something, can England enforce free-trade by her guns on all re fractory nations, when she is unable to convert to the free-trade policy even her own colony, Canada? Nay, even Vera Cruz, in Mexico, under the protection of customs officers, begins to manufacture cottons, and boasts this year of its 40,200 spindles, 287,700 pieces of cotton cloth, and 212,000 lbs. of yarn!

But the flattest contradiction to the export theory has been given by India. She was always considered as the surest customer for British cottons, and so she has been until now. Out of the total of cotton goods exported from this country she used to buy more than one-quarter, very nearly one-third (from 17,000,000l. to 22,000,000l., out of an aggregate of about 75 millions). But things have begun to change. The Indian cotton manufactures, which-for some causes not yet fully explained-were so unsuccessful at their beginnings, suddenly took firm root. In 1860 they consumed only 23 million pounds of raw cotton. In 1877 the figure increased nearly four times, and it has doubled since, reaching 184 million pounds in 1885-6. The number of cotton manufactories has grown from 40 to 81; the number of spindles increased from 886,100 to 2,037,055, the number of looms from 8,537 to 61,596; 57,188 workmen were employed on the average every day, and 1,454,425 tons of cotton goods were manufactured. The export trade in cotton twist has more than doubled in the last five years, and we read in the last 'Statement' (p. 62) that what cotton twist is imported is less and less of the coarser and even medium kind, which indicates that the Indian mills are gradually gaining hold of the home markets.' The jute manufactories of India have grown at a still speedier rate. In 1882 they had 5,633 looms and 95,937 spindles, and employed 42,800 persons. Two years later (1884–5) they had already 6,926 looms and 131,740 spindles, giving occupation to 51,900 persons. And therefore we saw that while India continued to import nearly the same amount of British cotton goods, she threw the same year on the foreign markets no less than 3,635,510l. worth of her own cottons, of Lancashire patterns (33 million yards of grey cotton piece goods), manufactured in India, by Indian workmen, by English and Indian capitalists. The once flourishing jute-trade of Dundee has been brought to decay, not only by the high tariffs of Continental Powers, but also by Indian competition. India exported jute-stuffs to the value of no less than 1,543,870l. in 1884-5. Nay, it is not without apprehension that the English manufacturers ought to see that the imports of Indian manufactured textiles (cottons, jute-stuffs, silk, woollens, and coir), which were 461,0867. worth in 1881, have now reached the value of 667,300l. At any rate she is a serious competitor to British produce in the markets of Asia and even Africa. And why should she not be? What should prevent the growth of Indian manufactures? Is it the want.

of capital? But capital knows no fatherland; and if high profits can be derived from the work of Indian coolies whose wages are only one-half of those of English workmen, or even less, capital will migrate to India, as it has to Russia, although its migration may mean starvation for Lancashire and Dundee. Is it the want of knowledge? But longitudes and latitudes are no obstacle to its spreading; it is only the first steps that are difficult. As to the superiority of workmanship, nobody who knows the Hindoo worker will doubt about his capacities. Surely they are not below those of the 91,611 boys and girls less than thirteen years of age who are employed in British textile manufactories. Organising capacities may have been at fault at Calcutta and Bombay for several years; but these capacities, like capital, go where they reap most profits.

Volumes have been written about the present crisis-a crisis. which, to use the words of the Parliamentary Commission, has lasted since 1875, with but a short period of prosperity enjoyed by certain branches of trade in the years 1880 to 1883,' and a crisis, I shall add, which extends over the chief manufacturing countries of the world. All possible causes of the crisis have been examined; but, whatever the cacophony of conclusions arrived at, all unanimously agree upon one, namely, that of the Parliamentary Commission, which can be summed up as follows: The manufacturing countries do not find such customers as would enable them to realise high profits.' Profits being the basis of capitalist industry, low profits explain all ulterior consequences. Low profits induce the employers to reduce the wages, or the numbers of workers, or the hours of labour, or finally to resort to the manufacture of lower kinds of goods, which, as a rule, are paid worse than the higher sorts. As Adam Smith said, low profits ultimately mean a reduction of wages, and low wages mean a reduced consumption by the worker. Low profits mean also a somewhat reduced consumption by the employer; and both together mean lower profits and reduced consumption with that immense class of middlemen which has grown up in manufacturing countries, and that, again, means a further reduction of profits for the employers. A country which manufactures chiefly for export, and therefore lives chiefly on the profits derived from her foreign trade, stands very much in the same position as Switzerland, which lives to a great extent on the profits derived from the foreigners who visit her lakes and glaciers. A good season' means an influx of from 1,000,000l. to 2,000,000l. of money imported by the tourists, and a bad season' has the effects of a bad crop in an agricultural country: a general impoverishment follows. So it is also with a country which manufactures for export. If the season is bad, and the exported goods cannot be sold abroad for twice their value at home, the country which lives chiefly on these bargains suffers. Low profits for the innkeepers of the Alps mean narrowed

circumstances in large parts of Switzerland. Low profits for the Lancashire and Birmingham manufacturers mean narrowed circumstances in this country. The cause is the same in both cases.

For many decades past we have not seen such a cheapness of wheat and manufactured goods as we see now, and yet we are suffering from a crisis. People say its cause is over-production. But overproduction is a word utterly devoid of sense if it does not mean that those who are in need of all kinds of produce have not the means for buying them with their low salaries. Nobody would dare to affirm that there is too much furniture in the crippled cottages, too many bedsteads and bed-clothes in the workmen's dwellings, too many lamps burning in the huts, and too much cloth on the shoulders not only of those who used to sleep in Trafalgar Square between two newspapers, but even in those households where a silk hat makes a part of the Sunday dress. And nobody will dare to affirin that there is too much food in the homes of those agricultural labourers who earn ten shillings a week, and pay for their meat ninepence a pound, or of those who earn from fivepence to sixpence a day in the clothing trade, or in the small industries which swarm in the outskirts of all great cities. Over-production means merely and simply a want of purchasing power amidst the workers. With their wages they cannot buy the goods they have produced themselves, because the prices of those goods, however low, include the profits of the employers and the middlemen.

The same want of purchasing powers of the workers is felt everywhere on the Continent. But it is obvious that it must be felt more in this country, which has been accustomed to pump bargains out of her foreign customers, and now sees her exterior trade decline. The exports of manufactured goods from this country have declined by 161 millions in the three years ending 1880 when compared with the year 1872—said Mr. Gladstone at Leeds. Even those who will not admit that there is a notable decline in the exports, willingly admit that the prices are so low in comparison with those of 1873, that in order to reach the same money value, England ought to export four pieces of cotton cloth instead of three, and eight or ten tons of metal instead of six. The aggregate of our foreign trade in the year 1883, if valued at the prices of ten years previously, would have amounted to 861,000,000l., instead of 667,000,000l.,' we are told by the Commission on Trade Depression.

6

The home markets are overstocked; the foreign markets are escaping; and in the neutral markets Britain is being undersold. Such is the conclusion which every observer must arrive at if he examines the development of manufactures all over the world. Great hopes are laid now in Australia; but Australia, with her ever-growing numbers of unemployed, will soon do what Canada does. She will manufacture; and the last Colonial Exhibition, by showing

to the 'colonists' what they are able to do, and how they must do, will only have accelerated the day when each colony farà da sè in her turn. Canada already imposes protective duties on British goods. New demands for a further increase of duties are continually being pressed on the Canadian Government. As to the much-spoken-of markets on the Congo, and Mr. Stanley's calculations and promises of a trade amounting to 26,000,000l. a year if the Lancashire people supply the Africans with loin-clothes, such promises belong to the same category of fancies as the famous nightcaps of the Chinese which were to enrich this country. The Chinese prefer their own home-made nightcaps; and, as to the Congo people, four countries, at least, are already competing for supplying them with their poor dress: Britain, Germany, the United States, and, last but not least, India.

There was a time when this country had almost the monopoly of the trade in manufactured ware. But now, if only the six chief manufacturing countries of Europe and the United States be taken into account, Britain, although still keeping the first rank, commands less than one-half of the aggregate exports of manufactured goods. Two-thirds of them are textiles, and more than one-third are cottons. But while thirty years ago, Britain took the lead in the cotton industries, about 1880 she had only a little more than one-half the spindles at work in Europe, the United States, and India (40,000,000 out of 72,000,000), and a little more than one-half of the looms. (550,000 out of 972,000). She was steadily losing ground, while the others were winning. And the fact is quite natural: it might have been foreseen. There is no reason why Britain should always be the great cotton manufactory of the world, when raw cotton has to be imported. It was quite natural that France, Germany, Italy, Russia, India, and even Mexico and Brazil, should spin their own yarns and weave their own cotton-stuffs. But the appearance of the cotton industry in a country, or, in fact, of any textile industry, unavoidably becomes the starting-point for the growth of a series of other industries; chemical and mechanical works, metallurgy and mining feel at once the impetus given by a new want. The whole of the home industries, as also technical education altogether, must improve in order to satisfy it, as soon as it has been felt.

What has happened with regard to cottons is going on also with regard to other industries. Britain and Belgium have no longer the monopoly of the woollen manufacture. The immense factories at. Verviers are silent; the Belgian weavers are misery-stricken, while Germany yearly increases her production of woollens, and exports nine times more woollens than Belgium. Austria has her own woollens and exports them; Riga, Lodz, and Moscow supply Russia with finest woollen cloths; and the growth of the woollen industry in each of the lastnamed countries calls into existence hundreds of connected trades.

For many years France has had the monopoly of the silk-trade.

VOL. XXIII.-No. 134.

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Silkworms being reared in Southern France, it was quite natural that Lyons should grow into a centre for the manufacture of silks. Spinning, domestic weaving, and dyeing works developed to a great extent. But eventually the industry took such a development that home supplies of raw silk became insufficient, and raw silk was imported from Italy, Spain, and South Austria, Asia Minor, the Caucasus, and Japan, to the amount of from nine to eleven million pounds in 1875 and 1876, while France disposed only of 800,000 pounds of her own silk. Thousands of peasant boys and girls were attracted by high wages to Lyons and the neighbouring district; the industry was prosperous. However, by-and-by new centres of silk-trade grew up at Basel and in the peasant houses around Zürich. French emigrants imported the trade, and it developed, especially after the civil war of 1871. The Caucasus Administration invited French workmen and women from Lyons and Marseilles to teach the Georgians and the Russians the best means of rearing the silkworm and the whole of the silk-trade, and Stavropol became a new centre for silk-weaving. Austria and the United States did the same; and what are now the results? During the years 1872 to 1881 Switzerland more than doubled the produce of her silk industry; Italy and Germany increased it by one-third; and the Lyons region, which formerly manufactured to the value of 454 million francs a year, shows now a return of only 378 millions. The exports of Lyons silks, which reached an average of 425 million francs in 1855-59, and 460 in 1870-74, have fallen down to 233 millions. And it is reckoned by French specialists that at present no less than one-third of the silkstuffs used in France are imported from Zürich, Crefeld, and Barmen. Nay, even Italy, which had 2,000,000 spindles and 30,000 looms in 1880 (as against 14,000 in 1870), sends her silks to France (3,300,000 francs in 1881), and competes with Lyons. The French manufacturers may cry as loudly as they like for protection, or resort to the production of cheaper goods of lower quality; they may sell 3,250,000 kilogrammes of silk-stuffs at the same price as they sold 2,500,000 in 1855-59-they will never regain the position they occupied before. Italy, Switzerland, Germany, the United States, and Russia have their own silk-manufactories and will import from Lyons only the highest qualities of stuffs; as to the lower sorts, a foulard has become a common attire with the St. Petersburg housemaids, because the North Caucasian domestic trades supply them at a price which would starve the Lyons weavers. And they do starve. The misery at Lyons was so great in 1884, that the poorly fed soldiers of the Lyons garrison shared their food with the weavers, and spared their coppers in order to alleviate the misery. But neither charities nor public works at the fortifications will help. The trade has irremediably gone away; it has been decentralised; and Lyons will never become again the centre for silk trade it was thirty years ago.