the
claims of the tax-gatherer, the landowner in need of money for
improvements, the shopkeeper desirous of outfit, the artisan who
would set up or extend his workshops, are one and all driven
into the hands of the private lender. . . The unfortunate peasant
is thus ground as between an upper and a nether millstone.
Three per cent, a month is the ordinary rate of interest; and
this, if unpaid, is at the end of the year added to the principal.
The day of selling out soon comes; the family emigrates or
starves. We have known a single moneydender thus draw to



352 SOCIAL SCIENCE AND NATIONAL ECONOMY.

himself the substance of a whole district. Another evil that
naturally follows is that capital wherever it exists is certain to
be applied almost exclusively to loans of this nature, while for
productive investment scarce a farthing can be found. A profit
of thirty-six per cent, is sure, particularly with the Asiatics, to
be preferred to one of four or five per cent, though more solid
and made by honester means, such as mining, agriculture, and
the like. Hence, too, every work of public utility is thrown
into the hands of foreigners ; foreign capitalists construct
harbors, work mines, utilize forests, lay dowu railroads, or at
least organize companies which profess to do all these things;
while the profits, if any, are shared among foreigners and outside
the country. . . Lastly, whatever home-made capital still remains
in the territory is unavoidably, by the very universality of small
private loans, so broken up and subdivided as to become prac-
tically useless for any serious purpose. Of all the sinister in-
fluences at work within the empire, none is more directly
destructive of its internal prosperity, aud, above all, of its agri-
cultural and landed well-being, than this. 'Not a single
property, great or small, within this district, but is burdened to
my certain knowledge with obligations aud liabilities exceeding
the value of its possible produce for two generations to come/
said a Turkish provincial governor."

The outside world is continually deceived by a show and pre-
tence of reform, but these go no deeper than the surface. Things
are growing worse, not better. " The administration is more
corrupt than ever, justice more venal, popular education more
neglected, taxation much heavier, and the population at large
more impoverished aud dwindling than in any preceding epoch.
. . . When the mines of Anatolia are worked, the manufactures
of Syria encouraged, the dikes of the Tigris valley restored;
wheu the bridges, roads, quays, embankments, canals, reservoirs,
caravanseries, all that was the pride and profit of local govern-
ments, and is now perishing or has perished with them, are re-
paired and perfected, — then indeed will there be hope for the
government and the governed, for Turkey and her Sultan."



OUR COLONIAL HISTORY. 353

Hand-in-hand with the destruction of local centres of industry,
with the lowering of the people to the level of a single employ-
ment, and with the effacement of the freedom and individuality
of character that accompanies diversified employment, has gone a
parallel political revolution that closely corresponds to the
economic one. " From a confederacy of half-independent states,
each retaining in the main its own customs, privileges and insti-
tutions, guaranteed by a strength to defend them, and by a
rough but efficacious popular representation, Turkey has within
the last fifty years sunk into an absolute, uncontrolled, central-
ized despotism, under which every former privilege, institution,
custom, popular representation — in a word, every vestige of
popular freedom and local autonomy — has been merged and lost
in one blind centralized uniformity." " She has sacrificed an
empire to a capital." And the decline of military power has
followed that of industry. " Whoever lists may now assail the
provinces with the safe assurance that the regular troops once
overcome no further opposition will remain ; the people starved,
disheartened, disarmed, and thoroughly alienated at heart from
a government that is a mere synonym for fiscal extortion, that
takes all and gives nothing, that has forgotten the traditions of
its youth, and preferred the office of tax-collector to that of
leader, will offer no resistance."

§ 310. The history of American industry may be said to begin
with the independence of the nation, or rather with the adop-
tion of the present Constitution. The navigation laws confined
the carrying trade of the colonies to English or colonial vessels.
In 1672 duties were imposed upon goods carried from one Brit-
ish colony to another, and as the West Indies at that time sup-
■ plied us with sugar, cotton, tobacco and indigo, took timber,
grain, &c, in exchange, the trade thus taxed for the benefit of
the English treasury was an extensive one.

During last century the tendency of the colonies to unite
manufactures with then" agriculture and save the expense of
transportation of the raw produce they sold and the manufac-
tured goods they imported, was sternly repressed by English
^23



354 SOCIAL SCIENCE AND NATIONAL ECONOMY.

legislation. They saw, as Franklin wrote from London in 1771,
that " every manufacturer in our country makes part of a market
for provisions within ourselves, and saves so much money to the
country as must otherwise be exported to pay for the manufac-
tures he supplies. Here in England it is well known and under-
stood that wherever a manufacture is established which employs
a number of hands, it raises the value of land in the neighbor-
ing country all around. It seems, therefore, the interest of our
farmers and owners of land to encourage young manufactures in
preference to foreign ones."

In 1699 the export of wool and woollens from the colonies, as
well as from Ireland, was forbidden. In 1731 an inquiry of the
Board of Trade ascertained that the colonies were making linens,
woollens, iron-wares, paper, hats and leather, and even export-
ing hats. The carriage of these, even from one " plantation " or
colony to another was forbidden. In 1750 the preparation of
iron, except in its rudest form for export to England, was pro-
hibited; and every slitting or rolling mill, tilt-hammer, forge or
steel furnace was declared " a common nuisance." The making
of pig iron was allowed, because, the application of coal to its
manufacture being as yet not invented, and the American woods
furnishing an unlimited supply of charcoal, it was thought good
policy to encourage the colonies in this line. The law was very
commonly evaded, as the ruins of the old steel furnaces and iron
works in out-of-the-way places of New Jersey and other states
still show.

The economical theories which underlay this British policy will be found
in a standard work of that period — Gee On Trade, (London, 1750). " Our
colonies," he says, " are much in the same state that Ireland was in when
they," the Irish, " began the woollen manufactory, and, as their numbers
increase, will fall upon manufactures for themselves. A little regulation
would remove all this out of the way, It is proposed that no weaver
have liberty to set up any looms without first registering the name and
abode of any journeyman that shall work for him ; that all negroes shall
be prohibited from weaving either linen or woollen, or combing of wool,
or working at any manufacture of iron, further than making it into pig
or bar iron ; they shall for time to come never erect the manufacture of
nails, under the size of a two-shilling nail, horse-nails excepted; that all



TIIE REVOLUTION AND INDUSTRIAL REVOLT. 355

slitting-mills and engines for drawing wire or weaving stockings be put
down; that also they be prohibited from manufacturing hats, stockings
or leather of any kind. ... If we examine into the circumstances of
the inhabitants of our plantations, and our own, it will appear thai not

one-fourth part of their products redounds to (heir own profit, for oui of
all that comes here, they only carry back clothing and other accommoda-
tions for their families, all of which is of the merchandise and manufac-
ture of this kingdom. . . . All these advantages we receive by tho
plantations, besides the mortgages on the planters' estates, and the high
interest tbey pay us, which is very considerable ; and therefore very great
care ought to be taken that the}' are not put under too many difficulties,
but encouraged to go on cheerfully. . . . The colonies have not commo-
dities and products enough to send us in return for purchasing their
necessary clothing, but are under very great difficulties, and therefore any
ordinary sort sell with them, and when they have grown out of fashion
with us, they are new-fashioned enough there."

This is not irony, as we might have supposed if Do Foe had written
it, but sober earnest. It represents the unquestioned English opinion of
that day. Even our friend Lord Chatham declared in the same year
that the colonies should not be allowed to manufacture "so much as a
hob-nail " for themselves.

§ 311. The legislation to keep the colonies to the work of
producing raw materials for English manufacturers, and take in
pay a small share of English goods, Avhile through their ne-
cessities English capital became more and more the master of
their estates, was among the provocations that led to the American



Online LibraryRobert Ellis ThompsonSocial science and national economy → online text (page 32 of 38)