Government. Neither Mr. Chamberlain nor any of those who agree with him have ever been able to tell us where all this money is to come from, nor, I fear, will they succeed in doing so until they have solved the greatest economic problem of all time-how you can both eat your loaf and have it. The pockets of the capitalists and manufacturers have, it is true, been suggested; but Mr. Chamberlain knows full well that they never have much money in their pockets, and have none at all when they are most prosperous. They can then employ it to better purpose. It cannot be taken from the wealth realized by past production, for three reasons-the first, because that wealth has been largely re-employed in industry; the second, perhaps a childish reason, because it would be misappropriation; the third, because, as the fund would soon be exhausted, it could not provide a permanent provision for the objects in view. It must, therefore, be taken from the current industry. It must come from the manufacturers' profits, where they still exist. Even admitting that all manufacturers are still making a profit, it is not a very large one; and it is clear that the profits in every industry must vary according to the special advantages possessed by some manufacturers as compared with others. The larger and wealthier among them can, as a rule, make money when those less favoured can barely make both ends meet. It is evident, therefore, that any readjustment of the division of profits between employers and employed, or any provision made out of profits for the latter based on what the larger and wealthier manufacturers can afford, must tend to the extinction of the smaller men, and that with their extinction a large number of operatives will be thrown out of work. These will, I presume, join the ranks of the unemployed, for, according to Mr. Burns, Government is to find reproductive work at a full rate of wages in our dockyards and arsenals. It seems to escape our new reformers that in process of time all the population which has not already left the country will be occupied in the manufacture of war material; for it is evident that the wages paid to every man engaged in the building of warships and guns, which, Mr. Burns notwithstanding, is not

reproductive work, means the withdrawal from really reproductive industry not of one man but of many men. If we know anything, we surely know by this time that money raised by taxation, and expended by Government, does not go nearly so far and is not applied to as good purpose as the same sum expended in private enterprise. Moreover, these ships and guns once made must be manned; and the evil does not stop there, for then we must get up a little war just to see how well, or how badly, they work. There is one sense, however, in which these works are reproductive. When finished, they are so imperfect, that the supposed necessity for them requires us to produce others to take their place; and in these we reproduce the same or as great defects. The difference between building a war vessel and a merchant vessel is, that every man engaged either in the construction or the maintenance of the former is a drain on the resources of the country; while every man engaged on the latter is contributing to find employment for many others at home and abroad, and is thus, not only occupied in work which will in time reproduce itself out of the profits it makes, but is adding to the wealth and prosperity of the nation at large. Our new reformers seem to take a totally different view of the situation from President Cleveland; and consider that, while it is the duty of the Government patriotically and cheerfully to support the people, it is in no wise one of their functions to support the Government, or, in other words, themselves. Those manufacturers who are left after the extinction of their smaller and less wealthy competitors will, for a time at least, do an excellent business, even after they have deducted from their profits their share of what is required for the support of the unemployed. It is wonderful how clearly we see the mote which is in our brother's eye, for I should be afraid to say how many English homilies I have read in the last ten years, addressed to the benighted American people, proving most conclusively that the protection of industry must create huge monopolies which oppress the people, and especially the working classes. We fail to recognize the fact that the protection of labour must accomplish the same result even

more surely. It is the same with every measure proposed, if we follow it to its logical conclusion; it is the working classes who must, as Sir William Harcourt says, pay the piper; and this is, perhaps, only fair, for it is they who call the tune.

These would-be reformers are entirely sceptical as to the capacity for progress possessed by a really free society, and they map out the future course of progress by means of their own foot rule. A reference to the many proposals for the provision of old age pensions from the rates will explain my meaning. It is clear that the rate of pension must bear some proportion to the rate of wages current at the time the measure is proposed, the more so if the prospective pensioner is to contribute towards the amount required. To-day we fix the pension at five shillings a week, and in forty-five years a working man now aged twenty will come into the enjoyment of that income. Supposing, however, a similar measure had been passed forty-five years ago, half-a-crown a week, or less, would probably have borne about the same proportion to the rate of wages then current as five shillings does to-day. In the meantime, we have taken away from the young man, during the best years of his life, the greatest incentive to thrift-the necessity of making provision for old age-and we have misled him into relying on a pension at sixty-five, which, when that time arrives, proves to be no provision at all. What reason is there for thinking that the rate of wages will now stand still, and that forty-five years hence five shillings will satisfy the legitimate ambition of a working man any more than half a crown does to-day?

I have often wondered what an American working man would say if any one suggested he might have a pension of five shillings a week when he was sixty-five. I should not advise any one to make the proposal to him, except at a very safe distance.

'God knows,' said Mr. Gladstone, in his interview with the coal-miners, that eight hours is long enough for any man to work underground.' Mr. Gladstone generally weighs his words very carefully, and, in speaking thus, he must have

done so either to add impressiveness and solemnity to what he was saying or because he considered it incapable of contradiction. It is evident, however, that God cannot have come to two absolutely contradictory conclusions; and I would ask if God does not also know that there is far more suffering of the cruellest kind among the poor from cold than there is among the colliers from overwork, and whether legislation which could in any way add to that suffering would not be wellnigh criminal? We know from experience that, where a policy of free trade prevails, the tendency is always to the maximum of production consistent with a reasonable profit to be divided between employers and their workpeople. A maximum of production must necessarily lead to a maximum of employment and a maximum purchasing power for the wages earned. The regulation of industry must as certainly lead to its restriction, to a decreasing amount of employment available for the working classes, and to a lower scale of real as opposed to nominal wages. The former policy leads to a state of great national prosperity and an increasing demand for all the necessaries and luxuries of life; the latter to continual contraction of production and the misery to which it must give rise.

England and America can be very useful to each other, and in no way more so than by teaching each other what to avoid. The whole history of American protection provides us with an object lesson which we cannot study too carefully. At first it was a tax for revenue and, as such, possibly accomplished its object as well as any other form of taxation; then it was to establish their industries, and this it may have helped to do; but it was found that this system had no inherent strength. The older these industries grew the greater was their need of protection. Tariff was piled on tariff, and still the believers in protection cried Give! give! and at last the climax of absurdity was reached when the McKinley Bill was passed. Protection is unsound in theory, but it is far more unsound in practice. It is not equal protection which is wanted; but each section of industry intrigues to be specially protected at the expense of every other section. Wealth and

poverty being merely relative terms, a good protectionist has no desire to advance only with the rest of the population, and calls on his fetish to pass him on a little ahead of the others. It generally happens, however, that there is some class which cannot be protected, and the larger and more simple this class, the longer will it be able and willing to support all the rest of the community. In the United States this was the agricultural class, and on it fell the entire burden of taxation. Naturally its powers of endurance were limited; but the crash was averted for long by loans made to the farmers on mortgages of their properties by the other sections of the community which they supported, and, unfortunately, to a large extent by investors in this country. The financial crisis through which America is now passing is purely agricultural, and neither commercial nor industrial, as seems generally to be supposed. Of the bank failures which have taken place, 85 per cent. have occurred in the Western States, 10 per cent. in the South, and only 5 per cent. in the Eastern States, which alone can lay claim to any industry not immediately connected with agriculture, excepting, of course, mining, through which, however, banks could not become directly involved. And the end of the crisis is not yet, for the mortgages on agricultural lands are held principally by the savings banks, which have the right to require six months' notice of withdrawal from their depositors, and this, it has generally been supposed, would give sufficient time to enable them to foreclose, should that be necessary. In every announcement of the failure of a bank it has been stated that the assets were amply sufficient to cover the liabilities; and no doubt they are, if the same level of value at which these mortgage loans were made can be maintained. This, however, remains to be seen, and must depend on the proportion of mortgages they hold, as compared with other securities. It is evident that anything like general foreclosure is impossible.

With this picture before our eyes, it is wonderful that we should rush so madly after the chimaera protection. Like the Americans, we think we have discovered the class which can support all the others; and this class we fondly