Such taxation, as indirect taxation spread over a large field of commodities, cannot distribute the charge equitably; it is an income tax levied on all consumers without abatement or exemption. Protection introduced in our country, then, would throw out the whole of our carefully arranged scheme of taxation; would tax, not according to the circumstances of the tax payer, but according to the circumstances of the producer; and so give a legitimate grievance against those who benefited by the high prices.

If Retaliation be not Revenge, the suggestions concealed in the word require careful analysis. We find action called for on two perfectly distinct grounds:—(1) hostile tariffs abroad, (2) dumping here.

The only justification of Retaliation is success. Did the retaliation before 1846 succeed? Have the tariff wars since succeeded? Granted, however, that other nations are anxious to keep our great Free Trade market, and are open to conviction through force; (l) we are quite unprepared for a retaliatory policy; (2) they believe in Protection, and, besides, could not give us better terms without giving the same to others.

If we retaliate by Import Duties, what kinds of goods are we to tax without greatly hurting ourselves? And will any possible Retaliation seriously hurt the country retaliated on? Meanwhile, the effect in disturbing our own industries may be serious enough. Protective tariffs already do us two injuries; let us see that Retaliation does not add a third.

We cannot object to the import of “naturally cheap” goods. But the double monopoly of Trusts, dumping their surplus, presents new features, the most serious being that the dumping is intermittent. But (1) it has compensations, not so much in cheap goods as in cheap material for many of our industries—a Nemesis which the dumping countries are beginning to notice. And (2) its extent as yet seems exaggerated; “dumping” is often blamed for inability to compete when “inefficiency” would be a better word.

We cannot very well ask a foreign government to stop its individual citizens doing in foreign trade what it cannot stop them doing in home trade. We know how underselling is met in home trade—by similar underselling. But the only retaliation yet proposed against underselling nations is the imposing of Import Duties here, and this, surely, is merely a defensive measure. Will this, however, cure dumping in our case when it has not cured it elsewhere? But, once admitted that dumping constitutes a claim on government protection, where are we to stop?

National Income: Pauperism: Wages: Income-Tax returns: Savings: Banking statistics: Shipping: Import of Raw Material: Leisure: little luxuries. Measured by all these tests, the country is prosperous and progressing.

BEFORE coming to the more drastic proposals now before the country, we may profitably ask how the nation stands as measured by the ordinary canons of prosperity.

If a country is progressing, its Trade should increase: not necessarily its foreign trade. Falling exports may indicate fuller employment of home industries which do not export, and increasing exports may indicate Trust dumping or home depression. Free Trade exports, not being exports of superfluity, are no adequate gauge of overflowing abundance.

The statistical stagnation proved by reference to 1872 is quite fallacious; scarcely less so the comparison with the period 1871-5. For these were years (1) of abnormal expansion and activity, due, among other things, to the war; (2) of the highest prices, just before the great readjustment of the price level. True, other nations show a greater percentage of total increase in statistical exports. But the only real criterion is exports per head, not per nation; and here we have a long lead and are increasing it.

It is said that we are exporting raw materials which employ little labour, and importing manufactures which, made at home, might employ much. But Coal employs more labour for its value than most manufactures. Most of the manufactured imports, again, are materials of our industries. Of the remainder, there are some our consumers will have; some, foreigners can make better; some would require skilled labour, which, probably, is already profitably employed in other ways.