I.--On the Progress of Commerce and Industry during the last Fifty Years. An Introductory Lecture, delivered at King's College, by PROFESSOR LEONE LEVI, LL.D., on 13th October, 1887.

It is well to know that commerce and industry are now admitted as demanding and deserving the solicitude of States. Time was when sovereigns were only concerned with wars and alliances, and with despotic pretensions or matrimonial schemes, and when the material interests of the people were held of no account, or deemed as beneath their notice. States have now, by experience, learnt that a nation rich and prosperous is more likely to be heard in the council of nations, than one poor and decaying; that the prosperity of the people is the first condition for the stability of the public finances; and that national influence is better advanced by the diffusion of commerce, the power of capital, and the presence of native merchants in every nook and corner of the habitable globe, than by the presence of armies and navies, or by the action of ambassadors and consuls, however skilful they may be. But though the prosperity of trade must ever be a matter of supreme regard, the government of a State must remember that its functions are primarily, if not exclusively, the maintenance of order, and the protection of the country from aggression from within and from without. And although it is the duty of the Government, as far as its power extends, to shield its subjects or citizens from fraud and exactions, wherever they may be domiciled, it is not incumbent on the same to procure for them trade and privileges. The ambassador, who is the eye and the ear of the State; the consul, specially deputed to watch over the commercial interests of the people he represents, must be alert in sending such information, or take such steps as may delay or prevent the granting by the States to whom they are accredited, of special privileges to other countries collectively, or to merchants of other countries

individually; but what would be objected to if given to others, must not be sought for ourselves. The ambassador is a political, not a commercial representative. The consul must not allow personal partialities to sway his public duties. In all matters, indeed, having reference to the material or economic interests of the nation, the Government must needs be earnest, but cautious, for there is as much danger of doing too much, as of doing too little; there is danger of misconceiving the interests of individuals for the interests of the nation; and still more danger from the fact that the action of the State is often irreparable, and if mistaken, may commit the nation to a policy bearing the most disastrous consequences. There is much reason indeed for such caution in all matter of commercial legislation, especially in the present state of the customs laws of different countries, the operation of which, in many cases, is very irritating, and well nigh insupportable.

Free traders are reminded that Mr. Cobden's predictions, that if once England adopted free trade, all the world would follow in her steps, have been singularly unfulfilled. Yes, indeed, protection is rampant in many States. But if the light that is in them be darkness, how great is that darkness. A glance at the negotiations now going on for new treaties of commerce, on the basis of more and more protection, shows that not a few States are quite at their wit's end as to what is best to be done. Reasons of State, or want of revenue; the need of quieting or satisfying the cravings of manufacturers and capitalists always eager for monopoly, and a natural anxiety to promote produce and manufactures, make States ready and willing to increase their tariffs. And they fret if they are hampered by treaties or threatened by retaliation. Under what is called the "most-favoured nation" clauses, in most treaties of commerce, each nation provides that the contracting States will give to one another the full benefit of whatever concession either may make to any other country. Most necessary clauses they are, which justly prevent favouritism. But these clauses, advantageous in many respects, act as a barrier to any special legislation of a restrictive character against any State, whatever the provocation. And so those who resent the hindrance, are ready to advocate the abandonment of the most-favoured nation clauses, and the holding in reserve of a customs tariff bristling with protective items, dependent on internal legislation, and not on the agreement or adhesion of other States: a tariff which might act as a salutary menace, and prove the means of artificially exacting relaxions of duties from other countries. The evil of such a course, however, is that as soon as one autonomous tariff comes into operation, the example is immediately followed by other States, each imposing higher protective duties, till at last there is an end of all stability of duties, and an end too of all calculation of the probable success of business. At one time questions like these were the constant causes of war. We are not going so far now, but the contention is serious, and who can tell the result. The relations of France and Italy on this very subject at the present time are precarious in the extreme, and I earnestly hope that neither power will push its demands to excess.

But apply these remarks to a question persistently brought forward in this country, that of the sugar bounties. Admitting all that has been said of their injurious working to the British sugar manufacture, though the nation as such can have no objection to getting sugar cheaper than its actual cost would justify, could England meet such bounties by a preferential legislation in favour of any country not guilty of such a course, whilst heavily taxing the products of the country guilty of the same? Treaty obligations happily compel us to treat all nations alike, and if so, it is perfect folly on the part of any section of the people-nominally, indeed, the workmen, but practically West India sugar importers and British refiners-to ask the Government to do what the nation as a whole would not like it to do, or what, if it were desirable to be done, we are absolutely prevented from doing by a clause in our treaties which is as useful and beneficial to ourselves as it is to any other countries. What we want is some general understanding on matters of customs tariffs. If universal free trade is impossible, because customs duties are required for revenue purposes, could not an agreement be arrived at fixing the maximum rates on the different articles in all countries alike? If customs duties are wanted for securing a reasonable protection of native industry, what percentage ought to be allowed for such a purpose, taking into account the natural protection of native against foreign produce in the cost of transport, insurance, commission, &c. ? The United States, altogether wrong as they are in their policy as regards foreign commerce, enjoy at least the benefit of free trade within themselves over their own vast area. In Europe, unfortunately, every petty State shuts itself up from all the rest by the most complex and absurd system of tariffs. I do not approve of making financial matters the subject of conventions, but surely a better understanding might be arrived at on the broad question of customs tariffs throughout Europe.

Notwithstanding all difficulties, natural and artificial, the commerce of the world is, and must be, constantly increasing, the necessary consequence of the increase of population in the principal States of Europe, and the immense masses of people brought within the range of commercial intercourse within the last fifty years; of the many articles of produce and manufacture which have, by science and ingenuity, become valuable articles of commerce; of the speed attained in the transport of goods and passengers by sea and land, and the celerity of communication by telegraph; of the augmentation of capital, with increasing security and facilities for its investment; and last, though not least, in consequence of the increase of the amount of gold, and the extension of banking and credit. Within the last fifty years not only has the population of Europe increased upwards of 100 millions,1 but intercourse has been opened or enlarged with India, China, and Japan, numbering together some 500 millions. What does this

The population of Europe was given by Balbi in 1833 at 227 millions, in 1887 the Almanach de Gotha gave the population of European States at 336 millions.

mean but an immense increase of producers and consumers, the productive power being increased in many cases a hundred fold by the use of implements, tools, and machines, and the application of new natural forces, such as steam and electricity; and the consuming power being also augmented by the diffusion of comforts among all classes. The Board of Trade tables relating to the trade of the United Kingdom show us how every new invention leads to increasing traffic. The exports of manufacture of soda, of chemical products, of drugs and medicinal preparations, and of chemical manures, all comparatively new industries, amounted in 1886 to upwards of 5 million £. The manufacture of caoutchouc or india rubber was but little known fifty years ago, yet in 1886 the exports of the same amounted to nigh 1 million £. I have stated that the speed of transport facilitates trade. Whence is it that we now regularly receive large quantities of wheat from India, but because the railways recently constructed bring the wheat cheaply from the interior to the shipping ports, and steamers carry it from India to British ports? The railways are the creation mainly of the last forty years, and there are now in the world upwards of 300,000 miles of rails, carrying to and from great masses of merchandise and people. And who can tell the number of words which are flashed as by lightning through the 2 millions of miles in length of telegraphic wires? No longer months and months are required to complete a commercial transaction with India or Australia. A bill at usance needs not be at six months' date. By cable an order is sent, and by cable a banking transfer completes the operation. But is there no limit to the increase of commerce? It is surely limited, on the one hand by the power to produce, and on the other by the power to consume; and there is reason to think that whereas in the early part of the last fifty years the power to produce was less than the power to consume, in recent years production has proceeded at a far greater speed than consumption. Taking quantities especially into account, it is not too much to say that whereas population is ordinarily increasing at the rate of 1 per cent. per annum, production at times has been increasing at the rate of 10 or 20 per cent.* Political economy commends the increase of production, but production of what? Not of simple materials, measured by length or weight, but of utilities or of real wealth. And if we will have commerce to be profitable, or to have the effect of increasing utilities, we must observe the conditions of limitation imposed on the same by time, place, and circumstances.

Of the entire amount of trade now carried on in the various

2 The production of coal in the chief coal-producing countries of the world was 256 million tons in 1873, and 333 million tons in 1882, showing an increase of 30 per cent. in ten years. The production of pig iron in Great Britain and six next largest iron-producing nations, was in 1873 14,689,000 tons, and in 1882 21,063,000, showing an increase of 44 per cent. Unlike the increase of popula tion, the increase of production, a decennial increase of 20 to 30 per cent., does not represent an annual increase of 2 to 3 per cent., but an increase by bounds and rebounds often remaining permanent, and sometimes to be followed by reaction.

countries of the world we know but little. We can only guess at the amount of internal trade in this country, where statistics are so much in use. How much less do we know as respects other countries? Even of the external trade of the principal countries, the information available is very inexact. Taking the facts as they are given in the Statistical Abstract of the principal and other foreign countries, published by the Board of Trade, the total or aggregate amount of general commerce, including imports and exports, in 1885, amounted to about 800 million £ sterling; the greater part, or over 80 per cent. of the whole, being in the hands of eight countries, viz., the United Kingdom, Germany, France, the United States, Belgium, Holland, Austria, and Italy. But among these, some are mainly producers of articles of food and raw materials, and some of manufactures and other articles of general use. The United States of America are by far the largest producers of grain, cotton, and other articles belonging to the former category. The United Kingdom is the largest producer of merchandise included as manufacturing industry. As regards the former, or among producers of articles of food and raw materials, there is really no competition; but as regards the latter, or of manufactured goods, the question is, what nation can produce for export the largest quantity of merchandise, of the best quality, and at the most advantageous conditions? This is indeed the practical question of the day, and we are all anxious to know, whether in the same industries, or in the export of those articles for which the United Kingdom used to enjoy complete supremacy, other countries are advancing faster than we are; whether this country's manufactures are suffering at home from the competition of foreign manufactures, and whether the foreign markets for British produce and manufacture are less open to us now in consequence of the advance made by their native producers and manufacturers. That other countries advance pari passu with us we must not complain. The question is, do we lose by what they gain? We complain that our exports are not increasing so fast as they used to do. In 1846 the exports of British produce and manufacture amounted to 58 million £, and in 1866 they amounted to 189 million £, showing an increase in the twenty years of 229 per cent. Between 1866 and 1886 the exports did not increase so fast, the amount having risen only from 189 million £ to 212 million £, or only 12 per cent. Whence this diminution in the rate of increase? Was it owing to our being now handicapped by other countries? No, it cannot be, because the experience of France has been quite similar. Whilst between 1846 and 1866 French exports rose from 34 million £ to 127 million £, or at the rate of 273 per cent., between 1866 and 1886 they actually fell to 124 million £; and in both countries the exports in quantities were considerably larger. It is only when we come into details and deal with special industries, that we can ascertain how competition really operates. Thus, take the exports of cotton manufacture, the staple industry of England. Of cotton manufactures, Germany, Holland, Belgium, France, and Austria in 1875 exported in the aggregate to the value of 7,600,000l., and in 1885 of 9,900,000l., showing an increase of 30 per cent.; whilst