Fact versus fiction; the Cobden Club's reply to Mr. Chamberlain

Preface

In his recent campaign against the fiscal and commercial policy which has guided British statesmen for the past sixty years, Mr. Chamberlain has seldom spoken without references to the Cobden Club, and he has frequently attacked the principles and misquoted the opinions of Mr. Cobden.

Mr. Chamberlain was for fourteen years, until 1892, an eminent member of the Cobden Club, the chief speaker on two occasions at its annual gatherings, and the proposer at one of them of a toast to its foreign members, all of them honorary members, including many of the most distinguished economists in Europe. He has lately asserted that the Club is supported by the money of these foreign members in the interest of their own countries, and against that of Great Britain. He has been informed that foreign members are only honorary members, that they do not pay subscriptions, or contribute to the funds of the Club, and that they have no voice in its councils. He has, however, declined to withdraw or substantiate his untruthful statement.

In one respect we ought to be grateful for his action. It justifies us in replying to him with a frankness iv

PREFACE.

and fulness we might otherwise have been unwilling to adopt to a former colleague.

Under these circumstances, and in view of the momentous issues raised in the fiscal campaign, the Cobden Club have thought it incumbent on them to reply, in their corporate capacity and not in the name of any single member, to statements and arguments which have been so recklessly piled up in the many speeches in which Mr. Chamberlain has presented his policy to the country.

The reply has been prepared by a Committee consisting of Mr. Shaw-Lefevre, as Chairman, the only survivor of the original Committee of the Club when founded in 1866. of Lord Welby, the Chairman of the General Committee of the Club, Sir Spencer Walpole, K.C.B., Mr. Fletcher Moulton, K.C., M.P., Mr. F. W. Hirst, Mr. J. Murray Macdonald, and Mr. H. M. Williams. The work has been approved by a full Committee of the Club, and represents their views.

Apology may seem to be due for the length of the reply. It should be observed that the case against Mr. Chamberlain is a cumulative one. If the reply had dealt with five or six, or even ten or twelve, only of the principal mis-statements in Mr. Chamberlain's speeches, it might have been thought by the public that the rest of his statements were unimpeachable. But a careful consideration * of the speeches by the Committee has proved that they are open to objection in every part and almost in every paragraph ; that the frequent historical references are wholly unreliable ; that when authorities, such as Adam Smith, J. S. Mill, Cobden, Bright, and Gladstone, are quoted or

PREFACE.

v referred to, opinions the very opposite of what they held are attributed to them ; that the statistics are grouped together in an unfair and unscientific manner ; and that illustrations drawn from particular trades are ill-founded or exaggerated. It has been thought worth while to prove this by following out many of the principal mis-statements both of fact and theory without, however, at all exhausting all the sources of error.

Contents

CHAPTER PAGE

Preface iii

I.— Cobden Club's Reply to Mr. Chamberlain I

Chapter I

" In this controversy, which I am commencing here* I use figures as illustrations. I do not pretend that they are proofs. The proof will be found in the argument, and not in the figures. But I use figures as illustrations to show what the argument is." — Mr. Chamberlain at Greenock (October /\thi 1903).

Mr. Chamberlain having completed the programme he sketched for himself some months ago of addressing a series of great meetings on the fiscal question at various centres of industiy, it may be assumed that the whole of his case is now before the country. We have heard, therefore, all that can be urged in favour of the reversal of the policy of the past sixty years, and of a return to Protection, the taxation of food, and Colonial preferences. We know also from his own mouth, in the above quotation, the value which must be attached to any statistical argument of which he has made use.

It was to be expected that as the speaker, in the course of his campaign, discovered what were the subjects which most told with his audiences, he would amplify and magnify these at the expense of others which created less interest. It is doubtless for this reason that, while there has been much repetition in the many speeches which Mr. Chamberlain has made, there has also been an important change in the relative importance attached to the various topics with which he has dealt.

In the early stages of the scheme, in the past year, it was represented that the destruction of the Empire was at hand, and could only be averted by a preferential tariff. This, it was hoped, apparently, would be a first step towards an Imperial Zollverein. But the only definite proposal then made was a small duty on food imported into this country, with an exemption in favour of our Colonies. The scheme was also baited with " Old Age Pensions," for which funds were to be provided by the taxes on food. It was stated by Mr. Chamberlain that he could not himself look at the matter unless he was able to promise that a large scheme for the provision of such pensions could be assured by a revision of our fiscal duties.

At the next stage, in a speech at Glasgow, October 6th, a new departure was taken. It was proposed that a duty averaging 10 per cent, should be imposed on manufactured goods imported into this country. This, it was said, would afford the means of obtaining funds to reduce the burthen which might fall on the working classes from the increase in the cost of food caused by the scheme of Colonial preference. It would also give opportunities for negotiating with other Powers for a reduction of their import duties on our manufactures. Old Age Pensions disappeared from the programme, and were no more heard of.

This, however, was only ancillary to Mr. Chamberlain's original object — namely, the taxation of food for the purpose of conceding Colonial preferences. We know from the statements of Lord Balfour of Burleigh that in the scheme laid before the Cabinet for effecting Colonial preference no mention was made of an intention to propose a duty of 10 per cent, on manufactured goods. This latter proposal, therefore, was an afterthought.

TO MR. CHAMBERLAIN.

With the instinct of an accomplished and experienced platform speaker, Mr. Chamberlain no doubt perceived, as he gradually felt the pulse of his audiences, that the scheme of Colonial preference awoke little interest; that the proposed taxation of food with the consequent increase of price, in spite of his protestation to the contrary, alarmed the working classes ; and that what really interested his audiences was the promise of Protection to all home industries against foreign competition.

His later speeches, therefore, were mainly directed to this more popular and specious topic. The Empire was no longer in immediate danger, and Colonial preferences were relegated to the background. With the object of commending the wider scheme of Protective duties, it was expedient to devise a new version of the condition of the country before 1846, to attribute new motives to the statesmen who carried Free Trade, to ascribe their action to class interests, and to argue that the working classes of those days were not consulted, or did not give support to the movement. For the same reasons he now began to urge that the prosperity which followed on the adoption of Free Trade was not due to this, and to contend that during the last thirty years the conditions of trade have completely altered, and that a return to Protection is expedient and desirable. To these topics, therefore, the greater part of the later speeches has been devoted.

Apparently, also, in the later speeches, in consequence of this modified programme, it was necessary for the orator to adduce facts and arguments, for which he had not been prepared at the outset. He appears to have taken at second hand from his coadjutors and clerks many facts or arguments which he did not verify himself. This, at least, will explain why his illustrations of the evils resulting from free imports, with rare exceptions, are not founded on facts, or are misleading as to the real position of things. The " facts " and figures in these speeches have been followed by a chorus of denials in the columns of the Times and other papers from persons conversant with the trades concerned. But in spite of this they have been repeated in the published speeches as though the speaker were infallible.

In view of this altered strain of Mr. Chamberlain's utterances it will be well to analyse his statements and arguments as concisely as possible, and to invert their order. In lieu of beginning with Colonial preferences and then gradually approaching his full-blown scheme of Protection all round, we propose to commence with his new version of the effect of Protection before Free Trade, and of the objects and aims of the statesmen who overthrew Protection ; and then to trace his historical resurnt downwards to the present time, and to conclude by an exposition and criticism of his specific scheme.

It will be seen how unreliable are Mr. Chamberlain's historical references, how delusive and unscientific his statistics, how misleading his quotations from Cobden, Mill, and others, and how unsound his conclusions.

It will be seen also that the three objects of his scheme — the first of Colonial preferences founded on the taxation of food, the second of Retaliation against excessive tariffs, and the third of Protection all round for home industries — are entirely distinct from one another, and, subject to the conditions laid down, incompatible, and that, if effect is to be given to his policy, further taxation of food and raw material will be inevitable.

When the speeches are carefully analysed and reduced to their elements, the actual propositions on which they are founded may be grouped under the following heads : —

1. Those relating to the condition of England under the

system of Protection, with the object of proving that the commonly received conclusion that there was a great evil to be remedied is a delusion.

2. Those dealing with the economists and statesmen who

MR. CHAMBERLAIN'S HISTORY, 5 proposed and carried Free Trade, with the double but hardly consistent object (a) of injuring their credit, (b) of suggesting that they were not really Free Traders, and would, if now alive, support Mr. Chamberlain.

3. Those affirming that the prosperity of the country

for twenty-five years after the adoption of Free Trade was not due to that policy ; that conditions have wholly changed during the last thirty years, that stagnation has overtaken our foreign export trade, and that other foreign countries have prospered far more under a system of Protection.

4. The economic fallacy that Import Duties fall in great

part cn the foreign producer, and to a small extent, if at all, on the home consumer.

5. Arguments in favour of the three-fold scheme of

Colonial Preference, Retaliation, and Protection all round.

Chapter II

MR. CHAMBERLAIN'S NEW READINGS OF HISTORY IN DAYS OF PROTECTION BEFORE 1846.

"It is a popular delusion that during the time of Protection England was declining, until it had reached a state of unexampled misery and destitution." — Birmingham, May 15^, 1903.

u It has been falsely represented that the people in those days were not only on the verge of hunger, but were actually being starved." — Ibid.

"Is it true that at the time when Free Trade was introduced, and the Corn Laws were repealed, we were in a state of destitution and misery and starvation ? Is it true that under the Protection which prevailed before that this country was going down in the scale of nations or losing its prosperity and

COB DEN CLUB'S REPLY.

losing its trade ? No, absolutely no. The exact reverse was the case." — Ibid.

These statements are a travesty of history. They are opposed to the facts recorded of the times preceding the adoption of Free Trade by almost every historian or economist who has addressed himself to the subject. Volumes might be written in disproof of them.

Mr. Chamberlain must be quite cognisant of the conditions of England under Protection, for no one has ever more emphatically summed them up in a few pregnant sentences than he did, when speaking at a great meeting at Birmingham in 1885, on November 7th. The country at that time was passing through a period of depression and stagnation of trade — fortunately, as it proved, of a temporary character — and there was a very decided movement in certain quarters in favour of a return to Protection under the guise of what was then called " Fair Trade " and " Reciprocity."

<f I think it is necessary," he said, " that we should once more rub up our history of these bad times before Mr. Bright and Mr. Cobden succeeded in persuading Parliament that the Corn Laws were an iniquitous tax.

" I wonder whether in this vast audience there are any people who have any conception of the state of things which existed forty or fifty years ago — i.e. between 1835 and 1S45. At that time the whole of the labourers in the agricultural districts were on the verge of starvation. The Poor Rates were in some districts 20s. in the pound. At the time of which I am speaking the large towns were described by eyewitnesses as bearing the appearance of beleaguered cities, so dreadful was the destitution and the misery which prevailed in them. People walked the streets like gaunt shadows, and not like human beings. There were bread riots in every town. There were rick burnings on all the country sides. We were on the verge of a revolution when the Corn Laws were abolished."

In the same year at the Eighty Club, on April 28th, he said : —

MR. CHAMBERLAIN'S HISTORY. 7

" I think it is inconceivable that the working classes of this country will ever again submit to the sufferings and to the miseries which were inflicted upon them by the Corn Laws in order to keep up the rents of landlords. If that is the programme of the Tory party we have only in answer to it to recall the history of those times when Protection starved the poor, and when the country was brought by it to the brink of revolution. Remember the description which was given in the verses of the Corn Law rhymer of the sufferings endured by the people and of the burning indignation the sufferings called forth : —

They taxed your corn, they fettered trade, And every good that God hath made They turned to bane and mockery.

They knew no interest but their own, They shook the state, they shook the throne, Oh, years of crime ! . . . .

That is not a retrospect which I think would be favourable to any party or any statesman who should have the audacity to propose that we should go back to those times."

It may be well to refer to a few authorities in confirmation of these statements. Sir Spencer Walpole, in his History of England (Vol. VI., p. 386), expresses his " deliberate opinion that the wretchedness of the lower orders had been constantly increasing from 18 15 to 1842, and that the wave of misery in Britain reached its summit in the course of that year."

Mr. Cobden, in the first speech he delivered in the House of Commons on August 25th, 1841, referring to the previous ten years, said : —

" I have seen at Manchester a body of ministers of all religious persuasions, 650 in number, . . . gathered, not from Yorkshire or Lancashire only, not from Derby or Cheshire only, but from every county of Great Britain — from Caithness to Cornwall, at an expense of £3,000 to £4000, which was borne by their respective congregations. . . I will state generally that both from the manufacturing and agricultural districts there was the most unimpeachable testimony that the con-

COBDEN CLUB'S REPLY.

dition of the great body of her Majesty's labouring subjects had deteriorated wofully within the last ten years, and more especially so within the three years last past ; and, furthermore, that in proportion as the price of the food of the people had increased, just so had their comforts been diminished. I have seen statements derived from the reports of infirmaries and workhouses, from saving-banks and prisons ; and all alike bore testimony, clear and indubitable, that the condition of the great mass of her Majesty's subjects in the lower ranks of life" is rapidly deteriorating ; that they are now in a worse condition and receiving less wages ; and that their distress and misery result in a greater amount of disease, destitution, and crime than has ever been witnessed at any former period of the history of this country."*

Speaking at Edinburgh on December 2nd, 1845, Lord Macaulay, referring to the condition of the country in 1841, said : —

" Will anybody tell me that the capitalist was the only sufferer, or the chief sufferer ? Have we forgotten what was the condition of the working people in that unhappy year ? So visible was the misery of the manufacturing towns that a man of sensibility could hardly bear to pass through them. Everywhere he found filth and nakedness, and plaintive voices, and wasted forms and haggard faces. Politicians, who had never been thought alarmists, began to tremble for the very foundations of Society. First the mills were put on short time. Then they ceased to work at all. Then went to pledge the scanty property of the artisan ; first his little luxuries, then his comforts, then his necessaries. The rlfkels were stripped till they were as bare as the wigwam of a Dogribbed Indian. Alone amidst the general misery, the shop with the three golden balls prospered, and was crammed from cellar to garret with the clocks and the kettles, and the blankets, and the bibles of the poor. I remember well the effect which was produced in London by the unwonted sight of the huge pieces of cannon which were going northward to overawe the starving population of Lancashire."!

* Cobden's Speeches, Vol. I., p. 8.

t " Macaulay's Miscellaneous Writings," Vol. III., p. 361.

MR. CHAMBERLAIN'S HISTORY. 9

And the speaker subsequently added a few admirable words on prices and wages, which we subjoin : —

M If these things do not te'ach us wisdom we are past all teaching. Twice in ten years we have seen the price of corn go up, and as it went up the wages of the labouring classes went down. Twice in the same period we have seen the price of corn go down, and as it went down the wages of the labouring classes went up. Surely such experiments as these would in any science be considered as decisive."

At the commencement of 1842 — the year when Sir Robert Peel made his first great advance in the direction of Free Trade — the Queen's Speech at the opening of Parliament contained these words : "I have observed with deep regret the continued distress in the manufacturing districts of the country. The sufferings and privations which have resulted from it have been borne with exemplary patience and fortitude."

The following extract from a petition presented to Parliament by the Chamber of Commerce of Manchester in 1838 is proof of the depressed state of trade in the country, and is also disproof of the statement of Mr. Chamberlain that before the adoption of Free Trade this country had attained a virtual supremacy of the world's markets : —

" Your petitioners view, with great alarm, the rapid extension of foreign manufactures, and they have, in particular, to deplore the consequent diminution of a profitable trade with the Continent of Europe. : . . Whilst the demand for all those articles, in which the greatest amount of the labour of our artisans is comprised, has been constantly diminishing, the exportation of the raw material has been as rapidly increasing.

" Several nations of the Continent not only produce sufficient manufactures for their own consumption, but they successfully compete with us in neutral foreign markets. Amongst other instances that might be given to show the formidable growth of the cotton manufacture abroad, is that of the cotton hosiery of Saxony, of which, owing to its superior cheapness, nearly four times as much is exported, as from thi? country ; the Saxons

COBDEN CLUB'S REPLY.

exporting annually to the United States of America alone, a quantity equal to the exports from England to all parts of the world ; whilst the still more important fact remains to be adduced, that Saxon hose, manufactured from English yarn, after paying a duty of 20 per cent., are beginning to be introduced into this country and sold for home consumption, at lower prices than they can be produced for by our manufacturers.

" Further proof of the rapid progress in manufacturing industry going on upon the Continent is afforded in the fact that establishments for the making of all kinds of machinery for spinning and weaving cotton, flax, and wool have lately been formed in nearly all the large towns of Europe, in which English skilled artisans are at the present moment diligently employed in teaching the native mechanics to make machines, copied from models of the newest invention of this country, and not a week passes in which individuals of the same valuable class do not quit the workshops of Manchester, Leeds, and Birmingham to enter upon similar engagements abroad."*

Attention is drawn to the change in Mr. Chamberlain's version of historical facts, not merely for the purpose of showing that it is absolutely unsupported by any authority, but also because such a change has a totally different moral quality from a simple change of opinion about the merits of Free Trade. The change of opinion may be morally justified. But what are we to say of the moral sense of the man who changes his version of historical facts in order to support his change of opinion ?

Chapter III. Charges Against Leaders Of Free Trade

One of the charges brought by Mr. Chamberlain against the leaders of the Free Trade movement is, that they were actuated by their own interests as manufacturers,

* See for this^ petition " Free Trade and the Manchester School M {Harpers, 1903).

CHARGES AGAINST FREE TRADERS. n and that they believed wages would be lowered, and that they would consequently be better able to compete with foreign manufacturers.

" It is a fact," he said at Liverpool, October 27th, 1903, " that the movement was a manufacturers' and a middle-class movement. The leaders of the movement, or some of the leaders of the movement, admitted that they thought it would enable wages to be kept at what they called a reasonable level. They thought that it would give cheap food, or that if the labourer had cheap food he could afford to work for lower wages, and that they therefore could afford to carry on a competition with which they were threatened in the goods they manufactured. . . Rightly or wrongly, the leaders of the Free Trade movement believed that the big loaf meant lower wages."

The statement that the leaders of the movement expected that it would result in lower wages to their workmen is a curious instance of the disinterment of a scandalous charge frequently made at the time by opponents of Free Trade. Mr. Cobden's speeches contain many references to it. On February 24th, 1842, he said : —

" We are told that the object of the Repeal of the Corn Laws is to lower wages here to the level of Continental wages. Have low wages ever proved the prosperity of our manufactures ? In every period when wages have dropped it has been found that the manufacturing interest dropped also ; and I hope that the manufacturers will have credit for taking a rather more enlightened view of their own interests than to conclude that the impoverishment of the multitude, who are the greatest consumers of all that they produce, could ever tend to promote the prosperity of our manufactures."

On February 23rd, 1844, ne reverted to the subject : —

" With respect to farm labourers, our opponents tell us that our object in bringing about the Repeal of the Corn Laws is, by reducing the price of corn, to lower the rate of their wages. I can only answer upon this point for the manufacturing districts ; but as far as they are concerned, I state it most emphatically B

COBDEN CLUB'S REPLY.

as a truth, that for the last twenty years, whenever corn has been cheap, wages have been high in Lancashire ; and on the other hand, when bread has been dear, wages have been greatly reduced. Now I distinctly put this statement on record, and challenge anyone to controvert it."

In many other speeches Mr. Cobden nailed this lie to the counter. It is strange indeed that Mr. Chamberlain should try to make it pass current again.

The more general charge that the leaders of the movement were thinking only of their own class interests is equally unfounded. It gives us the excuse for quoting the touching passage in Mr. Morley's " Life of Cobden," in which Mr. Bright described the incident that caused his entrance into the Anti-Corn Law conflict at the instance of Cobden.

M It was, said Mr. Bright, in September in the year 1841. The sufferings throughout the country were fearful ; and you who live now, but were not of age to observe what was passing in the country then, can have no idea of the state of your country in that year. ... At that time I was at Leamington, and I was, on the day when Mr. Cobden called upon me, in the depths of grief — I might almost say of despair ; for the light and sunshine of my house had been extinguished. All that was left on earth of my young wife, except the memory of a sainted life and of a too brief happiness, was lying still and cold in the chamber above us. Mr. Cobden called upon me as a friend, and addressed me, as you might suppose, with words of condolence. After a time he looked up and said, ' There are thousands of houses in England at this moment where wives, mothers, and children are dying of hunger. Now,' he said, ■ when the first paroxysm of your grief is past, I would advise you to come with me, and we will never rest till the Corn Law is repealed.' I accepted his invitation. I knew that the description he had given of the homes of thousands was not an exaggerated description. I felt in my conscience that there was a work which somebody must do, and therefore I accepted his invitation, and from that time we never ceased to labour fiard on behalf of the resolution which we had made."^

* Morley's "Life of Cobden," Chap. IX,

CHARGES AGAINST FREE TRADERS. 13

These pathetic words have become classical in the English language. Mr. Chamberlain, who professes to have lately read the " Life of Cobden," can hardly have failed to notice them. Yet these are the men of whom he ventures to suggest that as leaders of the movement they entered upon it from interested motives, in the belief that wages would fall with a lower price of corn, and that they as manufacturers would be better able to meet competition.

Indeed, the only scintilla of justification which Mr. Chamberlain gives for stating that the leaders of the Free Trade movement looked for lower wages is a letter from Mr. Bright, written in 1888, to a friend in America, suggesting to him that if his countrymen made Protection their policy they would have to give higher wages to their working classes — higher wages and shorter hours. No reference is given, and we have failed to trace the letter. As it happens, however, we know exactly what Mr. Bright thought about the effect of Free Trade upon wages in England from two published letters of 1884. From the first (written to a member of the Hackney Liberal Association on the death of Professor Fawcett) we take the following passage : —

" Let your workmen reflect on the change in their condition which Free Trade has wrought within the last forty years since the reform of our tariff. The Corn Law was intended to keep wheat at the price of 80s. the quarter ; it is now under 40s. the quarter. The price of tea is now less than the duty which was paid upon it in former days. Sugar is not more than one-third of its cost when a monopoly of East and West India sugar existed. As to wages in Lancashire and Yorkshire, the weekly income of thousands of workers in factories is nearly if not quite double that paid before the time when Free Trade was established. The wages of domestic servants in the county from which I come are, in most cases, doubled since that time. A working brick-setter told me lately that his wages are now 7s. 6d. per day; formerly he worked at the rate of 4s. per