II.

THE COMING INDUSTRIAL STRUGGLE.

WE frequently hear now that the Manchester school of political economists is dead, and that the doctrines it inculcated are extinct. That this should be so seems to be considered a subject for general congratulation. Its policy is described as narrow and selfish, unsuited to the more enlightened and philanthropic times in which we live; while its professors are accused of want of patriotism and, strangely enough, of having sacrificed the interests of the whole nation to those of one particular class. Those, however, who have read the inaugural address of President Cleveland—perhaps the most remarkable declaration of policy ever delivered by any man in any country, though it has attracted far less attention in England than it deserves—may come to the conclusion that the Manchester school is not dead; but that, like a large part of the population of this country, it has emigrated to America, and taken its principles with it. This is, perhaps, not to be wondered at. We are a very great and a very intelligent nation, and for the last twenty-five years we have been lecturing the United States, in season and out of season, on the folly of protection, and the advantages to be derived from a strict adherence to sound economic principles. We have pointed to the marvellous development of our own industries, and to the rapid increase of wealth and enlightenment among every class of the community, as the best proof of the soundness of our advice; while we even ventured to predict for them an almost similar advance, if they would but follow our example.

E

How far we were honest in proffering this advice it is difficult to say. The followers of the Manchester school could consistently do so; for they believed that their policy must be for the advantage of every country adopting it, and that every advance in prosperity made by one nation must be for the advantage of every other. On the other hand, many believed that American manufactures were solely kept up by protection; and that, if the United States could be induced to open their markets, their own manufacturers could not compete with ours, and we should obtain an almost complete monopoly. Even Mr. Gladstone, who claims to be one of the last survivors of the Manchester school, in a controversy with the late Mr. Blaine, in the North American Review, some years ago, on the subject of free trade and protection, wrote as if it were the special mission of the United States in the universe to provide raw material for our manufacturers and food for our operatives, forgetting that he was addressing the representative of one of the largest manufacturing countries in the world. However, America is now going to adopt a free trade policy, possibly because of our advice, but much more probably from her own bitter experience of protection, which has ruined her agricultural classes, has tended to accumulate wealth in the hands of a few, and has led to a system of making concessions to every class of the community which had influence enough to exact them, to the detriment of those who had no such power.

This departure is far more important than at first appears. It may be said that America is only one country, and that most continental nations are still protectionist; but not only is America the most important of all as regards wealth, territory, population and resources, but she is also the only nation which can really claim to be protectionist in the fullest sense of the word. She alone is raising a revenue far in excess of her requirements. France, Germany, and all other protectionist countries, may gild the pill and endeavour to persuade their people that this form of taxation is a benefit, but every farthing raised is urgently needed for the support of their enormous armaments and the interest on their debts.

They probably find it easier to raise their revenue in this form than in any other. But the United States, practically without an army, a navy, or a public debt, had a revenue far in excess of what she could require, even after allowing for many illegitimate drafts made upon it; and, perhaps for the first time in the history of the world, the enormous accumulation of wealth in the public treasury became a pressing danger to the State. It was this condition of affairs which gave rise to the abuse of the pension fund, and led to the reckless extravagance, to call it by no stronger term, of the last Administration, which culminated in its defeat at the last election. But, opposed as I am to protection in every form, there is no doubt that more can be said in favour of it for America than for any other country. America is very nearly, if not altogether, self-supporting. With the exception of tea and coffee, and perhaps a few drugs, she can produce everything she requires in the way of food for her population, or raw materials for her manufacturers. If tection has failed in such a country, what can be said for it elsewhere? It has failed, and America is now pledged to a policy of free trade.

pro

While this change has taken place in the United States, the very reverse is going on among ourselves. Our farmers and manufacturers, or rather those who profess to speak for them, clamour for protection. Workmen are to be protected against their employers; the unemployed against those who do not employ them. We are to be protected against working too many hours, against getting drunk, against old age, against incapacity, against everything, except, perhaps, small-pox, by these new reformers. All this will require money; and, enormous as our taxation is, especially in view of the present condition of trade and commerce, this appears to present no difficulty. Government is to pay for all the proposed benefits, and the necessary taxation can be raised from the capitalists. Coexistent with this public extravagance, as is always the case, there is the most wild and reckless private expenditure the world has ever seen among all classes of the community, while both public and private extravagances are held

up as proofs of our marvellous prosperity. For years the old watchword of the Manchester school-Retrenchment-has never been heard here, and it now sounds strangely in our ears, as it comes to us, across the Atlantic, from the lips of President Cleveland, as he preaches public and private thrift and frugality, individual freedom, and independence of all government support and protection.

The object of this paper is to forecast, as far as possible, what will be the effect of this change of policy; and what each country will gain and lose by it. But, before entering on this subject, and to show how wide the lines of divergence already are, I propose to place in juxtaposition a few statements from the speech of Mr. Cleveland, in which he lays down the fundamental principles of good government, and some of the utterances of prominent statesmen in this country, belonging to all parties—unless, indeed, there still be a party representing the Manchester school.

PRESIDENT CLEVELAND.

'While every American citizen must contemplate with the utmost pride and enthusiasm the growth and expansion of our country, the sufficiency of our institutions to stand against the rudest shocks, the wonderful enterprise of our people, and the demonstrated superiority of our free government, it behoves us constantly to watch every symptom of insidious infirmity that threatens our national vigour.

'It cannot be doubted that our stupendous achievements as a people, and our country's robust strength, have given rise to a heedlessness of those laws governing our national health, which we can no more evade than human life can evade the laws of God and Nature.

'... We should be wise and should temper our confidence and faith in our national strength and resources with a frank confession that even these will not permit us to defy with impunity the inexorable laws of finance and trade.

Closely related to the exaggerated confidence in our country's greatness, which tends to the disregard of the rules

of national safety, another danger confronts us not less serious. I refer to the prevalence of a popular disposition to expect from the operation of our Government especial and direct individual advantages. . . This is the bane of republican institutions-a constant peril to our Government by the people. . . . It perverts the patriotic sentiment of our countrymen, and tempts them to a pitiful calculation of the sordid gain to be derived from their Government's maintenance. undermines the self-reliance of our people, and substitutes in its place dependence on governmental favouritism.

It

'The lesson of paternalism ought to be unlearned, and the better lesson taught that, while the people should patriotically and cheerfully support their Government, its functions do not include the support of the people.

6

Acceptance of this principle leads to a refusal of bounties and subsidies, which burden the labour and thrift of a portion of our citizens. .

...

'It' (that is, the neglect of this principle) leads also to a wild and reckless pension expenditure, which . . . prostitutes to vicious uses the people's prompt and generous impulse to aid those disabled. . . .

'Every thoughtful American must realize the importance of checking at its beginning any tendency to extravagance in public or private stations, and to regard frugality and economy as virtues. The toleration of the idea of extravagance results in waste of the people's money by their chosen servants, and encourages prodigality and extravagance in the home life of our countrymen. Under our scheme of government, waste of public money is a crime against the citizen, and contempt for the character of our people for economy and frugality in their personal affairs; and it deplorably saps the strength and sturdiness of our national character. It is the plain dictate of honesty and good government that public expenditure should be limited by public necessity, and that this should be measured by the rules of strict economy. It is equally clear that frugality among the people is the best guarantee of the contented and the strong support of free institutions.